Share, Split & Combine for Spousal Tax Savings – Tip #3
This is the third of a 5-part financial tips series focusing on tax savings opportunities and strategies for spouses.
Spousal Tax Savings Tip #3 - Charitable Donations
While the first $200 of charitable donations claimed is eligible for a 15% federal tax credit, donations in excess of $200 are eligible for a 29% federal tax credit. As a result, spouses may want to combine their donations in order to take advantage of the higher tax credit on donations in excess of $200. Donations can also be carried forward for up to 5 years allowing individuals who donate smaller amounts to combine and claim their donations in a single year to also take advantage of the higher tax credit on donations in excess of $200.
Note that the 2013 Federal Budget also introduced a tax credit for first time donors to charity (defined as individuals who have not donated to charity since 2007). This super new credit supplements the charitable donation tax credit with an additional 25% tax credit o up to $1,000 in cash donations, entitling donors to a 40% federal tax credit for donations of $200 or less, and a 54% federal credit for the portion of donations over $200.
Beginning Feb. 10, 2014, the value of a cultural property gift made through a tax shelter arrangement is limited to the amount paid by the donor for the donated property.
In The Series:
Courtesy of Marta Stiteler, MA CFP CIM CLU, Financial Planner at Pillar Retirement Group/Worldsource Financial Management Inc.
Marta can be reached at: Pillar Retirement Group, 50 Coreslab Drive, Flamborough ON L9H 0B2. T: 905-690-5038 E: firstname.lastname@example.org
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