Still Looking for Deductions?
Here's one of the best last minute tax deductions we can think of!
Colorado residents can, once again, make charitable donations for child care programs and get nearly all their money back through tax savings.
It is called the Child Care Contribution Tax Credit and provides a 50% tax credit against your state income tax for every dollar donated.
This tax credit had been suspended for a number of years due to budget constraints. It returned in 2013 and is being phased in over a number of years.
For 2013, half the credit can be claimed this year (essentially 25% of your donation) and carry the other half forward to 2014 and four more subsequent years. That means you should eventually get full benefit of the entire 50% credit.
The savings, however, don't stop there! In addition to the tax credit, your donation also qualifies as a charitable contribution deduction on both your IRS and Colorado income tax returns. Depending on your tax bracket (which could be as high as 39.6% for IRS and 4.63% for Colorado), the deduction can also save you a significant amount of tax.
When you consider the 50% tax credit in addition to the tax saved from the deduction, some taxpayers can get back nearly all their donation through tax savings. Yet 100% of their donation goes towards supporting child care programs in our region! Everyone wins!
Donations can be made directly to specific programs, such as the Boys & Girls Clubs (http://www.begreatlarimer.org/Pages/ColChildCareContributionTaxCredit.php), or to the United Way of Larimer County Child Care Fund to assist a variety of such programs (http://uwaylc.org/wp-content/uploads/2011/08/Child-Care-Fund_UWLC_2013.pdf)