Giving and Tax

December 16, 2021
Avril Liljekvist

Charities and Tax Deductions

Which contributions are tax deductible?

Giving to charities is helpful, altruistic, and can give you a break on your tax, but not every contribution to a good cause is tax deductible. The internet has made it very easy for lots of organisations and individuals to raise funds for various causes but unfortunately, this can make it a little confusing about whether a contribution to a cause can be claimed on your tax return.

In order for a contribution to be tax deductible, the contribution is assessed against two specific criteria – who received it, and what it was for.

Who is it paid to?

Firstly, for a contribution/donation to be tax deductible, the organisation receiving it needs to have DGR endorsement (Deductible Gift Recipient). Many charities will advertise this when they're asking you for a donation, but if you're unsure you can use the Australian Business Register to look them up.

Once you search for (and find the organisation) its DGR status can be found under the “Current Details” tab:

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This gives you an easy way to check if a charity you've donated to, or are considering donating to, is registered for a tax deduction. If you've already donated, the receipt should state if it's deductible.

What is it for?

Once you've confirmed that the organisation has DGR status, the next thing to consider is the nature of the contribution. For your contribution to be considered a gift, you can't receive any material benefit in return. That means that buying raffle tickets might not count, as you're getting the benefit of the chance to win a prize. Gifts to DGR organisations are tax deductible.

If you received some benefit for your donation, like a raffle ticket or a charity dinner, then it's a contribution and there are additional criteria which must apply in order for the amount to be tax deductible. You can read more about the precise conditions on the ATO website.

What do I do to claim?

In order to claim you'll need to be able to prove that you made the donation, and a receipt is the easiest way to do that. Receipts are usually issued by DGR organisations but if you don't have one, you can use your bank statement to show that the donation was made.

When you complete your tax return online, there is a section for gifts or donations, and the details of the contribution can be entered here.

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Documentation to support your tax return should be kept for five years. The ATO has a record keeping app for your phone  which will help you by storing your receipts electronically and then you can upload and prefill your tax return when the time comes to submit it.

By keeping these criteria in mind, you can check yourself as to whether or not you should be claiming a deduction, and avoid missing out on a deduction you're owed.

* The information provided in this article is general information only and does not take into account your objectives, financial situation or needs. Before making a financial decision, please assess the

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