November usually means lots of bad moustaches for a good cause, as the Movember campaign to raise funds for prostate cancer gets going. And the federal government is matching any donations directed to rebuilding the Philippines, following the recent devastating typhoon.
The first $200 of any charitable donations you make are worth a 15 per cent federal credit, or $30 in tax savings. But the amount donated in excess of $200 is worth 29 per cent federally. So if you made a $1,000 donation, you would receive $262 in federal tax savings, plus your provincial credit. So the more you donate, the more you are rewarded at tax time.
And new this year is the First-time Donor’s Super Credit, designed to attract more first-time or lapsed donors with even more tax savings.
With some exceptions, only registered Canadian charities are able to issue tax receipts. If you donate to an organization outside of Canada, it does not generally qualify as a deduction. The charity should issue a receipt for the amount you donated. A charity should not offer to provide a receipt for more than your actual donation.
You are also allowed to carry forward charitable donation to maximize your claim. For example, if you didn’t donate more than $200 last year, you can combine your 2012 and 2013 receipts and claim them on your 2013 tax return. In fact, you are allowed to claim up to six years of charitable donation receipts on your return. And spouses or common-law partners are allowed to pool their donation receipts to maximize their savings.
Besides helping the organization who receives your donation, giving to charity will also help at tax time. Make sure you gather all your receipts for the year. Every donations means a little less tax to pay.