With tax season in full swing and tax day right around the corner, we thought it could be helpful to share some info on how to get the most out of your donation to support the neurodivergent adults at Rainbow Acres.
As a business owner, you may be looking for ways to reduce your tax obligation while also supporting a meaningful cause. One option to consider is donating to a nonprofit organization like Rainbow Acres, which provides housing, education, and vocational training for adults with developmental disabilities in Camp Verde, Arizona. Here’s how donating to Rainbow Acres can help reduce your business taxes:
1. Take advantage of the Arizona Charitable Tax Credit: Like individuals, businesses can also utilize the Arizona Charitable Tax Credit to receive a dollar-for-dollar credit on their state tax return for donations made to qualifying charitable organizations. For tax year 2022, the maximum credit amounts are up to $400 for single or head of household filers and up to $800 for married filing jointly.
However, businesses are not subject to the same credit limits, so the amount of the credit can be significant.
2. Deduct donations on your federal tax return: In addition to the Arizona Charitable Tax Credit, businesses can also deduct donations made to nonprofit organizations on their federal tax return.
The IRS allows businesses to deduct up to 10% of their taxable income for charitable donations, which can be a significant tax savings.
3. Corporate Social Responsibility: Supporting nonprofit organizations can also be a part of your company’s Corporate Social Responsibility strategy.
By donating to a cause that aligns with your company’s values and mission, you can not only make a positive impact in your community but also improve your company’s public image and reputation.
4. Other tax benefits: In addition to the Arizona Charitable Tax Credit and federal tax deduction, donating to a nonprofit organization like Rainbow Acres can also provide other tax benefits.
For example, if you donate appreciated assets such as stock or real estate, you may be able to avoid capital gains taxes and receive a deduction for the fair market value of the asset.
Donating to a nonprofit organization like Rainbow Acres can be a great way for businesses to reduce their tax obligation while supporting a cause that is meaningful to them. By taking advantage of the Arizona Charitable Tax Credit, federal tax deduction, and other tax benefits, businesses can make a positive impact in their community while also improving their financial bottom line. It is important to consult with a tax professional to ensure that you take full advantage of all available tax benefits and that your donation is properly documented and reported.
Call us today to schedule a tour of our 50-acre ranch community for adults with developmental disabilities.
*Gifts received from January 1-December 31 count toward that year’s giving total. All donations are tax-deductible to the extent provided by law. Please seek out advice from your tax professional.