Tax benefits of charitable giving
AU community coming together to help support first in family to attend university award.
There are a lot of compelling reasons to give to charity at the holidays. The cost-of-living crisis is hitting the wallets of many folks, including university students, so giving back is timely—and much needed.
Did you know that you can support Athabasca University’s (AU) students and still receive a tax benefit that helps you at tax time? As a registered charity, AU offers tax-deductible receipts every time you give.
That means you’re not only supporting students, but you’re also saving as well.
“Donating towards a cause presents some financial advantages to the donator as well,” said Dr. Eric Wang, professor of finance with AU’s Faculty of Business.
For someone earning $80,000 per year, a charitable donation of $500 would result in a $200 credit in federal and provincial income taxes—more or less depending on which province you live in, Wang said.
”This means that you would pay $200 less in your taxes,” he said.
“Donating towards a cause presents some financial advantages to the donator as well.”– Dr. Eric Wang, professor of finance with AU’s Faculty of Business
Saving charitable giving receipts means even more savings
If you’re good at keeping your receipts, there are benefits to waiting five years, the maximum length of time allowed to submit your donations.
“Doing so will get you back roughly $1,200 of the $2,500 you donated in tax credit, as opposed to $1,000 in total if you had submitted each donation yearly,” said Wang.
Wang added that many people choose to donate at the end of a calendar year because it means you only have to wait a few months before you reap the benefits of a tax credit.
Give before year’s end to double your impact
If you give before the end of 2023, AU distinguished grad and philanthropist Esmail Bharwani (Bachelor of Administration ’92) will help ensure your gift makes the biggest impact possible. Bharwani will match donations (up to $20) made to AU’s First in Family to Attend University Award until midnight (Mountain) on Dec. 31.
Aside from the financial benefits of giving, research has shown that there are mental health impacts as well. According to research from the Netherlands, donating to a cause can increase one’s self esteem and psychological wellbeing.
“My wife Safana and I believe education empowers people to improve the quality of their life. My hope is that the many gifts our foundation is donating to support students will inspire others to give as well,” said Bharwani.
Bharwani’s long-time generosity and support of education is sparked by his own experience as a student in England. When he encountered financial difficulties, a professor from his program helped him find a job at an accounting firm.
“What he did for me was a very small favour to him, but he had an impact on my life,” he said. “This is my way of saying thank you for what I’ve got, and what I’ve been gifted. Basically, this is a way of saying, I owe you. I owe back to the community. I owe back to the people.”