Friday, August 24, 2018

IRS Proposed Regulations May Affect Your 2018 Taxes


Your State dollar-for-dollar tax credit contribution may need to be made by Monday, August 27, 2018 if you are planning utilizing it for a 2018 Federal deduction
Yesterday, August 23rd, the IRS issued proposed regulations that could affect your ability to utilize your state dollar-for-dollar tax credit as a federal deduction if you itemize.  This is a proposed regulation at this time.  It states only tax credit contributions made after August 27, 2018 will be affected by this proposal if it is approved.  IBE is sending this information out to alert Arizona taxpayers so they can make informed decisions regarding their tax credits.  This in no way affects your ability to receive an Arizona state tax credit. 

Arizona has five different tax credit opportunities:
·         Public School
·         Private School
·         Military Family Relief Fund
·         Qualifying Foster Care Charitable Organizations
·         Qualifying Charitable Organizations

Here is a link to the Arizona Department of Revenue’s information regarding tax credits:
Please keep in mind that these are only proposed regulations and are not final.  Our concern is if made final, the date of August 27, 2018 will already be passed and Arizona taxpayers will no longer be able to claim their tax credit as a federal deduction. 
Consult your tax advisor to determine if this proposed regulation will affect you.

Monday, August 20, 2018

Unprecedented $145 Million Submitted in Corporate Applications


Now that the dust has settled on the Corporate Donation Application period, we're able to look back at the magnitude of what happened. Over $145 million was submitted in almost 1500 applications between the Low-Income Corporate and the Disabled/Displaced programs. This amounts to over $50 million dollars over the cap available for this year! Applications up to the cap ($94 million total) were approved and the rest were wait listed. At this time, the AZDOR has approved some of the wait listed applications and we are expecting more to be approved. If you did not get your application in before the July 2nd cap opening, you can still submit your application to be added to the wait list. There is still a chance that additional applications will be approved as the AZDOR receives notifications of corporate donations. If you would like to get a jump start on next year's cap, feel free to submit your application now to be held for next year. If you have any questions, please contact the Corporate Program Coordinator, Wendi Hauser at wendi@ibescholarships.org.

Thursday, July 26, 2018

2nd Round Application Deadline Approaching



The second round deadline for 18-19 scholarship applications is August 15th; awards will be listed in your file by October 5th, 2018.
If you have not yet applied for the 18-19 school year, log in to your file to apply online or create an account if you are a new applicant. Printable applications are available on our website under the Applicants drop down menu. Also available are the Previous Award Verification form and Public School Attendance form. These forms are required if you are applying for the Low-Income Corporate or PLUS scholarship program and your student is moving from an AZ public school to private school or has been awarded a Low-Income Corporate, PLUS, or Disabled/Displaced scholarship from another organization.
Please call our office at (520) 512-5438 if you have any questions.

Friday, June 29, 2018

Last chance for Corporate Tax Credit Applications

All Corporate Tax Credit Applications will be submitted July 2nd at 10am to the Arizona Dept of Revenue. The application is available below by clicking "Donor Form". Please complete and email to our Corporate Coordinator, Wendi Hauser at wendi@ibescholarships.org. Our office will be closed July 2nd-July 6th for Staff Appreciation Week and Fourth of July holiday, but Wendi will be available by email and working to submit all applications on time. Please email her with any corporate questions and she will get back to you as soon as possible. Have a wonderful and safe 4th of July!

4th of July and Staff Appreciation Week

Our office will be closed July 2nd-6th. For help with corporate donation applications, please email Wendi Hauser at wendi@ibescholarships.org; she will be working through July 2nd to submit all corporate donations and will respond as soon as possible. For all other information, please log in to your file at www.ibescholarships.org to access applications, awards, donations, and receipts. Have a safe and wonderful 4th of July!

