Bob's Blog

Welcome to the first of my blog postings.  The main blog page will show a monthly newsletter, whereas, this page will contain items which I consider to be of special interest and importance. As you may have noticed, this is a new, redesigned web site for Robert E. Hinske CPA, PC.  In addition to an updated site, I have included several new pages containing useful information and tools for your use.  The first of these is the “Links” page which contains a variety of links to government web sites.  You can easily link to the Internal Revenue Service or Arizona Department of Revenue to check on the status of your income tax refunds.  There is also a link to the Social Security Administration.  Next, is the page titled “Financial Calculators.”  This page contains 40 useful and free financial calculators.  These can provide assistance in the areas tax calculations, retirement and planning tools, personal finance, business calculators, home ownership, loan calculators and vehicle financing.  Please take a few minutes to review this page.

Don’t forget the Arizona State tax credit donations to reduce your Arizona income taxes.

The State of Arizona has a rather unique system to encourage taxpayers to donate to a variety of charities in exchange for a dollar-for-dollar credit against the taxpayer’s Arizona income taxes.  There are several categories of charities, with each category having its own requirements and limits.  The following is a summary of the main categories and the related maximum amount of donation that will qualify for the credit each year.  A taxpayer may elect to make donations to organizations in all, some or none of the categories.  The credit for each category is limited by the maximum for the category and the total amount of credit from all categories is limited to the total Arizona income tax for the taxpayer for the year.   

Category

Single

Joint

Arizona Qualified Charitable Organization

$400

$800

Arizona Qualified Foster Care Organization

500

1,000

Arizona Public School

200

400

Arizona Private School Tuition Organization           

 

 

      Original Credit

611

1,221

      Plus Credit

    608

 1,214

           Total Private School Tuition Org

 1,219

 2,435

                 Total for all available categories

 $2,319

 $4,635

 

Please be aware that the main limitation on the amount of tax credit donations that can be used in a given year is limit to the amount of total Arizona income tax as shown on the taxpayer’s return.  For example, if a single taxpayer contributes the maximum amount allowable to organizations qualifying in each of the categories for a total of $2,319.  Furthermore, assume that the taxpayer’s total Arizona income tax was only $2,100.  The taxpayer would be able to use $2,100 of the credit to reduce the Arizona tax to $0 but would have to carry the remaining $219 to the next tax year.  I understand that this may seem to be a bit confusing.  Please do not hesitate to call me for further clarification.

Don’t be a procrastinator when it comes to tax planning.

All too often, taxpayer’s put off tax planning until after the end of the year.  Then, once they realize that they owe more taxes than they ever thought possible, they want to “do something” to reduce the liability.  While there may be a few things that can be done after the end of the year, they are limited.  If you have an unusual event, such as the sale of assets or an increase in income, don’t wait, do the planning before the end of the year.  If you believe that you might have a tax problem, don’t wait, feel free to give me a call so that we can assess the situation and make plans to deal with the taxes.