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Gifts and Donations as Tax Deductions

gifts donations tax deductions

Did you know that your charitable side can increase your tax return? Gifts or donations, usually of more than $2, to registered charities can be claimed as deductions come tax time. Circumstances where you can claim a deduction, include:

  • Gifts of money (or property) to nominated funds, authorities, institutions, classes or other specified bodies or persons. This includes donations to an eligible school building fund.
  • Gifts of works of art.
  • Gifts of national heritage properties.
  • Gifts of trading stock.
  • A contribution of more than $150 to a deductible gift recipient in respect of a fund-raising event
  • Donations to political parties (with a limit of $1,500). Note that, from 1 July 2008, deductions for donations to political parties can only be claimed if the taxpayer is an individual and is not making the contribution during income-earning activities.

Deductions are generally only allowed if the gift is made voluntarily and not as a result of a contractual obligation. Also, there must be no material advantage gained because of the gift or donation.

A taxpayer cannot obtain a tax deduction for certain gifts unless the recipient is endorsed by the Commissioner or is specifically listed by name in the ITAA 1997 (or the regulations) as being eligible to receive a deductible gift. Such entities are referred to as Deductible Gift Recipients.

Particular Deductible Gift Recipients have additional conditions for your donation or gift to be tax deductible. For instance, the gift may only count as a deduction between certain dates or for a specific use.  Visit the ATO website here for further information on this.

You can also make donations through your employer through workplace giving programs and salary sacrifice arrangements.

Read our Guide to Tax Deductible Donations blog for more information.

How to Claim Gifts and Donations as Deductions

You need to make sure that you keep receipts for all your gifts and donations. You should also ask if the charity or body that you are donated to is a Deductible Gift Recipient before you make the donation. Don’t claim deductions for gifts or donations that you don’t have records of or you’ll find yourself in trouble if you’re audited.

Your receipts should include:

  • Proof that the payment was a gift or donation.
  • The name of the fund, authority or institution.
  • The Australian Business Number of the Deductible Gift Recipient, if it has one.
  • Your name.
  • The date of the donation.
  • The amount you donated.
  • A description of the type of donation, i.e., cash, property, shares etc.

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Contact Online Tax Australia for All Your Gift and Donation Claims

If you want to make the most out of your tax return by finding an agent that can make sure you’re rewarded for your gifts and donations, contact the friendly team at Online Tax Australia today: