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Are Donations Tax Deductible in Australia

Let me guess, you’ve made a donation or gift to a charity, and you’re wondering if it’s tax deductible. Am I right? 

Judging by the title of this article, I think it’s safe to assume there’s a good chance that’s the exact reason you’re here. 

Fear not my generous friend for I have the answers you’re looking for. In this article, we will walk you through what qualifies your donation to be tax deductible, as well as how much you can claim on tax for donations. 

So, before you submit your Tax Return this year, have a quick read below.

What qualifies a gift or donation as a tax deduction? 

Can you throw a few dollars into the local wishing well and claim that as a tax deduction? I’m sorry, but unless you wish for the ATO to rewrite the rules the answer is no. 

For a donation or gift to qualify as a tax deduction, it has to meet a few criteria first: 

  • The gift or donation must be made to a registered Deductible Gift Recipient (DGR) 
  • You must be willingly giving the money away without receiving or expecting to receive any sort of material advantage, gain or benefit
  • It has to be a money or property donation (which can include financial assets like shares) 
  • It has to to comply with current DGR gift conditions 
  • You need to have a  receipt 

If you’re feeling unsure about your donation, and you’re not sure how to apply it to your Tax Return for a tax deduction, send one of our Number’s Geek a quick message. One Click Life’s online platform and support team of Accountants are all ready to give you a hand with any of your tax questions during tax time. 

What types of gifts or donations can you claim as a tax deduction? 

Alrighty, so we’ve clarified what qualifies a gift or donation as a tax deduction, but what are you actually allowed to donate? 

The types of gifts or donations you can claim as a tax deduction include: 

  • Money donations that are at least $2, or more 
  • Property
  • Donations under the heritage and cultural programs (donating items to a public museum or gallery) 

What types of property can be donated for a tax deduction? 

You can donate all sorts of property as long as the donation qualifications we talked about in the section above are met.

Some of the different types of property you can donate includes: 

  • Art
  • Buildings and land 
  • Cultural artefacts 
  • Relevant scientific materials 
  • Film 
  • Historical pieces 
  • Books 
  • Antiques 
  • Jewels 

When is a donation not a tax deduction? 

Now of course the main point of making a donation to a worthy cause isn’t to lower your tax – the people getting the help is what matters most. However, if it is tax deductible it sure does make things better. 

The donation is not a tax deduction if: 

  • If the organisation is not a DGR
  • If you receive something in return for the donation 
  • Gifts made to family and friends 
  • Donations made under a will

You’re not sure if your donation is tax deductible? Don’t panic. Come tell one of our Number’s Geek about your donation, and let’s work out together if it’s susceptible to gift tax in Australia. 

How much do you get back from tax deductible donations in Australia?

The amount you get back as a tax deduction from the ATO depends on your income tax bracket – your tax deduction rate on your donation is the same as your marginal tax rate. 

For example: 

If you earn between $18,200 – $45,000, you are taxed 19 cents for every $1 you make. When you make a donation, you will get 19 cents back as a tax deduction for every $1 you donate. So if you make a $100 donation, you will receive a $19 tax deduction. 

What is a Deductible Gift Recipient (DGR)? 

A DGR is more or less the way the Australian Business Register proves if a charity is legit or not. If the charity is a registered DGR, it means you will be able to claim donations made to them as a tax deduction in your return. 

You can usually see if a charity is a DGR on their website or on the ABN Lookup page, otherwise you should call the charity and ask them. Either way, you should always confirm if the charity is a registered DGR before you donate to them. 

Sometimes a DGR has another business collect donations on their behalf – is this still tax deductible?  

A DGR will sometimes have another business collect donations on its behalf – the donation you make IS still tax deductible (as long as you get a receipt). 

What’s an example of this you might ask? 

Well, have you ever been to a supermarket or petrol station where at the counter they ask you if you want to donate to a charity? Usually they are collecting that donation on behalf of another organisation, and as long as you keep a receipt, you should be able to claim yours as a tax deduction.

How to claim your donation as a tax deduction 

The more you deduct, the less tax you pay and the more money you can spend on yourself. The best way for you to do that is by popping onto our website and logging into your One Click Life Account. 

You can also claim your tax agent/Tax Return fees back on tax (this includes One Click Life!), so why wouldn’t you let us help you minimise your tax and maximise your money?

One Click Life offers online Tax Returns at your fingertips in an easy-to-use platform run by industry professionals. Our Tax Returns take less than 5 minutes!

Taxes, health insurance, and wills can be time-consuming and tedious. Our app allows you to be able to do this fuss-free, giving you a simple way to organise, track and manage all of your life admin in one place.

Let One Click Life take care of your Tax Return and life’s essential tasks, so you can spend more time doing the things you love.