Lets start with the bottom line.
If you give $200 or less to Canadian charities this year, your income taxes will be reduced by at least 25 cents for every dollar you donate.*
It gets even better.
For every dollar that you donate above the first $200, your taxes will be reduced by at least 40 cents on each dollar.
So lets say you donate $500. You save at least $50 on the first $200 plus at least $120 on the other $300. That's a total tax break of $170 or more - in other words, for every $3 you donate, you get at least $1 back in tax saving.
*The exact value of the charitable donations tax credit varies slightly according to the donor's taxable income and province of residence
The credit for charitable donations is the best tax break available for Canadians
Many Canadians underestimate the real value of tax credits for charitable donations because of the completed way they are calculated.
1. Donations of $200 or less reduce basic federal taxes by 17% of the amount donated.
2. Donation amounts above $200 reduce basic federal taxes by 29% of the amount donated.
3. Provincial income taxes are calculated as a percentage of basic federal taxes, so the federax tax credit reduces provincial income taxes too. (except in Quebec, where donations get a seperate provincial tax credit.)
4. Federal and provincial surtaxes are also calculated as a percentage of basic federal taxes, which further increases the value of the tax credit for charitable donations.
5. The tax break for charitable donations is a credit, not a deduction from taxable income - it's subtracted directly from your taxes.
* To learn more about SAVING by GIVING, visit the Canadian Government Website.
* For further information on Tax Advantages Click Here
