View South Los Angeles VITA Centers in a larger map
Two-hundred dollars. That is the base rate Liberty Tax’s Watts branch said it charges to prepare a simple tax return. According to 2000 census data the median household income in South Los Angeles is $25,303. This means that most South Los Angeles residents could have their taxes prepared for free.
IRS Spokeswoman Anabel Marquez said anyone who made less than $49,000 last year qualifies for Volunteer Income Tax Assistance (VITA), a free tax preparation service offered by the IRS.
So why do people still pay to have their taxes prepared at Liberty, or H&R Block (whose base rate in Los Angeles is $99), or Jackson Hewitt (whose base rate in Los Angeles is $39)?
Kathy Jun, a volunteer tax preparer at the USC VITA center, has found that some people simply aren’t aware that VITA exists. “I’m sure there are a lot of people who qualify and just don’t know what their options are,” she said.
Some of the promotional offers from tax preparer chains may also be luring in South Los Angeles residents with lower incomes who likely qualify for VITA services.
Jun points to a promotion H&R Block was running this year as an example. The company was offering free simple return preparation for those making under $100,000. However, there was an extra charge for those who qualified for the earned income tax credit, a credit which is for people who work, but have low wages. “It is specifically targeting people who don’t know better and who don’t make a lot of money,” said Jun.
Another reason people who qualify for VITA services may opt to pay a preparer is the offer of tempting, but expensive refund-anticipation loans. Though these loans give you your tax refund on the spot, they are notorious for having high interest rates and hidden fees.
These instant rebate loans have, however, become increasingly difficult to get, as the federal government is beginning to reign them in. H&R Block was barred from offering them this year.
The demand for such loans is also dropping thanks to the option to e-file. “More people are filing their taxes online,” said Marquez. “And what happens is when they do that, is they get their refund really fast.”
At the USC VITA center, Jun said most clients who receive their refunds via direct deposit see the money show up in their account within 8 – 14 days, virtually eliminating the need for a refund anticipation loan.
Though the IRS does not officially discourage people from obtaining refund anticipation loans Marquez said that they do, “encourage people to go through venues where they won’t have any money taken from their refund.”
Regardless of which tax preparation service you chose, Marquez said the most important thing is to do your homework, asking for references and checking with the Better Business Bureau. For those that qualify, VITA is a surefire bet.
“If you are going to a VITA site then you have nothing to worry about, because every volunteer has been trained by the IRS,” said Marquez.
Check out the map below to find VITA centers in South Los Angeles. Call 1-800-906-9887 for full listings.
View South Los Angeles VITA Centers in a larger map
