The True Cost of Charitable Giving
UNDERSTANDING THE TRUE COST OF CHARITABLE GIVING
It might be less than you think
The following used the tax year of 2008 as an example.
Assume you gave a total of $1000 to charity in 2008
- The first $200 cost you $158.30 (Tax Credit = 20.35%) Put another way, each $1.00 you gave cost you $0.7915.
- The remainder ($800) costs you $450.40 (Tax Credit = 43.70%). In other words, each $1.00 you gave cost you only $0.5630.
Assume you give $10,000 through your Will
- The first $200 costs your estate $158.30
- The remainder ($9,800) costs your estate $5517.90
- The total cost of your gift is $5,675.70
What is the impact on your heirs of giving your community $10,000 in your Will
- If you have two children who will share your estate equally, each of them will give up only $2,837.85
- If you have three children who will share your estate equally, each of tem will give up only $1,891.90
Taxes can reduce the value of your estate a lot: Capital Gains; RRSP’s and RRIF’s
You can choose to pay taxes to Canada Revenue Agency or to support a worthwhile cause in your community. What makes the most sense to you?