MARCH 2017 38 | FRONTDOORSMEDIA .COM They almost sound too good to be true. But Arizona's charity and education tax credits are very real, and completely legitimate. And they're more than just a great way to save money on state and federal tax returns — they've become one of the most important fundraising tools available for hundreds of non-profits and schools statewide. "It is a win-win for everyone," said Christine Ewing of Ewing Consulting, a Phoenix-based fundraising consulting firm. "This legislation improves the quality of life for deserving Arizonans and should be taken advantage of for the benefit of all." If you're not familiar with tax credit contributions, you should be. Here's how they work in a nutshell: Every year, you pay state income taxes to the Arizona Department of Revenue based on how much money you make. However, state law allows you to receive a dollar-for-dollar credit on the amount of tax you pay if you donate to a qualified charity or educational institution in one of four categories: Arizona Qualified Charities, which is a general category most non-profits fit in. Contributions are limited to $400 per person or $800 per couple. Arizona Qualifying Foster Care Charitable Organizations, which as the title implies encompasses non-profits who provide foster care services. Contributions have a $500 limit for individuals and an $1,000 limit per couple. Public Schools, including charter schools, with a $200 per person and $400 per couple limit Private School Tuition Organizations, which fund contributions to private schools, which have a $1,087 total limit per person and $2,183 limit per couple So, for example — say you give $800 to an Arizona Qualified Charity. As a result, your state income tax owed is reduced by $800. Period. And, you can claim that same $800 charitable contribution on your federal taxes, lowering your federal tax bill as well. It's a net win compared to paying tax dollars to the state, and you directly contribute to these beneficial organizations instead. With all the different categories, individuals can save as much as $2,187 and couple as much as $4,383 on their state tax bill, while claiming the same amount of contributions on their federal taxes as well. Arizona law changed last year as well to allow for these contributions to be made all the way up to the April 15 tax deadline and still count for the 2016 tax year (contributions made in 2017 would count for your 2017 federal taxes, however). So it's crunch time right now for many organizations who rely on these contributions for funding. "This tax credit is an opportunity for you to direct your tax dollars by sending these funds directly to the charities you wish to impact versus leaving the money with the state to allocate at their discretion," she said. "You get to take these allocations into your own hands." {spring 2017} TAX CREDIT DIRECTORY Tax credit contributions fuel non-profits and schools, help donors’ bottom line Tom Evans | CONTRIBUTING EDITOR

MARCH 2017 FRONTDOORSMEDIA .COM | 39 Click Here Frontdoors Media’s guide to Arizona charity and education tax credits, how they benefit you and how they help organizations throughout our community.