Being a numbers guy, I'm always interested in stats. Did you know that there are 10 people named S. Claus currently living in Canada? And there's one Kris Kringle. Some people don't believe in Santa – which is truly disappointing.
Even my youngest son is a skeptic. I told him that the year he stops believing in Santa is the year he'll get nothing but underwear and socks for Christmas.
He shared some questionable stats with me. He said that Santa would have to make 9,259.4 visits a second, travelling at four thousand times the speed of sound, to deliver all his gifts during the night. At that speed, Santa and his reindeer would burst into flames instantaneously.
"You're starting to sound like Scrooge," I told him. "Who would you rather be, Santa or Scrooge?" I asked. As we wind up 2017, I want to share some ideas that, to borrow from a classic ad campaign, will allow you to give like Santa, but save like Scrooge.
Give like Santa
It's the time of year to be charitable. It's a better idea to make giving part of your everyday living than waiting until the last minute, but better late than never. Here are some charitable ideas to consider before year-end.
Give appreciated securities.
There may still be time to donate publicly traded stocks, bonds, or mutual funds to your favourite charity. You'll save more tax by donating securities that have grown in value than by donating cash since you'll be entitled to a tax credit for the value of the securities you donate and you'll eliminate the tax on the capital gain on the investments in the process – a double benefit.
Claim the first-time donor's credit.
You may be entitled to a first-time donor's super credit if neither you, nor your spouse or common-law partner, have claimed a donation credit after 2007. This is the last month you'll be able to claim this temporary tax credit (it expires at the end of 2017), which will give you an additional 25 per cent non-refundable tax credit on up to $1,000 of donations.
Help the community around you.
Take the time to learn more about the needs in your own community by speaking to your community foundation and then donate to the foundation. These folks can help you meet the most pressing needs right around you – many you may not be aware of. Ask your community foundation for their Vital Signs report, which leverages local knowledge to identify the greatest needs where you live.
Use CHIMP to give.
The Charitable Impact Foundation (CHIMP) is a powerful online resource that will help you to make giving a part of everyday living and can enable you to be more impactful in your giving. CHIMP allows you to manage your own giving in one place, donate to any Canadian registered charity securely online and create giving groups to donate with others, among other things.
Check out Charity Intelligence.
Have you ever wondered which charities are doing the best work? Are you concerned about whether a charity will use your gifts wisely? An organization called Charity Intelligence (CI) is made up of trained financial analysts who can help you make informed giving decisions so that you can have a greater impact. CI has created profiles for more than 700 Canadian charities.
Save like Scrooge
There's also a little time left to save taxes this year and to set yourself up for savings in 2018. Consider these ideas:
Create deductions for 2017.
Don't forget to pay for certain costs by year end, such as: child-care expenses, moving costs, tuition fees, medical expenses, deductible support payments, interest on your student loans and home-accessibility renovations. Even if you don't have the cash to pay these costs, you can use your credit card and still get the deduction in 2017. Also, don't forget to contribute to your RRSP by March 1, 2018, to claim an RRSP deduction in 2017.
Pay dividends to family.
If you're a small business owner, you're likely aware that changes are coming in 2018 that may limit your ability to pay dividends to family members (see my article from last week). Consider paying dividends to family members before year-end if waiting until 2018 will mean higher rates of tax for your family.
Create a part-time business.
Set yourself up for tax savings in 2018 by starting a part-time, home-based business. This can open the door to deducting a portion of all kinds of costs, such as: mortgage interest, property taxes, home insurance, home repairs and maintenance, utilities and many vehicle costs.
Tim Cestnick, FCPA, FCA, CPA(IL), CFP, TEP, is an author, and co-founder and CEO of Our Family Office Inc. He can be reached at tim@ourfamilyoffice.ca.
Tim Cestnick