‘Tis the season to be giving

lady holding a xmas decoration

The recent NSW bushfires have been devastating on lives, homes, and wildlife. Our modest super hero’s at the Rural Fire Service, National Parks & Wildlife and Emergency Services deserve all the support they can get. In fact, coming into Christmas, there are many opportunities to give to those in need or people less fortunate than ourselves.

Over 80% of Australian adults donate to charities each year. A staggering $12.5 billion is donated annually.1 That equals $764 for each and every Australian adult. Compared with 10 years ago, this amount is on the rise. Charitable donations are tax deductible in Australia. While this welcomed by charities and tax payers, it can make the simple act of giving overly complex come tax time.

Before giving a large sum to charity, it pays to be aware that your donation can be deducted. This will give you more confidence heading into the ‘giving’ season.  To help, we”ve complied this basic charity checklist to help you navigate the most common forms of giving.

1. Are you giving to a Deductible Gift Recipient?

To be tax deductible, the recipient of the donation must be registered as a Deductible Gift Recipient (DGR). You can quickly check the DGR status of the charity or not-for-profit you are donating to using this ABN lookup tool.

2. Are you giving a ‘Gift’ or a ‘Contribution’?

Next, determine if what you are donating is considered a gift or a contribution:

  • Gifts – are when you give money or property and do not receive anything of value in return, except perhaps a pin or ribbon as non-valuable recognition of your donation..
  • Contributions – are when you may or have the chance of receiving something of value in return, even if that value is less than what you gave. Raffle tickets, charity auctions or paying to attend a fundraising dinner are examples of contributions.

As a general rule, almost all gifts to DGR’s are tax deductible whereas more conditions relate to what can be claimed for contributions and it is usually the difference between what you gave and what you received up to certain limits.

3. Are you giving $2 or over for each DGR recipient each financial year?

It’s pretty well known that donations $2 and over are tax deductible. However if you made multiple donations of under $2 to the same charity (DGR recipient) during the tax year then this could be claimed. 

In terms of receipts, you must keep receipts that list the name of the DGR, their ABN, the value given and the fact that it is for a gift or contribution. For contributions, the receipt needs to state the market value of any goods or services received in return for your contribution.

4. Are you giving to a ‘bucket appeal’?

Bucket appeals for natural disasters can at times make it difficult to get proper receipts. If the ATO has approved the disaster as being eligible, up to $10 for each disaster can be claimed without a receipt.

Getting certainty on your charitable contributions

There are many ways to give to charity and also many more different tax treatments that apply to charitable contributions in Australia for both individuals and businesses. To be confident you will get a deduction it’s best to consult with a registered tax agent. 

Saige Accountants as a Registered Tax Agent can help advise on the tax treatment on your charitable donations. Whether it be a one-off donation or a regular sponsorship arrangement. Talk to us about any tax or accounting matters for your personal or business needs.

1. Philanthropy.org.au – Fast facts and statistics on giving in Australia

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