What donors should know about deductions

Photo courtesy of Metro Creative

Donating to charity is a selfless endeavor that may lead to rewards when donors file their tax returns.

Giving to charity is a selfless act that’s worthy of recognition. That recognition can come in many forms, and donors should know even the “tax man” likes to reward those who donate to charity.

Both the U.S. and Canada reward donors with tax credits. The financial services firm H&R Block notes, in the U.S., taxpayers can deduct donations made to qualified charities. Such deductions must be itemized, but they can greatly reduce a person’s taxable income.

According to TurboTax, Canada also has a generous tax credit system, rewarding taxpayers who donate to charity by giving them a credit that’s up to 29% of the amount donated at the federal level. In addition, taxpayers also may be entitled to an additional amount up to 24%, depending on which province they call home.

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