This is a guest post from Village Hive Member, Niina Felushko.
What You Need to Know About Claiming Charitable Donations on your Tax Return!
Giving to charity can give you that warm feeling knowing that you’ve helped out an organization in need of funds to support their cause, but many still have questions when it comes to claiming their donations on their income tax return. Here’s what you need to know!
a) First step is to determine the eligible amount of your charitable donation & ensure you have an official receipt with name of the organization, date, amount & charitable ID number. Charity lotteries are not eligible donations for tax purposes.
b) In any one year, you may choose to claim donations made by December 31st of the applicable tax year, any unclaimed donations made in the past 5 years and any donations made by a spouse or common law partner in the taxation year or previous 5 years. If you donate a small amount each year, it may be more beneficial to save them up for 5 years and claim at the same time.
c) You can claim eligible amounts of gifts to a limit of 75% of your net income. You may be able to claim up to 100% of net income if it was a gift of certified cultural property or ecologically sensitive land.
d) So how much is the non refundable donation tax credit? You receive 15% on the first $200 and 29% on amounts over $200. This is why many will choose to save up their donation receipts and/or combine with their spouses to receive the maximum tax credit.
e) First time making a donation? Ask your tax professional if you are eligible to claim the Super-Donor Credit which is an additional 25% non refundable credit for those who have not made a claim, nor has a spouse or common-law partner who has made a claim for charitable donations since 2007. It can only be claimed for donations of money, up to $1,000. Either spouse can make the claim, or it can be split. The super donor credit can only be claimed once and will only be available until 2017, so don’t miss out if you’re eligible.
So as we approach the holiday season and year end, think about making a donation to a registered charity of your choice. Whether you are a first time donor or give annually, together, we can make the world a better place.
Still need help? Have questions? Contact me for a consultation.
President / Insightful Financial Connections Inc.