Making filing less taxing

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By Landmark News Service

With tax season now in full swing, many Americans will seek professional help to file their federal and state returns. But sometimes that professional help can take a chunk out of a taxpayer’s wallet.
AARP annually offers a free solution for low- to moderate-income taxpayers through its nonprofit Tax-Aide program.
District coordinator Carol Sheahan has been helping area AARP tax preparation sites for about 13 years. She became involved with Tax-Aide when she found an ad for a volunteer opportunity to prepare taxes for seniors.
There are Tax-Aide sites all over Southwest Virginia, including one in Galax. The local AARP Tax-Aide site is at the Galax Public Library Annex (the old Vaughan Memorial Library) at 610 West Stuart Drive. Services are available Thursdays from 8 a.m. to noon.


Each location has a leader who coordinates with Sheahan to make sure each site is up and running. There are about 70 volunteers working at the sites.
Some volunteers are retired certified public accountants or financial advisers. Regardless of their career background, all volunteers must take IRS certification tests in order to prepare taxes with the program.
Sheahan strongly suggests that appointments be made in advance. Walk-ins may find themselves waiting hours for rare cancelation openings, and as the tax season progresses, it will become more likely that people will have to wait a few weeks for an appointment.
Taxpayers will need to prepare for their appointment by bringing a Social Security card for every name on the return, a government-issued photo ID for the taxpayer and spouse if filing jointly, W-2s and other tax forms for payments received or expenses.
Bank account information is also encouraged for direct deposit. Paper checks will not be issued this year for state refunds. Those who do not choose direct deposit will have their refund returned on a debit card.
While the program focuses on tax preparation for seniors, Tax-Aide does not discriminate based on age. One location has prepared taxes for clients from college-aged to age 102.
Tax-Aide served 1,900 clients 2012. The program hopes to serve at least 2,400 clients during the current tax season.


AARP Tax-Aide District Coordinator Carol Sheahan talks about available tax preparation services, new tax laws and the volunteer training needed to prepare taxes through the Tax-Aide program.

Q: What is the maximum income accepted for tax prep?
A: “We have various ideas on what should be our upper limit, but basically there is no upper limit in terms of income on the returns that we would do. It depends on the scope of the return. There are certain things that we are just not trained to do. As long as it is within our scope, and we have time.
“We have had people with low six-figure incomes, and that’s OK as long as it’s the type of income that we can deal with.
“We can’t do farm income. We can’t do any kind of returns that deal with a depreciation issue because we are not trained to do that. That would rule out people with rental income or small business. We can do small business as long as the individual doesn’t have employees and doesn’t deal with depreciation. We can’t file a return for them if they are trying to claim a loss on a business. Those are the kind of things that are out of scope for us.”

Q: What kind of training must a volunteer complete in order to prepare taxes with Tax-Aide?
A: “We have two kinds of volunteers. We have the facilitators, which are basically our greeters. The important thing they need to have is what we call our standards of conduct. It’s basically ethical training. Of course our counselors that are working with the clients also take the standards of conduct. This is something that the IRS has required of us the last couple of years.
“In addition to that, the counselors here, the new ones have gone through about 30 hours of training here at the site. Then, as all of us do, we have to take an IRS test every year and be certified.
“We had an all-counselor meeting where we update ourselves on what’s new this year for everybody including returning counselors. Then we all have to take the certification test.”

Q: Will the delayed tax filing date affect filers?
A: “The only form that we’ve been told that we won’t be able to file until March 1 is the Residential Energy Credit, which is going to affect very few of our clients, if any.
“Any other of the late-arriving IRS forms are items that are out of scope for us that won’t affect our clients. The biggest issue we have is the clients that come in and don’t realize they don’t have all of their forms because a bank hasn’t sent it to them yet.
“They will do their return early. Then in a few weeks, they will come in with yet another form and we have to do an amendment. If we’ve done the original return, we just go online, make a change and print it out. They do have to mail in the amended form, but it’s not a problem for us to do it if we’ve done the return. If we haven’t, we send them back to whomever did the return.”

Q: How will the new tax laws affect senior filers?
A: “We were concerned about the Alternative Minimum Tax, which would have created additional tax for some of our seniors. Since Congress finally did act on that and indexed it to inflation, we’re pleased that our clients will not be affected by that.
“There were some other taxes issues that will affect some of our clients, things that were reinstated like the Educator Expense deduction which allows full-time K-12 teachers to take an adjustment to income for up to $250 for out-of-pocket supplies they provide for their students.”

Q: What are some common mistakes made by seniors that cost them more in taxes?
A: “We have a pretty complete intake and interview form that asks them three pages of questions about their income, expenses and life situation so we can get a good handle on what kind of issues they have.
“We want to be sure that if they, for example, paid into a pension fund and they are now getting payment from that pension fund, that they don’t pay taxes on all of the amount that they are getting because part of it would be tax-free depending on what they contributed.
“We want to make sure that they know what kinds of items for example might be deductible on an itemized deduction schedule. We’ve had elderly people who should be taking out a required minimum distribution from their IRAs and they haven’t been doing it, so that’s a problem. They are going to get a huge penalty on that if they don’t take out their required minimum distribution.
“We don’t advise clients, but we can inform them of the law and make sure that they have the information they need so that we can do a correct return.”

Q: Why do you volunteer for Tax-Aide?
A: “I find it very satisfying to help people who are baffled by our incredibly complex tax laws, and I do not believe they should have to pay to file their tax returns. Our clients are so gracious and thankful that it is a pleasure to be able to help them.
“I also enjoy the comradeship of the dedicated volunteers who work in the program.”