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Donate to Charity
12-26-2017
This holiday season, you’re likely to open your wallet or purse not only for your loved ones but also for charities and causes you’re passionate about.
The first challenge in maximizing the impact of your charitable donation is finding an organization that not only operates in the area you’re passionate about but also will use your money well. “People don’t always distinguish between a great cause and a great non-profit,”
How can I donate wisely and avoid fraud?
Warning signs of fraud:
• pressure to give right away
• calls that thank you for a pledge you don't remember making
• organizations that use names similar to popular charities
• canvassers who do not want to give you details about their organization
• requests to send cash or a money order, instead of a cheque or credit card (cash is not traceable and cannot be cancelled)
• offers to send a courier to collect your money
• overly-friendly canvassers who ask personal questions
• using free email addresses, which let people hide their identity
Tips for donating wisely:
• use the Charities Listings or Other qualified donees listings to confirm that the organization is eligible to issue official donation receipts
• learn about the organization’s activities and how it is managed
• beware of donation schemes that promise a tax receipt for more than you donated
• write cheques to the charity, not to an individual
• make sure that your online payments are secure
• refuse to donate if there is pressure to give right away, or if there are any other signs of fraud
Tax Credit for Charitable Donations
Charitable donation entitles you to a three-tier credit. The first $200 of donations for the year (total to all charities) gives you a 15% federal tax credit, worth about 25% when provincial tax is taken into account. Donations above that level give you a 29% federal tax credit, worth about 46% when provincial tax is factored. If your income is above $200,000, you will get a 33% federal tax credit, worth about 50%, including the provincial credit, for the portion of your donation above $200 that equals your income over $200,000, stating in 2016.
The new 33% federal donation tax credit applies for 2016 and future years. Donations carried forward from 2015 or prior years will not be eligible for the higher credit rate.
The maximum amount of donation you can claim in a year is 75% of your net income.
The annual limit for donation in the year of death and the year before is 100% of net income for the year.
First –Time Donor Super Credit
A first-time charitable donor’s super credit is available for donations made after March 20, 2013 and before 2018. If neither you nor your spouse or common-law partner have claimed a charitable donations tax credit in any year after 2007 , you may be able to claim an additional 25% tax credit on up to $1,000 in donations.
If u meet these qualifications as a first time donor, you are entitled to 40% federal credit for donations of $200 or less, and 54% federal credit for the portion of donations over $200 but not exceeding $1,000. If your income is over $200,000, this credit could be 58%. Only donations of money qualify for this credit. You can claim this temporary credit only once in 2013 – 2017.
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