Did you know that in 2014 over 35,600 cats were spayed or neutered while in the care of animal shelters? At an average cost of $205 per surgery, that’s over $7 million in just one year. Because many animal shelters operate purely on donations, every dollar helps. If you’ve donated to the Society for the Prevention of Cruelty to Animals (SPCA) or other any other charity, here are some tips for claiming your donation at tax time.
Pool Your Donations
Charitable donations are flexible in how they’re claimed. However, it doesn’t hurt to do a bit of planning. It can help you maximize your benefit come tax time! Here’s an example:
Penny is an animal lover. She donated $200 to the local SPCA in April 2016. Her husband Jim made a one-time donation of $200 to the same shelter for Penny’s birthday in May 2016.
- If Penny claims her donation on her return and Jim claims his on his return, the credit works out to $30 each – $200 X 15% = $30 – for a total of $60.
But there’s a better way.
Because donations can be pooled for both spouses, Penny and Jim can earn themselves a bigger credit by combining the two amounts!
- If either spouse claims the total amount, the credit works out to be $28 more. The first $200 remains at the 15% mark ($30) but the next $200 is credited at 29% ($58) – $30 + $58 = $88.
If Penny and Jim are both first-time donors, the breaks gets even bigger! The First-time Donor’s Super Credit gives an extra 25% on cash donations. An even better reason to give more!
- If either spouse claims the total and both spouses qualify as first-time donors, the credit rises another $100. The original $88 plus an extra credit of 25% of the $400 total ($100) bringing the total federal credit to $188.
Once the provincial part of the donations credit is applied, the credit grows even more. Provincial rates vary but in Ontario, for example, the $400 combined total yields a credit of $32.42. This means that Penny and Jim’s $400 not only did a lot of good for the local shelter, it also produced a tax credit of $220.42.
Donations may also be carried forward for up to five years. This means that you can save up your receipts and use them all at once to get the most bang for your buck! If you’re looking to learn how to maximize your tax credits for charitable donations check out our tips here.
Make Sure Your Donation Qualifies
This may come as a surprise to you but, not all donations qualify for a credit at tax time. There have been a number of scams over the years involving fake “charities” where the money ends up in the pockets of the fraudsters. To make sure your donation is actually going to a good cause, check out Canada Revenue Agency (CRA’s) list of qualified charities before donating.
Take a moment to examine your donation receipt. Valid cash donation receipts contain specific information including:
- A statement that the receipt is for tax purposes,
- The full name and address of the organization as well as the name and website address for CRA,
- The date the donation was made as well as the amount,
- The CRA registration number of the charity.
As with other credits, it’s not necessary to send in your receipts with your return. Keep them on file for at least five years, just in case CRA requests more information.
If You Can’t Give Money, Give Your Time
Although volunteer work at shelters is not a taxable deduction, the result is priceless. Helping a dog or cat feel safe and loved increases the chance of adoption. Contact your local shelter today to find out how you can make a difference.