Arizona Charitable Tax Credits – No Itemization Required in 2013

If you’re in Arizona, you may be able to divert some of your tax dollars to charitable organizations, rather than to pay them to the state.¬† In 2010, I wrote about tax credits which were available to folks living in Arizona.¬† I was unable to take advantage of those tax credits because itemization was required, and we cannot itemize (not enough deductions).

However, I recently learned that the tax laws were changed in Arizona, and beginning in 2013, you can participate in these tax credits even if you do not itemize!

State Seal of Arizona.
State Seal of Arizona. (Photo credit: Wikipedia)

Now before I go any further, I want to make the point that I am not a tax accountant or tax professional, and am sharing this information based on my personal interpretation of the information found at the Arizona Department of Revenue website. Please consult your tax professional for more information.

As I’ve grown older, I am finding that I have a very strong desire to help others in need, but it is extremely difficult to do this when you are trying very hard to get out of debt, and constrained by your income.¬†¬† I have big dreams about helping people, and one day those dreams will become a reality but in the meantime I’ve been helping family members as I can. For example, I paid for an eye exam and glasses for my sister. Yes, I should have applied that money toward my debt but life happens and my sister needed glasses now, not five years from now.

Here are some links if you want to learn more:

There are two types of charitable tax credits available.¬† Note that the charitable organizations that you donate to must be “qualified” – meaning they must be listed with the State of Arizona.¬† You can donate to a QCO, and you may¬† donate to a QFCO.¬† If you are a single person or head of household, you can donate $200 to each one.¬† If you are married and filing joint, you can donate $400 to each one.

If you donate to a QFCO, you can donate the maximum: Single or head of household $400, married and filing joint $800.  Please see the official Arizona Publication 710 (this will open a PDF) for more details.

For 2012, after our standard deduction and personal exemptions, our tax liability was $867.  I anticipate it will be higher for 2013, so I plan to divert $400 of my tax dollars to a qualifying charitable organization, and another $400 to a qualifying foster care charitable organization.

Now here’s the trick.¬† If you are living from paycheck to paycheck you may not be able to come up with the money right now to make the donation before December 31, 2013.¬† It just so happens that I have money set aside in savings which I will need to pass on to Uncle Sam and the state of Arizona from self employment.¬† Since this money is set aside to pay self employment taxes, I figure I may as well pay some in advance.¬† Because I can afford to put out an additional $800, this will count as a “payment”, and I may receive a refund for this amount, depending on my tax liability. Utilizing this tax credit will not reduce the amount of tax I will owe – it is basically just diverting money from one business (the state of Arizona) to another (a charitable organization).

My happiness stems from the fact that I can put my money toward a charity and know where my dollars are going, and know that they will help adults and children in need.

My tax dollars would help the state of Arizona, but I like the idea that I’ll be able to help two charities.

If you would like to donate to a qualifying organization in 2014, you might consider setting aside a portion of the full amount Рfor example if you are a single taxpayer and you wish to divert $200 of your tax dollars, just put $17/month into a special savings account.  If you want to divert tax dollars to a QCO and QCFO, set aside $34.  You could also consider pledging this amount to the charity throughout the year.

Does your state have similar tax credits?



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2 thoughts on “Arizona Charitable Tax Credits – No Itemization Required in 2013

  1. Very nice job here. You should be a CPA or tax attorney. Anyway, these are some nice tax breaks for AZ people. PA does not give any tax breaks for gifts to charity. It is a gross income system with no deductions except for employees who have out of pocket business costs.
    Thanks for the information as I have some AZ clients.
    STEVEN J. FROMM, ATTORNEY, LL.M. (TAXATION) recently posted..Small Businesses: 8 Great Year-End Tax Planning Tips and Tricks: A Must ReadMy Profile


    Mrs. Accountability Reply:

    Hello Steven, thank you very much! That’s too bad about your state, but you know sometimes it doesn’t even help to tell people because they don’t want to help others in need. I personally wonder how come the state of Arizona just doesn’t want the money for itself as our state is always crying that its broke. Anyway, good for the charities involved. Thanks for stopping by and commenting! Mrs. A


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