End-Of-Year Tax Planning: How To Maximize Tax Credits Now

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The end of the year is fast approaching, but there is still time to do year-end tax planning to reduce an individual tax liability for 2011.

Arizona offers several tax credits that redirect money to local, charitable organizations, reducing the amount of taxes paid in April.

The maximum amount a person filing single, married filing separately or head of household can put toward the Working Poor Credit is $200, with married filing jointly, $400.

Taxpayers need to itemize deductions on their Arizona income tax return, but not on their federal return.

It’s always a good idea to calculate medical expenses, medical insurance premiums (including Medicare premiums), state income taxes withheld, property taxes paid, mortgage interest and miscellaneous deductions for Arizona income tax purposes because itemized deductions are not subject to the same limits as the federal income tax return.

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Debra Daniels

Local organizations eligible for the Arizona Working Poor Charitable Tax Credit in Payson include, Payson Area Habitat for Humanity (including the ReStore), Payson Christian Clinic, Payson Helping Payson, Payson Lions Charitable Foundation, Big Brothers Big Sisters, Time Out Shelter, Paz de Cristo Community Center and just recently approved — Payson Senior Center.

A complete list of the organizations that qualify for the credit is available at www.azdor.gov/ TaxCredits.aspx.

In addition, there are two education tax credits available in Arizona: Credit for Kids and the Tuition Tax Credit.

Credit for Kids is available up to $200 for single, married filing separately and head of household filers, and $400 for married filing jointly.

Credits can go toward any extra-curricular school activity, specific program, schools, and/or in the Payson Unified School District in general.

A Tuition Tax Credit of up to $1,000 is available to “private” schools.

Those organizations include Catholic Tuition Support Organization (including Catholic schools in Payson), Arizona Christian School Tuition Organization, Inc. (includes contributions paid to the Payson Christian Community School in Payson).

Check with a church to determine if their program qualifies for the credit.

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