How Much Can We Deduct For Arizona Tax Credits This Year.
Many clients want to know the maximum amount of Arizona tax credits they can deduct each year on their current Arizona Individual Tax return. We will not only answer this question for you today but will also explain the individual credits and the date you need to fund each credit.
The Arizona State Tax Credit program allows you to make a donation to eligible organizations and receive a dollar for dollar credit against your Arizona tax liability. You also receive a federal deduction on Schedule A if you itemize your deductions. You can donate to anyone or all of the different categories on the list below. Each has its own maximum donation.
Donating to eligible organization will leave you in a tax neutral situation. Meaning you pay an amount to a charity and receive a credit of the same amount, therefore you are even cash wise, but you gain the power to direct your tax dollars to the organization of your choice.
What is the Maximum I can donate in 1 year
The tax credits are not refundable, meaning you can only deduct the credit if you have a tax liability. So the maximum amount of the credits you can deduct is the your Arizona tax liability for the year. You will find this amount on your 2016 AZ Form 140, page 2 on line 46. You do have the ability to carryover any excess contributions for 5 later years
What are the 5 individual Tax Credits
The Arizona Military Family Relief Fund Credit
The Qualifying Charitable Organization Credit (Formerly Work Poor Credit)
The Arizona Department of Revenue keeps a record of these organizations on their website.
Public School Credit
As the name implies, this credit is for a donation to public schools. Check the school’s website for information on donating to the school you have an interest in.
Private School Credit
Maximin Credit: $1,087 dollars for single filers and $2,173 for Joint filers. Donations to deduct on 2017 tax return is 4/15/2018 or sooner.
As the name implies, this credit is for a donation to private schools. Check the school’s website for information on donating to the school you have an interest in.
The school will send you a receipt.
Foster Care Charitable Organization
Maximin Credit: $500 dollars for single filers and $1.000 for Joint filers. Donation to deduct on 2017 tax return is 4/15/2018 or sooner
List of organizations on the Arizona Department of Revenue website.
Donation are for qualifying Foster Care organizations
So if you have a large enough tax liability in 2017, the maximum a single filing person can donate in 2017 is $2,2387 and a joint filer can donate a maximum of $4,773. If you have any questions on how to determine your tax liability, contact H&S Accounting. We can also provide you with a quote for our services in the area of individual, business, and trust taxes along with accounting and consulting services.
Tim Walch CPA