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Maximizing the Tax Benefits of Your Charitable Donations

Optimize Team November 11, 2021

So you were in the giving mood last year? Good on you!  If you did give to charity in 2015, you’re probably eligible for returns on those contributions. Here are five tips on maximizing the tax benefits on your charitable donations.

 

1. Keep and Gather Receipts

An eligible receipt must have the charity’s name and registration number. It should also include the date, serial number, amount donated, donor’s name, and a signature on behalf of the organization. Make sure your receipts have all these details before filing. If you are filing by paper, you will be required to include all receipts before sending to the CRA. If filing electronically, keep the receipts handy in case the CRA asks for them later.

 

2. Combine Spouses’ Donations

Any donations made by a spouse or common law partner can be filed by either person in the relationship. And so, to maximize eligible tax credits, all donations should be lumped together.

 

3. Don’t forget In-Kind Donations

In-Kind donations include common items like clothing, food, toys and other household goods. The CRA will allow credits on what they call “gifts of property.” If you have made donations such as these, you will need a receipt from the charity showing fair market value for the item donation(s).

 

4. Donations at Work Count, Too

If you made any financial contribution to your workplace, you are eligible for a credit. Keep track of them and be sure to notify your employer if necessary. You can refer to these workplace donations in “Box 46” on your T4.

 

5. Carry Forward your Donations Appropriately

Most donations can be carried forward for up to five years. There are a few advantages of doing this. The first is to take advantage of the higher tax credit available on donations over $200. Also, until 2017, you can carry forward your donations to take advantage of the CRA’s “First-Time Donor’s Super Credit.”  This credit gives you an extra 25 percent non-refundable federal tax credit when you file your first charitable donation.