What are ‘tax deductible donations’ in Australia?
The ATO confirms that tax deductions (or gifts) are when you donate to an organisation that has the status of Deductible Gift Recipient (DGR). Charities like Share The Dignity are DGRs (read all about our tax deductible charitable status here).
The tax deductible donation must:
- Be a voluntary transfer of money
- Give you no material benefit or advantage (for example – you couldn’t claim it for attending a fundraising dinner as you received a meal)
- Be $2 or more
Tax deductible donations for individuals
When you visit your agent during tax time, you’ll be asked if you made any tax deductible donations. You’ll need to provide evidence of the date and the amount that you donated. It’s possible to make the system work to your advantage. If the amount of tax deductions you make pushes your way into a lower tax bracket then you’ll receive a higher amount back at tax time. The deduction is taken from your taxable income. If you’re earning over the threshold for a high tax bracket, you can minimise it using tax deductible donations and other deductible items (uniform costs etc). This means that a worthy cause, like Share The Dignity, is getting those dollars instead of the tax department! Any accountant worth their salt will help you minimise your taxable income to the legal limit. Keep an eye on your payslips in June and estimate how many deductions it would take to reduce your tax bill. You may need to ask your accountant for some advice before June 30th. Reducing your taxable income can have other benefits – like increased childcare entitlements and reduced levies in other areas. A quick “pre- end of financial year” chat with your accountant, and a few wise tax deductible donations could mean you’re ahead by hundreds or thousands of dollars in the new financial year. Don’t worry, it’s 100% legal and extremely popular amongst the rich and financially savvy!
Tax deductible donations for businesses
Tax deductible donations can have a similar impact on small business tax returns if done correctly. Your business can make tax deductible donations to bona fide non-profit registered charities like Share The Dignity. If you’re a sole trader you could also make this claim on your personal tax return instead of as your business entity. Tax deductible donations will reduce the taxable income of your business which, again, may well see you walking away with more money in your pocket at tax time. Corporations have more complex deductibles and can benefit from partnering with a charity – we know a good one!
Tax deductible donations to Share The Dignity
Share The Dignity is well known for squeezing every drop of value out of our donations. We don’t waste a penny. Your donations don’t go to costly rents and CEO salaries… 95% of your tax deductible donation will go straight to a woman who needs it. Wouldn’t you like to make tax deductible donations work for you AND improve the lives on women in need?
Donate to Share The Dignity to change lives. And enjoy that extra cash this tax season!
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