Those IRS-certified volunteers include us. When we moved to Beaver Dam for the winter, we volunteered for Tax Aide, primarily because there was no Volunteer Income Tax Assistance (VITA) program in Mesquite. Makes sense – there are a lot of seniors in Mesquite and the surrounding areas.
The Tax Aide program requires the same certification as VITA, plus a senior-specific training that we learned a lot from. VITA’s focus is on getting low-income taxpayers their Earned Income Credit, where Tax Aide focuses on the needs of seniors. We learned how to calculate the taxable portion of annuitized pensions and how to give a retired Public Service Officer a well-deserved tax break. We also learned how to advise our clients who really don’t need to file a tax return at all.
In many ways, Tax Aide is simpler. We saw no disputes over which parent gets to claim which child, and very few penalties under the Affordable Care Act. Most of our clients have Medicare. But in other ways it’s more complicated. The more well-to-do clients are receiving Required Minimum Distributions from their IRAs, and taking capital gains and losses from their stock portfolios.
In two days working at the Mesquite Senior Center, I saw more W2G’s than I’d seen in six years in VITA. What’s a W2G? It’s a report of gambling winnings. Casinos are required to report winnings of $1200 or more to the IRS. Most players who report significant winnings also report significant losses. Here’s the rule: Winnings are considered income and are directly taxed. Losses can be deducted if you can itemize deductions, but only up to the amount won. Not a very favorable situation for the gamblers of the world, and they usually tell us about it.
When we worked VITA it made me happy to see a single mother supporting her children get an earned income credit of $2000 - $3000. Now, working Tax Aide, it makes me happy to see the 70 to 90 set bringing in a good income in retirement, enjoying their lives, and not having to worry about their taxes. So far my oldest client is 93. Hoping to see him again next year!