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I live in Toronto, Canada. I can control my income. I want to know how much of charitable donations will lower total tax payable for different incomes. Then I'll pick what income to aim for.

  • I believe you want to know how to calculate the amount of charitable donations sufficient to move your taxable income to a lower tax bracket. Is that a correct understanding? If so, it is not possible. A charitable donation gives you a tax credit, which will reduce your total tax payable. canada.ca/en/revenue-agency/services/charities-giving/… – C'est Moi Nov 24 '19 at 11:56
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    Note that charitable donations never increase your income-after-tax. Using them for tax purposes does not advance your self-interest. Aside from genuine interest in supporting the charity you're donating to, it only serves to spite the public interest by reducing tax revenue. – R.. GitHub STOP HELPING ICE Nov 24 '19 at 17:09
  • Ditto what @R.. said -- if you're looking to pay no taxes your best bet is to have your own business and just spend all of you additional income on your business which you can then write-off. – Dugan Nov 24 '19 at 19:22
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The CRA gives this example How do I calculate my charitable tax credits? - Canada.ca

Danielle lives in the province of Saskatchewan and donated $400 in 2013 to registered charities:

  • The federal charitable tax credit rate is 15% on the first $200 and 29% on the remaining $200. Her federal tax credit is therefore (15% × $200) + (29% × 200) = $88.
  • The provincial charitable tax credit rates for Saskatchewan for 2013 are 11% on the first $200 and 15% on the remaining $200. Therefore her provincial tax credit is (11% × $200) + (15% × $200) = $52.
  • Her combined charitable tax credit is ($88 + $52) = $140.

It's Saskatchewan, not Ontario, but the idea is the same.

You are given a credit, based on the donation and independent of income, which you can apply as payment against your taxes.

So unless your income is so small that your annual taxes are less than (in this example) $140, the income will have no effect on the tax credit value of the donation.

So aim for maximum income (that's generally a good long-term strategy).

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  • I had a whole long answer, but Ray beat me to the punch with a shorter, clearer answer. +1. :) – ChrisInEdmonton Nov 24 '19 at 14:46

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