Bringing Down Tax Owed Through Political Contributions Tax Credit

Political Contributions Tax Credit is one common credit that is given to taxpayers who are interested in sponsoring their favorite political party with a share of their hard earned money.

They receive tax credits in the following tax year as a rebate.

It is an opportunity for you to contribute to a registered federal political party with which you will get a tax credit which is deducted from your federal tax payable.

Political Contributions Tax Credit is a way by which contribution towards a common cause is encouraged and at the same time funds the political organization’s growth and development.

If you are married, you can make two separate contributions and get receipts in the names of both spouses, for greater flexibility in maximizing the tax credit.

If you spread your political contributions over two years you will enjoy more credits. For federal purposes, the credit can only reduce taxes paid or payable.

If you plan to use your credits make sure that you will certainly have some taxable amount for the next tax year.

If you are not liable for any taxes during the forthcoming tax year, the credit is lost. Also the credit cannot be carried forward.

Though this is not a prominent contribution system, it is definitely one of the useful tax incentive programs.

This will allow certain taxpayers to subtract the amount of the credit from the total they owe.