To assist with donations, we have put together a short guide for you.
1. Confirm the charity has their DGR status
DGR stands for “deductible gift recipient” and means any donation of $2 or more can be claimed as a tax deduction in Australia. Without this status, you are unable to claim a tax deduction for any donations made.
2. Retain invoices
Not all charities or not for profit organisations will provide you with an annual summary at tax time, so keep track of deductable donations with receipts, invoices or credit card statements. You can claim a total of $10 a year in donations without receipts. This is handy for the coin collection buckets.
3. A purchase is not a donation
If you are receiving anything of value from your donation, you cannot claim this as a deduction. This can include raffle tickets, purchasing products where the proceeds go towards charity and even the cost of fundraising events.
4. Employees with salary sacrifice arrangements
Please be aware that some employees who make donations under salary sacrifice arrangements are not entitled to claim an income tax deduction for donations made through this arrangement, as their taxable income has already been reduced. Consult your payroll team if you are unsure.
5. Donations from superannuation funds
Unfortunately making a donation from a self-managed superannuation fund may be seen as breach of the sole purpose test. If you are eligible to access your superannuation, you can withdraw an amount as a benefit payment and make the donation personally but if you can’t access your super yet, donations should not be made from this source.
Donating to charities and causes that are important to you not only benefits the charities themselves but it is also incredible rewarding. At DFK Gooding Partners, we regularly donate our time and funds to charity.