As we approach the end of the year, one thing to keep in mind is we are coming to the end of the tax season.
The Tax Credit Team, a group of nine Arizona non-profits, is working to educate people about the benefits of donating to charities before the end of the year, so taxpayers can take full advantage of available tax credits.
"We have a unique opportunity," Said Jake Adams, from Southwest Human Development and a member of the Tax Credit Team. "What we are trying to do is encourage more folks to use this great resource that we have here in Arizona."
A tax credit is different from a refund. With a tax credit, if a taxpayer is expecting to owe Uncle Sam at the end of the year, a credit will reduce that bill. A refund is money a taxpayer will get back from the government. A tax credit will never result in a refund.
There are four types of credits available to Arizona taxpayers.
Qualifying Charitable Organizations tax credit
Organizations that provide assistance to residents of Arizona who either receive Temporary Assistance for Needy Families benefits, are low income residents of Arizona or are children who have a chronic illness or physical disability.
A single filer can donate up to $200/year to one of these organization and get a dollar-for-dollar credit on their tax filings.
Qualifying Foster Care Charitable Organizations
These organizations work to provide foster children with all the goods and services that the State does not provide for. Often times clothes, field trips, extra-curricular activities and anything else a child might need to help make it through an extraordinary situation.
In many cases, qualifying foster care organizations also fall under the qualifying charitable organizations tax credit, meaning filers can donate double the amount ($400 for single filer, $800 for joint filers) and receive a dollar-for-dollar tax credit.
Credit for Contributions Made or Fees Paid to a Public School
Taxpayers can claim up to $200 for a single filer or $400 for joint filers per year for fees paid to public schools for extracurricular activities, like sports or music programs.
Private School & Certified Tuition Organizations
Taxpayers can make donations toward tuition or scholarships to private schools. Single filers can donate up to $535, Joint filers can donate up to $1070 for a dollar-to-dollar credit. Qualifying Private Schools are listed here.
According to the Tax Credit Team, these credits are a way for the taxpayer to direct where they want their taxes to go.
"It's an opportunity for the public to give," said Tamera Shanker, Chair of Arizona Friends of Foster Children Foundation, a Tax Credit Team member. "It's not just a donation, it's a way of directly helping your community. It is a way of letting our state legislators know where your priorities are as an Arizona citizen."