Tax deductible donations

Making a big donation at End of Financial Year (EOFY) is not only good for the soul; it is also good for your bank balance. Donations can reduce an individual’s taxable income and money donated in June can result in money back in July. Desert Pea Media can benefit this financial year from your tax deductible donation. Tax deductions are a way to reduce your taxable income and the amount of tax that you pay. While most deductions are expenses directly related to earning your income, gifts and donations can also be considered tax deductions. Donations of $2 or more made to an organisation that is defined by the Australian Tax Office as a Deductible Gift Recipient (DGR) can be considered tax deductible donations. Desert Pea Media Association Incorporated is a DGR. Click here for more information.

If you receive something in exchange for the donation (eg. a raffle ticket or pen) then it doesn’t qualify as a tax deduction. The Tax Office defines this as a transaction where you receive a good or service in return for the money donated. However receiving tokens, like lapel badges and stickers that promote the organisation, are acceptable and still qualify as a tax deduction.

Does claiming a tax deduction on a donation affect the amount of money Desert Pea Media receives?

No. Any amount received back to donors comes from the Australian Tax Office as part of the tax refund process.

How much can I claim?

You can claim the full amount of the donation as long as it is $2 or more. There is no limit to how much you can claim, however there is a limit to how much of a donation you can claim in a financial year. A deduction for a gift can reduce your accessible income to nil in a tax year, but it is not allowed to create or add tax loss. If this is a possibility, the deduction can be spread over several years and be used as a deduction for up to five years.

Can companies donate?

Absolutely. Just as individuals can claim donations as a tax deduction, businesses can claim gifts to charity – as long as it is a cash gift and the charity is a deductible gift recipient. More information is available on the Australia Taxation Office website.

 

How do I claim? 

Make a donation to Desert Pea Media and keep the receipt. Gather all of your tax documentation including tax file number, PAYG payment summary and receipts. Lodge your tax return online, with a paper tax return or with a tax agent. Pay close attention to section D9 Gifts or donations of the return – this is where you should record your donations.