Friday, August 28, 2015

Phony IRS Collections

This may be old news but the scary phone calls continue to keep coming.  The scenario is something like this: incoming phone call with a recorded message indicating that it is from Internal Revenue Service, there is a warrant out for your arrest due to unpaid taxes, please call this number (usually an 800 or similar number) to make payment arrangements.  

The IRS has posted information about this tax scam earlier this year as it continues to be problem. IRS Newsroom-Phone Scams Continue to be Serious Threat and Remain on IRS Dirty Dozen List of Tax Scams

As our offices and other professionals have told clients and taxpayers, the IRS does not make first contact via a phone call.  If you receive a phone call that purports to be from the IRS, do not share personally identifying information or provide payment information (debit or credit card information, pre-paid VISA card information, etc.).

It also appears that the scammers have been listening to the professionals about phone calls not being the initial contact from the IRS and have started a new scam - sending official looking letters stating balance due.  If you receive any contact that you suspect is not truly from the IRS, you can check to see if the contact is legitimate in a couple of ways (see the ways at the IRS website here: IRS Report Phishing).

If you have unusual contact, please contact either the IRS or a tax professional to seek help before dealing directly with the potentially scam artist.

Until next update.

Many happy returns,

Friday, August 21, 2015

Arizona Individual Income Tax Credits for 2015

Generally there are few changes to Arizona's individual income tax credits.  Tax credits are better than tax deductions because a deduction only lowers your taxable income but a credit offsets the tax liability, dollar for dollar in the amount of the credit.

The state of Arizona has many tax credits but the most popular are the Working Poor Tax Credit, Qualifying Foster Care Charitable Tax Credit, Arizona Military Family Relief Fund, Fees Paid to Public School and Private School Tuition Organizations.  These credits are non-refundable credits, which means that you can not create a refund solely by donating to these organizations, but these credits act as an offset to your tax liability and may provide a refund of withholding already paid via your paycheck or other tax pre-payments.

The amounts for the tax credits are as listed below:

Working Poor Tax Credit - $200 single/$400 married taxpayers
Qualifying Foster Care Charitable Tax Credit - $200 single/$400 married
Arizona Military Family Relief Fund - $200 single/$400 married
Contributions or Fees Paid to Public School - $200 single/$400 married
Contributions to Private School Tuition Organizations - the maximum credits are $1,067 single/$2,134 married

Qualifications for the credits:

Working Poor Charitable Tax Credit - The Working Poor Tax Credit is for contributions to Arizona based charitable organizations that spend at least 50% of their budget on services to Arizona residents who received TANF (Temporary Assistance for Needy Families), households living below a certain income level, or households containing chronically ill or physically disabled children.  I am partial to Helping Hands for Single Moms (as I am involved with this organization) and Becky Gaylor would recommend ShoeBox Ministry.

For a list of Qualifying Organizations visit this website: List of Qualifying Organizations

Foster Care Charitable Tax Credit - This credit is similar to the Working Poor Tax Credit, but for organizations that might additional criteria in serving qualified individuals.  These organizations can qualify for both the Foster Care Tax Credit and the Working Poor Tax Credit so be aware of that when making your contributions.

For a list of Qualifying Organizations visit this website: List of Qualifying Organizations

AZ Military Family Relief Fund - This credit is administered by the Arizona Department of Veterans Services (Website).  This credit is limited to the first $1,000,000 in donations that are received during the year.  As of the date of writing this entry, they have received $177,000 and based on history they will reach their cap by early December.  If you send your donation after they have reached their cap, they will return the check to you.  To donate you must submit the donation form with your check (AZ Military Family Relief Donation Form)

Contributions or Fees Paid to Public School - Amounts can be made directly to the Arizona school of your choice and to qualify for AZ tax credit, the donation can be made up until April 15, 2016 and taken on the 2015 tax return.

School Tuition Organization - This credit referred to as the STO credit (school tuition organization) has 2 components, the original credit is for donations to scholarships for kids already attending private school and the additional credit (sometime referred to as PLUS or Switcher) is for kids just entering private school or switching from public school to private school.

For a list of Qualifying Organizations visit this website: List of Qualifying Organizations

If you should have any questions about this items, please feel free to contact the office at 602.494.7641 or email

Best regards and many happy returns,
Matt Gaylor