Institute Of Chartered Accountants Of Ontario

Institute Of Chartered Accountants Of Ontario

March 17, 2011 09:15 ET

Give to Worthy Causes and Save on Taxes: Ontario CAs

Effective Tax Planning Can Help Canadians Support Charity

TORONTO, ONTARIO--(Marketwire - March 17, 2011) - When the economy declines or emergency situations like natural disasters occur, requests for donations seem to increase exponentially. So the need for charitable giving is very high today and, thanks to provisions in Canada's tax system, the incentives are in place to make it easier and financially effective to give.

"Donating helps everyone – you the taxpayer and those in need," says Chartered Accountant Rosa Maria Iuliano, Tax Partner, Collins Barrow Ottawa LLP.

"Donating to Canadian-registered charities has many benefits – both personal and tax-wise. Not only are you helping out your neighbours, but you can also take advantage of the non-refundable tax credits. Donations are eligible for a federal tax credit of 15 per cent of the donation amount on the first $200 you donate, and increase to 29 per cent of the amount over $200. You can claim all or part of this amount to a limit of 75 per cent of your net income." 

In addition to the federal credit, donors will also be eligible for a provincial tax credit.

For gifts of certified cultural property or ecologically sensitive land, a Canadian may be able to claim a gift amount of up to 100 per cent of his or her net income. Also, when making a donation of certain publicly traded securities with an accrued capital gain to a charity, the donor will not be taxed on the gain arising from the gift while being able to claim the fair market value of the securities as a donation.

To claim donations on an income tax return, a donor will need a receipt. Often times, charitable organizations will not automatically provide receipts if the amount is less than a certain sum. However, it's wise to always request a receipt, regardless of the amount donated. Note that for larger gifts, the Canada Revenue Agency may also request proof of payment in addition to the official receipt.

"You require the tax receipt to support your charitable donation deduction," advises Iuliano. "So be mindful of whom you give money to. Be sure the organization is a registered charity - if you are not sure, you can confirm the registration on the CRA website at http://www.cra-arc.gc.ca/chrts-gvng/menu-eng.html."

For more tax tips:

As an example of the type of expertise a Chartered Accountant can offer, we've attached a link to Institute articles containing important tips to consider when setting up a Registered Retirement Savings Plan. All of the information in the article is verified, accurate and provided by the Institute of Chartered Accountants of Ontario as a public service. It is available at: http://www.icao.on.ca/MediaRoom/MediaArticles/TaxPlanArticles/1009page5883.aspx.
If you use any of the tips, we only ask that you maintain the credit to the Institute. It would be very much appreciated if you could let the Institute know when you run any of our RRSP tips.

About the Institute of Chartered Accountants of Ontario:

The Institute of Chartered Accountants of Ontario is the qualifying and regulatory body of Ontario's 34,000 Chartered Accountants and 5,000 CA students. Since 1879, the Institute has protected the public interest through the CA profession's internationally recognized standards of qualification and the enforcement of its rules of professional conduct. Chartered Accountants are the professionals Canada's business leaders trust to help make the financial, strategic and leadership decisions that matter. The Institute's website is: www.icao.on.ca and the student website is www.guidetorulingtheworld.ca.

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