MEDA Helps Tax Client Get First Refund Ever — One-Third of Annual Income!

Blog“I almost fainted when I saw how much money I was getting back!” says decade-long Mission resident Angelica Maldonado of the $4,110 refund she received when getting free tax preparation at MEDA. Not surprising, considering that this is one-third of her annual $12,000 income. Turns out 40 minutes can change a life.

That amount came about by MEDA amending Angelica’s 2014 taxes and preparing her 2015 taxes.

Angelica’s was just one of the 4,130 tax returns filed this year at MEDA’s four VITA sites, making the nonprofit the largest free tax preparation service in the San Francisco Bay Area. There was $5.8 million returned to the community in the three-month tax season, building some major community capital.

Angelica’s story of impact
It turned out to be a serendipitous moment when a promotora (community outreach worker) handed Angelica a bilingual tax brochure one day in front of Plaza Adelante, MEDA’s Mission neighborhood center.

Angelica (photo, right) had always paid to have her taxes done – with bad results. She laments,” Tax preparers did not correctly fill out some items, meaning I had to pay $500 to $600 each year. I always owed Uncle Sam.”

This caused dread each January for the dedicated mother of a soon-to-be 14-year-old, as Angelica had never before received a tax refund.

That all changed this year.

To maximize this client’s income, MEDA took advantage of the Earned Income Tax Credit, now offered on a federal, state and City level. For the latter, the once-in-a-lifetime San Francisco Working Families Credit came into play.

Angelica’s $4,110 tax refund was quickly put to good use. She took business classes in securities sales, her sought-after career path. Also, the loving sister sends home $150 each month to Jalisco, Mexico, so that her family can take care of a sibling with Down syndrome. Angelica is pleased that she now has more than a year’s worth of monthly payments to send to those who depend on her.

Bundled services
Tax time is a pivotal moment for MEDA clients. It all starts with an assessment of household need and an explanation of the numerous free services offered. Angelica epitomizes this situation, as she is now bettering her family’s life in many ways.

In Angelica’s case, that improvement starts with building credit, an issue for many newcomers. To remedy that situation, a Secured Credit Card has been opened, this innovative program building credit scores by the cardholder putting down a little over $200 of their own money, often from their tax refund, as the line of credit. The strategy is to then pay off a monthly bill, like a cell phone or electric bill, via monthly automated payments. To make this a reality, MEDA’s Financial Capability team is actually needing to help Angelica open a checking account – her first.

To refine job skills, Angelica is also participating in basic digital literacy classes at MEDA’s Digital Opportunity Center. For interim work, Workforce Development Workforce and Tax Specialist Ernesto Martinez (photo, left) is now in charge of job training and connections for Angelica.

Word-of-mouth advertising
Angelica was so impressed with the bundled free services she received at MEDA that she counseled other community members to stop by Plaza Adelante to see how their lives could also be bettered. Many heeded her advice and are now enrolled in workshops or are receiving one-on-one coaching.

Some had eviction issues. Some needed a job. All needed a financial education.

“Most Latino immigrants need to learn the rules of money in this country. MEDA is here to help!” concludes an enthusiastic Angelica, who has no doubt where she’ll be getting her taxes prepared for free next year.

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