Puente tax program expands into financial education

Tax time doesn’t usually inspire smiles all around. But at Puente, tax prep sessions usually end with a big one from clients who learn they’ve earned tax refunds sometimes as high as $6,000 per family.  The smiles get even wider when they finish filing without having to pay for their tax prep – because at Puente, tax services are free.

“They’re low-income families, and it feels great to offer free taxes to them. Then they’re really benefiting from their refund,” says Omar Ortega, the 22-year-old Site Coordinator for Puente’s year-round tax program.

Ortega with two tax program participants in 2015.

Ortega with two tax program participants in 2015.

After seven years, the tax program is now on sustainable footing thanks to support and major generosity from United Way of the Bay Area, the San Francisco Foundation, and Silicon Valley Community Foundation (SVCF). Now with the support of SVCF, Puente is taking the leap into a new program area: financial education.

Ortega and two other Puente staff members handle approximately 100 clients per year, from single contract workers to families earning a dual income with multiple dependents. They are trained to help clients access tax breaks and refunds, no matter how unconventional their tax situation or limited their income.

After all, it’s money that’s rightfully theirs. Believe it or not, the IRS has over $1 billion in unclaimed tax refunds, $28 million of which is owed to Californians. Many people never realize what they’re entitled to.

In 2014, Puente staff helped clients earn $111,256 in refunds, which include Earned Income Tax Credits (EITC) and family tax credits. The question is, what do locals do with that money?

“For many of these families, it’s literally the largest paycheck they’ll see all year. They plan their annual budgets around having these refunds at tax time. But giving someone a check on its own doesn’t guarantee they’re going to do what’s best for themselves,” says Rafael O. Morales, who leads the economic security grantmaking portfolio at SVCF.

Puente’s goal is to help people create a safety net for themselves and their families. Puente’s financial education program will identify selected participants and offer a personalized approach to helping them create a budget, increase their savings or improve their credit. Puente will also launch a series of free community workshops on similar topics.

“It’s hard for people that are low income to just save that chunk of money, you know? It’s difficult for them to just put it aside,” says Ortega.

“A lot of people don’t have a savings or a checking account.  So it could be as simple as showing them how to open an account and how to manage it,” he adds.

Puente tax clients are a diverse group. Some are English speakers, some Spanish-only. Roughly half of those who file are unauthorized immigrants. They use an Individual Taxpayer Identification Number, or ITIN, rather than a Social Security number to file. Some clients lack the language skills or the wherewithal to advocate for themselves, and that can make them vulnerable, says Rita Mancera, Executive Director of Puente.

“People come in with all these crazy stories about how they’ve been scammed. Sometimes they get letters from the IRS they don’t understand, and sometimes they’re in tax collection. Omar helps them get in touch with the IRS and work it out. Often they even end up with a refund,” says Mancera.

If you know someone in Pescadero, La Honda, Loma Mar and San Gregorio that could benefit from this program, refer them to Puente.

Even native English speakers can get caught flat-footed when it comes to the IRS. Tamar Ingber, a Farmstand Manager at Pie Ranch in Pescadero, ended up owing taxes to the government in 2013 after filing as a contractor. It was more money than she had on hand, so she had to go on a payment plan.

Last year, however, Ingber tried out Puente’s tax services. It was the first time she had her taxes done by a professional. She loved it.

“I was excited to be talking to someone local, not some computer software that didn’t understand what my circumstances were.  It was so nice having Omar help me look through everything,” she says.

Ortega quickly realized that Ingber was entitled to a large tax deduction for her work-related mileage, something she had not understood. In the final accounting, Ingber broke even.

“It was a huge relief, actually quite freeing, to not have to pay a past-due tax bill,” she says, adding: “It’s incredible to have this kind of local help in Pescadero.”

Ortega himself has been paying taxes since he was 16. He still remembers the day his father took him to the bank, as an 8-year-old, to open his first savings account. He started filling that account when he began working with Puente’s summer youth program at 14. He knows how hard it is for a low-income family – like his – to set money aside for far-off goals amid pressing short-term needs like rent and groceries.

Ortega assists a tax program participant in 2016.

Ortega assists a tax program participant in 2016.

But Ortega’s parents pushed him to attend college from early on, and he started saving for it. He wants Puente’s financial literacy program to send a message about college to parents and students: that with some careful planning and encouragement, it is within their grasp.

“A lot of my friends had bigger goals for college, but the financial issues got in the way. Parents and youth get discouraged because they worry about the financial aspect,” he says. “Having something like this program could definitely help them set something up so that they could start planning.”

Thanks to Puente’s tax assistance program, the tax refunds many families receive are the largest paychecks they’ll get all year.

Please help support Puente so more people like Tamar can receive these free services. Click here to become a monthly donor or to make a gift to support our programs.

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