When an overwhelmed taxpayer plops down a pile of envelopes on Judy O’Leary’s desk, she is quick to reel in the paperwork and sit down to meticulously explain taxation. She walks taxpayers through the W-2 and the entire return process.
“We sort through everything,” O’Leary said early this week at Coastside Hope, where she volunteers three afternoons a week during tax season to offer free tax help for low-income Coastsiders.
With the deadline for the 2011 tax year coming up Tuesday, April 17, volunteers at Coastside Hope and Puente de la Costa Sur were busy meeting with local people who need extra help filling out forms that can be complicated. This year, O’Leary expects to complete about 300 tax returns.
Based on early numbers Coastside Hope tracks for United Way, the average income for local, low-income people seeking tax help was $19,306, up from $18,434 in 2010.
This year, O’Leary noticed an increase in people coming in with three, four or even five W-2 forms, the wage and tax statements used to report wages paid to employees and the taxes withheld. She attributes the rise in W-2 forms to local people who lost full-time jobs and had to patch together a few jobs to make ends meet.
A lot of people don’t know how to deal with all the forms, explained Judith Guerrero, an office assistant at Coastside Hope who worked last year as a Spanish translator for O’Leary. About 85 percent of Coastsiders seeking tax help speak Spanish as a first language, according to O’Leary.
Guerrero lamented the fact that low-income people often don’t know that when their kids go off to college or they buy a house, they can itemize for tax credits. She said the government doesn’t do an adequate job of explaining exemptions, which reduce or entirely eliminate the obligation to pay tax.
“(People who come for tax help at Coastside Hope) don’t understand the forms,” said Guerrero. “They understand the work and the money.”
O’Leary learned about taxes by simply doing them. She worked as a public school teacher before starting Los Niños Nursery School in the 1970s. By doing the books for her school, she became interested in accounting.
O’Leary has been sitting on the board of Coastside Hope for 10 years. She got to know several low-income families through her work with the organization’s Adopt-a Family program. About 10 years ago, she began providing tax services for Coastside Hope.
“I don’t think (taxes) are as complicated as people make them out to be,” she said. “The complicated part is that middle-income people take the biggest hit.”
She said it’s the middle-income people who have the hardest time finding loopholes in the tax system.
O’Leary recently worked with a single parent who assumed the family’s income was so low that it wasn’t necessary to file.
“The person didn’t know about the earned income credit,” O’Leary said. She sent the parent home having qualified to recoup $5,000.