It’s tempting to race through your tax return in order to meet deadlines, but think a moment before you hit submit. While tax deadlines are important to meet, by rushing, you might be missing out on valuable tax savings opportunities that could put more money back in your pocket.
One great tax opportunity in Ohio is the Angel Scholarship Fund. Keep reading to learn more about it and how you can use it to maximize your tax savings.
What’s the Angel Scholarship Fund?
The Angel Scholarship Fund is a scholarship fund benefiting Ohio’s Catholic school students. Created by The Catholic Community Foundation in 2021, it partners with the Diocese of Cleveland to provide tuition assistance to low-income families hoping to provide better educational opportunities to their children. The fund is primarily funded through individual contributions, providing taxpayers the opportunity to contribute to the fund and receive a state tax credit for doing so.
How Does it Work?
When you contribute to the Angel Scholarship Fund, you can receive a 100% Ohio income tax credit of up to $750, or $1,500 for married couples filing jointly. Tax credit directly reduces the amount of tax you owe, compared to tax deductions, which lower your taxable income.
Your contribution has a powerful financial impact due to its dollar-for-dollar benefits. The credit allows you to turn a portion of your Ohio tax liability into a direct investment in education, helping families in need while keeping more control over where your tax dollars go.
Money from the Angel Scholarship Fund is awarded to eligible students from any Catholic school. Donors also have the opportunity to designate their contributions to a particular school.
Maximizing Your Angel Scholarship Fund Tax Credit
While you can contribute any dollar amount to the Angel Scholarship Fund, the tax credit is limited to $750 for individual filers. It’s non-refundable, meaning it can only reduce the amount of Ohio tax you owe; it won’t result in a refund beyond that.
For example, if you owe $500 in Ohio income tax and contribute $1,000 to the fund, the credit will reduce your tax bill to $0, but you won’t receive the extra $500 as a refund or additional credit. Similarly, if you don’t owe any taxes, you won’t be able to benefit from the credit, though your contribution would still support student scholarships.
To maximize your credit, it’s important to consider how much credit you can realistically use before making a donation. To do so, you can use your previous year’s return to estimate what you may owe this year.
After making a contribution, the Angel Scholarship Fund will send you a receipt. It’s essential to keep this receipt so you can submit it with your tax return.
Finally, make sure your contribution is made before the deadline for the applicable tax year to ensure you’re eligible to receive the credit.
The Benefits of Individual Tax Planning Services
With the wide range of tax-saving opportunities available in Ohio, it’s wise to consult a qualified tax professional to help you make the most of your savings. A professional can help ensure you’re maximizing the credits and deductions you typically qualify for, while also identifying additional opportunities you may not have been aware of. Even if you think certain tax strategies may not apply to you, having an expert review your situation is a smart way to uncover potential savings, reduce risk, and avoid costly oversights.
Royal Oak Financial Group has a team of local tax experts ready to guide you through personalized tax-saving strategies. Contact us today to learn more.
