As Australians we’re notoriously known as being generous donators to a wide and varied range of charities.
This has become even more apparent with the recent natural disasters from drought ravaged farmlands, to catastrophic raging fires, torrential rain, record breaking hail stone sizes, damaging floods and storm damaged properties.
Throughout it all, the Australian people have shown generosity beyond belief. Donations have been made to buy hay bales, support the Royal Fire services, The Australian Red Cross, The Salvation Army and many other providers of help to those in desperate need.
Whilst not everyone donates to obtain a tax deduction, it may encourage us to be more generous in our donations.
What is a tax deductible donation?
For a donation to be considered tax deductible it must be made to an entity endorsed as a Deductible Gift Recipient (DGR). It must also be a genuine “gift”.
Therefore, if you donate to a charity and receive raffle tickets, or your donation purchases a fundraiser dinner, your donation is not usually tax deductible.
In accordance with the ATO, a tax deduction can be claimed for a donation if:
- It is made to a DGR – You can check this by visiting the ACNC charity register
- It is truly a gift or donation – You receive no items of monetary value in return.
- The donation is money or property.
In most cases you may not need a receipt of your donation to claim a tax deduction. For example bucket donations of up to $10 can be claimed without a receipt.
In some cases you may be given a small item which may be promotional material for that DGR, such as a pen or a wristband. These donations are still tax deductible over $2.
On the other hand if you donated to a personal GoFundMe page to directly help a friend or someone directly affected by the fires, this donation would not be guaranteed to be tax deduction as it would be considered a personal gift.
We all know making a donation is an act of kindness and generosity, and no one expects to reap any rewards or benefits by doing so. However, it is worth keeping in mind when it comes to tax time, as you may receive an unexpected deduction in your return.