Feel good about giving - charitable giving, December 2005

You've heard the story before: charities cannot do the good work they do without your help. Even though you've given in the past, you can no longer be so cavalier with your funds.

Retirement can be both freeing and constricting at the same time. You are no longer laden with a career but you also see no more of the benefits of a steady paycheque. Having set up an RRSP prior to your retirement (or age 65 - whichever comes first) is the first step to ensuring you retire comfortably. But income tax doesn't end when your earned income does. You are liable to be paying more taxes on your RRIF than you need to. An easy way to reduce taxation on your income is charitable giving.

Some people over the age of 60 do not realize they are being taxed on the income they are paying tax on their RRIFs. Unfortunately, there is not a magical age when this taxation ends.

Though it may seem contradictory, the more you give to charity the more you'll "give" to yourself. A gift of less than $200 to a registered charity will result in a tax credit of 16% of your donation total. This credit percentage rises when the gift amount exceeds $200.

Individuals have the right to claim an amount up to 75% of their income for the year. You could give money to one or more registered charities and receive credit on those amounts for your annual income tax. This process is quite simple - providing you get a tax receipt - and it allows you to become involved in something that affects so many people in such a good way.

Though there is a limit on the amount of tax credits you receive, there is no limit to the personal benefits you will receive when you give. Research your charities wisely and then contact a Rice Financial associate. You will see how donating every year to a worthwhile cause will make you feel happier on the inside and give a luster to your retirement you would otherwise be without.

	Here are some tips on making sure your donation is headed to the right place from CBC Online Consumer Tips:
			Ask for written information. Legitimate charities will provide a
			brochure outlining their mission, how the donation will be
			distributed and/or proof your contribution is tax deductible. If
			they are a registered charity, ask for their latest annual report
			so you can assess where the money is going.
			Call the charity. Ask how much of your gift will be used for
			those in need and how much will go toward other programs
			and administrative costs. A good charity should be directing at
			least 60 per cent or more of its money toward services.
			Tax receipts - be sure to ask for one if you need it as
			charities may set minimum limits for issuing one. They are
			not required by law to issue tax-deductible receipts for all
			donations and those that do must be registered with the
			Canada Revenue Agency.