How to Take Advantage of Arizona Tax Credits
Here in Arizona, we have a great opportunity to take advantage of “dollar-for-dollar” tax credits. In our experience, people struggle to leverage them in their finances. We interviewed Barrie Petty, the Executive Director at the Arizona Private Education Scholarship Fund (APESF), about Arizona Tax Credits here. On the blog today, we’re breaking down these credits and talking next steps on how to use them.
What are “dollar-for-dollar” tax credits?
Simply put, these credits are another way to pay your Arizona state income taxes. Typically, most people pay through payroll withholding or estimated tax payments. Another way to pay is donating to qualified organizations. In doing so, you reduce your tax liability “dollar-for-dollar.”
The best part about “dollar-for-dollar” tax credits…
Here at Redeem Wealth, we help people align their money with their values. Utilizing these credits allows you to control where your tax dollars go, ensuring the support of organizations that are lifting up our community.
What credits are available and how much can I give?
A household with a $100,000 income will likely have an Arizona tax liability around $3,000. As a result, that same household can forego payroll withholding or estimated tax payments and give $3,000 to qualified organizations instead! Here are the 2021 limits and types of credits:
Qualified Charitable Organizations (maximum of$400 for single and $800 for married)
Foster Care Organizations (maximum of $500 for single and $1,000 for married)
Private School Tuition Organization (maximum of $1,219 for single and $2,435 for married)
Public School Credit (maximum of $200 for single and $400 for married)
Keep in mind- you can use multiple credits in a given year. Also, corporations can take advantage of dollar-for-dollar credits as well! Look here for organizations that qualify.
What makes APESF different from other STOs?
The Arizona Private Education School Fund has several distinguishing factors. First, APESF takes the extra step to get to know the children that apply for private school tuition scholarships. The extra effort to know kids on a deeper level allows you to specify who your donation supports. If you’re passionate about supporting children of first responders or foster children, you can with APESF!
Taking Action
If you want to know how utilizing Arizona Tax Credits makes sense for your family or your business, please reach out. Feel free to schedule a time where we can dive into the specifics of how you can have an impact.
For more information, visit: APESF • AZ Department of Revenue
