Charitable Donations In The Season Of Giving & Tax

Posted on 20 December '22 by , under tax.

It’s coming close to the season of giving, and Australians might be looking to pay it forward to those in need.

Making a charitable donation is a great way to round out the end of the year and boost the deductions that you’ll be able to make in next year’s return.

It’s also for a good cause.

For a donation to be tax-deductible, the ATO must recognise the charity as a Deductible Gift Recipient (DGR), and it must be a genuine gift. You will not be able to benefit from the donation if you receive a benefit from it (e.g.a raffle with a prize will not count, even if the proceeds go to a charity).

Before you start your gift of charitable giving this holiday season, you should check:

  • If the charity is a deductible gift recipient organisation

» You might want to donate money to a church – however, this will only be deductible if the church is a registered DGR. Otherwise, it’s nondeductible.

  • If the donation made to the charity will be tax-deductible

» The charity’s website should inform you whether or not the amount is partly or fully deducible, but if you are still not sure that it can be claimed as such, contact the charity directly.

  • That you will not receive anything in return for the donation. Benefitting from a donation (ie. raffles, dinner attendance, event entry, chocolates etc.

After making the deduction, be sure to:

  • Keep records of every donation. These will be required by your accountant when it’s time to lodge your return – and you don’t want to miss out on claiming a deduction with them.
  • You can also keep note of all of the charities that you donate to (especially if you make recurring donations) as you may be able to request a record of your donations from them. This may take time, so you’ll want to get this process underway before tax time.
  • Save your receipts – the ATO needs eligible proof of your donations to claim them as deductions. Charities should always provide receipts after a donation, so save them somewhere you won’t lose them.

If you want to look into other deductions that you could be claiming back this coming holiday season, you should start a conversation with us as soon as possible.