By Pascale Hansen

Planning for charitable donations not only allows you to support causes you care about, but also provides potential tax benefits that can enhance your financial strategy.

Here are some key points to consider when planning your charitable giving in Canada:

1. Choose the Right Charities

Research organizations that align with your values and objectives. Ensure they are registered charities with the Canada Revenue Agency (CRA), which will allow you to receive proper tax receipts for your donations.

Consider supporting local charities or grassroots organizations that may have a more direct impact on your community. Check out my favourite charities, WCK (West Coast Kids Foundation): https://wckfoundation.ca/ and Little Warriors: https://littlewarriors.ca/.

2. Understand Tax Credits

In Canada, charitable donations can provide you with a non-refundable tax credit. The federal tax credit is 15% on the first $200 donated, and 29% on amounts over that. Provincial credits vary, adding further benefits depending on where you live.

Donations over a five-year period can also be aggregated, allowing you to maximize your tax credits in a single year, which is particularly useful if you've made a substantial contribution.

3. Keep Detailed Records

Always obtain an official donation receipt from the charity. This is crucial for claiming your tax credits.

Track your total charitable donations throughout the year to ensure you know how much you’ve given and to which organizations.

4. Consider Other Ways to Give

Beyond cash donations, you can also donate securities, personal property, or volunteer your time. Donating appreciated securities, for instance, can help you avoid capital gains taxes while providing you with a tax receipt for the fair market value.

Explore setting up a donor-advised fund, which allows you to make a charitable contribution and receive an immediate tax benefit while taking your time to decide which charities to support.

5. Create a Giving Strategy

Think about your overall financial plan and how charitable giving fits into your goals. Whether through regular contributions or larger annual donations, establishing a plan can help you manage your budget effectively while maximizing your impact. A cost-effective way to maximize your impact and reduce your taxes is to leverage life insurance, click here to learn more: https://bit.ly/3AFWCpD

6. Consult a Professional

If you're unsure about the best approach to charitable giving or how to navigate tax implications, contact me today to tailor a strategy that aligns with your financial situation while maximizing your philanthropic impact.

By understanding the tax benefits and planning your giving, you can make a lasting impact while benefiting our financial well-being.

Pascale Hansen is the Founder, CEO, and Financial Strategist at Zada.

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