Tax Tips for the Black Community
Stacy M. Brown (NNPA Newswire Contributor) | 1/23/2017, 8:02 p.m.
Tax season has officially begun and it’s time to find those deductibles and items that might help offset some of what you might have to pay the government by April 15.
For African-Americans, filing income taxes has never been simple – nor has it historically been anything to look forward to.
“One thing that’s certain at the top of each year is tax season. Yes, that one thing that most of us dread yet we know we have a short window of time to complete what should be done as the new year begins,” said Cozette M. White, an acclaimed author, financial analyst and tax strategist. White is also founder and CEO of My Financial Home Enterprises, a financial management firm that helps organizations and entrepreneurs develop solutions that fuel business growth and transform products into accelerating profits.
White said it’s important to decide early on who will be preparing your returns. “Tax preparers are the least trained, but the cheapest to hire,” she said, noting that enrolled agents are typically more competent than tax preparers but much less so than a certified public accountant.
Further, White said it’s important to be organized – set aside a manila folder for all tax documents. “Schedule your appointment early, especially if you have a child applying for financial aid and, if you have not updated your payroll department with your new address, do so today to avoid delays,” she said.
The new tax year accompanies an interesting set of new facts for African-Americans, according to The White House.
For instance, the unemployment rate for African-Americans has seen a larger percentage-point decline in the recovery, much faster than the overall unemployment rate over the last year, President Barack Obama’s administration reported.
The real median income of Black households increased by 4.1 percent between 2014 and 2015 and President Obama enacted permanent expansions of the Earned Income Tax Credit and Child Tax Credit, which together now provides about 2 million African-American working families with an average tax cut of about $1,000 each.
A recent report from the Census Bureau revealed that the real median household income grew 5.2 percent from 2014 to 2015, the fastest annual growth on record.
Income grew for households across the income distribution, with the fastest growth among lower- and middle-income households. The number of people in poverty fell by 3.5 million, leading the poverty rate to fall from 14.8 percent to 13.5 percent, the largest one-year drop since 1968, with even larger improvements including for African-Americans, Latino-Americans, and children.
The poverty rate for African-Americans fell faster in 2015 than in any year since 1999. While the poverty rate fell across all racial and ethnic groups this year, it fell 2.1 percentage points for African-Americans, resulting in 700,000 fewer African-Americans in poverty.
African-American children also made large gains in 2015, with the poverty rate falling 4.2 percentage points and 400,000 fewer children in poverty.
So, for tax time, it means more African-Americans need to better understand what they should and shouldn’t do; what deductions and credits might be available, White said.