I got my taxes done today at the South Carolina State Credit Union on Huger, courtesy of the VITA program. I tried to do them myself, but got stumped by my Health Savings Account and my Peace Corps W2 with no state info on it. This program will file simple returns (1040s) for free and you can arrange to have any refunds direct-deposited too. The caveat is that your household has to make less than $40,000 per year. I’m not sure why they went with household, since a household of one person making below that (i.e. me), is in a really different situation than a couple or family making below that. I think it should be a per person number, but that’s not really the point.
I got there at about 9:20AM, and they had to confirm that I had all the appropriate information with me. I did, having checked the website ahead of time. Then I had to fill out a checklist that said I had all the stuff, which was a little silly since they asked me if I had it all before they even signed me in. So I waited for about an hour out there. Then I filled out a more detailed questionnaire about my taxes, and got called to the back where I was checked into a computer system and waited in another waiting area for about an hour and a half. They called me in, helped me file my taxes, and I was done with the actual doing of the taxes in less than half an hour.
As I was sitting there waiting, I was surprised by the fact that I was the only person who seemed to have brought anything to do. Everyone else was just sitting there, staring at each other. I had taken work – papers to grade, other papers to read, etc., but even if I hadn’t, I’m sure I would have taken a book. I still don’t understand why you wouldn’t bring a book or a magazine or something, but as I was sitting there, it occurred to me how lucky I am to be able to work anywhere. Most people can’t just take their work with them wherever they go. If you’re a nurse, or a mechanic, or even a banker or whatnot, it’s just not possible to be professionally productive while you wait to have your taxes done. Working with ideas instead of objects has serious benefits that I take for granted.
The second surprising thing was that the people who were waiting were complaining about how long we had to wait. I know I’m speaking from a new perspective (I’ll explain that later), but I just found that shocking. I mean, it’s free, be grateful already. It’s like looking the gift-horse in the mouth. But then I started thinking that it’s not really free. If you go to a personal accountant, they see you right away, they know your information, etc. You pay for not waiting and familiarity. If you go someplace like H&R block, you’ll probably have a short wait, but not too bad (unless you’ve waited until April 14th). You wait a while; it’s a step down from personal accounting, but with a significant decrease in price. Then there’s this service. Wait a long time, but it’s free. But if time is money, they’re still paying, but they’re paying with a resource we’re assuming they have, time, instead of a resource we’re assuming they don’t, money. This assumption is probably false, but even if it were true, there’s still an advantage to having and using programs like VITA.
Let’s assume that it takes a person 3 hours to get their taxes done from start to finish using a free service like this. Let’s say it takes you an hour to get them done by your personal accountant. A person working a low-income job wouldn’t make, in 2 hours, enough money to make up for the cost of using a personal accountant or a paid tax preparation service. They could make enough to use an online service, such as TaxSlayer, but that would require that they understand how to do their taxes, which they, like me, may not.
Going back to the time assumption, it’s also important to realize that people with higher paying jobs also tend to have more autonomy and more flexible vacation time, etc. They may also be in a position, like me, to work from anywhere, or rearrange their schedules to get their taxes done in the middle of the day. That’s a luxury most people don’t have.
The new perspective I mentioned above is based on the fact that this kind of luxury is a first-generation privilege for me. Most of the people there were couples, older veterans, etc., who clearly had more than 1 person living in their under $40,000 household. They were people like my parents. People who are tight on money and who need a free tax service. I felt like a big jerk just being there, feeling like I took that tax preparer’s time away from someone who really needed it because I could have paid to have my taxes done. I’m trying to be a good budgeter, primarily because I got myself into a mess of credit card debt when I came back from Peace Corps, re-establishing a household and then with my mom here and in the hospital. I just put money management to the back burner and now it’s coming back to haunt me, but I’m paying it off as quickly as possible and while I feel overwhelmed sometimes, I know that eventually it will be okay. If it weren’t for that, I could live more than well off my annual salary, even though it is less than $40,000. I’m pinching pennies because of bad financial decisions, whereas those people are pinching pennies because they have to, because if you divide the money that’s coming in by the number of mouths to feed, there’s just not enough.
It occurred to me that waiting didn’t seem like such a hassle to me because it was a choice. I chose whether to spend my time or my money, and since I could do work while waiting, I didn’t really give up anything to be there. Maybe any wait seems like too long when your options are limited and you’re missing time from work, or you come in at 11 and are told that there are so many people waiting that they don’t think they’ll have time for you and you can go to another tax preparation site except you could only get today off work and you had to walk there anyway because you don’t have a car.
I got there at about 9:20AM, and they had to confirm that I had all the appropriate information with me. I did, having checked the website ahead of time. Then I had to fill out a checklist that said I had all the stuff, which was a little silly since they asked me if I had it all before they even signed me in. So I waited for about an hour out there. Then I filled out a more detailed questionnaire about my taxes, and got called to the back where I was checked into a computer system and waited in another waiting area for about an hour and a half. They called me in, helped me file my taxes, and I was done with the actual doing of the taxes in less than half an hour.
