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*Ostroff, Fair and Company>>>Canada Taxes

What does it mean when a donation is tax deductible?


What does it mean when a donation is tax deductible?

It means that you do not have to pay income tax on that dontation.

Eg If your wage was $20,000 per year and you donated $2000 then you would only have to pay tax on the remaining $18000.00
It means that you can take the amount of donation and show it as a charitable deduction on your taxes. This works only if you itemize. It basically reduces your taxable income, and therefore you pay less taxes. For example, if you are in 30 % tax bracket and you donate $ 100, then you will save $ 30 on your tax bill.
Unless you own a home and have a mortgage, you probably won't itemize your deductions, so a tax deductible donation is meaningless (you can't take the tax deduction if you take the standard deduction on your income tax returns)
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