Planned Giving

Planned Giving –Take the Plunge!

February 2016

For the last few years brave souls in Lac du Bonnet have been jumping into the Winnipeg River in the middle of February! This year the Polar Bear Dare is Saturday February 20. The plunge raises funds for KidSport Manitoba - a great cause. I am not nearly daring enough to plunge into the freezing river and give credit to all those who are more courageous than I, but I do support the cause and wanted to provide a few tips that will help you make the most of your donation.Whether you support KidSport Manitoba or another worthy cause here are a few tips to make the most of your donation:

1) Give Generously: When you donate to a registered charity you receive a non-refundable tax credit. Canada has a two-tiered credit system. In Manitoba you receive a combined federal and provincial tax credit of 25.80% on the first $200 of donations in a year.Donations beyond the $200 threshold receive a combined credit of 46.40%. When determining your tax credit for the year CRA considers your total donations to all charities in a calendar year. Legislative proposals in December 2015 introduced a new tax bracket for incomes over$200,000, in Manitoba the combined tax rate of this new bracket is 50.4%.  If you are in this new tax bracket and donate over $200 in a year, to the extent your income is above $200,000, you will receive a 50.4% tax credit. This larger credit will only apply if your income is over $200,000.

2) Share with Your Spouse: If you have a spouse or common law partner CRA allows you to combine or split your donations in any proportion. For example if you donate $150 to a charity and your partner donates $150, if claimed separately you would each receive the lower tax credit. If combined,the $300 would surpass the $200 threshold and part of the donation would qualify for the higher tax credit. The higher income spouse should claim the combined donations.

3) Combine Several Years of Donations: If you regularly make small donations you might consider combining multiple years of donations on one tax return. Donations need not be claimed in the year they are made. They can be carried forward for up to five years. Claiming several years of donations on one return could push you above the $200 threshold and allow you to claim the larger tax credit.

Consider the above mentioned tips and introduction to the topic of planned giving.Donations of property, First-Time Donor’s Super Tax Credit, the strategic timing of the donations and a host of other tax items can make the situation quite complex and require the help of a tax professional. Regardless of the complexity the tax perks are always secondary, the main goal is to help out a worthy cause. So give generously and if you are truly brave sign up and take the icy plunge this February


Clinton Orr B.Comm(hons.), CIM, CFP, DMS, FMA  lives in Beausejour and is a portfolio manager with National Bank Financial.


This information transmitted is intended to provide general guidance on matters of interest for the personal use of the reader who accepts full responsibility for its use, and is not to be considered a definitive analysis of the law and factual situation of any particular individual or entity.  As such, it should not be used as a substitute for consultation with a professional accounting, tax, legal or other professional advisor. This commentary reflects my opinions alone, and may not reflect the views of National Bank Financial Group.