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Understanding Tax Deductions for Charitable Giving

Understanding Tax Deductions for Charitable Giving

If you also follow charitable giving, and amid this hard time, if you are also coming ahead to help people who are unable to deal with the current situation, you must understand Tax deductions. It’ll not just assist you in trimming down the excessive tax burden from your shoulder; indeed, it may encourage you to help needy people more.

Every year, around one-third of Australians give their significant contribution to Charities. If you are also one of them, you must pay attention to the following rules that are crucial to understanding for every person contributing to charitable giving.

Are you giving money to charity? Don’t forget your gift!

Do you want to give a significant boost to your tax refund? Then tax-deductible donations are the best way to make this possible. You can find plenty of charities around you who rely on donations as it supports them. Your little contribution can help lots of unfortunates.

But remember, if you want to connect with a charity or already you’re a part of any, then make sure the charity is registered by ‘ATO’ if you’re paying more than $2 as a donation to them. According to ATO, it must be “Deductible Recipient organisation” otherwise; you can’t expect any tax deduction.

Most of the charities are apparent in such phases. But if you want to pay double attention, you can also ask them for “deductible gift recipient status,” which will clear your doubts.

Donation That Isn’t A Tax Deduction

ATO marks the following scenarios before providing you with a tax deduction for charitable giving-

  1. If you donate to an organisation that isn’t registered, you can’t claim any tax deduction on your generous donation.
  2. If in the exchange of your donation you receive something from the charitable organisation, such as- a dinner attendance, chocolates, etc. then you aren’t eligible for a tax deduction.
  3. It’s often a significant confusion among people that donating to churches will shed tax burden. Still, it’s not the whole truth. Like a registered charitable organisation, the churches come under registered places for charity. However, leaving essential things unnoticed and requesting ATO for deduction may give rise to problems for you. Don’t claim it unless you’re entirely assured whether it’s eligible or ineligible.

It’s easy to track your Tax Deductible Donations to charities.

Most Australians, during tax time, fail to mention or present some crucial things that hold them back to claim any deduction. For example- people either forget their receipts or deductible donations while filing tax return in Melbourne.

You must be prepared to verify your claim. For this, you must always be ready with entire documents and a series of receipts. No matter; whether your donations were in cash or related to some goods or services, you should always keep a detailed record of your donation in order to become eligible for a refund. However, it would be much better if you’ve made payments with check or donations have been made in the following Tax Year.

So are you ready for your tax deduction?

The most neglected tax deductions of all times

Don’t let your hard-earned money squander in ATOs pocket, here are some neglected tax deductions that can save you big bucks.

With the tax deadline coming up, it’s good time to think about tax deductions- particularly deductions that are frequently missed when preparing to file your tax return. Tax time can be quite stressful especially because we are looking for ways to maximize our tax return.

It’s obvious that getting the basics right is the most imperative part of the puzzle, however you may be able to add a little sweetener to your return by making sure you have claimed every tax deduction possible to you.

In the hope that you don’t commit the same taxation mistakes again, we have shared the top forgotten tax deductions.

Mobile Phone expenses:

Do you use your mobile phone for making work-related calls? Unless you have been given a company phone there’s a fair chance that you have used your personal mobile phone to make some work-related calls. Whether you are calling clients or organizing meetings, make sure you can claim all of those calls on your next bill. Remember, you can only claim the calls you’ve made for business purposes, so make sure to keep your itemized bill or a logbook to ensure you are giving ATO an accurate listing of your expenses.

Union/Membership fees:

Are you a member of any union? Is your association related to your profession?

If you answered “Yes”, there’s good news for you! If you pay a union or membership fees and they are related to your profession, then you can claim the cost of these.

Work related car expenses:

In situations where you are required to use your car for work-related purposes, you can claim these expenses in your tax return. To claim these expenses you should note down the “business kilometers” you’ve travelled by your personal car.

According to ATO, business kilometer is the distance travelled by your car in the course of earning income. Remember for claiming these expenses you must be the owner of the car and you can’t claim the cost of driving from home to work and vice versa.

Claim Home Computer use expenses:

Ever did office work from home? How about checking and responding to your official emails in the evening or on the weekend? If you do so, you are eligible to claim the cost of using your personal computer as a tax deduction.

Tax Agent Fees:

Do you use tax agents for filing your tax returns? If yes, then you can claim the amount you paid last year- on current year’s tax return. You can simply put the amount you paid last year into Section D10 “Cost of Managing Tax Affairs”. The agent fees you pay for tax help are always tax deductible.

Is it worth it?

You might be thinking some of these expenses seem to be very small, but together these can save you a handsome amount. By being aware of these deductions you can reduce the amount of your hard-earned salary that is taxed.

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