Thursday, June 7, 2018

Corporate Donation Application Deadline Fast Approaching



The Arizona state cap on corporate tax credit donations will be opening on July 2nd, 2018. The donation application must be received before that date to be submitted on time to the AZDOR. With the new federal tax laws in place, IBE expects the state cap to be met immediately. If you have any questions, please contact our Corporate Program Coordinator, Wendi Hauser, at (520) 512-5438. Read below to understand how the new federal tax laws will affect local S-corps and LLCs that file as S-corps.



New Federal Tax Law Creates Huge Opportunity for S-Corps and Most LLCs


The new Federal tax law has capped the SALT (State and Local Tax) deduction to $10,000.  This means that Arizona taxpayers who itemize on their Federal 1040 form for 2018 may no longer be able to itemize the full amount of this SALT deduction as they had previously.  Below is a chart that shows how the SALT deduction worked in 2017 for S-Corp owners and LLCs that filed their taxes as an S-Corp and how the SALT deduction will work for 2018 without making an Arizona Corporate Tax Credit donation. 


2017 Taxes
S.A.L.T Deduction
State Income Taxes
 $  20,000.00
Real Estate Taxes
 $    4,000.00
Vehicle Licenses
 $     1,000.00
S.A.L.T. Deduction
 $  25,000.00 

2018 Taxes
S.A.L.T Deduction (capped at $10,000)
State Income Taxes
 $  20,000.00
Real Estate Taxes
 $     4,000.00
Vehicle Licenses
 $      1,000.00
S.A.L.T. Deduction
 $   10,000.00


Because there was no limit on the SALT deduction in 2017, the top scenario was common.  With the new Federal tax plan, the bottom scenario is how the same Individual’s 2018 SALT deduction will look if they file exactly the same way.  With their SALT deduction limited to $10,000, 2018 tax return will result in approximately $4,000 in Federal taxes that they did not pay in 2017.  They have lost $15,000 worth of deductions!

Making a dollar-for-dollar 2018 Corporate Tax Credit contribution will be necessary if shareholders want to realize the highest potential itemized deduction. This amazing opportunity is available for S-Corps and LLCs that file as an S-Corp (on the 1120S Form with your K-1).  Shareholders will be taking their Individual State tax liability out of the SALT deduction and putting it into the Charitable Contribution deduction resulting in a HUGE savings in Federal taxes owed and a dollar-for-dollar tax credit on your State taxes! This is how this scenario looks:

2018 Taxes
S.A.L.T Deduction (capped at $10,000)
Real Estate Taxes
$     4,000.00
Vehicle Licenses
$      1,000.00
S.A.L.T. Deduction
$     5,000.00
Charitable Deduction
State Income Taxes
$  20,000.00
Charitable Deduction
$  20,000.00

The shareholder removed their State taxes out of the SALT deduction by making a dollar-for-dollar 2018 Arizona Corporate Tax Credit contribution.  This allows them to put their State taxes into a Charitable Contribution Deduction and they are now able to realize the same amount of deductions as in 2017.  This will save the taxpayer the same approximate $4,000 they would have paid if they had not made a dollar-for-dollar Arizona state tax credit.

As a Corporate donor, you can still recommend a specific Arizona private school.  Please contact Wendi Hauser at 520-512-5438 or wendi@ibescholarships.org for more information.

Why IBE...?

  • IBE retains only 5% of corporate donations for admin costs, allowing more money to go to students in need. Other STOs keep up to 10%.
  • IBE has been a trusted School Tuition Organization (STO) since 1998.
  • IBE works with more schools in Arizona than any other STO.
  • IBE is recommended by donors, parents & schools for our commitment to customer service.


How often do we get a chance to make a difference in the lives of Arizona children while saving on our Federal taxes? 

Wednesday, April 18, 2018

AZ State Tax Deadline will not be extended to match the IRS extension

We have confirmed with the Arizona Department of Revenue that Arizona will not be extending their 2017 state tax credit deadline to match the IRS extension deadline of April 18th at midnight. The state deadline to donate any tax credit was yesterday, April 17th at midnight. If we receive any further information, we will let you know.