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Making Tax Season Work

As you’ve picked up your mail over the past few weeks, I’m sure you’ve been reminded that tax season has arrived. W2s, 1099s, and all other sorts of statements are coming in, and we are all doing our best to make sure things are taken care of before April 15. For many of us, doing our taxes might seem like a hassle, an extra task, or maybe just something we ship off to our accountant. But for our Springboard families, tax season is often a lifeline.

Receiving a tax refund can be an important part of how low-income families plan and budget for what is coming up next or work to pay off debts they might owe. For many families just trying to get by, this extra bit of cash coming in the early spring is exactly what they need to make it a few more months. This year, with the expanded Earned Income Tax Credit (EITC) and Child Tax Credits (CTC) that were a part of the American Rescue Plan, it is more important than ever that families are able to file their taxes and take advantage of the credits and opportunities made available.

Unfortunately, though, there is a whole industry dedicated to taking advantage of families who rely on this extra bit of income. We’ve probably all seen the pop-up shops that show up from December-April with flashy signs and advertisements, often in the middle of low-income communities promising specific amounts of money or an immediate cash payout instead of having to wait for one’s return to come in the mail or through direct deposit. Not only do these shops typically take a significant portion of a person’s refund as payment for their services, they rarely are staffed with certified accountants or people who know anything beyond the very basics of filing taxes. As such, they often fail to get families all the credits that they are due, like the EITC and CTC, and often exploit a family’s need for immediate resources, charging exorbitant preparer fees or offering illegal “loans” to get your refund faster. We’ve watched as these predatory institutions specifically target our families, putting out advertisements on cars and doors as early as December to try to lure families in.

While we’ve always partnered with the United Way and other entities to provide better information and free tax preparation, this year we’ve doubled down our efforts. In all our communities, we have been pushing out information about Volunteer Income Tax Assistance (VITA) sites where all our families qualify to have their taxes done for free by a certified professional trained to make sure they get all the tax credits they are due. Through our partners at Community Change, we were able to provide residents with direct access to an IRS Community Affairs staff member who could answer their tax questions and make sure they got accurate information about tax credits, VITA sites, and more.

But our hope is not only to educate families about what resources are available to them. We also want to ensure our families feel empowered and equipped with the knowledge they need to make the best decisions for themselves – not only this tax season, but in every tax season to come. So often low-income families are told they’re not smart enough or well-connected enough to know what they need, and predatory entities swoop in to fill the gap. But we know this story, like so many of the other myths that surround our families, is not true. As we talk about VITA tax sites and qualified preparers with residents, we also talk about what the EITC and CTC and other tax credits are, so they feel empowered to ask for what they deserve and not bogged down by jargon or complex policy that can leave all of us confused at tax time.

When we think about policy agendas or advocacy campaigns, tax season is not always the most glamorous or exciting topic rising to the top. But we know from talking with our families and being in communities that it is essential for them. And as an organization demonstrating the importance of cash-based benefits for families in our own work, we know we have to ensure that all these benefits, including tax refunds, are designed to support the most vulnerable families based on their voices and experiences.

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