As Australia burns, many of us have already or are considering donating to one of the many appeals set up for this worthy cause.  You may have also seen items being auctioned, sold or raffled all in the name of raising money, not to mention charity events and dinners and buckets being handed around at one of the many sporting and social events you attend over summer.  

There is often some confusion in these types of situations as to what can and can’t be claimed as a tax deduction.  So why does it matter how the funds are raised and received when it comes to claiming a tax deduction?

In short you can only claim a deduction, in your tax return, for donations made to a tax deductible gift recipient (DGR) where they issue you a receipt stating that donations of $2 or more are tax deductible.  The only exception to this is where you make a donation of $2 or more to a bucket collection conducted by a DGR for natural disaster victims where you can claim up to $10 without a receipt.  

What is a deductible gift recipient (DGR)?

A DGR is an organisation that has been approved to receive donations that are tax deductible.  You can find out the DGR status of an organisation by searching ABN Lookup, by simply typing in the name of the organisation to which you wish to make a donation.

How much further will my donation go if I make it through a DGR?

If, for example, Sarah who earns between $37,000 to $90,000 per year makes a donation of $100 to a DGR supporting bushfire victims then she will be only out of pocket $65.50.  If it was Sarah’s intent to make a donation where she would be out of pocket $100 then she could make donation of $153 and after she receives the benefit of the tax deduction she will still only cost her $100. 

Can I claim a deduction for raffle tickets, events, auction items and other merchandise?

Unfortunately you cannot claim a tax deduction for any items that provide you with a personal benefit, even though what is purchased may greatly exceed its monetary value.  So sadly there is no deduction available for raffle tickets, events, auction items and merchandise.

What are some examples of DGR’s?

If you are thinking that you would like to make your donation go further and claim a tax deduction, you can make your donations to:

For all other organisations checkout there DGR status first by searching ABN Lookup.

Will donations through Celeste Barber be tax deductible?

The good news is that donations made through Celeste Barber’s crowdfunding platform are tax deductible.  Donations are made to the Paypal Giving Fund which is  listed on ABN Lookup as a DGR.  Paypal forwards funds raised to the nominated DGR, in this case the NSW Rural Fire Service.  However it is worthy to note that Paypal does charge a fee for donations of between 2.2% to 2.9% plus $0.30 for every transaction, so it may be worthwhile to donate directly.

If you would like specific advice tailored to your business and circumstances, Accounting Heart offers affordable service packages where you can work with Sonia one-on-one to help you get on top of deductions and all other aspects of your financials. Book your FREE Discovery Call to find out more.

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Disclaimer: This is general information only and is not advice of any sort.  No warranty or representation is provided by Accounting Heart Pty Ltd as to the accuracy, currency or completeness of the information contained in this summary Readers of this summary should not act or refrain from acting in reliance upon any information contained herein and must always obtain appropriate taxation and / or other advice as may be appropriate having regard to their particular circumstances.