It is the time of year where Canadians overwhelmingly open their hearts and wallets to various charities. In 2019, 72% of Canadians engaged in charitable activities, 65% of those people donated to causes that they cared about. Studies have shown that any act of altruism or selflessness is connected to positive physical and mental benefits! Your brain releases those ‘feel good’ chemicals that make you feel warm and fuzzy for having done a good deed, also known as a ‘givers high’.
So, if you were thinking of donating to a charitable cause this season, or you have done so already this year, you may wonder if there are any tax credits available to you; The answer is yes! You can claim donations made by December 31st of this year or any unclaimed donations from the previous 5 years, either made by you or a spouse/common law partner. There are two charitable tax credit rates for both the federal government and for the provinces and territories. These are non-refundable tax credits which mean that they can only be used to reduce tax owed, if you do not owe any tax you will not get a refund.
The maximum amount you can donate is 75% of your net income, and the optimal donation amount is a little complex as it is a staggered rate. However, your favorite Surrey Accountant, Jason Ding CPA Inc, would be more than happy to help you optimize the value of your dollars donated.
To claim a charitable donation on your taxes, you will need to have a receipt issued by the charity. Only registered charities are eligible to provide receipts. Additionally, it’s always a good idea to check that the charity you are giving to is legitimate and the money you are giving them will go to the intended purpose. If you’re not sure whether a donation can be claimed, reach out to us and we will be happy to assist.
As always, if you have any questions, please contact us!
Thank you,
Melissa Whyte
Accounting Coordinator
Jason Ding CPA Inc.
* Source: https://www.cafcanada.ca/wp-content/uploads/2019/03/CAF-Canada-Giving-US-FinalMASTER5.pdf