Yes, there is still time!
Make the most of your 2021 charitable donations
Of course, nothing in our modern economy and income tax system is simple. I have received many questions today about the treatment of charitable donations for Canadian Income Tax purposes. So, let me try to simplify things a bit.
First quick point: In Canada, charitable donations must be received by a registered Canadian charity before midnight on New Year's Eve to be deductible in 2021. Therefore, yes there is still time… but not much.
Second quick point: the $300, 100% charitable donation tax write-off that many people are asking about is an American tax change with no impact in Canada.
In the Church, we give because we love. God places some of His Church in places of prosperity not so they might live easily while other parts of the Church suffer. God places some of His Church in prosperity to harvest God's resources for the benefit of the Church everywhere – we are one body! This is a significant, yet frequently ignored biblical truth. Just as a stomach works to provide nutrients to the heart, bones, brains etc., so the Church in prosperity works to nurture and support the Body of Christ as a whole. In this way, God entrusts resources to each of us for His purposes – Paul tells us that one of God's purposes in this trust is to reveal the sincerity of our Love.
That said, as good trustees of God's resources we will manage His resources wisely. So yes, we should consider strategies that maximize and equalize the benefits of God's economies among all of God's people. First and foremost, this means giving priority to the most effective, in need and vulnerable ministries and missions of the Church. ACrossMission, for instance, is determined to work in ways that maintain an efficiency rating above 97% - this means we lose only 3% of donations to bank transfer costs and the overhead of the charity.
Next, many Christians refuse charitable donation receipts or refuse to use them. However, before you do, consider this. If you wish to give a gift of $1000 of your resources, you have a couple of options. You can give the gift and refuse the receipt – a $1000 after-tax cost. Or (using Ontario Canada as an example), you can give $1,865.67, accept the receipt and then use the receipt to save $865.67 in personal income taxes. The net cost to you remains $1,000, but the blessing to the charity is so much greater.
In the table below, I provide information for the provinces where ACrossMission currently has donors. If you need help with other provinces contact me, I am happy to help. Also, always discuss income tax issues and planning with your tax professional.
A "rule-of-thumb" for 2021: to determine a pre-income tax offering, first you must consider the amount of your personal income. If your income is under $214,368, you will use the rate in column A for your province from the table below. Otherwise, use column B.
As a closing comment, there are significantly enhanced income tax benefits when gifting charities some of your investments, RRSPs, RRIF's, real estate and other assets that have accrued capital gains. The laws affecting these types of gifts are more complex, but the benefits are also much higher. If this interests you, please speak with an income tax specialist. ACrossMission is grateful for and able to receive these types of gifts.
If you have any questions, please feel free to email me at the email below.
I pray that you feel peace and joy in the work and mission that God has given you.
Thank you for your care and concern for those ministers and communities to whom ACrossMission has been sent.
Let 2022 be a time of revival among your family, friends and colleagues!
Rev. Howard Edwards, CA/CPA