The 12 days of Christmas, a time for giving

To continue on with my theme of giving during these holidays, this post is about donations and their tax treatment.

With the 12 days of Christmas here, it is time to be giving presents.  Those presents could be a donation to a charitable organization. 

For personal tax purposes a charitable donation gives rise to a tax credit.  The credit obtained,
is 15% federally and 10% provincially (Alberta) on the first $200 of donations.
The credit then increases to 29% federally and 21% provincially on any amounts above $200.

Another benefit of donations is that you can claim both your own and you spouse's donations on one return, therefore benefiting from the higher credit on the amount above $200.

As a household if you contributed a total of $500.  The tax dollars you would receive back would be:
($200x 25%) = $50  plus ($300 x 50%) = $150.  Total = $200.     So on a donation of $500 you would be giving to a great cause; then at tax time reducing your tax bill by $200.  You only have to pay a net $300 and the charity gets $500.  Everyone wins,  awesome.

If you own and operate a corporation.  Charitable donations are a fully dedcutible expense for tax purposes.

So if you are thinking of giving these season,  from a tax perspective it is a smart thing to do.  Any donations made before December 31, 2011 would be credits on your 2011 tax return.

Have a great giving season

Christmas is around the corner

Here at Henderson Campeau we are getting excited for Christmas and all the fun  that it brings.

It's great to see the city glowing with Christmas lights, the atmosphere in the neighborhood joyous, and the snow starting to fall.

Skiing season is here and we are excited about that. I'm sure many Calgarians are excited as well.

With it being the holiday season it is a great time to come down to Kensington and support the local businesses. 

Henderson Campeau is a big promoter of supporting local businesses and events.  We are proud to be apart of the Kensington Business Revitalisation zone. 

We encourage everyone to support the local small businesses in your community and getting involved these holidays to help grow Calgary neighborhoods.

Here is a recent article on Kensington in the herald.  http://www.calgaryherald.com/business/Kensington+ramp+excitement+factor/5781654/story.html

Have a great week and enjoy the snow.



International Day of Persons with Disabilities

The holiday season is here, and that means opening your heart to giving. Not only to those close to you, but to those that really appreciate a helping hand.  We should make a habit of giving throughout the entire year and not just at Christmas.

This Dec 3, 2011 is the International Day of Persons with Disabilities. This is an international observance promoted by the United Nations since 1992. We encourage you to participate in this day, at a local level, and think about giving back to those in need.

Check out this link for how to celebrate in Calgary. http://www.calgaryidpd.ca/

From an accounting perspective, I will discuss a few tax breaks that are available to persons with disabilities. People who qualify can take advantage of the credits available.

Disability tax credit

A disability tax credit can be claimed if you have a severe and prolonged mental or physical impairment which restricts your ability to perform the basic activities of daily living, such as: speaking, hearing, walking, feeding, dressing, and performing the mental functions necessary for everyday life.

If the disability qualifies, it must be certified by a doctor, who will then complete this form: T2201

For 2011 the federal disability credit is $7,341.  This amount can also be transferred from the dependent to the caregiver.

Amount for infirm dependent

An individual may claim an amount for dependants age 18 or older, provided they are dependent on the individual because of a mental or physical disability.

Dependant

A dependant is defined as a person who at any time in the year is dependent on an individual for support. This includes the individual's or the individual's spouse's or common-law partner's

• child or grandchild; or

• parent, grandparent, brother, sister, uncle, aunt, niece, or nephew (if this person is resident in Canada at any time in the year).

For 2011, the federal credit is $4,282

Registered disability savings plans (RDSPs).

Family members, and other authorized contributors are entitled to establish registered disability savings plans (RDSPs) if they are related to individuals with a prolonged and severe physical or mental impairment.

RDSPs are designed to help parents and others save and provide for the long-term financial security of a disabled beneficiary.

The tax treatment of RDSPs is very similar to that of Registered Education Savings Plans. The contributions to the plan are not tax deductible, investment income accrues on a tax-deferred basis, and withdrawals from the plan are taxable to the beneficiary to a certain extent.

Disability support deductions

Eligible disability supports expenses may be claimed as a deduction if the following conditions are met:

• the expenses were incurred to enable the individual to:

– be employed,

– carry on a business (either alone or as an active partner),

– carry on research or similar work (for which the individual received a grant), or

– attend a designated educational institution or secondary school where the individual is enrolled in an educational program

Example of such payments include: note-taking services, voice-recognition software, tutoring services, talking textbooks, job coaching services, reading services, full- or part-time attendant care services provided in Canada

The disability support deduction is available only to individuals with disabilities; it is not available to people who support them.

Other tax credits include amount for eligible dependents, child care expense deductions, amount for children, medical expense credits, and caregiver amounts. 

Check out this not for profit organization that works with people with disabilities for social activities and lots of fun.  http://www.betweenfriends.ab.ca/

The following is a link to the Government of Canada’s resource for people with disabilities. http://www.pwd-online.ca/pwdhome.jsp?lang=en

If you or somebody you know qualifies for these tax deductions and credits please ensure you are using them.

Have a great day.