Donations Worksheet

Every year I complete tax returns for one or two couples who want charitable donations claimed on a spouse other than the one who is the “optimized”. For example, TaxCycle wants to claim donations on a spouse who is in the highest (53%) bracket. This is logical, but this couple (for their own good reasons) wants the donations on the lower-income spouse’s return. I dread this every year because its is difficult (or at least not self-evident) to do in TaxCycle, and since I only do it once or twice, I can’t remember how from one year to the next! It is frustrating that something that should be so simple is unnecessarily complicated (and requires an Override!). TaxCycle is a great product, but I hope this little problem can be fixed by making it easy to transfer donations from one spouse to the other right on the Donations Worksheet with check-boxes or similar method.

The tax credit value of donations only varies between spouses if one can’t use the entire credit. The tax bracket doesn’t matter. I most often shift when one owes, the other has a refund. I reduce the refund by putting donations in the payer’s return. I have one couple who are both generous donors. I leave the donations on each donor’s return, print a family summary, then put them on one return. They have some method of calculating what one owes the other. I don’t want to know.

Exactly, Because it’s a credit the cash value is the same. Put it where it reduces the debit, unless it can’t be entirely used. Just right-click and “transfer all”. No optimization required.

This might be particular to Ontartio, but there is one case where the tax credit value can vary between spouses. In Ontario (possibly other provinces?) if a person is in the highest (53%) tax bracket, they get a 53% tax credit on donations made with income that exceeds the highest threshold. In other words, the top threshold is $221,708, so a person with total income of $231,708 is eligible for a 53% tax credit on $10,000 of donations.