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Free tax help eases the pain
Preparation centers get those in a bind bigger refunds

By Jenny Upchurch . THE TENNESSEAN . January 23, 2009

Comfort Johnson left the free tax preparation center in East Nashville with mission accomplished: Her 2008 federal income tax was complete, and she was expecting a larger-than-usual refund.

"I'm no longer working, so it's a big help," she said Thursday. "Especially at tax time, a lot of people are in a bind, and they're able to get themselves out of a bind with this."

The Volunteer Income Tax Assistance center on Gallatin Pike is one of the first free tax prep centers opening this week in Davidson and surrounding counties for those who make less than $49,000.

"If used wisely, a tax refund can make a huge difference for their family," said Rachel Freeze, who is coordinating the VITA program.

One goal is to get the Earned Income Tax Credit for more who qualify. As many as a fourth of those eligible in Nashville don't file for the credit, Freeze said. Income limits have been raised so that those with two or more children can make as much as $41,646 and still qualify for the credit.

Even more could be eligible this year, as household members have lost jobs or income. One is Johnson, who qualified this year for the Earned Income credit, boosting her refund by about $1,000.

A family with two or more children can receive as much as $4,824 with the credit. And the credit is refundable, which means the taxpayer gets the full amount no matter how little tax is owed, said Dan Boone, spokesman for the IRS in Nashville.

The IRS, United Way and 20 other community agencies and financial institutions are working with Freeze's Nashville Alliance for Financial Independence to run the centers through April 15.

The centers will file returns electronically for free on the IRS Web site, and most refunds will come within 10 days.

"We're expecting 2.8 million returns to be filed in Tennessee," Boone said, and probably 90 percent would qualify to file free on the IRS Web site because their adjusted gross income is less than $56,000.

Yet few take advantage. Of the 1.89 million returns filed electronically in Tennessee last year, only 130,000 were on the free IRS site, Boone said.

New Fillable Forms let higher-income taxpayers also e-file for free on the IRS Web site. Using these forms is much like filling out paper forms, without prompts to claim credits or deductions.

But a taxpayer comfortable with completing the forms can do that online and then file, Boone said.

With e-filing and direct deposit, taxpayers can expect to get refunds within seven to 10 days, Boone said. "If you're looking for an easy way to save money, e-filing would be it."

Freeze urges lower-income taxpayers to use that route rather than paying a tax preparer and getting a refund anticipation loan. A full-time minimum-wage employee would need to work 34.5 hours to pay an average preparation fee of $150 and an average interest charge of $100, she said.

Oscar Pointer has had his taxes done by a private company. But he came this year to the VITA center after seeing a flier at his job at Goodwill. "One reason is it is free," he said.

In addition to helping prepare and file tax returns, the program offers Second Chance bank accounts for people who don't have an account to get refunds by direct deposit, Freeze said.

The accounts through First State Bank can be set up at the tax center at the Nashville Child Center, 4115 Gallatin Pike.


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Nashville Alliance for Financial Independence
250 Venture Circle, Nashville, Tenn. 77228
phone: 615.780.2444   Fax: 615.780.2426   e-mail:
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