Giving - Force the Gov't to donate to the Charity of YOUR CHOICE!

February 12, 2021 | Mike Biette

SIMPLIFIED SUMMARY:

By giving money to a registered charity, you can force the government to match up to 77% of your out of pocket cost!!

More DETAILED explanation:

Do you have a local charity that you believe in and would like to see have more funding? Would you love to pull money out of the government’s bank account and send it to that organization? How about if the government said that they would give any charity of your choice between $0.34 to $0.77 for every dollar you gave the charity – would you take them up on it?  

Here’s how it can work:

Your Initial Donation
Tax Refund (Gov`t Portion)
Your Cost (after refund)
Charity Receives
% Gov`t match of your donation
First $200 Donation
$200
$51
$149
$200
34%
($51/$149)
Next $1,000 Donation
$1,000
$435
$565
$1,000
77%
($435/$565)
TOTALS
$1,200
$486
$714
$1,200
68% ($486/$714)
  • You donate to the Registered Canadian charity of your choice the total amount you want the charity to receive (example $200).
  • You receive a donation receipt for the full donation $200 and apply it to the following year’s tax return resulting in an additional tax refund of approx. $51* (the government reimbursing you for the portion of the donation that was “paid by them – but the credit given to you”).
  • This means you have given the charity $149 of your money and the government has indirectly contributed 34% of that amount by refunding $51 back to you.
  • If you have already donated at least $200 in the year, the benefit jumps immediately to a 77% match by the government! So, an additional $1,000 donation in the same year would result in an additional tax refund (or government reimbursement) of $435 (with higher benefits for those whose income exceed $210,000). Meaning that the additional donation only cost you $565 ($1,000 - $435) and the government contributed $435 (or 77% of your donation)!

And the best part is… you get to choose the charity that gets the government’s money, and you get the credit for giving the FULL AMOUNT!!!

Hint: (to save cash flow, donate large amounts at the end of the calendar year so you receive your tax refund a few months later.)

*These calculations are based on an having taxable income (income higher than your federal and provincial tax credits) and based on Saskatchewan provincial tax rates – exact amount will vary slightly in other provinces. See a tax professional to see if you would have similar benefits.

A tax professional at TaxTeam can discuss this and other credits and deductions that may affect your taxes. Call 306-694-4829 or visit www.taxteam.ca