Charitable Donation Tax Credit

bf230054 said:

I was wondering what is maximum amount you can give to a charity/organization in order to claim a tax credit because I don't want to go over the limit and not be able to claim them for next years taxes. Also, what are some organizations I can give to? I only know of Church and Political party's, any other? I was just interested since I'm only 18yrs old and would like to increase my tax credit for next year.

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I believe you can give up to 75% of your net income to charity and still obtain the tax credit.

Here's a good site with a list of Canadian Charities: http://www.canadahelps.org/

Here is more information on the donation tax credit.

You can also carry forward your charitable contributions for five years. It is sometimes better to claim five years worth at once, since the first $200 or $250 receive a lower credit than the balance.

Just make sure that you donate to a registered charity. There are many fraudulent organizations out there. If you have any doubts about a charity, check on the CRA website:

http://www.cra-arc.gc.ca/tx/chrts/dnrs/lstngs/menu-eng.html

Also if you receive something in return for your donation (like tickets, dinner, etc) it doesn't count as a donation

lb71 is right. In most, if not all provinces, the first $200 of charitable donations are credited at the lowest marginal rate, and anything above $200 is credited at the top marginal rate. I live in BC, so that means that the fist $200 I claim is credited at 20.06%, and anything above that is credited at 43.7%. So you can see, it makes sense to claim a pile of charitable donations all at once.

Political party donations work differently. For federal party donations, the federal tax credit is 75% on the first $400, 50% on the next $350, and 33% on the next $525. There is no tax credit above $1275 in a year. Provincial political party donations may follow a similar graduated system. I don't know if political donations can be carried forward.

are these formulas still the same as presented by FT in his 2007 post on MDG?

taxtips.ca is confusing me a bit.

we want to donate more this year, a lot more, but we'd also like to take advantage of the tax benefits best we can

Sustainable PF said:

are these formulas still the same as presented by FT in his 2007 post on MDG?

taxtips.ca is confusing me a bit.

we want to donate more this year, a lot more, but we'd also like to take advantage of the tax benefits best we can

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can anyone answer this for me, please - looking at donating $900 but have to make sure Mrs. SPF understands how our refund will be impacted

plen said:

Based on the following three pages, for 2010 here's the calculation in Ontario:

http://www.taxtips.ca/filing/donationstaxcredit.htm
http://www.taxtips.ca/taxrates/on.htm
http://www.taxtips.ca/taxrates/canada.htm

$900 donation would be
15% Federal + 5.05% ONT = 20.05% on the first $200 = $40.10
29% Federal + 11.16% ONT = 40.16% on the other $700 = $281.12

Total: $40.10 + $281.12 = $321.22

The best way to maximize donations is for one spouse to claim it all. Since you can carry over for up to 5 years, you can maximize your credit by amassing the largest you can over 5 years so the most of it is calculated from the higher tax category. But of course more money now means more investing opportunity now.

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thanks a ton plen