03/21/2014 05:46 EDT | Updated 05/21/2014 05:59 EDT

If You Made a Donation in 2013 a Karmic Tax Return Could Be Yours

Tax season is in full swing. You've received all your tax slips and various receipts, and you're set to file. What strikes me each year when I begin filing is how taxes are a window into what happened in my life the previous year. Whether it's buying a house, getting a pay raise, having a baby and even charitable giving.

No matter your age, you very likely made a donation you can claim on your tax return. This can be anything from sponsoring a friend's marathon, to attending a fundraising gala, to growing a moustache (in my case, my wife paid me to shave my mine).

According to the Canadian Tax Index from TurboTax, as of March 17, 2014, 57,852 Canadians have claimed charitable donations. The average donation was $1,029.21, while Canmore, Alberta is the most charitable city in the country with an average donation of $7,546.81.

If we look at the average donation by province using our data, the Northwest Territories come out on top, with an average contribution of $1,645.33. What's more, the majority of donations have come from Generation X, with Baby Boomers following close behind.

But it looks like many Canadians are still missing out.

According to the most recent Statistics Canada report, fewer than 24-million Canadians made at least one donation in 2010. Considering Canada's population was approximately 34 million in that year, I would fathom this isn't a reflection of generosity, rather and indication that many Canadians didn't take advantage of the tax credits owed them.

To that end, here are several tax tips Canadians should follow when claiming charitable donations:

1) Donate to a registered charity or qualified donee: Make sure you donate to a registered charity or qualified donee. Head to the Canada Revenue Agency's charities listing or full list of qualified organizations to confirm before you donate. This service also lets you see each charity's financial information, including revenue, expenses and employee compensation, to get a better sense of how your donation was used.

2) Track receipts: Save all receipts you receive from charities. A great way to do this is donate online and having them sent to your email address -- this makes them easy to bookmark and searchable come tax time. You should also keep in mind that qualified donees are not required to issue a tax receipts, so be sure to ask for an official tax receipt when you donate.

3) Think outside the box: You can claim more than cash donations on your return. Did you gift property, shares or stocks last year? If these were donated to a registered charity or qualified donee, you are eligible for credits. Check out the CRA's website for more information.

4) Take advantage of your first time: Were you a first-time donor in 2013? If so, you could qualify for the First-Time Donor's Super Credit. This gives you an extra 25 per cent non-refundable federal tax credit in addition to the provincial tax credit. All donations to registered charities and qualified donees after March 20, 2013 are eligible. But don't worry; tax software makes it easy to figure out if you qualify for this credit.

5) Pool your donations: If you and your spouse both made charitable donations in 2013, make sure you combine them on a single return. This will maximize the tax credit and put more money back in your pocket.

Giving through the year is a great way to give back to your community, and there's certainly a little karma built into tax refunds, so make sure you follow these tips to get a little back come tax time.


Free Software For Canadian Taxes 2013