5 December, 2016

Feel Good Year End Tax Credits

Whether you warmly embrace the holiday season whilst adorned in your most festive holiday sweater, or attempt to curse it away with a series of Ba-Humbugs, the Holiday Season is coming whether you like it or not. Here are a couple of year-end tax credit tips that are Scrooge approved.

Charitable Donation Tax Credit

December brings a surge of consumerism as well as an increase in charitable giving. According to the “Digital Giving Index” 31% of the year’s giving occurs in December[1]. Of course the global benefits of charitable donations can be immense but there is no reason not to take advantage of the Federal and Provincial tax benefits too.

In order to receive the non-refundable Charitable Donation Tax Credit you must have the official donation receipt from the qualified organization or registered charity.  These receipts must be kept for 5 years and you are required to complete a Schedule 9 to be included with your tax return. December 31st is the cutoff date to make a donation and get a tax receipt for 2016. You can also claim unclaimed donations made in the previous 5 years if you have kept the appropriate paperwork.

If you and your spouse have never claimed a donation tax credit you may be eligible for the First-Time Donor’s Super Credit (FDSC). The FDSC gives you an extra 25% tax credit on up to $1000 of money donations made after March 20, 2013.

The CRA has a Charitable Donation Tax Credit Calculator which can be accessed by clicking here.

Children’s Fitness and Arts Tax Credits

If your child has desperately wanted to start playing soccer or you have desperately wanted your child to attend piano lessons take advantage of the Children’s Fitness and Arts Tax Credits. The amount of eligible fees per child is $500 for the Fitness Tax Credit and $250 per child for the Arts Tax Credit. (There are additional credits available if your child is eligible for the disability tax credit.) The Fitness Tax Credit is a refundable tax credit whereas the Arts Tax Credit is non-refundable.

2016 is the last year for both of these credits. This means you need to pre-pay before December 31st for 2017 programs in order to receive the credit. This is not only a unique tax credit but a special Christmas gift for your child, which can take the focus off of the Nerf Guns and Frozen Characters and put the attention onto experiences and skill building.

To learn more about the Children’s Fitness and Arts Tax Credits click here.

From all of us at Fraser Financial Group we wish you Happy Holidays and all the best for a prosperous New Year!

Written by Alida Hildebrand

[1] https://www.charitynavigator.org/index.cfm?bay=content.view&cpid=1360