Personal Finance

Tax filing - charity donations?

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  • Feb 2nd, 2021 3:48 pm
[OP]
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Aug 11, 2003
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Tax filing - charity donations?

Folks,

I've wondered about tax filings every year .. where whatever charity you donated to issues you a tax receipt. Using that you get some break.

My question is how much should you have donated to charities for it to really give you a good tax break?

I donate to various charities throughout the year and over the years, I've noticed that when I'm doing my taxes, it doesnt really impact my overall what I owe to the tax man lol! Hope my question makes sense?
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Member
Apr 16, 2015
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The best tax breaks kick in once your donations exceed $200. At the federal level, you get 15% on the first $200 donated and 29% on the excess (unless you pay taxes in the highest tax bracket, in which case this can reach 33%). Plus, you get a provincial credit. The rates vary by province, but it is generally the lowest provincial tax rate on the first $200 and the highest provincial rate on the excess. In Ontario, your taxes will be reduced by a combined total of 20% of the first $200 donated ($40 saved), plus about 40% of the donation amount over $200.

You can claim the credit for donations made in the last five years, so it may be worth it to save them up to make a bigger claim in one year.
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Jan 19, 2017
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doomhammer wrote: Folks,

I've wondered about tax filings every year .. where whatever charity you donated to issues you a tax receipt. Using that you get some break.

My question is how much should you have donated to charities for it to really give you a good tax break?

I donate to various charities throughout the year and over the years, I've noticed that when I'm doing my taxes, it doesnt really impact my overall what I owe to the tax man lol! Hope my question makes sense?
Have you tried to compare the results with and without claiming donation credits? What do you mean by no Impact? What is considered good tax break? Do you mean the results are the same or the difference is small? Can you give some examples?
[OP]
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ml88888888 wrote: Have you tried to compare the results with and without claiming donation credits? What do you mean by no Impact? What is considered good tax break? Do you mean the results are the same or the difference is small? Can you give some examples?
Yah that's what.. you got it right!

I'm using this tax software for the past few years. With and without entering the charity contributions .. the overall difference I owe/am owed is small .. I'd even say its neglible to the point of .. I wonder why do I even pay to charity .. but then again, I'm not really paying for tax purposes .. kind of a moral/ideological issue (for me)?

Just wondering anyways ......
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Sr. Member
Nov 6, 2015
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Guelph, ON
You never are better off tax wise for donating to charities, you would always come out ahead giving nothing. Only reason to give to charities is to support them.
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Jan 19, 2017
4057 posts
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doomhammer wrote: Yah that's what.. you got it right!

I'm using this tax software for the past few years. With and without entering the charity contributions .. the overall difference I owe/am owed is small .. I'd even say its neglible to the point of .. I wonder why do I even pay to charity .. but then again, I'm not really paying for tax purposes .. kind of a moral/ideological issue (for me)?

Just wondering anyways ......
Can you explain what you meant by 'the overall difference I owe/am owed is small'? I.e. are you expecting tax saving of $1 if you donate $1? Are you expecting to make money by donating?
Member
Apr 16, 2015
204 posts
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ml88888888 wrote: Can you explain what you meant by 'the overall difference I owe/am owed is small'? I.e. are you expecting tax saving of $1 if you donate $1? Are you expecting to make money by donating?
I think that's what some people assume. However, if I donate $500, I'll save almost $200 in taxes, but I'm still out of pocket $300.
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Oct 24, 2010
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catsoncoffee wrote: I think that's what some people assume. However, if I donate $500, I'll save almost $200 in taxes, but I'm still out of pocket $300.
This is exactly what I was about to say.

If you want to maximize your take home, net, after tax income - don't donate to charities.

I'm not advocating that. There are a lot of non financial benefits to donating to charities; my wife and I donate a couple thousand a year. But, it's still the reality - no amount of donating to charities will increase the amount of money in your bank account on an annualized basis.
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Apr 11, 2011
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Memramcook
catsoncoffee wrote:
You can claim the credit for donations made in the last five years, so it may be worth it to save them up to make a bigger claim in one year.
Do I understand correctly that you can carry forward the donations for up to 5 years?? Example this year (2020 tax year) you could claim 2020 + the carry forward of the 5 years (2019, 2018, 2017, 2016 and 2015)?

Thanks

Bob
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Apr 16, 2015
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bobmacgolf wrote: Do I understand correctly that you can carry forward the donations for up to 5 years?? Example this year (2020 tax year) you could claim 2020 + the carry forward of the 5 years (2019, 2018, 2017, 2016 and 2015)?
Yes, if you have any donation receipts for 2015-2019 that you have not yet claimed on your tax return, you can claim them on your 2020 return. Likewise, if you have made donations in 2020, you can either choose to claim them this year, or save them and combine them with future donations in any of the next five years.

It says this right at the top of T1 Schedule 9: https://www.canada.ca/content/dam/cra-a ... s9-20e.pdf

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