Posts Tagged ‘taxes’

Vital service via VITA

Wednesday, April 14th, 2010

Given that tomorrow is Tax Day, I wanted to write about a volunteer project I’ve been doing for the last few months.

For three years I have been an active volunteer with the amazing New York Cares, which is a volunteer-aggregation organization. If you are local to NYC, or have been through Grand Central Station anytime during the holiday season, you may know them for the Winter Coat Drive program which provides gently used outerwear for free to homeless people. In the past, I’ve helped out with a gigantic Easter egg hunt in Prospect Park and did a one month stint in my neighborhood at a special ed high school helping teach life skills to kids through an after-school cooking club.

In this time of growing economic insecurity, I felt compelled to do something more, so I joined the IRS’s Volunteer Income Tax Preparation program (aka VITA) to serve low-income New Yorkers by helping them file their taxes for free. Sexy, no? I have done my own taxes for years but this was taking my penchant for completing forms to a whole new level. I had to take an extensive online course through the IRS and do in-person training to cover the NY state & city forms. I spent the week after Christmas getting deep into tax law – what better way to start the New Year than dissecting recent Congressional revisions to the tax code!

I was scared at the beginning – I’ve never done any economic development work and the constituents of this program are people I rarely comes across in the gentrified world of the performing arts. Reaching out to help people who live radically different lives than my own was actually the biggest attraction.

This is the final week, and while I don’t have totals yet for the whole season, I can tell you this (from the NY Cares program director):

As of the beginning of March, halfway through the season, New York Cares volunteers have completed more than 4,600 returns. You have helped return $10.6 million to low-income New Yorkers, about $6 million of which is from the Earned Income Tax Credit (EITC). The average refund is about $2,300.

Total refunds secured through our program are up by over $2.5 million from this time last year. In the current economic climate, this will have a great impact on our community and will change the lives of many of the families you have served.

My tax site specifically (housed at the wonderful Brooklyn Cooperative) got this progress report last month:

As of the end of February, New York Cares volunteers at the Bushwick site have completed 432 tax returns for a total of $875,469.

We were also visited by an IRS quality control agent and received exemplary remarks and ratings based on interviews with folks we helped and a random audit of returns we prepared – no mistakes at all.

I didn’t realize how rewarding it would be to help someone who qualifies for the Earned Income Credit, or work with a young adult who is filing their taxes for the first time, or help a retired widow collect her refund. We in the arts often live on meager income and develop resourceful strategies to get by, but it is a whole different thing when you meet a someone in their early 20s who qualifies as Head of Household by supporting their parent & siblings on less than $20,000 in NYC.

This program was an amazing learning experience for me on many levels. Do you volunteer and if so, what kinds of programs do you like to participate in?

Bonus link: I recently found another great resource for artists & taxes. Check out the FREE worksheets that the fantastic folks at Riley Associates PC have put together to help artists keep accurate records for tax purposes.

Improve your financial literacy

Tuesday, February 9th, 2010

In this post, I’ve included links to some important financial resources that were mentioned in Saturday’s workshop. Among them, you’ll find some of my favorite blogs and sites, as well as a gigantic financial glossary, three articles on how to hire a financial planner and some handy tools and calculators (loan, savings, retirement) courtesy of FINRA.

Banking & Lending

Bankrate is the place to get the best available rates on just about any kind of consumer financial product; Mortgage 101 is an educational site for potential home-buyers; if you’ve gone to college recently and wanted a scholarship, you probably remember filling out a nightmare of a form called the FAFSA; and if you are looking for basic, general information about all-things-banking why not head to the source and check out the educational resources provided by the Federal Reserve Bank of Kansas City?

Credit

Be sure to review your credit history each year using Annual Credit Report (it’s FREE); learn how your credit score is calculated and what affects it by visiting MyFICO; if you are trying to avoid debt collectors and bankruptcy, the National Foundation for Credit Counseling can put you in touch with a free credit counselor; if you are new or just inspired to learn more about how the game works, visit Credit.com; and next time you are ready to shop around for a new card, be sure to check out Card Ratings first.

Insurance

Such a topical issue given the health care “debate”…If you are an artist looking for health or liability insurance, you can find it at Fractured Atlas; if you are any kind of freelance worker looking for health, dental, life or disability coverage, check out Freelancer’s Union.

Investing

If you are curious about or ready to take the plunge into investing, here are some resources to help you learn the lingo, grasp key concepts and demystify the complicated world of “Wall St”: Investopedia, The Motley Fool, Morningstar, and Mutual Fund Education Alliance. The topic of peer-to-peer lending as an investment strategy came up, made famous by the international organization Kiva.

Retirement

The U.S. Social Security Administration sends you a statement twice a year to report on your taxable income and projected benefits. If you haven’t received one in a while, you can request it online. Be sure it matches your tax statements – I found they missed crediting me over $15,000 of income one year!

And obviously Social Security won’t be enough to support those of us under 40 when we reach collecting time, so you should consider participating in an employer sponsored plan (usually a 401K or 403B) and maximize any matching funds opportunities they provide. If that isn’t an option, consider an Individual Retirement Account.

Taxes

Why not start at the top and just contact the IRS (or consult their new YouTube channel – seriously!) with your questions? In preparation, you might want to spend some time on these blogs: Don’t Mess With Taxes and TAXGIRL.

Personal Finance

My top blog picks are The Simple Dollar and Get Rich Slowly – I have been reading both for years now, and think they are two of the best places online to find tips, tactics and techniques for reducing debt, saving for retirement, learning to craft a frugal lifestyle that doesn’t cramp your personal style and more. Of course, what is theory without practice, so be sure to investigate the free money management tools offered by Mint and Wesabe.

Finance, Economics, Policy

Here a few of my favorites blogs: naked capitalism, The Big Picture, and The Baseline Scenario. These are serious blogs written by serious minds who really know their stuff. Sometimes I don’t follow every little detail, but reading them has helped me dramatically improve my understanding of macroeconomics, fiscal and monetary policy, and the financial calamity we are currently living through.

Business

SBA stands for Small Business Administration – it is the part of the Federal government designed to help support small businesses; SCORE is an amazing national organization that provides business education, resources, templates and even mentoring in locations around the country; and if you are looking for general business advice, check out inc.com or allbusiness.com.

If there are any questions we didn’t have time to cover in the workshop, or follow-up thoughts or resources you’d like to share (whether you participated or not), please post in the comments section.

I want to thank everyone who braved the storm-that-never-came to join me.

Biting the tax bullet

Tuesday, September 8th, 2009

Last weekend the financial crisis hit home in a different way when I found myself in the strange position of having to write a sizable check to the IRS for the first installment of my 2009 Estimated Tax. My first response was “barf” – it was a pain in the ass to calculate and represents a big chunk of cash I hate to part with. However, I got over it a bit when I realized that:

A. if there was ever a time that the US Treasury can use my paltry contribution to the nation’s coffers it is now; and

B. since this is the first year I am making a truly livable wage as an independent contractor, I want to avoid any IRS issues by paying on time (especially upon discovering that penalties can be applied for paying late).

In my research, I found this handy list of 101 Tax deductions for bloggers & freelancers that I wanted to pass along for those who are just starting out or in need of a refresher course. As always, internet advice does not replace individualized advice from a qualified professional and I recommend using an accountant who specializes in independent artists.