The Australian Taxation Office (ATO) is urging taxpayers to ensure if they want to claim a deduction in their tax return for a donation they have made, it meets the criteria to be tax deductible.
The donation needs to be made to a deductible gift recipient (DGR) and items considered promotional advertising for the DGR, such as pens, wristbands or badges are among the only items to be accepted in return for the donation.
Gold coin donation for a sausage sizzle or purchasing vintage goods from an Op Shop are not considered eligible payments to claim for a tax deduction.
A record of the donation is also required to claim the tax deduction, and not all charities and not-for-profits are DGRs which are either endorsed by the ATO or listed by name in the tax law.
“We know crowdfunding campaigns are growing in popularity, but they may not be run by a DGR, so it is important to check whether your charitable gift or donation will be deductible at tax time. Taxpayers can confirm an organisation’s DGR status by checking the ABN Lookup on business.gov.au.”, the ATO’s Assistant Commissioner Tim Loh said.
“If you made donations of $2 or more to bucket collections conducted by a DGR for natural disasters, you can only claim a tax deduction of up to $10 for the total of those contributions without a receipt,” he said.
In the 2019-20 year, around 4.2 million Australians claimed deductions for $3.7 billion in gifts and donations to charities and not-for-profits, and last year the ATO had to adjust a large number of charitable claims because the taxpayer incorrectly claimed the donation, delaying the tax return from being finalised and any refunds being issued.
“We want to make it easier for you to support the charity of your choice. The myDeductions tool in the ATO app can store photos of donation receipts throughout the year. Then simply upload your donation information to myTax or send them through to your registered tax agent,” Mr Loh said.
