Friday, Dec 8, 2023
Give and get back
Arizona offers four kinds of "dollar-for-dollar" charitable donation credits, so here's a great way to do some good for the community and for yourself at the same time.
You get a dollar off your state tax for each dollar you donate, up to the program limit. Under new federal rules, however, those donations generally no longer count as charitable contributions on your federal return.
Feeling generous? You can donate for more than one of the tax credits. In fact, you can give for all four tax credits, if your tax situation allows.
It's not often you can end up on the winning end of a tax law, and three of the credits allow donations up to Apr. 15. Do yourself a favor and tell the state legislature how to spend some of its budget by checking out these Arizona tax credits:
- Qualifying Charitable Organizations (max $400 single/$800 married)
- Qualifying Foster Care Charitable Organizations (max $500 single/$1,000 married)
- Contributions Made or Fees Paid to a Public School ($200 single/$400 married)
- Contributions to Private School Tuition Organizations ($1,307 single/$2,609 married)
- Military Family Relief Fund ($200 single/$400 married)
Reminder: Quarterly estimated taxes due 1/15
If you make quarterly estimated tax payments, remember that the 4th quarter payment is due Jan. 15. For federal, mail to:
Internal Revenue Service
P.O. Box 802502
Cincinnati, OH 45280-2502
Or, pay online at https://www.irs.gov/payments
Instructions and voucher forms are available from the IRS website.
Mail state estimated payments to:
Arizona Department of Revenue
PO Box 29085
Phoenix, AZ 85038-9085
Or pay online at https://aztaxes.govTax tip: If you are going to make a state quarterly estimated payment, pay it by Dec. 31 so it counts as an itemized deduction on this year's return.
Now's the time to start thinking about how to minimize your tax liability for this year. If you'd like to discuss your tax situation, please contact me for an appointment.
Here are a few "top of the list" tips:
- Maximize your retirement contributions, whether to a 401(k), IRA or other "qualified plan."
- Pay ahead: paying now for spring semester tuition, spring property taxes, upcoming work-related expenses, charitable donations and other things can give you a tax deduction this year.
- Clear out your closets now to take charitable donations on this year's return
- Put in energy efficient improvements now to your home to qualify for tax breaks.
- If you have poorly performing investments that you want to dump, sell them now to take the losess this year.
- If there's income that you don't need to receive now and it can be put off, wait until after Jan. 1 so it will appear on your tax return in a year from now instead of in just a few months.
If you have a business and paid anybody who wasn't an employee more than $600 througout the year, you'll probably need to give them a 1099-MISC form in January. To make sure you have the information you need to file the 1099, have them fill out a W-9 Request for Taxpayer Identification form.
Ideally, you would have gotten a W-9 from them before paying them. But, if you didn't (or they changed information, such as a new address), this is your time to make good.
You can download they W-9 form from the IRS website. Tip: fill out one for your business so you have it ready when customers ask you for one.
How much can I deduct?
Many charities provide donation receipts without giving a value. If you need to determine how much to claim for your donations, check these sites: