Did you know that you might be able to claim charity donations as a tax deduction on your tax return.
If the charity you have donated to is registered as a Deductible Gift Recipient you can usually claim charity donations on your tax return. Read on to see what you can and can’t claim:
What is a Deductible Gift Recipient?
To claim charity donations, the organisation you donation to must be a Deductible Gift Recipient (DGR).
A DGR is an organisation that is either:
- Listed by name in the income tax law
- Endorsed by the ATO
Not sure if the charity you donated to is a DGR? The Australian Business Register lists all DGRs. Click the link to check.
What Can I Claim?
To claim charity donations as a tax deduction on your tax return, it must be a donation of $2 or more and be donated by you as an individual.
In addition the ATO states that:
- The gift must truly be a gift. A gift is voluntary transfer of money or property where you receive no material benefit or advantage.
- The gift must be money or property, which includes financial assets such as shares.
- The gift must comply with any relevant gift conditions. For some DGRs, the income tax law adds extra conditions affecting the types of deductible gifts they can receive.
The ATO also states you cannot claim charity donations for:
Gift or donation items that provide you with some personal benefit, such as:
- raffle or art union tickets
- items such as chocolates and pens
- the cost of attending fundraising dinners, even if the cost exceeds the value of the dinner
- membership fees
- payments to school building funds made, for example, as an alternative to an increase in school fees
- payments where you have an understanding with the recipient that the payments will be used to provide a benefit for you.
There are different rules for charity donations of property, shares, and some other goods. In addition, in some cases charities have special rules limiting the amount you can claim (your receipt should explain any limitations if there are any) If you are still unsure, contact Etax Local and one of our accountants will be more than happy to check for you.
For further reading: Deductions you can claim: Gifts and Donations
Remember: Keep Your Receipts!
As with all expenses you plan to claim as a tax deduction, you must keep proof of payment. To claim charity donations, keep all your receipts as well as the total amount of all the charity donations you made for that year.
Our tip: Upload photo’s and documents directly to your tax return via our secure client portal
Make sure you claim all the tax deductions you’re entitled to: Get in touch with Etax Local today by calling 1300 174 689.
Alternatively, send us an email or request a quote and one of our friendly accounting team will get back to you as soon as possible.
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