A taxpayer can claim a tax deduction for donations or gifts if they meet the all of the following ATO requirements:
- The donation or gift must be made to a DGR (Deductible Gift Recipient)
- Truly a gift
- Be a gift of money or a certain type of property
- Comply with any relevant gift conditions
- A taxpayer does not receive any material benefits in return for his payment.
- Taxpayers need to make sure they have correct records.
- They claim the tax deduction in the income year in which they made the donation.
- The deduction cannot add to or create a tax loss. However, they can make a written election to spread the tax deduction.
The following are not gifts for ATO:
- buying items at a charity auction
- purchases of raffle tickets and art union tickets
- buying chocolates, pens and similar low-cost items
- the cost of attending a fundraising dinner or concert, even if the cost exceeds the value of the dinner
- membership fees
- making a payment to a school building fund as an alternative to an increase in school fees
- providing a service – for example, a volunteer can’t claim a deduction for their expenses in carrying out the voluntary work or the value of their unpaid work
- any payments made if you have an understanding with the donor that the payments will be used to provide a benefit to them.
How much to claim
a taxpayer can claim a deduction over $2 or more, but the amount cannot be exceeded $10 without receipts. For gifts of property, there are different rules, depending on the type of property and its value.
A taxpayer can claim a portion of fundraising event if the contribution is for an eligible fundraising event, organisation must be registered for DGR.
In some circumstances, individual taxpayer can claim gifts, donations and other contributions to political parties, but contribution must be more than $2. Importunely, businesses cannot claim deductions for political contributions.
For further assistance, please contact Taxplanners on 1300 000 TAX (1300 000 829), 03 9600 0143 (10 Lines).
You can also visit our office for assistance –
Melbourne CBD – Suite 411-413, Level 4, 343 Little Collins Street, Melbourne
Werribee Office – 88 Watton Street, Werribee, Contact – 03 901 MY TAX (03 9016 9829)