Contributed by Virginia Dhondt CFP®,As some of our readers know, my husband Mike and I have two dogs, a Weimaraner (Cassi, age 11) and a Vizsla (Teka, age 8). When we got Cassi as a puppy, we never dreamed we would be “those crazy dog people.” But over the past decade, between us, we’ve gone to obedience classes, realized our dogs wanted to be birddogs, participated in hunting tests and field trials (and LOTS of field training), trained and trialed in agility, and made a great number of friends. Cassi is a Master Hunter, Canine Good Citizen, and has several agility titles; Teka is a Champion (show dog), Senior Hunter, Canine Good Citizen, and has a few agility titles. It has been quite a learning experience for us.
Join the club. Over the years, we have become involved in our local dog clubs for each breed, the Valley of the Sun Weimaraner Club (VSWC) and the Rio Salado Vizsla Club (RSVC). These AKC member clubs (501(c)(7) nonprofit organizations) support responsible breeding, pet ownership, dog sports, and rescue efforts.
Take more photos. Mike and I have served on the boards and volunteered at events, but one of my favorite efforts is our annual fundraising campaign. Mike came up with the idea of a photo contest, with the winners in the next year’s calendar. We collect the entries, coordinate the voting, and put together the calendar, including a collage of the non-winning photos. (That is a lot of work for Mike.) The contest has proven increasingly popular—the RSVC had over a hundred entries this year. And the club members love supporting the clubs by purchasing the calendars, especially when their dog wins one of the months.
Be involved. One of the things most people don’t know is that our clubs make financial contributions to other organizations when possible. Among the organizations our clubs have supported, we have donated to Valley Fever research, contributed to programs training companion dogs, and purchased protective vests for police dogs.
When the nationally-reported Arizona wildfires forced residents to leave their homes, in many cases unable to take their pets where they were temporarily relocated, shelters in the area were overwhelmed. Phoenix-area breed and rescue clubs reached out to their members for food, water, and supplies while the clubs donated from their general accounts.
Many of our club members volunteer with other organizations, including those providing pet therapy. One of my favorites is Gabriel’s Angels. Gabriel was a Weimaraner who visited abused and at-risk youth.
Get tax credits. In Arizona, there are several tax credits available annually. Tax credits allow a dollar for dollar tax credit on your tax return—essentially we get to say where our tax dollars go by personally making charitable contributions directly to an organization! You cannot use more credits than you have tax liability for the year. Beginning in 2013, you do not have to itemize deductions to claim the credits.
The Charitable Tax Credit (previously the Working Poor Credit) allows a contribution of $200 (single filers) or $400 (joint filers) to be credited. Contributions to a 501(c)(3) organization must be made by December 31 to qualify. A wide range of organizations, including Gabriel’s Angels, qualify for this credit.
Additionally, starting in 2013, contributions to a qualified foster care charitable organization may allow an increase in the Charitable Tax Credit to $400 (single) or $800 (joint). The excess amount above the original credit amount must be donated to a qualified foster care charitable organization. For example, a single filer may make a contribution of $200 to a foster care organization and $200 to another a non-foster care charitable organization, or $400 to a foster care organization, but not $400 to a non-foster care organization.
Arizona tax residents are also able to take a tax credit of $200 (single) or $400 (joint) for contributions made to public and charter schools. Contributions must be received by December 31. Two tax credits (an original program and an overflow program) may be reported for contributions made to private school tuition organizations totaling $1,031 (single) or $2,062 (joint). Contributions must be made by April 15 for the previous tax year. School tax credits may be carried forward up to five years.
The Arizona tax credits are an excellent incentive to encourage charitable donations. Since all of these donations can be made with a net cost of zero*, we are able to financially support our community every year in addition to the use of our time and talents. (*If you make donations online, you may incur a separate transaction fee to cover the credit card charge as it cannot be deducted from the contribution amount.)
Look for other opportunities. While many states do not have similar programs, charitable donations may be deductible on your federal and/or state tax return and, when necessary, may be carried over to future years when you have more income.
Furthermore, if you have an IRA and are over age 70 ½, you may have up to $100,000 distributed directly to charities each year; those distributions are not includable in your income for the year.
If any of these charitable contribution strategies appeal to you, contact us to determine what may work for you this year or next.