Tax season cometh

The American sage Ben Franklin is credited with giving us some of our most famous expressions, including the one about death and taxes. And while taxes are inevitable, the AARP Tax-Aide clinic seeks to make the process a bit easier.

Estes Park resident Lori Hendrickson, a former federal prosecutor, coordinates the annual clinic which started taking appointments this week and will run through April 14, the day before taxes are due.

The clinic is staffed by about 20 trained volunteers who can assist with tax return preparation by appointment.

“We prepared 463 tax returns last year, filing 449 electronic returns and printing 14 paper returns,” said Hendrickson. The clinic even provides envelopes and address labels for both the IRS and the state of Colorado for paper returns, said Hendrikson.

“There are a variety of situations that require filing of a paper tax return, usually because the taxpayer is missing some information, but we try to avoid filing paper tax returns because they take forever to get processed,” said the retired prosecutor.

Last year the AARP Tax-Aide volunteers helped to file tax returns for multiple years for a few people who were behind on their filing but had all of their necessary tax forms.

“We can prepare prior year tax returns,” Hendrickson said, but if the IRS has begun to send a taxpayer letters because they are in arrears or because something needs to be corrected, the clinic volunteers are not able to help with that.

“We encourage people to file every year even if they do not owe anything because of identity theft,” said Hendrickson.

“I prosecuted a lot of people that would just have these tax refund mills. They would just make up these completely bogus returns,” said Hendrickson. Fraudsters would sometimes go to a local welfare office and offer to buy people Social Security numbers for $100. They would then turn around and use that number to file for the earned income tax credits or other tax refunds using that social security number.

Crooks will also file multiple forms typing in random social Security Numbers until one gets accepted, she said. “That is why I tell people you should file every year, even if you don’t owe anything.”

Fixing a problem with identity theft can take time and resources and it often is not discovered for a year or more after it has occurred.

The AARP works with the IRS to train volunteers who have to get certified annually by the IRS. “There are tests that we have to take. Every volunteer has to take them every year to prepare taxes and that’s just to make sure people know all the tax law,” said Hendrickson. The training and testing helps volunteers to understand the latest changes and additions to the tax code

There are also standards of conduct for volunteers that must be followed, and volunteers are not allowed to take any money from someone they have helped.

The nation-wide Tax-Aide program began in 1968 and has helped more than 80 million taxpayers to prepare an individual’s taxes or provide coaching to individuals who want to do the work themselves.

The service is free and confidential, and while the program prioritizes individuals 50 and older who have low to moderate incomes, the clinic service is available to everyone with a few restrictions.

Volunteers are not permitted to prepare returns with residential rental income, solar energy credits, electric or hybrid vehicle credits, estate or trust returns, for businesses with employees or losses, or out-of-state returns. Volunteers also cannot prepare a tax return with sold or bartered virtual currency such as Bitcoin.

Hendrickson advises people not to wait until the last minute to schedule an appointment. The local clinic will still see people on April 14, the day before tax returns are due, but waiting until the eleventh hour can create its own set of headaches.

To schedule an appointment, contact the Estes Valley Library on line, by phone at 970-586-8116, or stop by the library’s downtown location.

What to bring to an appointment

It is best to not walk in empty handed to your AARP Tax-Aide appointment. What should you bring?

General

• All correspondence received from the IRS and your state/local taxing authority.
• Social Security cards and/or Individual Taxpayer Identification Number notices/cards or other official documentation that show the taxpayer identification numbers for every individual on your return.
• Government-issued photo ID for each taxpayer.
• Checking or savings account information if you want to direct-deposit any refund(s) or direct-debit any amounts due.
• Identity Protection PIN (IP PIN) (for each individual if applicable). If you do not have one the IRS can send you one.

Income

• W-2 forms for each employer.
• 1099-G form for unemployment compensation or state/local income tax refunds.
• SSA-1099 form showing the total Social Security benefits paid to you for the year, or RRB-1099, Tier 1 railroad retirement benefits form.
• 1099 forms (or other statements) reporting interest (1099-INT), dividends (1099-DIV) and/or proceeds from sales (1099-B), plus documentation showing the original purchase prices if you sold stocks or other assets.
• 1099-R form if you received a pension, annuity or IRA distribution.
• 1099-MISC, 1099-K or other 1099 forms. If you have a business, bring a summary list of all your income (cash and noncash) and all business-related expenses.
• Information about any other income of any form, including cash.
• Tax document that you may have received from your state.

Payments

Records of any federal and/or state and/or local income tax paid (including quarterly estimated tax payments) if not shown on income documents.

Deductions

Most taxpayers have a choice of taking either a standard deduction or itemizing their deductions. You need to have more itemized deductions than the standard deduction. If you have a substantial amount of deductions, you may want to itemize. If so, bring the following information:

• 1098 form showing home mortgage interest.
• A summary list of medical/dental/vision expenses, including doctor and hospital bills and medical insurance premiums, prescription medicines, assisted living services, long-term insurance and bills for medical-related home improvements such as ramps and railings for people with disabilities.
• Summary of cash and noncash contributions to charity.
• Property tax bills paid during the year (frequently shown on mortgage statement).
• 1095-A forms if you purchased insurance through the marketplace (exchange).

Credits/adjustments

• Dependent care provider information — name, address, telephone number and employer ID or Social Security number and amount paid to provider.
• 1098-T form for education expenses plus statement of account from the educational institution showing tuition and fees actually paid and scholarships, grants, etc. received. Bring a summary of any other education expenses.
• 1098-E form for student loan interest.