Although saving money on tax may not be the primary incentive to contribute to a particular cause, you will want to be confident that the intended recipients of any donation will actually benefit. Unfortunately, various schemes have been created that appear to represent legitimate charities but are in fact fraudulent. The Canada Revenue Agency (CRA) provides a resource that allows you to determine the status of a charity of interest: Click on the link below.

The charitable donation tax credit has two levels as well as maximums allowed in a particular tax year. The first $200 of eligible donations will reduce tax payable at a rate of 15% of the donation amount. Any amount donated over the first $200 per year reduces tax payable at a rate of 29%. The amount of credits claimed can generally not exceed 75% of net income in the year the credit is being claimed. The credits cannot be carried forward but the donation itself can be spread out over up to five years. Please speak to your financial advisor at the Walton Financial Group for more details.

The 2013 Federal Budget included an enhanced Federal Tax Credit for first time charitable donors. First time donors are those who have never claimed a charitable donation tax credit or those (or their spouses) who have not made a claim subsequent to the 2007 tax year. Please speak to your Walton Financial Group Advisor for more details.

There are different ways to make charitable donations which will have different tax/financial effects. For example, you can donate to an eligible charity or to the government. Cash, life insurance or property can be donated. Property can include gifts of eligible securities. If you donate securities (such as stocks or bonds), you will receive a tax credit for the fair market value of the donation and you will not have to pay capital gains tax on any increase in value from when the securities were bought to when they were donated. This is clearly preferable to selling the security and donating the cash since capital gains taxes would have to be paid. Your Walton Financial Group advisor can provide more details.