To help illustrate how the Arizona tax credit can benefit you, we created a few scenarios to help understand the benefits for donators. However, be sure you contact a tax expert/adviser to get more information for your individual situation.
|Mr. Bell*1||Ms. Goodman*2||Mr. & Ms. Sanders*3||Mr. & Ms. Trego*4|
|Tax Filing Status||Single||Single||Married||Married|
|State Income Tax Withheld **
|State Tax Liability
|TAX CREDIT Donation to AZ4Education||$500||$400||$1,000||$900|
|Tax Refund with Tax Credit||$395||$300||$1,250||$800|
|Carry Over to Next Year||$0||$150||$0||$100|
*Note: these examples are using tax credit amounts as of 2011 **Note: Shown on your W2
1) Mr. Bell
Mr. Bell is a single Arizona taxpayer, who owes $705 but the amount his employer held was only $600. Mr. Bell will need to pay another $105 to the State to make up the difference when he files his taxes. However, since he donated $500 to AZ4Education to help students in his community, he will actually get a $395 refund from the State, and he can use that money for something else.
2) Ms. Goodman
Ms. Goodman is a single Arizona taxpayer, who owes $250 to the State of Arizona. Since her employer withheld $300, she will receive a $50 refund (if she didn’t have a tax credit). Ms. Goodman knows the future is dependent on our children and their education, so she gave $400 to AZ4Education. In this case, the Arizona law stipulates that she can not receive a tax credit more than her tax liability (ie. not to exceed $250), so she will actually get a refund from the State of $300 (=250+50) with a carry over credit to next year of $150 (=400-250). Money well spent for our future.
3) Mr. and Mrs. Sanders
The Sanders are a married couple filing jointly and have a tax liability of $1350. They have withheld $1600, so they are expecting a refund of $250 from the State. Considering they have children who are enrolled in a private school, they know the benefit of the STO program, so they have donated the maximum of $1000 to AZ4Education. This means they will be helping another student with a scholarship and they will also be receiving a refund total of $1250. Income tax dollars supporting the local community through education.
4) Mr. and Mrs. Trego
The Trego’s are married and filing jointly this year. They have a combined tax liability of $800 and their employers have withheld the same amount. However, they were interested in helping a family, whom they have known for many years. The were able to donate to Az4Education and make a recommendation for their friends child in private school. Their $900 contribution is more then the combined $800 tax liability, so they will get back $800 from the State, and have a carry over credit to next year of $100.
BE SURE TO CHECK WITH YOUR TAX ADVISER FOR CONFIRMATION OF HOW YOUR CONTRIBUTION AFFECT YOUR TAX PLANNING.