Filing Your 2012 Taxes Online...For Free

There are lots of come-ons for online tax filing services that promise to get you quick refunds, as well as for tax preparation software that can help you.  In truth, many people are entitled to free tax help.  In a previous post, I discussed face-to-face tax assistance that low and moderate income people can get, and where to find it. 

You can also efile for free at any income level at the IRS website for efiling.  However, this site does not become active until January 17, 2012.  If you want to get a jump on this, you can file a federal tax for for free on this site by TaxACT.com. It's a commercial site, but the basic vanilla service for federal returns is in fact free for every income level.  However, if you want fancier services like state returns, importing your old returns, etc., you can get these for additional fees.

Here's some distinctions in IRS free efiling services: the IRS allows anyone at any income level to file for free, but people with an adjusted gross income of less than $58,000 can also have a choice of free software to help them.  But you must wait until January 17, 2012 to file for 2011.  If you can hold off that long--and have an adjusted gross income of less than $58,000--you can have access to free software to help you with your efiling.  Good (free) things come to those who can wait a few weeks.

The Tax Break Just for Poor and Moderate Income People...The Earned Income Tax Credit (EITC)

People are now thinking about filing taxes for the past year.  Please remember that if you are a low-income person, or even a moderate income person supporting children or a permanently disabled person, you may qualify for the earned income tax credit.  It may be worth looking into.

You can start looking into the EITC on this page. It's the overview of the program.  If you dig around a little you can find this page that gives you the income limits and maximum tax credits for the tax year 2011 (the one you are going to file for in early 2012). It's frustrating, because as of December 27, 2011, the page only had a EITC assistant up to the tax year 2010.  But if you try the page later, it may have a more current EITC assistant. 

As noted, you don't have to have children to  qualify for this if your earned income is low enough.  Here, you can find out what qualifies as "earned income."  You can also find out who qualifies as an eligible child for EITC purposes here.  And if you are supporting a permanently disabled child of any age, they may count as an eligible child. 

However, you can't get the tax credit if you don't file--and you must file for the credit to get it. For couples filing jointly with three or more qualifying children (and incomes up to more than $49,000), they may be able to get a credit of over $5,000.  Who wants to leave that kind of money on the table?  Of all the "free money" hype, this one is real, and really helps people who need it. Look into your earned income tax credit options.

Free and Low-Cost Help With Taxes and IRS Audits and Disputes

Soon we will be gearing up to make out tax forms, or have some smart person do it for us.  The nonprofit groups that have gotten VITA (Volunteer Income Tax Assistance) grants from the feds will be gearing up to take appointments from now until the middle of April.  How do you find these places?

In many places like Toledo, you can call 211 and set up appointments after the first of the year.  In fact, at the ONE Village Financial Center in north Toledo, you can call 419-724-5640 and set up an appointment right now.  If you worked in 2011, and made less than $50,000, you are eligible for free tax preparation from United Way of Toledo. Call 211 or 1-800-650-HELP (4357) to set up an appointment.
While the final list of VITA sites and times are being created right now, when tax season comes, you can call toll-free at 1-800-906-9887 to find a location near you.  For more information, check this website.  This number will also give you the locations and times of volunteers who work on the tax returns of older people on a volunteer basis(Tax Counseling for the Elderly).  Remember to call early; VITA tax sites are often booked to the hilt early, and you may be left out.  AARP has a similar website and hotline for volunteer tax services for older Americans.  Either check the website between late January and the middle of April, or call 1-888-227-7669.

Another place to check for tax help if you live in Arkansas, Florida, Indiana, Kansas, Mississippi, Ohio, North Carolina, Pennsylvania, South Carolina, and Texas is the Benefit Bank website.  Put in your zip code, and find out the places nearest to you where low and moderate income people can get free tax application help.

Besides this, there are some nonprofit organizations that offer to represent low-income people (those who make less than 250% of the poverty guidelines), in audits and disputes with the IRS.  See this webpage to find the one near you.  It has the income limits for clients they will represent in tax cases, state by state, phone numbers and cities for each location and a list of languages that they can provide translation for in the case of clients who do not speak English.

SSI for Ex-Cons: This One Just Fell in My Lap

In my day (only) job as a librarian, I'm used to colleagues pulling my fat out of the fire, and am mighty grateful for it.  The other day, a gentleman came up to the reference desk asking for legal cites, some of which looked downright weird.  He could not say exactly where he had gotten these--they were all written in a lengthy, handwritten letter, but he was vague about where it came from.  So I decided to take the lazy shortcut now available through Google, and put in one of the cites: "Public Law 93.365.92.603." 

