For example, charitable donations to a hospital foundation, university or non-profit organization designated as a "charity" by Revenue Canada, allow you to support a cause close to your heart, while reducing your tax bill!
Québec offers the most generous tax credits to those who give. For several years now, government authorities have significantly improved tax incentives linked to charitable donations to ease their financing. We are finding that more and more taxpayers are committed to reducing taxes by including more charitable donations as part of their tax and estate planning.
On the other hand, prospective studies based on the aging of the population show that several millions will be transferred to the next generation, not to mention Revenue Canada and Québec who are particularly voracious upon the death of a taxpayer. This situation certainly favors more planned giving in the future.
In 2010, 85% of Quebecers donated the same amount as all other Canadians (84.1%). The average donation was $200 among 35-54 year olds who are the largest segment, while those aged 55 and over give the highest amount of donations (Stephen Jarylowski, LaPresse, Business, Jan. 3, 2014)
In Canada, both individuals and companies can make donations. The gift can be made while living or in the case of death for an individual.
- 32.5% for the first $200
- 48.2% for any amount over $200
For example, a gift of $ 1,000 provides a tax reduction of $450.60 ($65.00 for the first $200 and $385.60 on next $800). A donor gives only $549.40 or only half a donation of $1,000 and at the same time he enriches by $1000 a cause dear to his heart.
A corporation may also make a charitable donation to reduce taxes. The tax will result in a reduction of a taxable income rather than a tax credit as it is the case for an individual. The economic advantage can be considerable and can ensure that relationships of trust are established in the company in favor of a corporate donor.
Various options allow you to help a charity in order to meet your philanthropic goals while minimizing your tax burden. The gift may be in cash or property. The donation of service is not recognized. Depending on the nature of the particular property, however, a donor must be careful in determining that the market value does not increase the resulting tax credit.
According to Statistics Canada, only 16% of donors donate for the sake of saving taxes. The majority of Quebecers are compassionate. Scientists have shown that giving makes us happy and reduces stress and there are all sorts of good reasons to give. We will be developing different forms of giving over the next while.
Mr. Jean-Guy Grenier, B.A.A., CMC, Adm.A Pl. Fin.
Regional Director - Elite
Development and Marketing
Insurance and Savings for individuals
Desjardins Financial Security
In collaboration with Suzanne Daoust, LLL, DDN
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