Year-End Donations - More Bang for Your Buck!
As we approach the end of the year, we hear more questions about last minute tax-saving ideas. One way to possibly save taxes and benefit the community is by making donations to charitable organizations such as your church, colleges and most social agencies.
In Colorado, donations to certain designated organizations qualify for significant income tax credits. These credits can be used to offset Colorado income taxes dollar-for-dollar.
Colorado Enterprise Zone Contribution Project Tax Credits
In Colorado, certain organizations have been designated as EZ Contribution Projects. Monetary donations to these organizations qualify for an income tax credit equal to 25% of the donation.
Statewide, there are more than 400 qualifying organizations, with 28 residing in Larimer County. A copy of the statewide list updated as of July 2018 can be found at the following link:
Colorado Enterprise Zone Contribution Projects
Colorado Child Care Contribution Credit
Monetary contributions made to qualifying organizations to promote quality child care in Colorado can qualify for an income tax credit equal to 50% of the donation.
Agencies in Larimer County who qualify for the tax credit include:
Boys and Girls Clubs of Larimer County
When you consider the income tax savings for the donation combined with the income tax credits, you get back a substantial portion of your donation in the form of tax savings. At the same time, the organization receives 100% of your donation.
The IRS has proposed new regulations that may decrease the Federal deduction for donations qualifying for state income tax credits.
In addition, there is now a cap on the deduction of State and Local Taxes in the amount of $10,000, and the Standard Deduction for 2018 has been significantly increased. The interplay of these two provisions could have an impact on the actual tax benefits to a particular donor.
We encourage you to consult with us in advance regarding the deductibility of all charitable contributions.