Understanding Tax Deductions for Charitable Giving - Accounts NextGen

Understanding Tax Deductions for Charitable Giving

Understanding Tax Deductions for Charitable Giving

tax deduction

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?

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