Monday, October 14, 2013

2013 Arizona Charitable Tax Credits

2013 AZ Tax Credits

Arizona is a generous state in that it allows taxpayers to direct contributions towards organizations and be provided a state tax credit for those donations. This is a reminder of the tax credits available for these charitable contributions to certain causes (available to those individuals that file and pay Arizona income taxes).

Arizona tax credits are available to reduce your tax liability, but are not refundable. Some of the unused contribution credits are eligible to roll forward to future years (5 year carryover). A taxpayer who makes $1,800 of eligible contributions but has only a $400 liability will reduce their liability to and have $1,200 available for future years. To see if this may be beneficial, you should review your State of Arizona liability for the last year. You will find your 2012 State of Arizona tax liability on Form 140 Line 26. If you have any questions, please contact the office.

Working Poor Tax Credit - $200/$400 Single/Married

List of Qualifying Organizations -

The Working Poor Credit contributions are reserved for charitable organizations that spend at least 50% of their budget on services to Arizona residents who received Temporary Assistance for Needy Families (TANF), households living below a certain income level, or households containing chronically ill or physically disabled children.
I have a personal preference recommendation as I am involved with Helping Hands for Single Moms (a qualified organization) and Becky is involved with ShoeBox Ministry (also qualified).  If you can support these organizations, that would be greatly appreciated.

School Tuition Organization - $514/$2,062 Single/Married

Qualifying Organizations -

The STO credit changed in the past year. It is now automatically indexed for inflation and there is a new additional tax credit available for kids switching to a private school from public school, increasing the total amount available. The purpose of the credit is to allow students attending underperforming schools to attend private schools based on merit or need, however there is no limitation on who may accept scholarships. Additionally, the contribution can now be made up to the April 15 tax deadline and qualify for the prior year as a credit.

For single taxpayers, the 2 credit amounts total $1,031 that you can contribute, the total for married taxpayers is $2,062. You have to inform the school tuition organization of the year the credit is being claimed and if you have made any other contributions.

Credit for Contributions Made or Fees Paid to a Public School - $200/$400 Single/Married
Eligible Organization: Any Arizona public or charter school

Credit amount benefit the school's general activity fund or designated extracurricular programs such as music, sports, arts, and civic activities. This is a great opportunity for individuals to provide funding for programs they are passionate about or participated in during their high school careers. This is also a chance to support an under-served school that might not otherwise get funding.

Arizona Military Family Relief Fund - $200/$400 Single/Married

Arizona Department of Veterans Services This link will  provide access to the form needed to remit your donation.

Contributions to this fund assist military families during the loss of a loved one, unforeseen financial hardships, or rehabilitation stints. This fund, an incredibly worthy cause, is capped at $1 million dollars of contributions annually. I urge you to CONTRIBUTE AS SOON AS POSSIBLE. 

As of November 27, 2013 we have received a total of $610,303.34 to help Arizona's Military Families!

If your contribution is received subsequent to the fund's cap, your contribution will be returned and the credit will not be available.

If you have any questions about how the tax credits are applicable to your tax return, please contact the office.

Best Regards,



Tuesday, October 1, 2013

Affordable Care Act - info to get you started

There has been a lot of information circulating the internet, news outlets and around the office water coolers.  I wanted to try and provide some information related to this re-vamping of the health insurance industry so here is information that I think folks need to know:

1) Individual Insurance coverage is required to be in place as of 1/1/2014.  To help facilitate that, the insurance exchanges open on 10/1/2013 (regardless of Federal shut down or not, this has been deemed an essential government service). To apply for individual coverage, you can go to to find out more information and fill out the application.

The government is providing insurance premium assistance to qualified individuals and families that have income levels up to 400% of the Federal poverty amount.  For a single person that would be up to roughly $44,000 or more to still qualify for assistance. 

If you have Medicare, Medicaid or employer provided insurance, you do not have to apply through the exchanges for insurance.  As long as you have insurance in place for 2014 you will not be subject to the tax (that is how the Supreme Court decided the penalty under ACA is applicable), this includes insurance through the exchange, Medicare, Medicaid or employer plan.

2) another change in the law is more tax related, the limitation on Medical expense deductions.  The limit has been historically subject to a reduction for 7.5% of Adjusted Gross Income, that now changes to 10% reduction.  Taxpayers that have attained 65 years old are "grandfathered" in at the 7.5% for the next few years. This change is effective for the 2013 tax return to be filed in 2014.

For Arizona taxpayers (my home state), there is no reduction or threshold if you itemize deductions.  So all medical expenses may provide tax relief for Arizona taxpayers.

3) Health insurance costs have dramtically increased and are expected to increase for some populations.  Older insured individuals may be provided reduced insurance costs due to ACA, but younger insured individuals will see costs increase. Speaking with a local broker, currently the 64 year old's premium is 6 times that of a 20ish individual, that is going to change to 3 to 1 next year.  Insurance agents and brokers are awaiting rates to be released by the companies.

As I learn more I will attempt to provide updates.