If you are anything like me you don’t like have so much of the money you work all year for going to the state for programs and projects that will never have any effect in your life. I know there are things we must pay taxes to provide; police, fire protection, and military among other necessities. However, there are many things that our governments at all levels do that we as individual citizens do not agree with or support. I don’t want to get into the minutia of which things the government ‘wastes’ my money on that I don’t like, because that is not the point here. I will just maintain that we all have things that we would rather not have the government ‘waste’ our money doing.
We, in Colorado, and especially here in the San Luis Valley, have an exceptional opportunity when it comes to how our tax dollars get spent, at least on the state level. The State of Colorado has seen fit to provide us the choice to basically self-direct our tax dollars through the use of tax credits for certain charitable giving. I’m sure this is not how the tax credits were sold at their on-set, but it can be the effect. I stumbled upon this as I did my own taxes this year. Let me walk you through an example. This will be a very basic example and there are many things I will leave out for the sake of keeping it easy to understand.
Let’s say you have a taxable Income of $50,000. You will owe the State of Colorado $2,315 in taxes.
There are several ways to be able to take advantage of Colorado Tax Credits. There are two of these tax credits that I take advantage of here in Alamosa. The first one being the Child Care Contribution Credit: “Taxpayers that make a monetary contribution to promote child care in Colorado may claim an income tax credit of 50 percent of the total contribution.” The second being the Tax Credit for Contributions to Enterprise Zone Administrators, Programs, Projects, or Organizations: A fancy name for saying that if you make a donation to an approved organization you “may claim an income tax credit of 25 percent of the value of the contribution up to a maximum credit of $100,000.”
So, continuing with the example above, I’m going to make this a slightly exaggerated example to demonstrate the concept of completely self-directing your state tax dollars.
You donate $200 a month to the Boys and Girls Club of the SLV (a qualified Child Care Contribution Credit organization) that equals $2,400 in donations. You also make a one-time contribution of $1,000 at some point during the year. Total contributions to the Boys and Girls Club of the SLV equal $3,400. You also donate $100 a month to Tu Casa (a qualified Enterprise Zone organization) for a total of $1,200 and you also make a one-time contribution of $1,000. Total contributions to Tu Casa are $2,200. Lastly, you make a $300 donation to La Puente (a qualified Enterprise Zone organization).
In summary, you have donated $5,900 to three local organizations that each serve local needs and are part of our community. These donations will result in tax credits ($3,400 to Boys & Girls Club = $1,700 tax credit, $2,200 to Tu Casa = $550 tax credit, and $300 to La Puente = $75 tax credit) totaling $2,325. This completely off-sets your state taxes and you receive a refund of all taxes paid to the State of Colorado.
This is just an example of how you can totally self-direct your state taxes. I know not everyone can or would choose to do this, but I do know it is possible. I didn’t even address the tax deductions you will get at the federal level thus reducing your total tax burden even more.
Even if you can’t fully self-direct your taxes, you should certainly consider doing this to some level. The three organizations I mentioned above are just a few of the great organizations at work in Alamosa and the Valley, all of whom will put your money to much better use- impacting the lives of our neighbors, our quality of life, our youth and our children. I want to invest in the San Luis Valley, where I live, work and play. I do not want to send my tax dollars to Denver, where I have no voice and cannot make a meaningful difference by just paying my tax bill.
Board chairman, Boys & Girls Clubs of the San Luis Valley