How to benefit from Charitable Donations

 If you want to claim the credit, the charity needs to be registered and make sure that your donations are going to registered charities.

The first $200 of charitable donations you claim are eligible for a 15% federal tax credit and any amount over that receives a 29% federal tax credit. Where you have some room to make this work to your advantage, without donating more than you would have, is that you do not need to claim your donations in the current year, as you can claim up to 5 years later. If your total donations each year are $200. you claim this amount each year, it would give you a $30 tax credit every year totaling $180 over 6 years. If you were to save all your receipts and file on the 6th year, your eligible donations would total $1,200. This would provide a tax credit of $320: $30 on the first $200 and $290 on the remaining $1,000. In this example, by holding your receipts for 6 years, you get an extra $140 back on the total donations.

By saving your receipts you can optimize the tax credit you receive on charitable donations you make to registered charities. However, you do need to realize that your credit is non-refundable. That means that you can only use it to reduce your tax owed. Once you hit $0, you don’t receive the benefit.