Child Tax Credit:

You can save up to $1,000 in taxes for each child in your family under 17. The Child Tax Credit and the Additional Child Tax Credit give you money back. To qualify for the tax credit:

• Your child must have lived with you for more than half the year
• Each child must have been under 17 in 2012
• You must have earned over $3,000 in 2012
• You and your child must have valid Social Security Numbers or Individual Tax Identification Numbers.
• You must file a federal tax return

Learn more about the Child Tax Credit.

Forms used to prepare income tax return.

Child and Dependent Care Credit:

If you paid someone to take care of your child (under age 13) or a qualifying dependent (unable to care for themselves), you may be able to get the Child and Dependent Care Credit. This credit can help with the expenses you had to care for them and it will reduce the amount of taxes you owe to the IRS. You must meet the following conditions to claim the credit:

• You paid someone to care for your dependent so you could work or look for work.
• You (and your spouse, if filing jointly) must have earned income, been a full-time student or been unable to care for yourselves.
• You must include the name, address and tax identification number (Social Security Number, ITIN or Employer Identification Number) of the care provider on your tax return. The care provider cannot be your dependent.
• The qualifying dependent must have lived with you for more than half of 2012.
• The credit can be up to 35 percent of your expenses, depending on your income.
• You must include a valid Social Security Number or ITIN for every dependent you claim.
• For children, dependent care expenses include (1) daycare, nursery school or preschool for a child below the level of kindergarten, (2) expenses for before or after-school care of a child in kindergarten or a higher grade (tutoring, summer school or camp can’t be included as dependent care expenses).
• To receive the credit you must file a federal tax return.

Please file your taxes for free compliments of the Asset Independence Coalition and the Capital Area United Way.

If you have any children that are going to college, learn more about tax credits and deductions for students.

Remember, the deadline to file your federal and state taxes is Monday, April 15, 2013.

Here are the top five things the IRS wants you to know about this credit.

1. EITC is valuable.  The EITC not only reduces the federal tax you owe, but could result in a refund. You base the amount of EITC on your earned income and the number of qualifying children in your household. The average credit was around $2,200 last year. If you qualify, the credit could be worth up to $5,891.

2. Review your eligibility.  If your financial, marital or parental situations change from year to year, you should review the EITC eligibility rules. Just because you didn’t qualify last year doesn’t mean you won’t this year.

Are you getting a refund this year?

3. File your return.  If you are eligible for the EITC, you must file a federal income tax return to claim the credit – even if you are not otherwise required to file. Remember to include Schedule EIC, Earned Income Credit, when you file your Form 1040. If you file Form 1040A, use the EIC worksheet and keep it for your records. If you use IRS e-file to prepare and file your tax return, the software will guide you and not let you forget this important step. E-file does the work and figures your EITC for you!

4. Know the qualifications.  You should understand the qualifications for EITC before claiming it, including:

• • You do not qualify for EITC if your tax filing status is Married Filing Separately.
  • You must have a valid Social Security number for yourself, your spouse – if filing a joint tax return – and any qualifying child listed on Schedule EIC.
  • You must have earned income. You have earned income if you are paid wages, you are self-employed, you have income from farming or you receive disability income.
  • Married couples and single people without children may qualify. If you do not have qualifying children, you must also meet age and residency requirements as well as dependency rules.
  • Special rules apply to members of the U.S. Armed Forces in combat zones. Members of the military can elect to include their nontaxable combat pay as earned income for the purpose of computing the EITC. Even if you make this choice, your combat pay will remain nontaxable.

5. Use the EITC Assistant.  It’s easy to determine if you qualify. The EITC Assistant, a helpful tool available on IRS.gov, removes the guesswork from eligibility rules. Just answer a few simple questions to find out if you qualify and to estimate the amount of your EITC.

With IRS Free File, you can claim EITC by using brand name tax preparation software to prepare and e-file your tax return for free. It’s available exclusively at IRS.gov/freefile. Free help preparing your return to claim your EITC is also available at one of thousands of Volunteer Income Tax Assistance sites around the country. To find the volunteer site nearest to you, use the VITA locator tool on IRS.gov.

For more information about the EITC, see IRS Publication 596, Earned Income Credit. It’s available in English and Spanish on IRS.gov or by calling 800-TAX-FORM (800-829-3676).

You could win cash!

On February 1st, Doorways to Dreams Fund will launch the national SaveYourRefund Sweepstakes which will give tax filers the chance to win cash prizes for saving a portion of their federal refund. With the help of partners in the public, private, and social sectors, the SaveYourRefund Sweepstakes will make saving at tax time rewarding, easy, exciting, and fun!