As I was sitting there waiting, I was surprised by the fact that I was the only person who seemed to have brought anything to do. Everyone else was just sitting there, staring at each other. I had taken work – papers to grade, other papers to read, etc., but even if I hadn’t, I’m sure I would have taken a book. I still don’t understand why you wouldn’t bring a book or a magazine or something, but as I was sitting there, it occurred to me how lucky I am to be able to work anywhere. Most people can’t just take their work with them wherever they go. If you’re a nurse, or a mechanic, or even a banker or whatnot, it’s just not possible to be professionally productive while you wait to have your taxes done. Working with ideas instead of objects has serious benefits that I take for granted.
The second surprising thing was that the people who were waiting were complaining about how long we had to wait. I know I’m speaking from a new perspective (I’ll explain that later), but I just found that shocking. I mean, it’s free, be grateful already. It’s like looking the gift-horse in the mouth. But then I started thinking that it’s not really free. If you go to a personal accountant, they see you right away, they know your information, etc. You pay for not waiting and familiarity. If you go someplace like H&R block, you’ll probably have a short wait, but not too bad (unless you’ve waited until April 14th). You wait a while; it’s a step down from personal accounting, but with a significant decrease in price. Then there’s this service. Wait a long time, but it’s free. But if time is money, they’re still paying, but they’re paying with a resource we’re assuming they have, time, instead of a resource we’re assuming they don’t, money. This assumption is probably false, but even if it were true, there’s still an advantage to having and using programs like VITA.
Let’s assume that it takes a person 3 hours to get their taxes done from start to finish using a free service like this. Let’s say it takes you an hour to get them done by your personal accountant. A person working a low-income job wouldn’t make, in 2 hours, enough money to make up for the cost of using a personal accountant or a paid tax preparation service. They could make enough to use an online service, such as TaxSlayer, but that would require that they understand how to do their taxes, which they, like me, may not.
Going back to the time assumption, it’s also important to realize that people with higher paying jobs also tend to have more autonomy and more flexible vacation time, etc. They may also be in a position, like me, to work from anywhere, or rearrange their schedules to get their taxes done in the middle of the day. That’s a luxury most people don’t have.
The new perspective I mentioned above is based on the fact that this kind of luxury is a first-generation privilege for me. Most of the people there were couples, older veterans, etc., who clearly had more than 1 person living in their under $40,000 household. They were people like my parents. People who are tight on money and who need a free tax service. I felt like a big jerk just being there, feeling like I took that tax preparer’s time away from someone who really needed it because I could have paid to have my taxes done. I’m trying to be a good budgeter, primarily because I got myself into a mess of credit card debt when I came back from Peace Corps, re-establishing a household and then with my mom here and in the hospital. I just put money management to the back burner and now it’s coming back to haunt me, but I’m paying it off as quickly as possible and while I feel overwhelmed sometimes, I know that eventually it will be okay. If it weren’t for that, I could live more than well off my annual salary, even though it is less than $40,000. I’m pinching pennies because of bad financial decisions, whereas those people are pinching pennies because they have to, because if you divide the money that’s coming in by the number of mouths to feed, there’s just not enough.
It occurred to me that waiting didn’t seem like such a hassle to me because it was a choice. I chose whether to spend my time or my money, and since I could do work while waiting, I didn’t really give up anything to be there. Maybe any wait seems like too long when your options are limited and you’re missing time from work, or you come in at 11 and are told that there are so many people waiting that they don’t think they’ll have time for you and you can go to another tax preparation site except you could only get today off work and you had to walk there anyway because you don’t have a car.
Comments
This is a great perspective Denise. I'm glad I was stalking your facebook today and came across your blog!
We just wrapped up the program and filed a total of 2,085 returns for people in the Columbia area. Consider this: the more people who have their returns completed, the more money groups like United Way and Cooperative Ministry can get in grants from the IRS next year. Last year under the United Way I think they only filed around 1,000 returns. Next year can only be bigger and better so I'm glad you used the service and I'm even happier you wrote about it.
One of the major obstacles is spreading the word about this program and having it up and running EARLY. One of the real goals here is to stop people from using the pay services which take advantage of them. I talked to countless people who used Liberty or whoever last year and they were charged anywhere from $200 to $400, probably depending on their return. That should be criminal. And the "instant refunds" are a bigger scam. These are actually high interest loans, similar to payday lending, and if the paid preparer screws up your return, you're liable for any difference between the loan and the actual refund.
So to combat this, we need the VITA program to be running full speed in February, if not January, when people who are desperate (or at least think they are) for their refunds are receiving their W-2s. Word of mouth is the best advertising but it also takes community involvement. We helped more than 2,000 people get over $1.6 million in Federal refunds with only 40 volunteers. If we could expand that, say double it, there's no telling how many people we could help.
Anyway, I'm rambling, so let me cut this off. Thanks again for writing about this.