The other day you were updated on some deductible expenses about which you may be forgetting to tell us. Although it is impossible to cover ALL of them, there are a few more deductions you should know about. They are the special credits for the Arizona tax return. Not only are they deductible as charitable contributions on your federal tax return, they also decrease your state tax liability through a direct credit. Here they are:
- Working poor tax credit for individuals that provide assistance to the working poor. A list of qualifying charitable organizations can be found here:http://www.azdor.gov/LinkClick.aspx?fileticket=IICRTSlqpIk%3d&tabid=133
- Public school tax credit for contributions or fees paid to a public school for support of extracurricular activities or character education programs (in 2012, up to $200 for single or up to $400 for married filing joint filers may be claimed). A list of qualified public schools can be found here:http://ade.az.gov/edd/
- Private school tuition tax credit for making a donation to a School Tuition Organization for scholarships to private schools (in 2013, up to $1,031 for single and up to $2,062 for married filing joint filers may be claimed). A list of qualified school tuition organizations can be found here: http://www.azdor.gov/LinkClick.aspx?fileticket=4LCbUS0EE4w%3d&tabid=240
Let’s say you are a married filing joint filer, and you expect your state tax liability to be approximately $2,000. Just thinking about giving this much money to the government may give you a headache. Now, think instead about giving this $2,000 to charities. An initial $400 can be directed to a public school, and directly benefits your children. The rest can be used to provide a non-dependent child with a scholarship. You can even recommend the beneficiary! And your $2,000 liability has just disappeared.
Forgot to make your donation before December 31st? Don’t worry, you can make the contribution to a School Tuition Organization until April 15th of the current year and apply it for the prior tax year.
Conclusion? Don’t forget to consult with us throughout the year; fill out the tax organizer, remember: it’s there to help you; and keep those dollars in your wallet!
In accordance with Internal Revenue Service Circular 230, you are hereby advised that if this post(or any attachment hereto) contains any advice concerning any federal tax issue or submission, such tax advice; 1) is not intended or written to be used, and it cannot be used by a taxpayer, for the purpose of avoiding penalties under the Internal Revenue Code; and b) is written to support the promotion or marketing of the transaction(s) or matters addressed herein, and any taxpayer should seek advice based on that taxpayer’s particular circumstances from an independent tax advisor.