Do taxes early. It's one of the most common resolutions made in every new year. There are all sorts of reasons for filing tax forms early, but doing so can be particularly important for low- and moderate-income families who may not be aware of available credits that could put more money in their pockets.
With that in mind, NeighborWorks Umpqua in Roseburg, Oregon, will offer free tax preparation for residents—a first for the organization, which is a rural-focused nonprofit that pays special attention to community, housing and finance issues in the southern part of the state.
Nick Noyes, communications specialist for NeighborWorks Umpqua, says the idea for creating a local, free, tax-preparation service came from the Ford Family Foundation, a nonprofit that also provided a grant to help fund it.
"We were notified of this emergent need in the community thanks to our partner, the Ford Family Foundation, and quickly constructed a program to fill that void," Noyes explains, adding that it is a good fit with NeighborWorks Umpqua's overall mission. "We are firmly rooted in providing services that align with our service pillars: community, housing and finance."
Another primary goal of the service is to ensure that residents don't miss out on deductions and tax credits. For example, the Earned Income Tax Credit (EITC) is a federal program established for low- to moderate-income working individuals and couples, particularly those with children. The amount of EITC benefit depends on a recipient's income and number of children. In addition to encouraging and rewarding work, the EITC offsets federal payroll and income taxes.
Many low-income families owe no income tax, but still must file a tax return to receive credits such as the EITC. Those who do file often need help, typically turning to a paid preparer. However, the cost of such services reduces the value of the EITC and other credits. That cost might be worth bearing if preparers helped their clients claim tax benefits that otherwise might be missed, but many don't, according to experts at the Tax Policy Center, a joint venture of the Urban Institute and Brookings Institution.
"NeighborWorks Umpqua is hoping to improve participation in the Earned Income Tax Credit. Oregon is well below the national average for states that take advantage of the deduction," Noyes says. "By providing this service, we can help Oregonians take advantage of credits and deductions that self-filers might miss."
According to data from the Senate Majority Office in the Oregon Legislative Assembly, in 2013—the most recent year of available statistics—the state's EITC participation was 74 percent, below the 80-percent national average. Eligible Beaver State residents who neglect to file for the annual credit leave a total of about $130 million unclaimed each year.
To ensure the service is properly staffed, NeighborWorks Umpqua put out a call for volunteers. Twenty-one people agreed to help, all of whom are required to pass the Internal Revenue Service exam before engaging with the public. Although no prior tax experience is required, a minimum commitment of 80 hours is needed—40 hours of online training and 40 of tax filing.
"We recruited [volunteers] via social media, our website and face-to-face presentations at various schools," Noyes says.
To raise community awareness of the service, NeighborWorks Umpqua is once again leveraging social media and earned media coverage, as well as its website, and organization officials expect about 100 residents to take part. No one will be turned away.
"They just have to make an appointment and show up," he says. "We don't have a limit for who can use our service."
Two locations, Roseburg and Coos Bay, will open Feb. 5, and the program will run until April 14, the Saturday before the tax-filing deadline of April 16.
As the team at NeighborWorks Umpqua provides this new service for the community, it in turn connects with residents who might benefit from other programs.
"As a NeighborWorks member, it is important for us to use any interaction with the public as an entry point for discussing other pertinent services and who we are as a company," he explains.