July 2009
Did you know that your generosity can help you substantially reduce your current taxes and the taxes owing at your death? Through charitable donations, you can support a cause that’s important to you while reducing your tax bill.
When you make a charitable donation, you receive a credit that will reduce your taxes. The total tax savings amount to the following percentages:
- A federal tax credit of 15% is given on the first $200 and 29% on the remaining donation amount.
- Depending on your home province, you can benefit from an additional tax credit. Contact your provincial tax office or your financial planner for more information.
A corporation can also make charitable donations and reduce its taxes at the same time. The tax treatment is slightly different in this situation. Instead of providing the company with a tax credit as in the case of an individual, the donations reduce the company’s taxable income.
There are several ways to help a charity and achieve your philanthropic goals while minimizing your tax burden. One good way to do it is donating a life insurance policy.
Donating a life insurance policy
You can make a charitable donation through a life insurance policy and choose to take advantage of a tax reduction in one of the following ways:
- During your lifetime, through premium payments; in this case, the charity must the policyholder and the beneficiary.
- At your death, by bequeathing the insurance amount to the charity or designating the charity as the beneficiary of the policy.
Desjardins Financial Security Planned Giving
Desjardins Financial Security Planned Giving is a life insurance product. It’s one of the many different planned donation options offered by DFS, such as:
- Charitable annuities
- RRSP or RRIF donations
- The bequest of life insurance proceeds upon death
Features of the Desjardins Financial Security Planned Giving product
- The donor takes out a new life insurance policy and designates the organization of their choice as the beneficiary.
- The charity is also the policyholder.
- The payment method is flexible (monthly automatic withdrawals, annual billing or credit card payment).
For more information, contact a representative at Desjardins Financial Security.