By Liz Scharf
Monica T. of Barre is the first to tell you that February is one of her favorite times of the year, and not just because it’s her birthday month. February is also the time she counts on her tax refund. For the first time, she will be using Capstone Community Action’s Volunteer Income Tax Assistance program (VITA) to help her file and claim the tax credits for which she and her family are eligible.
For many working Vermonters, the month offers relief as families enjoy a large influx of cash during tax filing season in the form of federal and state tax credits and refunds, often in the thousands of dollars. This money is frequently used to pay past-due bills, pay down credit cards, pay for heating fuel, and even rent. It also goes directly into the local economies as families use the money to buy clothing for the kids, replenish household items, dine out, and pay for needed car repairs. And, if there’s some left over, many families put the money in savings to use throughout the year for other expenses.
The Earned Income Tax Credit (EITC) is one of the most effective federal programs to lift lower income workers out of poverty. Considered a wage subsidy, the EITC comes as a lump sum during tax time with other credits and the amount a tax filer receives depends on the income, family size, and filing status. A single mom with two children who makes $25,000 per year can expect to receive approximately $4,300 as a credit, as well as a state EITC of approximately $1,500. And, with two young children, the family may be eligible for a refundable federal child tax credit of $1,400 per child. These credits are available to workers and provide much needed relief to families who may be struggling to meet their monthly financial obligations.
Nermina Beslagic has been using the VITA program for the past four years through Capstone Community Action. As a small business owner who runs A Cut Above the Rest Dog Grooming out of Four Paws Inn in Barre Town, she has relied on Capstone’s VITA program to help her file her taxes. While Capstone does not file business taxes, the program does help individuals who are filing personal income taxes with simple schedule Cs as long as their microbusiness doesn’t maintain an inventory or record depreciation.
As a single mom, she values the tax help. “Ninety percent of my refund will go toward paying bills in advance, such as my car and business insurance, business expenses, and internet for the year,” says Beslagic who counts on the EITC and the child credit for her young daughter. “My refund is crucial in helping me to be able to survive financially throughout the year. It helps having more financial stability as a single mom earning below the ideal amount.”
Beslagic isn’t the only person looking forward to tax season. Capstone’s steady crew of volunteer tax preparers is excited to begin helping central Vermonters file their taxes and access their refunds and credits. Susan Warren of Middlesex is in her third year as a VITA volunteer. When she retired from her job at the state, she was looking for a challenging opportunity to fill her time. “Helping people with their taxes is so rewarding. The process intimidates so many, and it’s great to ensure they get the refunds they are due. And I love meeting all the different people who come in for help with their taxes. Such interesting people I have met, it’s so fascinating to hear about such a wide variety of lives.”
Capstone’s Savings and Credit Program, which provides no-cost financial counseling and coaching to help central Vermonters reduce debt, improve their credit, budget and save money, oversees the Vermont Saves Campaign, a local affiliate of America Saves. In partnership with a number of like-minded organizations that understand the importance of saving money, including the Vermont State Employees Credit Union, the Vermont Bankers Association, Jump $tart, Vermont’s Community Action network, and others, the Vermont Saves Coalition encourages clients to develop the habit of saving because even a small amount can help with a car repair or an unexpected financial emergency.
Tax time is the perfect time to begin a savings account and volunteers like Warren offer clients the opportunity to set aside a portion of their refund for a rainy day. Through a national campaign called Save Your Refund, filers assign an amount to deposit into savings when they set up direct deposit of their refund with their tax preparer and then can enter an online contest at saveyourrefund.com to win weekly cash prizes.
Capstone’s VITA program, managed by Laura Sudhoff, begins free tax filing for families who earned $55,000 or less in 2018. There are various locations around central Vermont, including the Kellogg-Hubbard Library on Wednesdays, the Aldrich Public Library on Saturdays, at Capstone in Barre on Mondays, Tuesdays, and Thursdays as well as several other satellite sites. For complete details on locations and times, visit capstonevt.org or call (802) 477-5148. Families who make $66,000 or less can file taxes for no charge on myfreetaxes.com.
Liz Scharf works as the Savings and Credit Program Coordinator at Capstone Community Action. She is a certified VITA volunteer and AFCPE® Accredited Financial Counselor®