# Charitable donations - personally vs. corporate



## atrp2biz (Sep 22, 2010)

Has anyone gone through the tax math of a charitable _cash _donation personally vs. through a privately-owned corporation? Note--the corporation is not eligible for the small business deduction.


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## Eclectic12 (Oct 20, 2010)

As I understand it, both personal as well as private corp tax rates vary dramatically. 
YMMV so I'm not sure what value having someone else say which worked out for them is going to have for others.


Cheers


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## MoreMiles (Apr 20, 2011)

atrp2biz said:


> Has anyone gone through the tax math of a charitable _cash _donation personally vs. through a privately-owned corporation? Note--the corporation is not eligible for the small business deduction.


Since you are a medical doctor, your personal rate is likely at the highest bracket. It would be more beneficial to donate from your MPC directly.

That said, your recipient will know your occupation because of your corporation name. Believe me, you will get endless charity soliciting calls after that. Even legitimate charities like cancer society share their donor list... Some calls can be very aggressive so you may not want to let them know your occupation.


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## OurBigFatWallet (Jan 20, 2014)

That would depend on the marginal tax rate of your corp vs your own personal rate. For what it's worth CRA has introduced a super credit for first-time donors 

http://www.ourbigfatwallet.com/the-basics-of-the-charitable-donation-super-credit/


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## Davis (Nov 11, 2014)

Personal donations are not deducted as corporate ones are - they qualify for federal and provincial tax credits at the lowest tax rates on the first $200 and the remainder at the highest rates (generally), regardless of your personal tax rate. (Alberta has a fixed rate, and Ontario's tax credit does not reflect the additional 2 percent tax rate on very high income people). So looking at federal rates, an individual gets a tax credit of 15 percent of the first $200 of donations for the year, and 29 percent of the remainder. This will generally be worth more than the tax deduction for the corporation.


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## atrp2biz (Sep 22, 2010)

Davis said:


> Personal donations are not deducted as corporate ones are - they qualify for federal and provincial tax credits at the lowest tax rates on the first $200 and the remainder at the highest rates (generally), regardless of your personal tax rate. (Alberta has a fixed rate, and Ontario's tax credit does not reflect the additional 2 percent tax rate on very high income people). So looking at federal rates, an individual gets a tax credit of 15 percent of the first $200 of donations for the year, *and 29 percent of the remainder*. This will generally be worth more than the tax deduction for the corporation.


However, it's 29% of taxed personal income. If done through a PC, the PC's tax reduction would be 25% (assuming general rate and AB-based corporation) of money that has yet to be taxed at the personal level.

I'm not sure if it's the right way to think about it, but here is my back-of-the-envelope math of the real cost of a $100 donation (from perspective of owner).

_Through corporation_
If corporation donates $100, corporate taxes are reduced by $100 x 25% = $25 (general rate)
If $25 is passed through as eligible dividend at 15% rate, after-tax value to shareholder = $25 x (1-15%) = $21.25 or 21.25% of $100

_Personally_
If one personally donates $100, the donor would have to use $100 of after-tax money to yield a credit of roughly the same amount (if not less). Therefore, the benefit is at best a wash.

Is this the right way to think of it? I'm having troubles picturing these apples and oranges.


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