As a Charity, the level of accountability to both tax agencies and your donors is increased. It is imperative to remain informed and compliant with tax reporting requirements.
Registered charities are required to file an annual Information Return on Form T3010 each year. This return discloses both financial and non-financial information with regards to the charity’s operations, fundraising and political activities, as well the assets they hold and manage. Careful attention should be paid when assets inside of the charity exceed $100k to ensure adequate disbursements are being made to maintain charitable status.
Charities can be formed for a variety of different reasons and can hold various forms, but ultimately a charity must devote it’s resources to charitable activities that benefit the public and whose income cannot benefit their members. Some of the benefits of forming a charity can include an exemption from income taxes and possibly GST/HST as well as the ability to issue charitable receipts for amounts received from members/donors during the year.
