Did you know that the Canada Revenue Agency (CRA) allows a federal tax credit on charitable donations?
It’s true! You are allowed charitable donations of 15% for the first $200 and 29% on amounts over $200 up to a maximum of 75% of net income. The provincial tax credit for Ontario residents is 6.05 per cent of the first $200 and 11.16 per cent of any amount over $200.
Spouses can also combine their contributions to maximize this great feel-good tax break, which is a very important part of our Canadian giving culture anyway. Basically, charitable donations are a win-win for everyone!
Furthermore, and a very important thing to note, your contributions do not need to be claimed in the same tax year they were made, but can be carried forward for up to five years. FIVE YEARS!
Donations under the $200 limit can be accumulated and claimed in later years to qualify for the higher credit allowance.
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