Charitable Donations- how you can help while getting your financial house in order
Australians are a pretty giving bunch of people. We pride ourselves on lending a helping hand to those in need. In 2012-2013 alone, Australian households donated approximately $4 billion to charitable organisations (ABS: 5256.0). That’s a lot of good karma going around.
But how can you donate to your favourite charity and make sure you get the maximum tax entitlement for doing so?
As long as a charity is registered with the ATO as a ‘deductible gift recipient’ and you do not receive a material benefit for your donation, you are able to claim the donation as a tax deduction.
It may be worth mentioning that there is a big difference between a ‘tax deduction’ and a ‘tax offset’. By donating to charity, do not expect the government to give you the entirety of the donation back to you in your tax return. Instead, your donation will reduce your taxable income. The best way to think about it is you will get the tax back you paid on the donation.
Another way to make a tax effective donation is to shorten the donation cycle. If you make the donation in June and then claim the tax back in July, you are only without the money you will receive back (i.e. the tax deduction) for a short period. Obviously this is only an important factor when donating large sums of money.
You can also arrange for a donation in your will. This will mean that when you die, your executor will distribute the money you wish to a charity of your choice. If you don’t have a will, let us know and we can refer you on to a great solicitor we work with.
Donating to a great charity can do good things for the world we live in and can bring extra joy and satisfaction to our lives. What about you, what charity do you regularly donate to?
his post is from Ben Brett. Check out our details in the About Us page.