Not only is this an exciting national opportunity for you to save and win, but it ties directly to our advocacy goals.  By incentivizing tax-time savings in Bonds, we hope to drive use of this important tax-time policy. Growing uptake of tax-time savings bonds purchases demonstrate the importance of this policy to key decision makers in Congress and at Treasury.

So save small this tax season, win big, and help us preserve this policy by driving use!

Entering to win is simple:

Step 1- Save as little as $50 of your federal refund using Form 8888 in Savings Bonds (or any other savings account).

Step 2- Enter your name and refund amount saved at www.SaveYourRefund.com!

And don’t forget to tell your friends! This sweepstakes is open to any tax filer over age 18 who’s due a federal refund!

Good luck!

KeepBondsEasy

About the SaveYourRefund Sweepstakes:

The SaveYourRefund Sweepstakes will award four prizes of $250 every week of the tax season, and a Grand Prize of $25,000! Any tax filers over age 18 who saves at least $50 of their tax refund using IRS Form 8888 can enter the Sweepstakes through a simple online form. By offering large prize incentives and the chance to tell winning stories through videos and social media, the SaveYourRefund Sweepstakes will transform the often- stressful, anxious, moment of tax filing and the serious, earnest act of savings into a time of celebration.

D2D’s past work on prize-linked savings has shown that the opportunity to win a prize – even a prize of modest value – can energize and motivate people to save. The chance to win big prizes motivates tax filers with great odds at increasing a $50 investment by five times and having a chance to win a potentially life-changing Grand Prize, more than five hundred times that initial investment. With the SaveYourRefund Sweepstakes, filers truly can save small, and win BIG!

Keep Bonds Easy

It was a wonderful event.  The vendors  were there to educate the attendees on financial management.  Some of the break out sessions included Foundations of Money Management, Do You Have What It Takes to be an Entrepreneur? and Underwater on Your Mortgage? and Refinancing Options.

Everyone in attendance enjoyed themselves, as there were educational seminars, activities for the children and lots of food to go around.

The event had an excellent turnout as close to 90 people attended the event.  The list of vendors included PNC Bank, Flagstar Bank, Fifth Third Bank, GreenPath Debt Solutions, Bank of America, CASE Credit Union, Northwest Initiative, Center for Financial Health, 211, Asset Independence Coalition, Franklin Street Housing Corporation, the Ingham County Treasurer’s Office, Capital Area College Access Network, Ingham County Land Bank and DHS.

The Asset Independence Coalition and the CEDAM would like to thank all of our sponsors that helped make our event a success.  We also want thank LeighAnna Beach of the Franklin Street Housing Corporation for chairing this year’s event.

Theresa, you recently took a trip to Virginia – what did you do while you were there?

Earlier this month, I was fortunate enough to attend a training session on a federal and state tax preparation program that United Way Worldwide is involved in. It’s easy, safe, secure, and 100% free. I am very excited to be part of this opportunity for so many people to get help with their taxes. And did I mention it’s free?

Free? No kidding! What’s this program about?

This program is a partnership between United Way Worldwide, Goodwill Industries International, National Disability Institute, the Wal-Mart Foundation, and MyFreeTaxes. The partnership provides qualified individuals and families access to an online or in-person tax preparation and filing service for free. To qualify, a filer’s annual income must be $57,000 or less.

So, why is this program so important?

Thanks to the generous support of the Wal-Mart Foundation, MyFreeTaxes helps individuals and families save money and receive valuable refunds and credits like the Earned Income Tax Credit. These monies saved will help low-income families move towards financially stability. Since 2009, 4.5 million individuals and families have claimed nearly $6 billion in tax credits and refunds. To put those numbers in perspective, this program secures an average of over $1,300 per individual or family!

How does this program work & what options are there?

Central Michigan 2-1-1 schedules appointments for callers based on their income. Individuals and families can file online at MyFreeTaxes.com if they have a combined income of $57,000 or less. And individuals and families can file in-person at a certified Volunteer Income Tax Assistance site, if they earn $50,000 or less.

What makes MyFreeTaxes unique?

In its fifth year, MyFreeTaxes provides free tax preparation help and filing services to qualified individuals and families. Both online and in-person tax services are available to qualified people or taxpayers with disabilities. And this service is completely free.

To get started, check out this flyer, click here to begin preparing your taxes, or dial 2-1-1 – the operator will determine if they qualify and get them started.

Written on January 3, 2013 by Theresa Stevens.

A federal judge has ruled against the Internal Revenue Service’s efforts at better-safeguarding the financial security of the tens of millions of taxpayers who turn to commercial preparers each year. However, NCTC and the VITA field strongly urge federal policymakers to take the next wisest, appropriate steps necessary to ensure taxpayers don’t lose ground in the pursuit of accurate and high-quality services – steps that include the possibility of an appeal.

