This is the time of year when W-2s seem to be as good as gold.
According to advertisements, by simply handing over that little piece of paper that is your wage and tax statement, all your troubles, bills and cash shortages will disappear.
Maybe so, but it might not be wise to hand over your W-2s to some of those businesses if they keep a sizeable chunk of your potential tax refund.
"People need to avoid those refund-anticipation loans," said Marty Jones, programs manager at Community Action Council. "We want the population we serve to keep all their money."
Premium content for only $0.99
For the most comprehensive local coverage, subscribe today.
That's why the Central Kentucky Economic Empowerment Program provides free federal and state tax preparation for families and individuals who earned less than $52,000 in 2013, including itemized deductions if necessary.
The program is a coalition of agencies, led by the United Way of the Bluegrass, that use IRS-certified volunteer tax preparers who are trained to get refunds that help build household assets.
Many times the filers are unaware of the Earned Income Tax Credit, which can be a boon to any family budget.
Tracy Thurston, manager of the financial stability program at the United Way, said that last year volunteers prepared taxes for 3,866 households which resulted in $5.4 million in refunds. Of that amount, she said, $2.4 million was the direct result of filing for the earned income tax credit.
"That's a pretty significant impact on low-income families," she said.
The average gross income of those who filed taxes through the program was $20,900, Thurston said, and the credit ranged from one-fourth to one-fifth of their annual income. Why would you want to give any of that away when you can have it all?
That means extra money to put down on reliable transportation, to pay off bills or to offset significant life events.
The program is funded through the IRS Volunteer Income Tax Assistance program, set up to help provide free basic income tax return preparation with electronic filing to qualified individuals in local communities. Or the filer can have the return printed, ready to be mailed.
Throughout Kentucky, the IRS program filed 32,000 federal tax returns last year, giving families refunds totaling $49.4 million.
Nearly 150 trained volunteers will be preparing tax returns now through April 15 at 19 sites in Central Kentucky. Hours vary, so an appointment is necessary. But there will be slots available seven days a week, day and night, after the IRS begins accepting electronic returns on Jan. 31. The IRS delayed the filing season due to system testing following the federal government shutdown.
Appointments can be made by calling 211 or by going to the United Way's website, Uwbg.org, and making an appointment online, which is new this year.
Some volunteers at some sites can prepare returns for up to three prior years, Thurston said. "But we need to know ahead of time because we will need a good amount of time for that appointment," she said.
Quality controls are in place to protect the privacy of filers. "When people come to a tax site, they leave with everything they brought," Thurston said. "No personal information is ever kept at the site."
And if the return gets too complicated, Jones said, filers will be referred to other agencies at no cost.
This is the 11th year for the Central Kentucky program and some volunteers and filers have come back year after year.
Good. Now all we need to do is spread the word so the refunds can stay with the people who earned them.