Thrifty Thinking: MyFreeTaxes

Filing taxes can be tough. To help ease the financial burden of the tax preparation process and ensure individuals and families receive their full tax refund, the Walmart Foundation has partnered with leading nonprofits Goodwill Industries International, National Disability Institute and United Way Worldwide to offer MyFreeTaxes.

MyFreeTaxes is a free tool that provides the experience of a paid tax preparer without the cost – putting you in control of your own money. MyFreeTaxes also provides eligibility information about the Earned Income Tax Credit and other tax credits to help you keep more of what you earn. They’re on a mission to help educate taxpayers of their rights and options.

MyFreeTaxes offers eligible consumers two main ways to file:

·         Online at www.MyFreeTaxes.com, powered by H&R Block®, if you make $57,000 or less.

·         In Person with an IRS-certified Volunteer Income Tax Preparer, if you make $50,000 or less. Call 2-1-1 or visit MyFreeTaxes.com to find a free tax site near you.

I had a chance to interview Laura Scherler and Brad Turner-Little for more tax tips. Laura Scherler is the Director of Income Capacity Building at United Way Worldwide. Laura has led the creation and implementation of several multi-million dollar grant projects with an emphasis on financial education, and Earned Income Tax Credit outreach and free tax preparation. Brad Turner-Little is the Director of Mission Strategy for Goodwill Industries International. At Goodwill®, Turner-Little leads the organization’s strategic engagement related to mission services.

1)   What is the Earned Income Tax Credit?

The Earned Income Tax Credit (EITC) is a federal tax credit to assist working individuals and families that can provide a crucial income boost benefiting individual workers with low to moderate incomes, their families and their communities. The EITC is widely credited as the nation's largest anti-poverty program according to the IRS. Twenty percent of eligible workers fail to claim their credit each year — a credit that can make all the difference in helping families pay for utilities, food and rent every month. If you or your family earned less than $50,270 in 2012, check with the IRS to see if you qualify for the EITC.

 

2)   What other tax credits do people often overlook?

 The Earned Income Tax Credit is just one of several tax credits offered at the federal level.  Tax credits for qualifying individuals and families are available related to education, child care and savings. There is even a tax credit for plug-in electric drive vehicles! Check the IRS Credits and Deductions website for more information.  MyFreeTaxes.com provides an assessment to make sure you can claim all the credits you qualify for.

 

3)      Last-minute filers may be more likely to make mistakes with the time crunch. How can they make sure they're filing accurate forms?
If you are procrastinating and filling out your return last minute, it is likely that you could miss something. Before you start your return, it’s best to assemble all of the documents you need.  MyFreeTaxes.com provides a checklist that can help you.  The software will also double-check your calculations to make sure that your return is accurate.  It’s always smart to review your return once you’ve completed it; once it is filed, you can’t go back and add or change information. Filing an "amended return" is more work and you might end up paying penalties if you owe more in taxes later this year.  

4)      What can people do if they need more time to file or pay what they owe?
There are three ways you can request an automatic extension of time to file a U.S. individual income tax return: (1) you can electronically file Form 4868 (PDF), Application For Automatic Extension of Time To File U.S. Individual Tax Return; (2) you can pay all or part of your estimate of income tax due using a credit or debit card or by using the Electronic Federal Tax Payment System (EFTPS); or (3) you can file a paper Form 4868 by mail.If you can’t afford to pay your taxes in full, you can make monthly payments to the IRS through an installment agreement. To apply for an installment agreement, you must complete and return Form 9465. Fees for setting up an installment agreement range from $43 to $105. 

5)      Where are some resources people can go to for help on taxes?
MyFreeTaxes.com has resources on important types of income, deductions and credits that are important to taxpayers earning less than $57,000. If you need help filing with us, we have free help toll-free at 1-855-My-Tx-Help (1-855-698-9435). If you can't find an answer there, the IRS is a wonderful resource at irs.gov or by phone at 800-829-1040. If you need help filing your taxes and would like to locate a free site in your community where you can get assistance, go to MyFreeTaxes.com and ask for help finding a Volunteer Income Tax Assistance (VITA) site. VITA sites can also help you file prior year tax returns from 2011, 2010 or 2009.