Thrivety Thinking: Resolve to keep ALL your tax refund in 2017!

by John Breyault, NCL vice president, public policy, telecommunications and fraud

The new year is right around the corner. Along with champagne, the Times Square ball drop and midnight kisses, a new year also means resolutions for many of us. Unfortunately, those resolutions will too often be broken before the first few weeks of January are out. Fortunately for millions of of consumers, there’s one resolution you can make and actually keep this year: file your taxes early to get the federal tax refund you are entitled to! Why is this resolution so easy to keep, you ask? Millions of consumers qualify not just for valuable tax credits like the Earned Income Tax Credit (EITC), but also for free tax preparation help—both online and in person. By taking advantage of these programs, consumers can get thousands of dollars in tax credits, save money on tax preparation services, and file taxes safely and securely. Unfortunately, despite the availability of these programs, too many consumers fail to get all the money to which they’re entitled. Often, it’s because they simply don’t apply for the EITC even when they qualify. Other times, they may pay for expensive professional tax preparation services when free IRS-approved tax preparation options are available on the Internet and in local communities. And in some cases, it may be because unscrupulous tax preparers offer high-interest loans under the guise of giving consumers “early” refunds or, even worse, tax identity thieves steal refunds. This tax year, in partnership with the Corporation for Enterprise Development and the Intuit Financial Freedom Foundation, NCL is resolving to help consumers learn more about these important tools. First, we want qualifying consumers (i.e., those with a maximum annual income of $53,930 or less, depending on tax filing status and number of children claimed) to know that they may be entitled to as much as $6,318 in tax credits thanks to the EITC. Unfortunately, the IRS estimates that 20 percent of consumers who may qualify don’t claim the EITC. The message to consumers is that even if you work, but don’t have an income high enough to be subject to federal taxes, filing a return in order to claim the EITC can potentially put thousands of dollars in your pocket. One wrinkle to keep in mind this year is that thanks to a new law aimed at reducing tax identity fraud, consumers who claim the EITC or Additional Child Tax Credit (ACTC) will not receive their refunds until after February 15. While this may be an inconvenience for some, it gives the IRS important time to detect and prevent tax identity fraud, which unfortunately impacts hundreds of thousands of consumers every year. Second, we want low and moderate-income consumers to know that they may be eligible for free tax preparation help from trained volunteers community thanks to the IRS’s Volunteer Income Tax Assistance (VITA) program. At local VITA sites across the country, IRS-certified volunteers can help consumers who make less than $54,000 per year, persons with disabilities, and limited English speaking taxpayers prepare and file their taxes safely, securely, and completely free of charge. For taxpayers who qualify, using a VITA can save hundreds of dollars versus going to a for-profit tax preparer. For more information, visit irs.gov/filing or download the “IRS2GO” mobile app on your smartphone or tablet. For those that prefer to file their taxes online, we urge consumers to take advantage of the IRS’s Free File program. The Free File program, which is available to anyone making $64,000 or less in annual income, gives consumers access to more than a dozen brand-name online tax preparation services at no cost. Free state tax preparation may also be available through Free File-participating tax preparation services, depending on which state a taxpayer lives in. For more information on IRS Free File, click here. Thanks to programs like the EITC, VITAs, and IRS Free File, it’s never been easier for qualifying consumers to keep that resolution to collect ALL of the refund that they’re entitled to. This new year, make taking advantage of these programs a resolution you CAN keep! To read the full blog, click here.