On March 20th, KidsVoice staff attorney Tom Welshonce along with a representative from tax firm HBK presented an informative Tax Clinic to the 412 Youth Zone.
The clinic covered tax basics such as who must file, what counts as income, when you should file as a dependent versus when you should claim yourself, and the difference between deductions and credits. They also covered topics specific to the needs of the former foster youth who frequent the 412 Youth Zone:
- How to Spot Fraud
Be wary of calls from people claiming to be from the IRS, especially if they ask for personal information or demand money immediately. The IRS primarily communicates through the mail. IRS agents will not call a taxpayer and ask for his or her personal information.
If a return is rejected because the social security number has already been filed, this can be a sign that someone has used that number to file a fraudulent return. The best way to solve this problem is to call the IRS to let them know that a return has incorrectly been filed under that SSN and they will issue the taxpayer a PIN and direct them to file a paper form.
- Missing W2s
Because former foster youth often rely on several temporary jobs to make ends meet and often have several temporary living arrangements, it’s not uncommon for them to have 3 or 4 different addresses in a year, if they have any at all. This was the case with one youth, who had worked several temporary jobs and could only locate one of his four W2s because, presumably, the others had gone to previous addresses. W2s need to be reissued by the employer.
- Self-dependence and Claiming Other Dependents
Sometimes it can be tricky to identify whether to claim oneself as a dependent. Other times, it can be tricky to figure out which parent, if the parents live apart, should claim a child as a dependent. This all becomes even more complicated when one or both of those parents is involved in the foster care or juvenile justice system.
A rejected return, as mentioned above under the “Fraud” section, could be as simple as an estranged parent claiming their child, a foster youth, as a dependent even though the child has not lived at home in years. This might go unnoticed until the first year that a youth files his or her own taxes. As with the case of a fraudulent return being filed, the youth should contact the IRS for the best solution to their unique situation.
- The American Opportunity Credit
The American Opportunity Credit can reduce the amount of income tax a person is required to pay by up to $2,500 for qualifying educational expenses. Youth who are enrolled in post-secondary education almost certainly qualify for this credit. See the IRS.gov website for qualifying expenses and other terms for the credit.
We are thankful that HBK was able to lend their expertise to answer questions the youth had regarding their own circumstances. It was great to be able to give them straightforward answers on the spot as well as clear guidance as to the specific steps they can take. We are especially appreciative of the fact that this is crunch time for accountants and HBK made the conscious decision to make time for these kids.
Every Thursday, KidsVoice sends a representative to the 412 Youth Zone, who is happy to answer questions the youth have regarding taxes, social security, disability, record expungement, and much more.
To find volunteer tax assistance programs near you contact 2-1-1. If you’re interested in learning more about our community partner, HBK, check out their website http://www.hbkcpa.com/. Income Tax Returns are due Monday, April 18th this year.