How to Benefit with Your Arizona Tax Credit Charitable Donations

The tax credit has played a significant part in how people view their donations. While many do it for charity as their way to help others, without regard for the rewards, some donations are made not just to help others but also to help themselves. After all, donations by Arizona taxpayers to qualified charitable organizations bring dollar-for-dollar reductions in state tax liabilities.

This is how the Arizona State Charitable Tax Credit has helped countless less fortunate Arizonians and responsible taxpayers who make the donations. Unfortunately, with the tax reform law, tax deductions brought about the charitable tax credit may no longer be applicable.

Because of this, the fear that fewer and fewer people are going to make donations is becoming more real. Without the tax break that entices taxpayers to donate to certified charities in Arizona, who else will be willing to give? Yes, some people donate without asking for anything in return. Still, the numbers are simply against the favor of non-profit groups.

Fortunately, you can still get rewards only by donating. These benefits may not be the tax deductions you expect, but they will always help you in ways you would not have imagined.

  • Donating appreciated property instead of cash will create a deduction for the full value of the property donated. Even better is that you won’t get any taxable gain from it.
  • On the other hand, donating assets from an Individual Retirement Account will not generate any deduction. However, it will satisfy the required minimum distribution for people who are 70 years old and older. And, even without the deduction, the donation will not be included in the taxable income.
  • Focusing more on the programs of non-profit organizations and less on tax reductions will help in understanding the essence of donating to charities. It will get your mind off your taxes and place it on more important things, like how you can help more. When the programs are in tune with your values and life goals, you would not even think about getting rewards. You might also donate your time and effort, on top of the money you give, for the cause.
  • Most importantly, the fact that you get to help countless people from low-income families and the wonderful feeling it gives is more than enough reward for your donations, especially when you see your recipients’ reactions.

As you can see, there is more to your donations than just getting tax deductions. And the essential part of giving is the help you extend to those who need it the most. 

Don’t overthink what you can gain from the donation. After all, you donate to help others. The rewards just come as bonuses. When you put your heart on the act, no other reward will be as satisfying as the overwhelming feeling of helping your fellow Arizonians.

The Joys of an Arizona Tax Credit

Consider this: You’re a taxpayer in Arizona. Taxes which most citizens find burdensome but have to pay nonetheless. After all, it is the lifeblood of the nation. But wait, the Arizona Department of Reserve serves it to you like a carefully-aged tangy wine but with a smooth but a refreshingly delightful after taste. With parched lips, you come and taste it.

Yes, Arizona taxes are like that, and the smooth, delightful feeling comes with tax credits. You see, their tax credits come in either donation to Qualifying Charitable Organization and Qualifying Foster Care Charitable Organization, which have been assigned their respective five (5) digit code numbers. These are two of the recipients. Tax credits can be claimed using Form 321 and Form352 which are included with the Arizona income tax return. These “QCO Code” or “QFCO Code” are to be written in these forms to claim the tax credits for contributions to the aforementioned certified organizations. The Arizona Department of Reserve’s lists of qualifying charities include the code assigned per organization. So, you do not have to worry that you will miss the code for your choice’s charitable organization.

If you are an unmarried taxpayer, you can claim tax credit amounting to $400 likewise, if you are married but filing your tax return separately or head of your household. Married taxpayers, on the other hand, may claim up to $800 tax credit for as long as they file their return jointly.

Suppose you prefer donating in support of foster children and families. In that case, you can avail of $1000 tax credit if you are married and filing joint return, while $500 can be claimed by a single individual, head of the household and married taxpayers but filing separately.

Suppose you are a believer in education as the passport for the future. Why not choose to donate to Certified School Tuition Organizations or Private School Tuition Organizations? In which case, you can use Form 323 and Form 348, respectively. In the former, you can avail of a $590 tax credit if you are either married but filing separately, single or head of household, and $1,179 for married taxpayers and filing joint return.

Suppose you opt for filing Form 348 because you have donated to Private School Tuition Organizations. In that case, you can avail of tax credit amounting to $593 if single or head of household and if you are married but filing separately, and $1,186 for married and filing joint tax returns. 

If you feel satisfaction in providing financial assistance for members of the military in active-duty or veterans and their families, then donating to the Arizona Military Family Relief Fund by using Form 340 is just the act for you.

You will have that bubbly, refreshingly delightful feeling that your taxes have helped a lot of individuals in a variety of ways.