In this article, I’ll get into a little detail as to what the benefits of charitable giving are in your overall financial strategy. The term “donation” is an age-old word that describes the act of giving to a cause. Many people think that donating to charitable causes benefits the recipients the most.

However, charitable giving can do a wealth of good for the giver as well! Visit our corporate site at anytime should you wish to find out more specific information as it relates to the financial implications of charitable giving.

The Human Side of Donating

One of the greatest benefits you can get from making charitable donations in 2019 is emotional satisfaction. The act of giving to someone in need can restore a sense of humanity to the community. The act of giving to the underprivileged is a century-old spiritual concept, and it’s still vital to this day. If you give to others, you will feel that you are doing your part in society. You will be happy with yourself knowing that you helped someone else achieve his or her dreams. Additionally, you may feel that you have pleased a higher power or your inner self. Last but not least is the concept of karma. A generous act may come back to you one day when you need it the most because you lent a helping hand to someone else. 

The Financial Benefits of Donating

Donating can be a doubly delightful treat for you because it can improve your financial status. You can receive a tax deduction from donation, and that deduction may take you out of one tax bracket and put you in another.

Here’s how the tax benefits of charitable giving work:

What You Can Donate

The tax benefits of charitable giving can work with just about anything you donate. You can use straight cash or credit card donations. You can also donate something such as a vehicle or clothing and still receive the credit. It’s important to keep the receipts to get the tax deduction from donation. You’ll need to mail the receipts if you file a paper return. You must keep your receipts on hand if you file online just in case the authorities want to verify your donations.

When to Donate

You can donate any time of the year in 2019 up to December 31 if you want to claim your charitable contributions on your 2019 tax return. You do not have to claim all of your donations in one tax year, however. You can spread them across the next five years of tax returns if you so desire. 

When to Claim Your Donation

The timing of your donation claim is up to you. You may want to consult with your financial advisor to gain some insight on the best way to pace your claims. Ultimately, you want to do what’s best for your financial situation. 

Who to Donate To

You can donate to any party or organization you want to help. However, you have to ensure that the party is on the list of eligible charities if you want to receive the credit on your tax return. The Canda Revenue Agency lists such entities.

How Much You Can Save

The donation credit is limited to 75 percent of your annual income.

You will receive a federal credit and a provincial credit, but you must donate more than $200 to receive such a credit. Your federal credit has two parts to it. The first credit will be equal to 15 percent of the first $200. The second credit will be equal to 29 percent of any amount you donate over $200. Thus you will receive a $262 federal tax credit if you donate $1,000. 

Your provincial credit has two parts to it, as well, and it varies depending on where you reside. For example, Ontario’s rate was 5.05 percent for the first $200 in 2017. The rate was 11.16 percent for amounts over $200.  

First Time Donor’s Super Credit

If this is your first time donating, you can also receive the First Time Donor’s Super Credit (FDSC). You can receive it if you donated after 2013, and you have not claimed the charity credit ever, or at least since 2007. It will award you an additional 25 percent of an amount up to $1,000.

Now that you understand the benefits of charitable donations, you can donate with the highest level of pride and confidence. As an Assante Wealth Management Ltd. financial advisor I find anyone curious to learn more on the subject to contact me to find out more about the processes, benefits and the many ways you can leverage charitable donations to improve your life quality and financial wealth.