On Jan. 18 in Washington, U.S. District Court Judge James Boasberg ruled that the IRS lacked the statutory authority to impose the regulations that have been phasing-in since 2009, including continuing-education classes and a competency exam. The opinion came in response to a lawsuit brought on behalf of three commercial preparers last spring.

The judge’s order also enjoined the IRS against even temporarily retaining the regulations, during any appeals process. However, a higher court arguably could order otherwise and allow the regs to be kept in place while the issue continues to work its way through the legal system.

The IRS has not yet issued a response to the district court ruling, including thoughts on whether it will seek an appeal.

Yet providers of free tax preparation for low- and moderate-income, working families have worked with the agency for years in pursuit of basic, federal rules to ensure quality of service for the 60 percent of taxpayers who make use of commercial help with their returns. We strongly encourage policymakers to stay this important course.

Free, volunteer-based services as VITA long have been subject to fundamental training requirements and quality standards. In fact, the accuracy rate for returns prepared by such volunteer programs hit an impressive 92 percent last year, according to the latest IRS’ Quality Statistical Sample review.

Meanwhile, it’s significant to note that several states – from Maryland to Oregon – also have zeroed-in on the great need for paid-prep regulations by adopting their own. The federal court ruling does not appear to affect these welcome efforts.

The federal regulations do not apply to certain paid preparers, such as CPAs, attorneys, and Enrolled Agents.

Place: South Washington Office Complex (SWOC), 2500 S Washington Ave, Lansing, MI 48910

For more information, contact: Amber Paxton, 517-256-1466 or LeighAnna Beach, 517-482-8708 or visit Show Me the Money Day.

This means you won’t get an estimated refund date right away. Updates to refund status are made once a day — usually at night.

Once the IRS is able to accept returns beginning January 30, we expect refunds to be issued within normal timeframes. The IRS issued more than 9 out of 10 refunds to taxpayers in less than 21 days last year. The same results are expected in 2013.

It’s easy!

Just use the IRS2Go phone app or go to IRS.gov. Both are available 24 hours a day, 7 days a week. After January 30, 2013, you can start checking on the status of your return within 24 hours after the IRS received your e-filed return or 4 weeks after you mailed a paper return.

To use W_h_e_r_e_’s_ _M_y_ _R_e_f_u_n_d_?_ _have your 2012 tax return handy so you can provide your social security number, filing status and the exact whole dollar amount of your refund.

Tips to help you file an accurate return and get a faster refund

• Use e-file — it’s the best way to file an accurate tax return; and combining e-file with direct deposit is the fastest way for you to get your refund;

• Verify the correct social security number or taxpayer identification number for yourself, your spouse and your dependents;

• Verify you used the correct mailing address;

• Use the correct bank account and routing number if you choose direct deposit.

Y_o_u_r_ _r_e_f_u_n_d_ _s_h_o_u_l_d_ _o_n_l_y_ _b_e_ _d_e_p_o_s_i_t_e_d_ _d_i_r_e_c_t_l_y_ _i_n_t_o_ _a_c_c_o_u_n_t_s_ _t_h_a_t_ _a_r_e_ _i_n_ _y_o_u_r_ _o_w_n_ _n_a_m_e_,_ _y_o_u_r_ _s_p_o_u_s_e_’s_ _n_a_m_e_ _o_r_ _b_o_t_h_ _i_f_ _i_t_’s_ _a_ _j_o_i_n_t_ _a_c_c_o_u_n_t_._ _

As a volunteer income tax preparer serving in Lansing over the past three years, I’ve gotten up close and personal with the finances of Lansing residents, most living at or below the poverty level. Working with individuals to fill out city, state and federal tax forms and, most importantly, helping them claim state and federal tax credits, I’m often struck by my tax clients’ ability to creatively stretch their small incomes to make ends meet. What’s also striking to me, however, is that many of the tax clients I work with have a severe lack of access to financial information and mainstream financial products – information and services that many in the middle class take for granted.

Financial tips my parents taught me, like, for instance, to pay my credit cards on time, opt out of costly overdraft protections and have some liquid savings for emergencies, are pieces of knowledge vital to a person’s financial stability. But, often there is no formal delivery of this information to Americans, just the passing of information between friends and family. Further, higher levels of financial advice provided by trained professionals around topics like investing and retirement planning are available only to people who are able to pay for it. Financial products, even basic checking accounts, are designed to meet the needs of middle and high income consumers, with features like minimum balance requirements and hidden fees and charges that individuals with low to moderate incomes simply cannot afford.

