Tax advantages for individuals donating securities to charitable organizations

For many individuals, giving to charity is as important as contributing to an RRSP or saving for a child’s education.

Without a doubt, many wish to donate to recognized Canadian charitable organizations or foundations either during their lifetime, or at the time of their death.

Individuals who donate to a recognized charity receive a donation tax credit that reduces both their federal and provincial income tax.

The amount of the federal credit is calculated as 15% of the first $200 donated, and 29% of any donations in excess of $200 claimed for the year.

The amount of the total credit varies with each province, but the total tax savings is generally equal to your marginal tax rate.

When donations are made by individuals and their spouses or common law partners, what shouldn’t be overlooked is claiming all of the donations on one person’s tax return.

By claiming all the donations on one return, taxpayers can ensure the lower tax credit of 15% to the first $200 of donations applies only once.