Movember is just around the corner! Within the next few weeks mustaches will be sprouting and creeping out the general population all in support of men affected by prostate cancer, testicular cancer and mental health issues. To date the Movember community has raised over $574 million in over 21 countries around the world. Over the last few years I’m ashamed to admit I haven’t participated by growing a ‘stache but have still managed to donate money to other brave individuals that have donned the upper lip manly-ness. This year I’ll be throwing my self-consciousness to the wind and try to grow a robust Tom Selleck tribute. I’ll be posting weekly Selleck morphing selfies on the blog, so make sure to stay tuned!
Donating in Canada does not come without its tax benefits. Aside from the self-gratification we receive the government also provides each tax payer with a tax credit that can enhance your annual tax return. Here’s how it works:
- Up to 75% of a taxpayer’s net income can be claimed as donations for the tax credit – amounts exceeding this can be carried forward to future years
- The first $200 you donate will generate an approximate 20-25% credit ($40-$50 tax refund depending on which province in which you reside)
- Any amounts above $200 will generate a higher tax credit (depending on which province you live in this could range from 25%-40%)
- If you or your spouse haven’t received a donation tax credit in the last 5 years you qualify for the First-time Donor’s Super Tax Credit
- The FDSC will provide an additional 25% tax credit on donations up to $1,000
- Before you donate make sure the charity is registered with the CRA by checking the Charities and Giving website
- Typically, it makes sense to put all donations on one spouses return to maximize the excess tax credit over the $200 threshold
Example: If Jane lived in Ontario and donated $400 in 2014 she would receive a $120 tax credit (30%) assuming she made over $533 in the year.
The beauty of the tax credit is the government essentially funds some of your donation towards a worthy cause. In the example above Jane gave $400 to charity but only paid $280 out of pocket ($400 less $120 tax credit).
If you’ve read this far, bravo, and there’s something else about donating that is of imperative importance. Donating and giving are important factors in happiness. When we begin to invest in things outside ourselves (by volunteering or donation) we start to reap rewards that are much larger than ourselves. This is the type of happiness that is much more gratifying.by