John Connolly, Senior Tax Manager with MRSB Tax Services, provides some useful tips on maximizing your tax benefits when making charitable donations
Many of us are already familiar with the tax benefit of making donations. Your first $200 in donations earns you a tax credit based on the lowest personal tax rate. For donations in excess of $200 you receive a tax credit based on the highest personal tax rate. On Prince Edward Island this is 24.8% on the first $200 and 45.7% on everything over $200. If you donate $200, your taxes are reduced by $50. If you donate $400, your taxes are reduced by $141.
These are the basic rules. If you are willing to put in a bit more effort, here are some ways that you can boost your tax benefit through annual donations.
Delay your donation claim
The tax credit for donations is optional, and unclaimed donations can be carried forward up to five years. If you donate $200 or less each year, you may want to consider delaying your donation tax credit claim to take advantage of the higher tax credit on donations over $200 in a future year. For example, if you donate $200 per year and claim the tax credit every year, then you would save a total of $298 over six years. If you donated the same amount but claimed your donation tax credit every second year, you would save a total of $423 over six years - $125 extra in your pocket! If you carry forward your first five years of donations and claim all $1,200 in year six, you would save $507 ($209 more than if you claimed the credit every year), but you have to wait six years to receive the additional savings.
Be a first time donor
As of 2013 there is a new tax credit that will save a 'first time donor' up to $250 more in tax. You are a first time donor if you (and your spouse or common-law partner if you have one) have not claimed a donation tax credit since 2007. The new tax credit is 25% of up to $1,000 in cash donations. If you don't have $1,000 to take full advantage of the credit in one year, you can carry your donations forward as the credit can be claimed on up to five years of donations. For example, if you are a first time donor who gives $200 per year and claims the donation credit each year, you get an extra $50 tax savings the first year and no extra credit the other years. Conversely, if you wait and claim five years of donations at once, you will get $250 back. The four year delay would save you $367 in additional tax ($200 from this credit and $167 from the higher rate on donations over $200). Keep in mind that this temporary tax credit ends after 2017, so donations that qualify shouldn't be carried forward beyond your 2017 tax return.
Donate your shares
If you have unrealized capital gain in a stock market investment you can use it to increase your donations tax credit. Instead of donating cash to your registered charity of choice, you can make a donation of shares of the same value as the amount that you planned to donate in cash. You get a cash receipt for the value of the shares and the capital gain on the shares is not taxed. If your income is in the top tax bracket and you donate shares with a $1,000 accrued gain, then you save an additional $237 of tax because that capital gain is not taxed. The tax savings of this strategy should be compared to the cost of any fees your broker charges for transferring your shares to a charity.
If you have any questions about the tax benefits of charitable giving or other tax matters, contact a member of the MRSB Tax Services team.
MRSB Consulting Services shares some advice on how to get your team's best performance using a non-pushy approach
There are times in every business when your team could use some extra ‘get up and go’. As management, one of your most important challenges is to motivate your staff while not making them feel as if they’re being told to do something they might not want to do. Essentially, this is effective leadership at its best. And the benefits of a highly productive team cannot be understated; you get more work done, the outcome is of a higher quality and your business enjoys greater profitability and a stellar reputation to boot.
So what can you do to get your team performing their very best, while not coming across as a dictator? Here are a few ideas that are fairly simple to try and cleverly disguise your role as boss man or lady.
Find out what drives each individual to succeed
Ok, so you might not be able to do this if your team is more than 25 people strong. But even with larger groups there are ways of assessing what motivates them to do their best in the workplace. Discuss this with your team, either one-on-one or during informal group sessions. If you feel you would get better responses if staff were able to submit their thoughts in writing, distribute a questionnaire. You can either suggest motivators and see which ones apply (e.g. career development, work/life balance, praise from management), or leave the questions open-ended and see what comes up.
By understanding what motivates a group of people to give their best, you can take steps toward providing rewards or circumstances that fit these goals and preferences.
