The deadline for filing our taxes is almost here again, and the Minister of National Revenue has a few pointers to make the process less painful.

Preparing tax forms can be made easier by better understanding the Canadian tax regime, your obligations, and how to protect yourself from paying too much or too little. Here are a few tax tips on charitable donations that can save you money.

If you have made a charitable donation, you can claim a portion of it as a tax credit. This tax credit for charitable gifts provides an incentive for Canadians to support the work of registered charities. When Canadians donate money or goods to a registered charity, they will receive an official donation receipt. To confirm an organization’s charitable status, check the Canada Revenue Agency’s Charities Listings at www.cra.gc.ca/donors.

For many years, Canadians have been encouraged to claim charitable donations when filing an annual income tax return. The total amount of donations that you claim earns a federal tax credit of 15 percent for the first $200 and 29 percent for any amount over $200. You are also eligible for a provincial tax credit. Save even more by donating your listed securities to avoid paying tax on the capital gains. You can maximize your claim by combining receipts with your spouse or common-law partner, and you can stockpile your donation receipts for up to five years.

In a cautionary note, donors should avoid tax shelter gifting arrangements. Both donors and charities should be wary of promoters who encourage donating to a charity through a tax shelter gifting arrangement. These so-called “deals” typically promise you tax savings greater than the cost to participate in the scheme. Participants invest a small amount of money and receive a tax receipt for an amount several times higher than what they actually spent.

The Canada Revenue Agency usually finds that the participating charity keeps very little of the funds involved – often as low as just one percent. The majority of the money typically ends up in the hands of the promoters and other related parties. A registered charity that participates in a tax shelter gifting arrangement risks losing its registered status. And worse, Canadians could find themselves being audited and owing the government additional taxes plus interest.

The Canada Revenue Agency recently launched a new online self-service option called, “My Payment”. It allows individuals and businesses to send their payments electronically – check it out at www.cra.gc.ca/mypayment.

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