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How do tax deductible charity donations work?

22 May 2020

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Making a tax-deductible donation is a great way to give back and boost your tax return at the same time.

When you make a donation, your taxable income reduces, which can mean you get more money back on your tax return. Here’s how tax deductible donations work, and how making a donation can benefit you or your business this end of financial year.

What is a tax deductible donation?

A tax deductible donation is an amount of $2 or more that you donate to a charity that is registered by the Australian Taxation Office (ATO) as a “Deductible Gift Recipient organisation”.

You cannot receive anything in return for your donation. Funds that are donated in exchange for benefits such as raffle tickets, gala dinners, or prizes, however genuine, are not tax deductible.

Any donation that meets this criteria is considered a tax deductible donation, which means you can deduct the amount of your gift from your taxable income on your tax return.

Aspect is registered with the ATO as a “Deductible Gift Recipient organisation” and therefore any donations towards our programs will be tax deductible.

How much am I allowed to give for my donation to be tax deductible?

As long as your donation is more than $2, you can claim any tax deductible donation on your tax return.

Are corporate donations eligible?

Yes! Corporate donations are eligible for tax deduction. Businesses can claim the same benefits from making a tax deductible donation that individuals do.

Similar to when an individual donates, in order for a corporate donation to be eligible, the contribution must be $2 or more in value. The charity must also be registered with the ATO as a “Deductible Gift Recipient organisation”.

Tax time is a great opportunity for your company to practice corporate social responsibility while increasing the business’ tax return.

How do I choose a charity to support?

Select a charity that reflects your values and passions or one that supports causes you care about. You’ll feel more comfortable making a donation if you’re connected to the charity through their efforts to make a difference.

You should feel confident in knowing that your donation will be going towards providing life-changing help to those who need it most.

How can I be sure the charity is an eligible organisation?

All donations made to a charity or nonprofit organisation with “Deductible Gift Recipient” status are eligible for tax deduction. You can check your chosen charity’s status by visiting the Australian Charities and Not-For-Profits Commission (ACNC) website and checking the charity register.

How do I claim charity donations on my tax return?

Once you have made a donation, keep your receipt so you can itemise your tax deductions. When submitting your tax return online or via an accountant, ensure you attach the receipts for your donations in order for your contributions to be eligible.

If you do not attach your receipts, the ATO may not approve your tax deductions.

Donate and boost your tax return before June 30th!

If you’re confident that you’d like to donate to charity to boost your tax return, you might like to donate to Aspect!

Your gift will provide life-changing support to children on the autism spectrum while boosting your tax return.

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