Give credit where credit is due
As an owner or manager, you might not need to hear that you’re doing a bang up job. Chances are, you already know it! For your employees, though, hearing the words can be a small but positive boost to their professional self esteem. Whether you give someone a pat on the back for completing a project in record time or congratulate them during your monthly meeting for their record sales numbers, the message won’t go unheard. It doesn’t have to be verbal either, if this isn’t your style. A small token of gratitude such as a gift card to the local coffee house relays the same message: ‘You rock!’
Lead by example
Have you ever had a boss who never seemed to be happy? Who radiated negative energy no matter how good things appeared to be? Yeah, most of us have. That’s why it’s important as a leader to raise the bar in terms of office attitude. As put by Glenn Llopis at Forbes, “Successful leaders create a positive and inspiring workplace culture. They know how to set the tone and bring an attitude that motivates their colleagues to take action.” The point isn’t to force a happy-go-lucky mantra down people’s throats, but to let your own, genuine positivity rub off on the people you work with.
Another aspect of leading by example is letting your team in on the excitement you personally feel when you win a client, launch a new product or achieve a 20% cost savings for the quarter. Rather than having the mindset, ‘They don’t need to worry about that’ or ‘They won’t care’, assume the opposite. Most people want to feel that they are part of something greater than their day-to-day tasks and responsibilities. They want to feel like they have a stake in the business itself, because their efforts are an important part of what keeps it going forward. This ties into our final recommendation...
Give employees a sense of control
When it comes right down to it, no one likes to be told what to do. Managers who hand their staff a pre-conceived list of items to be completed are doing just that, and might be missing out on a great opportunity. Chances are, your team has ideas about how things can be done differently, or even better. It takes the right work culture for people to feel like they can bring these ideas forward, and it’s up to you to make that culture flourish. Ask your team for ideas during meetings or via monthly emails. Encourage staff to come up with procedures and give them the freedom to go about their tasks or projects in a way that is conducive to their own style and pace (so long as deadlines are met!). They will feel as though they have some control over their work and in turn, will be more willing to put their best foot forward.
These are just a few tips for getting your team motivated. Sadly, there will always be employees who do not respond to positive reinforcement, rewards or a sense of responsibility. Paul Spiegelman at Inc.com wrote a helpful (and amusing) article on dealing with entitled employees here.
In many cases, a lack of motivation stems less from the people who seem unenthused to do their jobs at 100% than from general office culture and management style. Remember, change takes time, so put your patient hat on, try a new approach and see what happens. You might be surprised!
MRSB Group's Founding Partner, Shaun MacIsaac reflects on this week's celebration of small businesses
At MRSB Group we have been taking part in Small Business Week for a number of years, and this event never fails to pique our interest. It is the spirit of entrepreneurship and opportunity that resonates during the week’s events, and I am reminded of just how much our province has given to us as a group of entrepreneurs.
Like many Canadian businesses, our beginnings were modest. In 1977 my practice was Shaun MacIsaac, Chartered Accountant. I had a small office in Charlottetown and no partners or staff, but a small number of clients who valued my services and kept me going into my second year.
By 1981 we were MacIsaac & Younker Chartered Accountants and I was happy to have Colin Younker as my first business partner. Colin eventually went on to serve a term as Auditor General for Prince Edward Island, and I’m happy to say he is now back with us as a Senior Tax Advisor.
Between 1992 and 2006 we achieved many milestones, including the addition of four new partners, the launch of divisions in Tax, Consulting, Mergers & Acquisitions and Valuation & Litigation Support, and more than one change in location. We have been at our Queen Street address since 2004 and I love the bustle and energy that comes with being downtown, at the very center of our beautiful city.
What has always mattered most to us are our clients. I think the way we treat those we work with is a direct reflection on how we operate as a company – with respect, professionalism and an eye to the future of the business. These are the values that have driven us to succeed all these years, and which will ensure we don’t slow down anytime soon.
As we prepare our corporate booth at this year’s Biz2Biz Expo at the Charlottetown Civic Center, I will be thinking of all individuals and local businesses – large and small - who gave us their support and allowed us to transition into the team of trusted advisors we are today. For those of you just starting out in business, keep your head up, work hard and never forget the people who help and support you in reaching your goals.