Tax Time: A Gateway to Opportunity

Tax time is a gateway to opportunity for workers and their families to invest in their financial future -- whether it's to start an emergency fund or save for school. But most families have already committed their refund even before they receive them.

The key, as the Center for Economic Progress discovered this past tax season, is offering the right products and the right services at the right time.

During the 2008 tax season, the Center, thanks to nearly 1,000 volunteers, prepared taxes for over 30,000 workers and their families throughout Illinois -- returning nearly $45 million in refunds.

To take advantage of tax time, the Center partnered once again with financial institutions to offer low- or no-cost ‘beginners’ savings and checking accounts to its clients. The 2008 tax season saw nearly 1,000 accounts opened. Financial coaches were also present at tax sites to help clients with financial counseling, such as reviewing credit reports, debt repair, and basic budgeting.

But perhaps one of the most significant successes of the Center’s 2008 tax season came in the form of savings bonds. With a high level of recognition and trust amongst low-income populations, this was an ideal savings vehicle for families looking to begin to invest in their future. In fact, among clients who purchased a savings bond, an amazing 70 percent were saving a part of their refund for the first time.

“The influx of cash that comes with tax time means that this is a true "savable" moment and, as we’ve discovered, savings bonds are definitely a key piece in utilizing that moment,” said Mary Ruth Herbers, Senior Director of Programs for the Center for Economic Progress.

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