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Showing way to tax breaks

Many families who can qualify are learning about the benefits of the earned income tax credit.

By MEGHAN RULISON
Published January 31, 2007

Tax season is upon us and the Wealth Building Coalition doesn't want Pinellas residents to overlook the earned income tax credit.

The coalition offers free tax preparation in Pinellas and Hillsborough counties. The credit is a special tax benefit intended for low-income working families. In some cases, the credit can yield a return of an additional $4,000, depending on what taxes are owed. To qualify a family must have children, but the parents do not necessarily need to be married.

"Each year, more and more people come in knowing about the EITC," said Wanda Mitchell, a program assistant at the Enoch Davis Center in St. Petersburg. "They find out about it through word of mouth or advertisements."

The Juvenile Welfare Board launched a community awareness campaign 17 years ago to inform Pinellas residents about available tax credits. The campaign led to the Wealth Building Coalition, which is free to residents.

There are 63 earned income tax credit sites throughout Pinellas and Hillsborough counties. In mid and North Pinellas, those sites are the Pinellas County Urban League, 13420 Adams Circle, Largo, the High Point YMCA, 5345 Laurel Place, Clearwater, and the Union Academy Cultural Center, 401 Martin Luther King Jr. Drive, Tarpon Springs.

In addition to informing taxpayers of the benefits to the earned income tax credit, the coalition also warns of the risk of using a Refund Anticipation Loan, or RAL.

A RAL is a short-term loan backed by a tax refund. Taxpayers who want their refund quickly often sign up for a RAL to receive their money one to two weeks ahead of the usual processing time.

The risk with RALs is that the interest rates on such loans forfeit significant sums. Wealth Building Coalition volunteers encourage taxpayers to file their refunds electronically and as quickly as possible to prevent them from needing to request an RAL.

The strategy may be working. The percentage of requests for RALs has decreased. In 2002, 43 percent of taxpayers receiving a refund requested an RAL. The figure decreased to 38 percent the following year.

Since then the percentages have continually decreased, but only minimally.

"Although the coalition has made a dent, the number of people still requesting RALs is so large compared to what it needs to be," said Cherin Stover, project coordinator for the Wealth Building Coalition, "It is a lot of money that could otherwise put food on the table or be put into savings."

Taxpayers are encouraged to visit one of the 63 Wealth Building Coalition sites. Free tax preparation is available through the end of tax season.

Meghan Rulison is a reporter for the Neighborhood News Bureau, a program of the Department of Journalism and Media Studies at the University of South Florida St. Petersburg. She can be reached at (727) 327-2129.

Fast Facts:

Volunteer Income Tax Assistance sites

Pinellas County Urban League, 13420 Adams Circle, Largo, 581-7661

High Point YMCA, 5345 Laurel Place, Clearwater, 507-9622

Union Academy, 401 Martin Luther King Jr. Drive, Tarpon Springs, 934-5881

Asian Neighborhood Family Center, 1801 62nd Ave. N, St. Petersburg, 520-9820

Enoch Davis Center, 1111 18th Ave. S, St. Petersburg, 893-7159

James B. Sanderlin Neighborhood Family Center, 2335 22nd Ave. S, St. Petersburg, 321-9444

Wachovia Downtown St. Petersburg, 401 Central Ave., St. Petersburg, 892-7202

Wachovia Gulfport Financial Center, 2001 49th St. S, St. Petersburg, 892-7425

Wachovia Skyway Financial Center, 3095 54th Ave. S, St. Petersburg, 892-2034

[Last modified January 30, 2007, 23:11:54]