‘You are getting a donation receipt and also you’re paying no tax on these positive aspects,’ says tax skilled Jamie Golombek
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If you happen to’re pondering of giving to charity this yr, a securities donation may be probably the most tax-effective method to take action, in line with one tax skilled.
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“That’s in all probability the perfect alternative by way of tax-effective charitable giving,” Jamie Golombek, managing director of tax and property planning at CIBC Personal Wealth Administration, stated in a current interview with the Monetary Put up’s Larysa Harapyn. “You’re getting a donation receipt and also you’re paying no tax on these positive aspects.”
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He stated that donating shares or mutual funds on to a charity has extra advantages in contrast with money or bank card items. One profit is that you simply obtain a charitable tax receipt for the honest market worth of the securities to assert as a donation in your tax return. Along with that, you keep away from paying capital gains tax on your entire accrued acquire on these shares.
The charitable tax donation deadline for 2024 has been prolonged to Feb. 28 however the extension doesn’t apply to securities donations. That doesn’t imply which you could’t benefit from the chance whereas planning for the 2025 tax yr, nonetheless.
Golombek recommends placing collectively a price range of how a lot you wish to give to charity and making these donations by means of shares during which you’ve gathered massive capital positive aspects.
The federal authorities’s capital positive aspects inclusion fee improve, which was purported to be carried out on June 25, 2024, has been postponed to Jan. 1, 2026. Canadians may already discover some adjustments to the Canada Revenue Agency‘s types when submitting taxes this yr, Golombek stated, however they received’t affect something but.
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A brand new rule that Airbnb-owners ought to be mindful for the 2024 tax yr is the limitation for bills on short-term leases. If you happen to hire out a property in a zone the place it’s unlawful to take action, in line with your municipality, you received’t be capable to write off any bills, together with mortgage curiosity, towards that rental revenue. “So, simply be forewarned,” Golombek stated.
He additionally reminded Canadians who’ve made contributions to the First Home Savings Account this yr that they don’t want to assert that quantity in 2024. As an alternative, Golombek stated it may very well be extra useful to put it aside for a future yr when they’re in the next tax bracket.
College students with a Registered Education Savings Plan will also be strategic with their use of the fundamental private quantity on which they don’t pay any revenue tax. Golombek stated they will take out as much as that greenback quantity from their RESP yearly and pay no tax on their withdrawals.
“One thing for fogeys and youngsters to consider,” he stated. “If you happen to don’t declare that fundamental private quantity, you lose it endlessly for a specific yr, so it’s one thing you wish to try to benefit from yearly.”
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Golombek suggested self-employed Canadians to maintain receipts of their bills for his or her assertion of enterprise revenue. If you happen to’re travelling or taking purchasers out to lunch, it’s additionally a good suggestion to write down down who you met with and the aim of that assembly on the receipts in case the CRA audits you and asks you to justify why that was a authentic enterprise expense.
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“CRA is taking a look at them so that you wish to ensure you’ve obtained backup to your bills,” Golombek stated.
The 2024 tax submitting season formally begins on Feb. 24.
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