Should I claim my charitable donations this year?

Donations made to registered charities don't necessarily have to be claimed in the year it was made. In fact, you can include the following on your current year tax return.

• donations made by December 31 of the applicable tax year;
• any unclaimed donations made in the previous five years; and
• any unclaimed donations made by your spouse or common law partner in the year or in the previous five years.
• Up to a limit of 75% or 100% of your net income as the case may be. 

Before determining if it makes sense to deduct your donation, lets examine how the tax credit is calculated (using Saskatchewan as an example)

First $200 donation claimed - 15% Federal plus 11% Provincial tax credit.  

Beyond $200 - 29% Federal plus 15% Provincial

As you can see, you will get a greater bang for your buck for donations claimed in excess of $200. 

Now lies the question, should you claim your donation. 

If your annual donations are generally small, it may make sense to defer claiming the donation on your current year tax return. Instead, you should accumulate it over the next 4 years and claim it all at once. Thus allowing you to cross the $200 threshold. 

However, if your annual donations exceed the $200 threshold by a long shot, the impact of the lower tax credit would be insignificant as compared to the time value of holding off the claim to to a future year. In this instance, you should go ahead and claim the donation on your current year tax return.