Charitable Donations, Gifts & The Taxman – What You Need To Know

Posted on 28 July '21 by , under tax.

Did you know that making a charitable donation isn’t just contributing towards a better outcome, it could also be tax-deductible?

Every $2 donated under the right set of circumstances counts against your taxable income, and though many charitable donations and gifts can be tax-deductible, not every donation will count.

If you are planning on claiming a tax deduction on any donations that you have made this year, it’s best to bear in mind these tips from the Australian Taxation Office (ATO).

A common misconception made by Australians is that every charitable donation or gift is tax-deductible. You need to ensure that the donation that you are attempting to claim is endorsed by the ATO as a deductible gift recipient (DGR). This is an organisation or fund that is endorsed by the ATO to receive tax-deductible gifts or donations – not all charities and not-for-profits are classed as DGRs.

You must also be able to prove that you made the donation – having evidence in the form of a receipt directly from the organisation, or third-party receipts (if the receipt identifies the DGR and states the fact that the amount is a donation to the DGR).

One exception to this rule, generally, is that of bucket collections. If you made a contribution or donation of $2 or more to “bucket collections” conducted by an approved organisation for natural disasters, you can make a claim for a tax deduction of up to $10 for the total of those contributions without a receipt.

Not sure if a claim you’d like to make in your tax return is tax-deductible, or want a little extra help determining the eligibility of a donation for a tax deduction? We are here to advise and assist you.