1. Send a check or donate online through PayPal. (Up to $400 for a family, up to $200 for a single person) to James Madison Preparatory School.
2. Madison Prep sends you a receipt for your donation. Make sure to keep for your records.
3. When paying taxes in 2009, you compute your state tax liability; deduct the amount of your donation in step 1 for that figure.
4. The resulting figure is what you actually owe Arizona for 2008.
For example, let’s say you and your spouse have an adjusted gross income (AGI) of $60,000 in 2008. In February, 2009, you sit down to do your taxes. Let’s pretend for the sake of simplicity that the state tax rate is a flat 3%. Your state tax would be $1,800. However, since you donated a $400 tax credit, you immediately reduce that figure to $1,400. That’s the final amount of state tax you owe.
To complete the scenario, let’s pretend that your W-2 form shows that you’ve paid all of the $1800 you owe the state of Arizona from your wages during the course of 2008. When you file your taxes, the state of Arizona will issue you a refund of $400!
Can I take advantage of both the public and a private school tax credit in the same year?
Yes. If you have a state tax liability that meets the combined amount of both the public tax credit (up to $400) and the private tuition tax credit (up to $1000), you may take full advantage of both.
Click here to download the AZ Tax Credit Form.
Click here to pay AZ Tax Credit online.