With 2012 coming to an end and 2013 rushing in, we would like to update you on a few tax credits that are available to Arizona taxpayers. Two Arizona tax credits that will benefit you and your local community, without costing you money, are the Public School Tax Credit and Working Poor Tax Credit.
Public School Tax Credit
Taxpayers can claim a credit for donations up to $200 for individuals and $400 for married couples filing jointly to a public school of their choice. The beauty of the tax credit is that it costs you nothing, keeps your money local and reduces your State of Arizona tax liability. Connect to our website at www.holdsworthcpa.com
and click on “Community Involvement” to access links to various local school districts where you can donate online or, if you prefer, you can print forms to mail in your donation.
Working Poor Tax Credit
If you itemize deductions, you can ALSO claim a tax credit of $200 for individuals and $400 for married couples filing jointly. There are numerous organizations that qualify to receive this credit. You can access a link to the AZ Department of Revenue’s “List of Qualifying Charitable Organizations for 2012” through our website at www.holdsworthcpa.com, under “Community Involvement”. Our page also has links to two local organizations which benefit families in our community, Yavapai Big Brothers Big Sisters and Prescott Habitat for Humanity. Connecting to these links provides you with an easy way to donate online or get more information to mail in your donation.
Keep in mind that you can claim BOTH of these credits (assuming your state tax liability is at least as much as your donation) for a total of $400 individual and $800 married filing jointly. It is important to note that if you donate more than your state tax liability, you won’t receive the extra donation as a refund, it will carry to next year to offset your 2013 state taxes.
For example: You file a joint return with your spouse and your state tax liability is $900. You elect to donate $400 to a public school and $400 to a qualifying charitable organization. Your tax to the state is reduced by $800 to $100.
Note that you must make the donation by December 31st of the same tax year for which the credit is claimed. If you would like to claim a Public School or Working Poor tax credit in 2012, you’ll need to make your donations by December 31st, 2012.