Tax Return:: Claiming Tax Deductions for Donations/Gifts

Hello, this is your tax and super specialist P&C Tax Professionals.

Today, I would like to go through the tax deduction for donations which is one of the most frequently asked questions by our clients.

What is the donation tax deduction?

Not all charitable donations are subject to the tax deduction. First of all, the organisation receiving the donation must be registered with the Australian Taxation Office (ATO) as a deductible gift recipient (DGR). In addition, the donation/gift must be sincere. In other words, you are voluntarily doing it without receiving any personal benefits from the organisation in return for making the donation. If you do so, you will no longer become eligible to claim the donation as a deduction on your tax return.

Donations that are tax deductible

The types of assets that can be claimed as tax-deductible donations include money, property or other assets such as shares. You can also claim a tax deduction without a receipt for bucket donations of up to $10. For contributions that exceed $10, you would need a receipt.

Donations that are not tax deductible

As previously mentioned, if you receive something in return for making the donation, you will no longer be able to claim the donation as a deduction.

Some examples of non-deductible donations include:

> Donations/gifts you provide to your family and friends

> If you have received free sporting or other raffle/art union tickets in return for making the donation

> If you are invited to a dinner event and receive free food in return for making the donation

> Donations that are made under a will

> Donations that are made where the payments will ultimately be used to provide some sort of a benefit to you

> Donations that are made under a "salary sacrifice arrangement"

Supporting documentations that are required to claim the donation tax deduction

A receipt that has been issued by the Deductible Gift Recipient (DGR) would be needed. If you have not received a receipt from your DGR, you can still claim the deduction by using your bank statement which shows the amount you have paid for the donation or a photo of yourself donating. Please note that it is best to retain all supporting documents that have been used to claim for deductions on your tax return for at least 5 years.

In summary, today we have explained to you what a tax-deductible donation is, the different circumstances where you will or will not be able to claim for the deduction and the records you must have in hand to validate the donation you have made.

If you happen to have any further questions or enquires, please contact us via our Official Facebook Page (P&C Tax Professionals - Australia) or via our email at: pnctax@naver.com.