Whoa, March is about gone. The tax deadline is about here. If a refund is coming, tax time means bill-paying or a spending spree.
For Monroe’s Juan Gutierrez, a tax refund meant savings.
Gutierrez, 46, recently had his federal return prepared — free of charge — at a United Way of Snohomish County tax preparation site.
More than 100 Internal Revenue Service-certified volunteers are helping prepare returns at six places around the county. The service is free for taxpayers earning $50,000 or less. While this year’s filing deadline is April 17, United Way sites will be open only through April 14.
“We’re really happy with United Way. I used to pay somebody to help me,” said Gutierrez, who works for a trucking company.
The tax preparer found that Gutierrez, a married father of four who was unemployed for part of 2011, had an $8,000 refund coming from the IRS. Gutierrez had his return prepared at Frank Wagner Elementary School in Monroe.
On the spot, Gutierrez decided to invest $5,000 of his refund in Series I U.S. Savings Bonds. United Way tax preparers help make those transactions, using IRS Form 8888. That form, attached to the 1040 form, tells the IRS that a taxpayer wants to use all or part of a refund to buy paper I bonds.
The interest-earning bonds are bought at face value. They grow, for up to 30 years, earning a combination of a fixed rate and the rate of inflation. Series I bonds now earn more than 3 percent.
They can be cashed in after a year, but if redeemed before five years, the three most recent months’ interest is lost.
Gutierrez has more than one savings goal. “We started with thinking of our retirement. Now we’re considering helping the kids along with education,” he said. Gutierrez and his wife Clara have three sons and a daughter, ages 7 to 14.
The remaining $3,000 of his refund will go toward bills and their home mortgage. Gutierrez said he has never tried preparing his own tax return. Until a few years ago when he discovered the United Way’s help, he was paying more than $100 a year for tax preparation.
Neil Parekh, vice president of marketing and communications for United Way of Snohomish County, said the agency has been helping with savings bond purchases at its tax sites since 2007.
As of March 23, local United Way sites have helped 1,870 people file their 2011 tax returns. Parekh said those taxpayers will recoup nearly $3.5 million in refunds, including more than $1 million through the Earned Income Tax Credit, and save about $300,000 in preparation fees. The average annual income of people using the program is about $25,000, he said.
United Way’s tax centers, at schools and places, have been open since late January. Appointments aren’t needed.
People needing help should bring: photo identification, a Social Security card or tax identification number for each person on a return; W2 or other income statements; 1099 forms; name, address and tax ID number for a child care provider; student loan and tuition payment records; mortgage interest and property tax statements; a bank account number for direct deposit; and last year’s return if available. If filing jointly, both spouses must be present to file electronically.
Program sponsors and partners include the Boeing Company, the state Department of Commerce, Bank of America, Moss Adams LLP, Goodwill, the Walmart Foundation and the IRS.
The option to use all or part of a refund to buy paper savings bonds is available to all taxpayers, but may not be widely known.
Most banks, Parekh said, have quit selling paper savings bonds. Some people either don’t have Internet access to buy bonds through the U.S. Treasury’s TreasuryDirect website or don’t like making purchases online. “We’re happy to provide this service,” he said.
Volunteer tax preparers also help people better understand their finances, Parekh said.
With his decision to save big, Parekh said that Gutierrez is thinking long-term.
“He’s thinking about his kids,” Parekh said. “We want people to keep more of what they earn, and grow their assets.”
Julie Muhlstein: 425-339-3460, muhlstein@heraldnet.com.
Free tax sites
Six United Way of Snohomish County tax preparation sites, free to those earning $50,000 or less, are open through April 14.
Everett:
Goodwill South Everett Job Training and Education Center, 228 SW Everett Mall Way, 5:30-8:30 p.m. Tuesdays, Thursdays; 10 a.m.-3 p.m. Saturdays.
North Middle School, 2514 Rainier Ave., 5-8 p.m. Tuesdays, Thursdays; 10 a.m.-3 p.m. Saturdays.
South Everett Foursquare Church/Children’s Village, 14 E. Casino Road, Suite D, 3-7 p.m. Tuesdays; 9 a.m.-1 p.m. Wednesdays, Thursdays; noon-4 p.m. Fridays.
Lynnwood: Cedar Valley Community School, 19200 56th Ave. W., 5-8 p.m. Tuesdays, Thursdays; 10 a.m.-3 p.m. Saturdays.
Marysville: Totem Middle School, 1605 Seventh St. NE, 5-8 p.m. Tuesdays, Thursdays; 10 a.m.-3 p.m. Saturdays.
Monroe: Frank Wagner Elementary School, 115 Dickinson Road, 5-8 p.m. Tuesdays, Thursdays; 10 a.m.-3 p.m. Saturdays.
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