Canada has a generous tax credit system for charitable donors. If you make charitable contributions to a registered charity, the federal government of Canada lets you claim non-refundable charitable tax credits. This means that when you make a donation, you’ll receive a certain percentage of your donation as a tax refund. The maximum donation credit you can claim is 75% of your net income for the year.
Remember To Report The Donation
You need to report your charitable donations and claim your tax credits when you file your income tax return.
If you file your tax return electronically, ensure you keep the official donation receipts from the registered public charities for five years. For paper tax returns, ensure you have your completed Schedule 9. In this case, you won’t need to send your official donation receipts but still ensure that you have them.
Know The Charitable Tax Credit Rate In Canada
You can claim amounts of gifts to a limit of 75% of your net income. For gifts of certified cultural property or ecologically sensitive land, you can claim up to 100% of your net income.
Once you have determined the amount, use the Charitable donation tax credit rates table to calculate your charitable tax credit.
Be Mindful Of How and To Whom You Donate
Before donating, remember to ask the charity for its registration number and confirm its part of the stipulated list of charities. Or phone the Charities Directorate at 1-800-267-2384 to confirm the credibility of the nonprofit organization before making a donation.
If you want to learn more about how you can better manage your finances and investments, visit the Nour Private Wealth website.
Contact us today to learn more about tax deductible charitable donations.
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