In many cases, your gifts and donations could be tax deductible. While the purpose of giving isn’t to receive something in return, being able to claim your gift as a tax deduction can be an added bonus.
Conditions:
There are four conditions which must be met to claim a tax deduction for your gifts and donations.
The first is that your gifts and donations are only claimable if they are made to a deductible gift recipient (DGR’s). Often the recipient of your gift will let you know if it is tax deductible, but in case they don’t, you can look up their ABN on the ABN Lookup or follow this link to get the full list of DGR’s.
Your donation must also truly be a gift or donation. It must be voluntary and you must not receive or expect to receive any material benefit or advantage in return. This does not include token benefits (e.g. stickers or a keychain). Material benefits are benefits that have monetary value.
The third condition is that your donation must be either money or property and the fourth is that it must also comply with any relevant gift conditions. For some DGR’s, the income tax law adds extra conditions affecting the type of deductible gifts they can receive.
Sometimes other businesses collect donations on behalf of a DGR. If that’s the case with your donation, you can claim it as long as it still meets the four conditions above, and you must also have a receipt from the third party which identifies the DGR and states the fact that the amount is a donation to the DGR. The receipt does not have to include the DGR’s ABN.
If you receive a material benefit in return of your donation, your donation is instead considered a contribution and extra conditions apply.
Claimable Amounts:
The claimable amount of a gift or donation depends on the type of gift or donation it is. For the purpose of this article, we will only look at gifts of money. However, for information on gifts of property or shares and gifts under the Heritage and Cultural Programs, visit the ATO website.
For gifts of money, the amount you can claim is the amount of the donation, providing it is more than $2. Donations less than $2 are not deductible.
You can claim a total tax deduction of up to $10 for bucket donations made for the income tax year. If the donations were more than $10, you need a receipt before you can claim.
Are GoFundMe’s Deductible?
Donations made to GoFundMe’s are usually only deductible if they are made to a registered charity fundraiser. Donations made to a personal GoFundMe are generally considered personal gifts and are not tax deductible. If you make a donation through GoFundMe to a charity fundraiser, you will automatically receive a tax receipt from the PayPal Giving Fund.
Are School Fees Deductible?
You cannot claim a deduction for the cost of educating your children (or any other students), including school fees, as these are considered private expenses.
You can, however, claim a donation to a school building fund if the building fund is a deductible gift recipient, and if the donation was truly a gift. For example, you cannot claim a deduction for a donation to a building fund if it is an alternative to increasing your child’s school fees.
Examples of Items you Cannot Claim
Items bought at a charity auction
Purchases of raffle tickets or union tickets
Buying chocolates, pens and similar low cost items
Cost of attending a fundraising dinner or concert
Membership fees
Providing a service
Gift vouchers donated to a DGR
Donations made to social media or crowdfunding platforms unless they are a registered DGR
Keeping Records
The following list contains the records you must keep to claim a tax deduction for a donation you make:
Receipts for donations or contributions – if you don’t have a receipt, you can use other records e.g. bank statements
If you do have a receipt, it must state the name of the fund, the authority or institution to which the donation has been made, the DGR’s ABN and that it was for a gift
If you give through a workplace giving program, your evidence can be from either your income statement or payment summary or a receipt from a third party or a written record from your employer
A signed letter from the eligible organization confirming the amount of your donation or contribution
If you received a minor benefit (e.g. a charity dinner) as the result of your donation, the value of the benefit must also be shown
