Arizona Tax Credits

Are you taking advantage of the Arizona tax credits available to reduce the amount of income tax you have to pay? If not, you should be. There are a number of opportunities available to benefit The Singletons and other schools and organizations—and contributing may not cost you a dime!

A tax credit gives you much more ‘bang for the buck’ than a deduction. A deduction reduces your taxable income, while a credit actually removes your tax liability – dollar for dollar.  If you owe, the donation will reduce the amount owed, dollar for dollar.  If you’re getting a refund, the credit will increase your refund, dollar for dollar.

Even better than that, you actually have until you file your Arizona tax return to make a retroactive contribution to the organization of your choice for the prior tax year. In other words, if you sit down in front of your tax professional on April 14th, and realize that you owe a tax payment to the Arizona Department of Revenue, you can make a payment to one or more charitable organizations instead. If you’re getting a refund, but still want to make a contribution, you can increase your Arizona refund dollar for dollar.

And you’re not just limited to one or two of theses credits. If you have enough tax liability, you can actually donate to all five of the credits listed below.  That means, a married couple filing jointly can effectively eliminate up to $4,869 in Arizona tax liability. Talk about voting with your dollar! If you contribute more than your liability for the year, you can roll those credits forward against future tax liability for up to five years.

For all of these credits, you no longer need to itemize your deductions in order to take advantage of them.  Sounds like a win-win-win for the taxpayer and the organization receiving the donation. Here are just a few of the tax credit opportunities available.

Personal Tax Credits

  • Qualifying Charitable Organizations – Formerly the Working Poor credit, these contributions go to organizations that provide medical care, childcare, shelter, and job training services to low income Arizona residents. The Singletons is just one of the many organizations that qualify for this credit.
  • Qualifying Foster Care Organization Credit is a relatively new credit, first available for the 2013 tax year. Each of these organizations provide services to more than 200 Arizona foster children.
  • Public School Tax Credit – Arizona taxpayers can contribute to an Arizona public school. You can even count your child’s activity fees paid to their public school. Schools use these credits to help fund extracurricular activities, character education programs, prep materials for standardized testing and other qualifying activities.
  • Individual Private School Tuition Credits – Two private school tuition tax credits are available for individual taxpayers—if you contribute more than the maximum credit to a private school tuition organization, the remainder of your contribution may roll over to the certified school tuition organization credit. This effectively doubles the amount you may contribute to the tuition organization of your choice.

When you support an organization like the Singletons, you are effectively designating exactly where you’d like your Arizona tax dollars to go. The organization that you choose gets 100% of your donation, and you ultimately get all of that money back in reduction of your Arizona tax liability.  What could be better than that?

 

Credit Single, Head of Household, Married filing separately limit Married filing jointly limit Deadline
Qualifying Charitable Org. (Form 321) $400 $800 April 15th of the following year
Qualifying Foster Care Org. (Form 321) $500 $1,000 April 15th of the following year
Public School (Form 322) $200 $400 April 15th of the following year
Private School Tuition / Certified School Tuition (Form 323 / 348) $1,135 for 2019, indexed annually for inflation $2,269 for 2019, indexed annually for inflation April 15th of the following year
Arizona Military Family Relief Fund $200 $400 Capped at a total of $1 million per year.

 

Find out more about how you can support The Singletons via the Arizona Charitable Tax credit here.

 

Special thanks to Stacy Herman Lang, with Lang Accounting Services, PLLC , for being a community partner to The Singletons and providing us with this valuable information.  Stacy Herman Lang is an Arizona CPA, specializing in personal and small business taxes. She is also a Certified Profit First Professional for small business. Her business – Lang Accounting Services, PLLC, is located in Tempe and has been in operation since 2008. Stacy has lived in the Phoenix area since 1982.

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