On a recent Saturday, more than 120 people came to Glendale Mall not to spend money, but to save it by using a free tax preparation service sponsored by the Indianapolis Asset Building Campaign. Now in its second year, the campaign helps lower-income individuals and families with preparing their taxes, claiming the Earned Income Tax Credit refund and making strides towards financial health with services ranging from financial counseling to assistance in opening a savings account.

Glendale Mall is featuring a free tax preparation service sponsored by the Indianapolis Asset Building Campaign.

It"s a little-known fact that since 1976 the Earned Income Tax Credit has lifted more families above the poverty line than any other federal program for the working poor. Although Indianapolis filers received more than $92 million in EITC refunds in 2000, a recent Brookings Institution study found that an additional 15,000 to 20,000 Indianapolis households eligible for the credit failed to claim it - a loss of $22 million. Eligible workers often don"t claim the EITC because they aren"t aware of the program, or have an income so low that they are not required to file a federal tax return. The study also uncovered a second disturbing trend: Fifty-six percent of Indianapolis residents who did receive the EITC claimed their refund through commercial tax preparers offering so-called "refund anticipation loans" with high interest rates of 100 percent or more. According to Allison Luthe of the Indianapolis Asset Building Campaign, these fast refund services have grown in popularity in recent years as commercial banks close their branches in urban areas. "People use [rapid refund services] because they need them. If we were to do something to put the rapid refund places out of business, there would be many residents who would not have another way to access credit," Luthe says. The IABC"s Brenda Johnson, who recently visited a rapid refund service located inside a liquor store, feels that "those agencies prey on low-income urban tax filers." Married workers earning less than $33,178 and single workers earning less than $11,060 in 2002 are eligible for the EITC and the IABC"s free tax preparation and financial education services, and the campaign expects to prepare more than 5,000 returns this tax season. By 10 a.m., the Glendale site was already crowded with people waiting to receive tax help. While they waited an average of 20 to 40 minutes for an appointment with one of eight volunteer tax preparers, some people participated in a financial literacy workshop with Ron Butler of First Indiana Bank. "It"s not how much you earn, it"s what you do with it," he stressed, encouraging use of the Indy Saves program, which helps people open savings accounts and work toward reachable savings goals, no matter how modest. The Brookings Institution study found that over half of EITC earners use their refund to invest in education or transportation, make down payment on a home or start a savings account. Some use the credit to meet more immediate needs, such as one man who told IABC staff he planned to purchase a new bed and a computer. "For many people, getting the EITC represents a significant percent of what they earn during the year," Luthe notes. At the end of the day, people using the IABC service had claimed more than $129,000 in federal returns, though the staff said they could have served even more people, if not for a shortage of volunteers. The Saturday workshops will be offered twice more this tax season, on March 22 at El Centro Hispano, and on April 15 at the Julia Carson Center, where last-minute filers will be able to make appointments from noon to midnight. "When folks don"t know where to get help, they feel alone and unempowered," Butler says. "Knowledge empowers them." For more information on free tax preparation services, volunteer opportunities or to make an appointment for assistance on April 15, call the IABC at 423-1770, or visit www.indyfamilies.org/eitc. The Indy Saves program can be reached at 262-1706.

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