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To all subject to Canadian Taxation - Tax Season - Imminently relevant

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Disclaimer: While I present this information in good faith, I wish to disclaim all legal liability. Consult with a tax lawyer and accountant before. You can check the sources and make decisions yourself.

Donation Tax credits beyond the first 200$ donated always equal or exceed the taxation rate at every income level you can be. This is at the federal level.

This means you can divert every single income tax dollar from the state to a charity of your (limited) choice, and this completely legally. This is at the cost of donating most if not all of the income you would have kept had you just paid taxes. However, you can keep a decent amount of income from any other deductions, including the basic amount.

Caveate: You are limited to registered charities, approved by the CRA.

Examples with just employment income (It's even much better with dividends and capital gains instead of it)

Example:

Earning 46,605

it leaves you with  $28,517.06 with $18,087.93 in donations.

Instead of: 41359.50$ with 5245.50 in taxes.

Example: 

at the federal level only. Provincial is likely similar (but wide deviation is possible, check your province).
Earning 144,489 With just the basic federal amount.

it leaves you with  $47481.50 with $97007.5 in donations.

Instead of : $116,356.825 with 28132.175 in taxes

Add say 10000 in deductions to taxable income, and 3000 in other tax credits and

it leaves you with :  $66,791.85 with $77,697 in donations (the tax credit rate difference for the first 200$ was left out)

instead of 121,956.825 with 22,532.175 in taxes.

I'm tired so I might of made a mistake.

More example: you can make your own, see with capital gains and eligible dividends instead of employment income, it can be much better.


https://www.taxtips.ca/taxrates/canada.htm 

https://www.canada.ca/en/revenue-agency/services/charities-giving/giving-charity-information-donors/claiming-charitable-tax-credits/amended-legislation-charitable-donation-tax-credit.html

Some tools  (see if marginal tax rate exceeds the combined rate of the province and federal donation tax credits)

http://www.cra-arc.gc.ca/chrts-gvng/dnrs/svngs/clmng1b2-eng.html

https://simpletax.ca/calculator

Here are the tax credit rates at the provincial level: 

https://www.canada.ca/en/revenue-agency/services/charities-giving/giving-charity-information-donors/claiming-charitable-tax-credits/charitable-donation-tax-credit-rates.html#calcex

http://www.cra-arc.gc.ca/chrts-gvng/dnrs/svngs/clmng1b2-eng.html

My understanding is that you get tax credits to apply at both levels. 

Quebec for example

 https://www.taxtips.ca/taxrates/qc.htm

The above is also true for Quebec all the way to 200,000 in net (meaning after deductions) taxable income.

Above 200,000, it's only 1.5% below the tax rate. 

 

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