Reducing your tax burden with philanthropy
82% of Canadians make donations to charitable or non-profit organizations
55% of donors are aged 55 and over
Top Tax Facts for Charitable Giving:
- You receive a tax credit of 15% on the first $200 contributed and 29% on the remaining amount.
- Up to 75% of a taxpayer’s net income can be claimed as charitable donations.
- In the year of death, 100% of a taxpayer’s net income can be claimed as charitable donations.
- Only gifts to charities registered with the CRA qualify for the charitable giving tax credit.
5 Tips to Maximize the Gift of Giving:
- Make the Most of Unclaimed Credit: Any unclaimed donations you or your spouse have made in the previous 5 years can be claimed in your latest tax return. If you don’t currently earn enough to be taxed, consider holding off claiming any donations you make. Then, as your income increases, you can use them to reduce your tax burden.
- Don’t Forget the Super Credit: If you have never claimed charitable donations, you qualify for an additional federal tax credit of 25% on your first $1,000 of monetary donations. Take advantage of this extra credit before it is eliminated in 2018.
- Donation and Investment In-Kind: Capital gains on in-kind donations of publicly traded securities and mutual funds are not taxable. If you have investments that have increased in value, consider donating them to avoid capital gains tax.
- Get Professional Advice: The tax system is complex. Bring in professional guidance from your accountant and financial advisor to ensure you are maximizing the tax benefits of philanthropy.
- Review, Review, Review: Big life changes are not the only reason to reassess your tax plan. Make sure you review your charitable giving strategy annually to insure you are maximizing the tax benefits of philanthropy.
Contact us and start planning for your financial future.
Alliance Wealth Management is a program provided by Credential Financial Strategies Inc. offering financial planning, life insurance and investments to members of caisses populaires and their communities. Trademark(s) of Alliance Wealth Management are used under licence by Credential Financial Strategies Inc.