Charitable Donations

Put your Money Where your Heart Is: Charitable Donation Tax Receipts

We all love to give, and we want to give to a cause that touches our hearts. But what if I can show you a way that you can give and feel good about it, and also get a tax refund from that?

Pretty cool, right?

Hello, my name is Taayla Mark with Engrace Financial Solutions. I am so glad you’re here today because I love the topic we’re going to talk about, and I know that you will, too.

People are naturally geared toward giving. I honestly believe that. And how awesome is it

that we live in a country where we get rewarded for putting our money where our heart is?

And that is the side benefit of charitable giving (because the first benefit is in the giving)!

Charitable Donation Income Tax Receipts

Did you know, when you donate to your favourite registered charities, the Canada Revenue Agency supports your good deeds with a good deed in return?

The money you give away creates a tax credit against your personal income tax.

Although the term “tax break” may not be what springs to mind when you are moved to support a cause, you will be reaping that benefit anyways.

Of course, like all worthy, tax-related things, this benefit comes with some rules and regulations.

But don’t worry, they won’t hurt.

Here’s how it works:

First, to qualify for the tax credits, your charity of choice must be registered with the Canada Revenue Agency and must have a charitable registration number.

How to calculate what your CRA tax credit will be.

This is a little more involved, because you have to know the federal rate, which is the same for everyone in Canada, and the provincial rate, which is different for each province.

To keep it simple, I have provided a calculator in the video description below. It will do all the hard work and make sure that you qualify for the right amount, or you can use the CRA Charitable Donation Calculator

As to the extent of tax relief you can expect from your charitable donation, just know that if your total gift is $200 and under, you may be less thrilled by the tax credit you will get.

As an example, if you donate $200, you can expect anywhere from $40 to $60, depending on the province you live in.

However, for every dollar that goes over $200, your tax credit is closer to 40 to 50%, so that means that the $1000 you give away costs you $600, and if you live in British Columbia, you would receive a $400 tax credit. That’s actually a great incentive for you to give more.

You can combine CRA charitable donation tax receipts with your spouse or common law partner

If larger gifts are not available for you at this stage, don’t stop donating altogether, because there are other ways for you to take advantage of the bigger tax credits.

If both you and your spouse or common law partner give, then you can combine both amounts and apply to one person’s tax return to bring you over that $200 threshold.

Carrying over your CRA charitable donation tax receipts

Or, if you are single, you can hold off on claiming the donation this year and add it to next year’s total.

In fact, you can carry forward your cash donations for up to five years!

When it comes to giving to a worthy cause, it isn’t about the tax breaks that we get, although it is a helpful perk. It is about our connection to others and how our hearts break for their suffering, and our willingness to act.

If it wasn’t for your generosity in sharing your donations and time to help those in need, our world would be a much sadder place, so thank you to all the heroes out there.

I hope you are encouraged to give by what you learned in this video and I have so much more to say regarding financial planning around charitable giving. If you would like to form a plan around your charitable giving, please call me at (604) 428-8765 for a free consultation. 

Let me know your about your favourite charities and tell me why the cause or organization moves you in the comments below, because I want to create a community of givers!

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