What came up in Google was this from Snopes, the urban legend debunker site, and a personal favorite. It was a posting by a librarian who was given a very similar email twice in one week, with a lot similar "information"--about how these laws could be shown to Social Security offices so that ex-offenders could get their immediate SSI payment, which they could get within 72 hours.  I have family members on SSI, and can testify that you can't get ANY check in that time frame. Then, the email instructs you to go to the "general welfare" office in your state, to get a check issued in two hours.  Again, I've had relatives on assistance, and one actually had to wait twice that long for her worker to meet with her, much less get a check.  And the "medical card" that should be able to "be used at any doctor's office?" Please.  That ain't happening. Ex-offenders have to apply for and use the medical services for the poor available in your area like anyone else.

They go on to list a whole bunch of other stuff that you should be able to charge up: car expenses, work tools, "casual clothes," Again, these are not "benefits."  There are some nonprofits that work to help with a used car or repairs, or with work clothing, etc.  But these are things provided--when they are--by a patchwork of community groups, WHEN they have money available. 

The part of the email closest to the truth involves tax credits available to employers who hire ex-offenders and other specific groups of hard-to-employ people.  Even so, this is not immediate help. 

What can ex-offenders do?  Largely, they have to use the same social services that everybody else does.  There are places around the country that try to put ex-offenders in touch with the right people, and who know the right agencies to tap.  Here's a whole roundup of what I have been able to find that can help ex-offenders, including getting help on expungement.

As the librarian in the posting points out, the legal references in this email are not true, or not valid, or just weird.  But apparently some version of this letter is still floating around 11 years after snopes knocked it down.  If you get it, don't believe it.

New Consumer Hotline for Mortgage and Credit Card Complaints

The feds have created a new place for homeowners with mortgage complaints to contact and (hopefully) get them resolved.   This includes escrow disputes, mortgage modification issues, or mortgage fraud.  you can go online to www.consumerfinance.gov, or call toll-free 1-855-411-2372.  It was created through the Dodd-Frank banking law that passed in 2010.  What can they do for you?    They are supposed to mediate complaints, and if a complaint isn't within their sphere of power, they will refer you to an appropriate agency.

They also field credit card disputes.  If you run into your very own "Peggy," or have other credit card problems that can't be resolved you can file a complaint. 

It's got other good stuff: a page on student debt--with information to know BEFORE you get into student debt, and an online "assistant" to walk you through your options now that you have a ton of student debt. 

Other places you might want to go if you have mortgage or credit card issues: your own state consumer protection office,  or your state's attorney general office. 

More Unclaimed Funds on the County Level

In our wide hunt for unclaimed funds we presented a post that showed how to find the state  and federal unclaimed funds.  But did that fill the bill?  No. Because we found a whole new source. 

Besides money that you may be owed by a federal agency, state agency or which you might merely have innocently abandoned from a bank account or insurance claim, county government can apparently owe you money.  According to an article in the Toledo Blade, the Lucas County auditor now has an unclaimed funds website where you can search for monies owed from jury duty, court settlements, restitution, and from the county itself.  You can then apply for the money.  You need the form (and if you can't print one off the website, you can call 419-213-4406 and have them mail you a form.  Anyone who does not have access to a computer can call the same number and get help in searching for their claim. 

If you live elsewhere, it might be worth your while to see if your local county auditor has an unclaimed funds office for the same information.

Tax Credits that Might Attract Investment Money to Your Business

Money is hard to find for new and expanding businesses, but some is out there.  One form of investment (remember: NOT free money.  Remember our motto:  if money were easy to get everybody would have lots of it) is “equity investment.”  Simply put, it means that an investor buys a part of your business in exchange for the infusion of cash.  This is opposed to a loan, in which money is loaned for a particular rate of interest.  Equity investments are riskier because while there is a legal guarantee of responsibility to pay the debt, equity investors may see their investment crash and burn without getting a penny.  How then, can the government make this more attractive?  By giving a tax credit.

 This is called “tax equity.”  As described by the U.S. Partnership for Renewable Energy Resources:

 

“’Tax equity’ is a term that is used to describe a passive ownership interest in an asset or a

project, where an investor receives a return based not only on cash flow from the asset or

project but also on federal and state income tax benefits (tax deductions and tax credits). Tax

equity investors are usually large tax‐paying financial entities such as banks, insurance

companies and utility affiliates that use these investments to reduce future tax liabilities. Tax

equity is distinct from traditional “corporate equity,” where an investor makes an active

investment and is actively involved in corporate governance.”

