It’s that time of year. For many of us it’s a time to cherish moments with family, reflect on the previous year, and if you are in a position to do so – give back to those who are less fortunate. The holidays aren’t easy for everyone, and even small amounts can make the world of a difference. In Canada, we are lucky that along with the goodwill of giving back, there is also a generous tax credit system in place for donors to charities.
We know that the tax credits are not why you give back, but it is helpful to know what is in place and how it can benefit you. Here are some “good to knows” about tax credits for charitable donations.
• Alberta residents receive a 50% credit for donations over $200 in Alberta. This is the highest in Canada other than Quebec! Furthermore, any tax payers who have income over $200,000 can potentially receive an enhanced credit for 4% more, so a 54% total.
• Donations for the 2018 taxation year have to be made by end of December to be used for the 2018 tax year.
• Donation tax credits are limited to 75% of your income.
• Donations over $5,000 can often be selected for review, so it’s good to keep your donation receipt and cleared cheques (if paid by cheque).
• Donations can be combined for spouses. You might get a better deduction if you do this, as you can get over the $200 threshold quicker.
• Your tax credit will be received when you file your return.
If you are curious about the amount of tax credits you can receive from your donations, you can check out the Tax Credit Calculator here. We wish you all the best this holiday season, and are available to chat if you have any questions about tax credits for charitable donations. You can contact your trusted Catalyst advisor at 403-296-0082.