This past Tuesday evening at the Home Start office in Mid City San Diego was a busy night. I prepared six returns in four and a half hours. I am getting better with my spanish every week, and I was pleased that my site coordinator wanted to discuss with me the option to be a possible site coodinator next year as my returns are quick, accurate, and I communicate well with the clients.

My first client was an older married couple, the husband was retired and recieved Social Security and the wife was a care giver with a W-2 and made roughly $20k last year and also withheld $1900. They were older so they did not have any dependents but they did qualify to recieve the Earned Income Credit. They left with a refund of about $550.

Most of the clients that come to Home Start to get their taxes done qualify for the earned income credit (EITC). Unfortunately, clients that only have an ITIN number do not quality. The tax credit is for certain people who work and have low wages. A tax credit usually means more money in your pocket. It reduces the amount of tax you owe. The EITC may also give you a refund.

To claim the EITC on your tax return, you must meet all of the following rules: 
 - Must have a Social Security Number.
 - Must have earned income from an employer or self imployment.
 - Your filing status cannot be married, filing seperately.
 - You must be a U.S. citizen or resident alien all year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return.
 - You cannot be a qualifying child of another person.
 - If you do not have a qualifying child, you must:
            - Be age 25 but under 65 at the end of the year
            - Live in the United States for more than half the year, and
            - Not qualify as a dependent of another person
            - Cannot file Form 2555 or 2555-EZ (Related to foreign earn income)
            - Must meet the AGI income requirements:              

                $43,998 ($49,078 married filing jointly) with three or more qualifying children

                $40,964 ($46,044 married filing jointly) with two qualifying children

                $36,052 ($41,132 married filing jointly) with one qualifying child

                $13,660 ($18,740 married filing jointly) with no qualifying children

 The maximum tax credit you can earn is the following:

                $5,751 with three or more qualifying children

                $5,112 with two qualifying children

                $3,094 with one qualifying child

                $464 with no qualifying children

The last client I had for the evening was a single woman who was able to claim Head of Household status because she provide more than half the support of her son that was living with her. She worked as a house keeper and recieved a W2. Last year she was able to write off 3 dependents, her son of 25 that was going to school, her nephew that was living with her for more than half the year, and her 15 year old son. She recieved a refund last year of about $7700, unfortunately her refund was much less this year. This year, her 26 year old son started working and he claimed himself and was preparing his own taxes. Her nephew went back to live with his mother in Mexico last year, and included in 2010 taxes was the $400 making work Pay Credit in 2010 which is not available this year. In 2010 she claimed 4, this year she was only able to claim 2, she still was able to get a hefty EIC and left with a $5700 refund.

Overall I love helping people and even though I am working for free I enjoy

 

Tuesday evening was my first day volunteering for VITA. VITA, is the IRS Volunteer Income Tax Assistance (VITA) and the Tax Counseling for the Elderly (TCE) Programs that offer free tax help for taxpayers who qualify. You generally have to make $50,000 or less for this service.
My first client was a family of 5, the couple were not US citzens and provided me with ITIN's, their children were US citizens with SSN's. They spoke little english, and I had to have an interpreter with me. It was a simple W-2 with dependents. The couple was not married last year, as the husband filed Head of Household last year when he did their taxes. The husband worked at a restaurant with low income of $25,000 and the wife was a homemaker. I was pleased to see that he at least claimed 0 or 1 for federal withholding on his taxes. With 3 dependents he qualified for EIC and he had a refund of about $4000.
My second client was a woman who needed help filing out the tax survey we give to every client. She wasn't sure what her filing status was, as she filed for divorce this past year. She moved out of the house in April of 2011 and has two children that lived with her all year. She was from another country, and is a US Citizen now and has never filed taxes before as her husband always took care of the financial responsibilites. She worked for herself as a private tennis instructor and made $5000 in 2011. With vehicle expenses and her 2 children as dependents she qualified for Head of Household since she supplied more than half the income for her family. ** I don't know how since she stated that her rent is $500 a month and there is no way she was able to afford it without help and running her business with the expenses that she had. Obviously something wasn't right but we did the tax preparation anyway. Her ex husband had filed her as a homemaker the year before and told me that she wasn't that she has been an instructor for a while now. While looking at the taxes from the previous year I couldn't help but see some shady capital losses. Its none of my business, this isn't my life, but all I could tell her is that she can redo the taxes if she wanted to. She ended up with a $300 return. I really hope things work out for her as she is so uneducated of our tax system here.
Overall, it was a great experience and it is nice to be helping people this year and doing some volunteer work. Volunteering is important to me, its one of my new years resolutions  and also allows me to give back to my community.