Due to the winter storms that severely impacted the state earlier this year, tax season for most Californians was extended to Oct. 16 from its usual April deadline. While millions of people will have another five months to file their taxes, many are still unaware of free, virtual tax services and tax credits that can save them a lot of money.
United Ways of California, a nonpartisan organization that helps low-income families, is spreading the word about myfreetaxes.org — a website that connects people to free tax filing services.
People who use the site can choose from three options to file their taxes: they can do it on their own with a free tax filing software, schedule an online appointment with an IRS-certified tax volunteer or file them in person at a VITA tax site.
“I think about how expensive things are right now and how much money we’re paying for gas, for our electric bill, for our phone bills [and] for groceries,” said Mandy Nand, economic mobility program manager of United Ways of California. “It’s really overwhelming, and I think a lot of families and people across California are really feeling that as well.
“Our goal for everybody is we want everyone to be able to maximize the refund.”
To do that, Nand wants low-income families to be aware of tax credits that they may not know about.
The California Earned Income Tax Credit (CalEITC) and the Young Child Tax Credit (YCTC) are two anti-poverty tax credits that millions of families in the state can qualify for. For Californians who earn less than $30,000 a year, CalEITC can reduce the amount of taxes owed or make them eligible for a refund of $3,417. The YCTC is a refundable tax credit, up to $1,083 per tax return, for those with children under the age of 6.
There is also the Foster Youth Tax Credit for people ages 18 to 25 who were in California foster care at age 13 or older. The tax credit provides up to $1,083 per eligible individual. To qualify, tax filers also have to qualify for the CalEITC.
However, many may not be aware of these tax credits or services. In 2019, more than 14 million Americans paid around $1 billion in tax prep — using services that include H&R Block and TurboTax — that they should’ve gotten for free.
In addition, Nand said that paid preparers take an average of 20 to 30 percent of a person’s tax refund — money that could’ve been used for a car payment or to pay bills.
Nand explained that the free online software the website uses works the same way as the paid ones. However, she said that one of the biggest challenges her organization faces is convincing those who use paid services to use free ones instead, as some may have misconceptions that the free services are inferior.
Furthermore, Nand explained that many paid preparers are not educated on the different kinds of tax credits. She pointed to a 2021 study by the California Policy Lab that found that 92 percent of eligible households that claimed the federal EITC but not the CalEITC used an in-person, paid tax preparer.
“A lot of folks think, ‘I’m going to a paid preparer, it must be better quality.’ … I would argue that our VITA volunteers in the United States actually have way more oversight and training compared to paid preparers in this country,” Nand said. “VITA volunteers are there to maximize people’s refund.”
She said that these volunteers have been helping people with their taxes for years — sometimes 15 to 20 years.
If you’re looking to find a VITA site to do your taxes in person, myfreetaxes.org offers a map of available locations. However, Nand warned that many sites have either ramped down or completely closed since March. Since these sites are all operated by volunteers, how long these remaining sites will stay open depends entirely on volunteer availability.
They are trying to recruit more volunteers, which usually occurs during autumn, in the hope that those who are still working don’t get burnt out.
Still, whether in person or online, Nand encourages all Californians to file their taxes to claim their credits.
“If you missed out on stimulus payments or child tax credit payments, it’s not too late to go back and back file. Even if you aren’t legally required to file your taxes because your income is on the lower end, you still stand to make money back on that tax refund. If you don’t file, it means you’re losing out on money that belongs to you.
“After a certain amount of time, you can’t go back and claim that money, so make sure you file your taxes for free and maximize that refund.”