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Building Bucks. Taxes and Tax Credits. Taxes and Tax Credits. T ake advantage of tax deductions and incentives Earned Income Tax Credit (EITC) Child Tax Credit (CTC ) Refund splitting

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Building Bucks

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building bucks

Building Bucks

Taxes and Tax Credits

taxes and tax credits
Taxes and Tax Credits
  • Take advantage of tax deductions and incentives
    • Earned Income Tax Credit (EITC)
    • Child Tax Credit (CTC)
  • Refund splitting
    • Clients who file electronically can instruct the IRS to direct deposit their refund into multiple accounts
income tax basics
Income Tax Basics
  • Due annually on April 15
  • Compares your actual taxable income to the amount you have paid through the year
    • If you’ve overpaid, you will receive a refund
    • If you have not had enough withheld, you will owe money to the IRS
filing your income taxes
Filing Your Income Taxes
  • Withholding
    • determined by income level and information on W-4 form
    • Withholding allowances claimed will reduce amount withheld
    • If you claim more than 9 allowances, your employer may be required to send your W-4 to the IRS for review
tax filing strategies
Tax Filing Strategies

3 Main Strategies

  • Do it yourself via…
    • Paper
    • Software
    • E-filing
  • Professional assistance
  • Assistance from a volunteer-run program
do it yourself
Do It Yourself
  • Print paper copies of necessary forms, fill out, mail in to IRS


  • File taxes electronically
  • PROS: Costs nothing, empowering, helps you get a handle on your own financial situation
  • CONS: More difficult, time consuming, and higher chance of mistake
tax filing with assistance
Tax Filing with Assistance
  • Professional Assistance
    • Certified Public Accountant (CPA)
    • Tax preparation business
  • Volunteer Assistance
    • Volunteer Income Tax Assistance (VITA)
    • Taxpayer Counseling for the Elderly (TCE)
vita and tce
  • Provide income tax assistance to low-income individuals, handicapped or elderly
  • Volunteers trained by the IRS and the Wisconsin Department of Revenue prepare basic income tax returns free of charge
  • What to Bring:
    • Forms W-2 wage and tax statements
    • Information on other sources of income and any deductions
    • Social security cards
    • Rent certificate or copy of property tax bill
    • Record of any Wisconsin Works payments
filing income taxes
Filing Income Taxes

Necessary Information:

Deductions/Credits Information:

Advance Child Tax Credit Payment

Child Care Costs

Education Costs

Adoption Costs

Charitable Donations

Job Expenses

Medical and Dental Expenses

  • Social Security Number or Individual Taxpayer Identification Number
  • Record of all income sources over the last year
  • Information on any income adjustments
steps to filing income tax
Steps to Filing Income Tax
  • Determine gross income
  • Calculate Adjusted Gross Income (AGI)
  • Subtract deductions
  • Claim exemptions
  • Calculate tax rate
  • Subtract credits
  • Calculate your refund or taxes owed
tax refunds
Tax Refunds
  • Ways to receive your refund:
    • Mailed from the IRS within 6 weeks of receiving your return.
    • Direct deposit into your checking, savings, or retirement account.
    • Split deposit between multiple accounts.
if you owe
If You Owe
  • Promptly pay the tax owed including any additional penalties and interest.
  • You can pay the bill with your credit card, electronic funds transfer, check, money order, cashier’s check or cash.
  • An installment agreement may be requested if you cannot pay the liability in full.
reduce taxes due next year
Reduce Taxes Due Next Year
  • Contribute part of your paycheck to an IRA.
  • Purchase a home or real estate.
  • Take a “tax” loss on your investments.
  • Have dividend or municipal bond income.
  • Place some of your income into trusts and estates, a type of “tax shelter.”
managing a vita tce site
Managing a VITA/TCE Site
  • Complete IRS certification process
  • Focus on key client groups
    • Tax filers with larger refunds
    • Couples with children
    • Older taxpayers
  • Promote savings and asset building
    • Help families get through unexpected crises
    • Assets can be used as equity
    • Assets can be invested
    • Provide an inheritance for children
types of saving
Types of Saving
  • Checking Account
    • Faster refund
    • Easily accessible
  • Savings Account
    • Faster refund
    • Slow spending of refund
  • Savings Bond
    • Easy to save on behalf of others
    • Good return
  • CD
    • Save for a few months for a goal or expense
    • Good return
asset building model use while delivering tax preparation
Asset Building Model(use while delivering tax preparation)
  • Promotional materials – highlight opportunities to save.
  • Intake – identify clients with/without bank accounts and those with interest in savings.
  • Waiting Period – set up accounts and share more product information.
  • Tax Preparation – encourage clients to save.
  • Quality Review- urge client to use unexpected refund for savings.
  • Exit Surveys
clients without refunds
Clients without Refunds
  • Provide tax planning advice.
  • Referral to financial literacy workshops.
  • Encourage credit counseling for those with debt and credit issues.