That’s what the state of Ohio is now offering for small businesses and investors.  The Department of Development unveiled InvestOhio, in which small businesses and investors come to an agreement about the size and nature of the equity investment (how much money, how much the investor owns of the company), and then they both register with the state to become eligible to take part in the program.  Then one of the parties will register the investment at the Ohio Business Gateway site and wait for the Department of Development to approve.  If they do, the investor must invest, and the small business in the partnership must purchase the materials funded by the investment within a six month period.  There are specific categories that are eligible to be purchased with the investment money.  For the tax credit to kick in, the invested company must hold onto the material for two years and the investor must likewise hold onto their investment in the company for two years.  In the future, starting in June 2013, that will extend to a five year period. 

For more details, see the Department of Development website or call 1800-848-1300.  If you run a business in another state your state might offer similar tax credits for your potential equity investors.   In 2010, the Office of Legislative Research for the state of Connecticut did an article on 21 states that offered tax credits to “angel investors,” with details on their plans.  All plans are different, with different goals and restrictions.  For instance, the Arkansas plan is aimed at high-tech businesses.  Maine and Virginia have different plans, too. To find out if your state offers this, check your state's development office.

Awesome Foundation for Small Causes

What’s the Awesome Foundation?  It’s not like George Constanza’s Human Fund, a scam or nonsense.  It’s really a giving circle, in which a group of people pools their contributions and decide amongst themselves what worthy cause will get the  money.  They take applications and decides to fund things that are, in their terms, “awesome.”  In fact, their slogan is “funding awesomeness $1000 at a time.” 

Unlike an IRS-sanctioned grant-giving foundation, they are not hemmed in by needing to give to 501c3 organizations or to do a prescribed sort of “due diligence” investigation, or to distribute the funds through a pass-through organization that has 501c3 status.  Recipients can be a group or an individual.  The various chapters of the Awesome Foundation look at a short, straightforward application, decide if it is awesome, and if they wish to fund it.  And by awesome, they don’t mean nice clothes or a MP3 player for the applicant.  They don’t spell out  what constitutes "awesome,” but believe as Supreme Court Justice Stewart Potter believed about pornography, that they know it when they see it.  They don’t fund for personal use, the upkeep of established organizations, or vague ideas.  So what have they funded?

 According to their blog, they have funded a project to start urban farming in Los Angeles high schools, environmentally sustainable surfboards, and a collection of good literature in a public place that is more selective but just as non-monetary-based as a public library in San Francisco’s Mission District (Ourshelves), among other projects.

 In fact the Awesome Foundation has grown into a set of giving circles in over two dozen cities around the world.  Since it’s just individuals putting their money in a pot and making decisions, they can give money to causes that just need a short push to become reality, whether a group or individual has the correct IRS paperwork or not.  If you have an awesome project and a small amount of money might help, this could be a place to inquire.

The Truth About "Minority and Women Business Grants"

Urban legend (and misleading websites) would have you believe that there are loads of government grants out there for minority and women-owned businesses.  But that's not the truth.  The U.S. SBA (Small Business Administration) website states quite clearly that they do NOT provide grants to expand or start businesses.  (See here for some privately-generated grants for women business owners). But don't governments do something to help minority and women-owned businesses?  Yes, they do.

The SBA does have a site devoted to minority business development on the federal level, including opportunities to do business with the government, and help available to develop your business so that it will be able to compete for and complete federal contracting work.  It also has a link enabling you to find government loans and loan guarantees.  Loan guarantees are the federal backing for loans, which assures banks making the loans that they will be paid back. 

Several states also have help for minority and women-owned businesses in the form of set-aside programs.  These are programs that try to reserve a certain percentage of government contracting work for women, minority-owned, or "disadvantaged" or small businesses.  Often, these businesses need certification for their status to get these contracts.  Sometimes, IF A STATE HAS THESE PROGRAMS (and not all of them do), you  can find out about them at your state office in charge of minority contracting.  This list includes not only state offices, but several large cities in the U.S.  Contact these offices to get your firm certified as a minority or woman-owned business, if applicable, and then look for opportunities to provide goods and services for the government.  Also, take advantage of any training or mentoring programs available. 

Besides contracting opportunities, many states have loan programs aimed at disadvantaged/minority/female-owned businesses.  To find out about these programs, see your state's economic development department.