FDIC Says Taxpayers Can Save More of Their Refunds
As the tax season begins, low-and moderate-income taxpayers are being encouraged by the Federal Deposit Insurance Corporation (FDIC) to take advantage of the Internal Revenue Service (IRS) programs and bank services that can aid them in saving more money.
"Low-and moderate-income consumers should take advantage of every opportunity to save money on their tax preparation, qualify for tax credits, and use direct deposit to put a part of their refunds into a savings account where it can grow," said FDIC Chairman Sheila C. Bair.
One example for savings is the free tax-preparation offered by the IRS-coordinated Volunteer Income Tax Assistance (VITA) program that is available to individuals who qualify. Money may also be saved by people who receive tax refunds via direct deposit. The new IRS flexibility service allows the refund money to be split into as many as three different savings or checking accounts at three different U.S. financial institutions instead of just one.
The VITA sites are staffed with IRS trained volunteers who receive their certification through the IRS, and they can provide a valuable service to those who can not afford the services of a private tax preparer. The VITA sites can also help in determining if the consumer is eligible for tax credits and deductions which can result in further savings.
On January 16, 5200 of the FDIC supervised banks were sent letters by them to encourage the banks to consider ways in which to become involved with the VITA program. These ways include opening new accounts for people who visit the VITA sites, facilitating the delivery of financial education and informing the banks staffs of volunteer site opportunities. The FDIC also reminded the banks that their participation can result in favorable consideration under the Community Reinvestment Act (CRA) rules.
"The FDIC encourages the banks we supervise to be responsive to the lending and deposit needs of low-and moderate-income individuals and to offer appropriate products and services. Participation in the VITA program can be a win-win situation for individual consumers, financial institutions and the communities they serve," added Chairman Bair.
Eligible individuals who are interested in free tax return preparation can call the IRS at 1-800-829-1040 or locate a VITA site at http://www.irs.gov/individuals and financial institutions interested in the program can contact their regional FDIC Community Affairs Officer. The FDIC has a website to help consumers with no bank to enter the financial mainstream at http://www.fdic.gov/consumers/community .