Exciting news – charitable giving in Australia is growing! In the year 2022-23, the total amount donated and claimed as tax-deductible donations by individuals grew by a whopping $4.5 billion. Who knows what we’ll see in future years?
People support charities for all kinds of reasons; to further their impact, to support an organisation that helped a loved one in past, even just to feel good for helping a great cause. No matter your motivation for doing a good deed and supporting your local charity, some questions remain in many people’s minds…
Are my charity donations tax deductible?
Short answer? Yes, sometimes donations to charity are tax deductible.
The long answer involves examining the eligibility criteria as set out by Australian tax law. These are rules around what you can donate, what a donation actually is, and who you can donate to.
Related: Five Reasons to Donate to Charity
What counts as a donation?
Donations have to be genuine gifts. If you’re receiving a material benefit or personal benefit in return, it doesn’t count as a donation. Things like raffle tickets, event tickets or merchandise purchased from charities – while supporting important work – don’t count as a donation because you get something in exchange.
Goods, clothing and services are indisputably valuable to charitable organisations, but they can’t be claimed as donations on your tax return. There’s also a minimum spend. To be eligible for claiming at tax time, you must donate $2 or more – and you have to keep a record or receipt to file at the end of the financial year.
Who can you donate to?
For the purposes of tax deductibility, your donation must be to an Australian organisation recognised as a Deductible Gift Recipient (DGR). It’s a special status recognised by the Australian Government.
You can’t claim tax benefits for donations to:
- Overseas charities, unless they’re also registered as a DGR in Australia
- Crowdfunding platforms like GoFundMe (unless for a registered charity fundraiser, where you receive a donation receipt)
- Schools or churches, unless the organisation has DGR status
- Family and friends, for any reason
If in doubt, it’s easy to check the status of the charity you want to donate to on the ABN Lookup.
There are certain circumstances where you can’t claim donations as a tax deduction even if it is to a DGR charity, which include donations as part of salary sacrifice arrangements (which already impact your taxable income) or donations made in a will.
How do charitable donation tax deductions work?
All your eligible donations will be subtracted from your taxable income for the tax year you are claiming in. This means you’ll get a higher refund on tax paid, or a reduced debt if you owe tax. For claiming in this year’s return, you will need to donate by 30 June – otherwise, you’ll need to claim it next year.
To claim charitable contributions in your end of financial year return, you’ll need to provide confirmations or receipts of genuine monetary gifts to DGR organisations. Make sure to keep these in a safe place in case you’re ever audited by the Australian Tax Office (ATO).
Claiming donations at tax time
While it can seem like a big process, claiming your donation is actually pretty straightforward:
1. Check the DGR status of your intended recipient
They should indicate this in their material (e.g. with the ACNC Registered Charity badge on brochures or their website) but you can also look this up through the ABN or ACNC registers.
2. Make your tax deductible gift
Give over $2 without receiving any benefit in return. Even small cash donations add up, so giving what you can comfortably spare is just fine!
3. Keep your receipts
The ATO may still accept a bank statement or other payment confirmation, but it’s best to have an actual receipt where possible. If you donate on a schedule (e.g. monthly), charities will often send you a summary of what you donated at the end of the financial year – or you can request this.
4. Claim a tax deduction as part of your return
When you’re filling out your tax return details, make sure to include your donation/s in the deductions section. If you’re going directly through the ATO myTax tool, look for the “Gifts or donations” section in deductions; if you use an accountant or tax agent, you can just supply them with the receipts and they’ll know what to do.
Note: This information is intended as a guide only. If you need advice on tax deductions, please seen independent financial advice from your accountant, tax agent or the ATO.
Wheels for Hope is a registered DGR
Wheels for Hope is a small, local registered charity with full DGR status. We receive no government funding, so the support of our sponsors and donors is what makes the magic happen!
Thanks to the generosity of our community, we’re able to continue helping families of children with disabilities in Western Australia by providing wheelchair accessible vans on a loan basis.
Related: Keeping the Wheels Turning: What it takes to run our fleet
You can help us deliver the gift of mobility to these families, and do yourself a favour for when tax time comes at the same time. Why not donate to our mobility mission today? We have one-off and monthly giving options available to suit every budget – and we appreciate every gift, no matter how big or small.