The good news? Publicly announced just two days ago, Lansing residents will soon have access to free, one-on-one financial counseling, thanks to a national initiative supported by Bloomberg Philanthropies and the Living Cities’ Cities for Financial Empowerment (CFE) Fund. Set to open in March, the Lansing Financial Empowerment Center will help residents to reduce debt, build credit, increase savings, and access low-cost and second-chance financial products and services. Over the next three years, the Center is expected to reach 4,000 Lansing residents, helping them to gain financial knowledge and build financial security. The project involves a partnership of the City of Lansing, Capital Area Community Services, Lansing Community College, the Community Economic Development Association of Michigan (CEDAM) and numerous other Lansing-based organizations.

The Financial Empowerment Center model began in New York City as a project of the NYC Office of Financial Empowerment, which opened the first Financial Empowerment Centers in 2008. Since then, NYC’s Centers have built an evidence-base supporting the effectiveness of the model, helping more than 19,000 New Yorkers reduce their debt by more than $9 million and save more than $1 million. Centers seamlessly integrate one-on-one financial counseling with traditional forms of social services, to increase the effectiveness of these services. In Lansing, the Center will integrate counseling with emergency services, housing services, workforce development, asset building, Head Start and prisoner re-entry.

Additionally, through the Michigan Communities for Financial Empowerment (MCFE) network, the experiences and best practices that evolve from the Lansing Financial Empowerment Center project will be shared with other Michigan communities. MCFE is a program of CEDAM, generously supported by the C.S. Mott Foundation. Through MCFE, CEDAM contributed a high level of technical assistance to the Lansing project in both the proposal and implementation processes. Now, CEDAM will continue to support the Lansing project, but will also engage other Michigan communities to share national best practices and provide technical assistance for the development of similar projects that replicate the Financial Empowerment Center model. To learn more about MCFE, please visit mcfe.cedam.info.

As we approach the March launch of the Lansing Financial Empowerment Center, I’m excited for what this project means for the hard-working residents in Lansing who will benefit from the free, one-on-one financial counseling provided by the Center. I’m also excited for the potential this project has to benefit residents in other Michigan communities, who can learn from Lansing’s experience to replicate the Financial Empowerment Center model.

Additional Resources:

Bloomberg Philanthropies: http://bloomberg.org/

Living Cities’ Cities for Financial Empowerment (CFE) Fund: http://www.cfefund.org/

Cities for Financial Empowerment Coalition: http://cfecoalition.org/

Following the January tax law changes made by Congress under the American Taxpayer Relief Act (ATRA), the Internal Revenue Service announced today it plans to open the 2013 filing season and begin processing individual income tax returns on Jan. 30.

The IRS will begin accepting tax returns on that date after updating forms and completing programming and testing of its processing systems. This will reflect the bulk of the late tax law changes enacted Jan. 2. The announcement means that the vast majority of tax filers — more than 120 million households — should be able to start filing tax returns starting Jan 30.

The IRS estimates that remaining households will be able to start filing in late February or into March because of the need for more extensive form and processing systems changes. This group includes people claiming residential energy credits, depreciation of property or general business credits. Most of those in this group file more complex tax returns and typically file closer to the April 15 deadline or obtain an extension.

“We have worked hard to open tax season as soon as possible,” IRS Acting Commissioner Steven T. Miller said. “This date ensures we have the time we need to update and test our processing systems.”

The IRS will not process paper tax returns before the anticipated Jan. 30 opening date. There is no advantage to filing on paper before the opening date, and taxpayers will receive their tax refunds much faster by using e-file with direct deposit.

“The best option for taxpayers is to file electronically,” Miller said.

The opening of the filing season follows passage by Congress of an extensive set of tax changes in ATRA on Jan. 1, 2013, with many affecting tax returns for 2012. While the IRS worked to anticipate the late tax law changes as much as possible, the final law required that the IRS update forms and instructions as well as make critical processing system adjustments before it can begin accepting tax returns.

The IRS originally planned to open electronic filing this year on Jan. 22; more than 80 percent of taxpayers filed electronically last year.

Who Can File Starting Jan. 30?

The IRS anticipates that the vast majority of all taxpayers can file starting Jan. 30, regardless of whether they file electronically or on paper. The IRS will be able to accept tax returns affected by the late Alternative Minimum Tax (AMT) patch as well as the three major “extender” provisions for people claiming the state and local sales tax deduction, higher education tuition and fees deduction and educator expenses deduction.

Who Can’t File Until Later?

There are several forms affected by the late legislation that require more extensive programming and testing of IRS systems. The IRS hopes to begin accepting tax returns including these tax forms between late February and into March; a specific date will be announced in the near future.

The key forms that require more extensive programming changes include Form 5695 (Residential Energy Credits), Form 4562 (Depreciation and Amortization) and Form 3800 (General Business Credit). A full listing of the forms that won’t be accepted until later is available on IRS.gov.

As part of this effort, the IRS will be working closely with the tax software industry and tax professional community to minimize delays and ensure as smooth a tax season as possible under the circumstances.

Click here to find the nearest VITA site to you.