This article was originally written for the Business First publication.

You can’t avoid it any longer.  The year 2012 is drawing to a close.  I was startled to see Christmas decorations on the store shelves in early October, before Thanksgiving had even had a chance to finish making its appearance.  That means that Christmas shopping will need to be done.  This year I plan to avoid repeating the mistake of buying my wife the same gift two years in a row.  Lucky for me, she has a good sense of humour!

As each year draws to a close, people often start to think a bit more about their taxes.  You know, how to avoid paying the government too much more, and how to maximize their tax refunds.  A common question often heard is: “What are some of the best tax deductions?”

Did you know that one of the best tax deductions is charitable donations?  If you live in Nova Scotia, you can recover up to 50% of your donations in tax savings.  Because of the unique way tax credits are calculated for donations, even taxpayers in lower tax brackets can enjoy this level of savings.  On the first $200 of donations, you save 24%.  On anything over $200, your savings goes up to a full 50%.

That’s an impressive reason to donate right there.  If you still aren’t convinced, remember that when we pay taxes, a sizeable chunk of what we pay goes to fund social programs.  Wouldn’t you prefer to choose for yourself which causes you want to support?  And then have the government reimburse you up to one-half of what you donate?

There are a number of schemes that claim to get you back more in tax savings than your donation amount.  Please don’t fall for these schemes.  They are aggressively audited by the Canada Revenue Agency, and you’ll almost certainly end up losing your entire tax savings, as well as your original donation.  Rather, choose a registered charity that you trust and believe in, and support it.  Give from the heart.  You’ll enjoy the satisfaction of helping someone else, and then you’ll enjoy the satisfaction of the tax savings.

Filed under: Personal Tax by David Boese No Comments »

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