As we near the end of the year and yet another tax season, there are tax credit options you might want to take advantage of when it comes to your state taxes. The Arizona Tax Credit program is beneficial for state taxpayers because it allows some control over where tax dollars are going. You can choose any of the tax credit eligible organizations and donate between now and either December 31, 2020 or April 15, 2021, depending on the organization.
Making donations to the eligible organizations means that you’ll pay the same total amount that you would otherwise pay in taxes, but you’ll be allocating some or all of the taxes owed toward specific organizations. As an example, if you owe $1,000 in Arizona taxes, you may choose to pay the state of Arizona $1,000, or you may select one of the approved organizations and contribute directly to them. You must have a tax liability for at least the amount of your donation in order to take a tax credit. In other words, if you only owe $1,000 to the state of Arizona, you cannot receive $2,000 in tax credits.
Currently, there are several approved tax credit organizations for 2020, including schools, foster care, military, and more. You can choose to send your money to one, or spread your donation out over several organizations, depending on your preference and tax dollars. Each organization has different limits depending on whether you’re filing single or married. Here’s a list of organizations that are approved by the state of Arizona, along with helpful information.
The Arizona Military Family Relief Fund provides financial assistance to families of currently deployed service members and post-9/11 veteran and military families. There is a $1 million cap for annual donations. Donations are being accepted via mail until December 31. If you do donate and they’ve reached their cap, you will receive your money back. The contribution amounts are $200 for single filers and $400 for joint filers.
The Public School Credit program supports state eligible activities, programs or purposes defined by the statute. If you’d like to donate to a specific public school, you may search this list or the Department of Education database of Arizona schools. You can also find more information on eligible activities or programs here. The contribution amount is $200 for single filers and $400 for joint filers.
The Private School Credit program provides scholarships for students enrolled in Arizona private schools. This program allows you to contribute to a private school of your choice. You may view a list of certified organizations that can receive donations for this tax credit. The contribution amounts are $593 for single filers and $1,186 for married filers.
The Additional Private School Credit resulted from a law passed several years ago, allowing donors to contribute even more toward private schools. The contribution amounts are an additional $590 for single filers or $1,179 for joint filers. You may find more information here.
Qualifying charitable organizations provide assistance to families in need, such as those with low income, chronic illnesses or physical disabilities. The Department of Revenue provides an in-depth list of all qualifying charitable organizations. The contribution amounts are $400 for single filers and $800 for joint filers.
Qualifying foster care organizations provide assistance to individuals in need who are in the foster care system. The Department of Revenue provides a list of all qualifying foster care organizations. The contribution amounts are slightly higher than most and are $500 for single filers and $1,000 for joint filers.
Bayntree Wealth Advisors is a supporter of local kids and teens through Support Arizona Youth. You can take advantage of the Arizona Qualifying Organization Tax Credit and Arizona Qualifying Foster Care Organization Tax Credit by supporting youth in need, at no net cost to you! Learn more or donate here.
Lastly, once you contribute to your chosen organizations, make sure to keep records for your tax preparer. If you have questions regarding tax credits, the required forms or filing, Bayntree can connect you with one of our partner tax professionals for guidance.
If you have financial questions, please schedule an appointment on our online calendar by selecting the date and time that is most convenient for you! You can also always reach us at firstname.lastname@example.org.
Bayntree Wealth Advisors provides comprehensive financial planning and wealth management. The Bayntree team specializes in all aspects of financial health, including retirement planning, risk management, investment advice, tax strategies, estate planning and insurance. Bayntree does not provide specific legal or tax advice. Please consult with your tax advisor or legal professional for guidance with your individual situation.