Wednesday, November 17, 2010

Arizona Tax Credits - 2010

As we approach the end of 2010, there are still many steps you can take to reduce your Arizona tax liability. Arizona offers several tax credits:

1) Credit for contributions to Private School Tuition Organization. You may receive up to $500 ($1,000 MFJ) in state tax credit by contributing to one of the many private schools or tuition organizations in the state. To see a list of qualifying organizations, click here: School Tuition Organizations for Individual Donations

2) Credit for Donations to the Military Family Relief Fund. Make a cash contribution of $200, ($400 if MFJ) and support our AZ Military Families in need. Visit the Arizona Department of Veteran Services website for more information.

3) Credit for Contributions Made or Fees Paid to a Public School. Make a cash contribution of $200, ($400 if MFJ) to an AZ Public School (K - 12th grade). Help support your local school or find a school that can use the financial assistance. You can search for schools by name on the AZ Department of Education website.

4) Credit for Contributions to Organizations That Provide Assistance to the Working Poor. Make a cash contribution of $200, ($400 if MFJ) to a qualified charitable organization. For a list of current qualified organizations, click here.

By choosing the above listed credit options, you can designate where your money is directed.

A few notes about these credits:
- may also qualify as charitable donations on the Federal tax return.
- the credits are non-refundable, meaning it will reduce your tax liability by the amount of the credit and any excess credit will not be refunded to the taxpayer.

If you are unsure about taking advantage of these credits, please give the office a call and a 2010 tax plan can be completed to determine your eligibility for these credits.

Be on the lookout for more tax items in the next few days/weeks.

Saturday, November 6, 2010

2010 Tax Changes

There have been a lot of changes that have gone into effect for this year and that affect planning for next year as well. For individuals, there is the opportunity to convert traditional IRA retirement accounts to Roth IRA accounts and pay the tax over two years instead of all at once and without regard to income limits (prior to this year and after this year income limitations will apply again). Also there is still the chance to take advantage of energy efficient improvements to your principal residence, some of these credits expire after the end of this year. Considerations for 2011 include whether tax rate reductions will be retained or if resetting of rates will take effect and automatically increase taxes for income levels (mainly because the 10% tax bracket will be eliminated and so lower income people will be affected to a greater amount).

For small businesses, there is a tax credit if you provide health insurance for non-owners or family of owners, subject to certain limits for wages and number of employees. Businesses also are continuing to be incentivized to make capital improvements through increased section 179 expense limitations.

This is just a quick summary. I will try to share other impacts over the next few entries. Please take some time to review this year to avoid surprises at tax time while you can still make changes before year end.