What are the benefits of donating personally?
What are the benefits of donating through a corporation?
So which is better, personally or through a corporation?
In another example, let’s say that you want to make a $1,000 charitable donation and there is $1,000 in the corporation. In this case, if the donation was made directly from the corporation, the corporation would pay no corporate tax and the charity would receive $1,000. If, instead you pulled the money out of the corporation by way of additional salary or a bonus and then made a $1,000 donation, the donation tax credit would not fully offset the personal income tax owing on the additional salary or bonus and there would be a net shortfall of roughly $31 required to cover the personal income taxes. See the analysis below:
Individuals outside the top marginal personal income tax bracket may get different results. If a person has $150,000 of taxable income, they are slightly better off making the $1,000 donation personally. See the analysis below:
This article has been prepared for the general information of our clients. Specific professional advice should be obtained prior to the implementation of any suggestion contained in this article. Please note that this publication should not be considered a substitute for personalized tax advice related to your particular situation.