When Can You Claim Tax Deductions for Your Donations?

People donate to funds and organisations for various reasons. Some do it to show support for an advocacy, while others want to share the blessing they have received.

But regardless of whether you are an eCommerce CEO who wants to give back to the community or an influencer who wants to support a cause, you need an eCommerce or influencer accountant on your side when you make a generous donation.

According to the Australian Tax Office (ATO), a person who donates or gifts to organisations may be eligible to claim tax deductions. But not all presents and donations are tax-deductible. Which ones are deductible and which ones are not? This post aims to shed light on that topic and more.

What Gifts and Donations Are Eligible?

The ATO explicitly states that only donations to organisations with a deductible gift recipient (DGR) status are eligible for tax claims. Therefore, not all charitable contributions are tax-deductible.

DGRs are organisations or funds registered with the Australian Charities and Not-for-Profits Commission (ACNC) and have applied for a DGR endorsement. The Australian Business Register has a compiled list of all DGR funds and organisations to help people find one to support.

Are Donations Made through Crowdfunding Sites Tax-Deductible?

Unfortunately, most donations through crowdfunding sites are not eligible for tax deductions. You can always support personal GoFundMe fundraisers; you can’t claim any tax benefits from it.

However, donating to GoFundMe charity fundraisers is another thing altogether. Donations made through these fundraisers are tax-deductible. PayPal Giving Fund, GoFundMe’s charity partner, will automatically issue tax receipts to donors. Take note that you must double-check if you are donating to a Certified Charity Fundraiser.

What Tax Deductions Can You Claim?

The amount of deduction you can claim relies on the gift or donation that you have given. If you have donated monetarily with more than 2 AUD, you can claim the whole amount of the gift. But gifts-in-kind are a bit more complicated.

Tax deductions for gifts of shares and property rely on the gift types and valuation rules. Heritage and Cultural program gifts have even more special circumstances and may fall into the jurisdiction of cultural gift programs, heritage gifts, or claiming conservation covenant concessions.

Are Bucket Donations Eligible for Tax Claims?

Bucket donations are smaller one-off donations that aim to raise awareness of a cause. Bucket donations for natural disaster relief are tax-deductible according to ATO rules.

Furthermore, people who have donated anywhere from 2 to 10 AUD can claim deductions without a receipt. However, donations over 10 AUD require receipts for tax claims.

How to Claim Tax Deductions for Donations

You need to keep records of all the tax-deductible contributions you have made to successfully claim tax deductions for your donations. These records can include donation receipts, copies of donations, payment summaries, or signed letters from the organisation confirming the donation amount.

It is interesting to note that DGRs are not required to give you a receipt every time you donate. However, if they do provide one, you need to make sure they have three things: the organisation’s name, their Australian business number (ABN), and the amount of the gift you have donated.

Conclusion

Donating to different causes, funds, and organisations can help make the world a better place. But if you contribute to a DGR, that sizeable donation you gave to support an advocacy can also provide you with tax benefits that you can enjoy today. Regardless of whether you are an influencer donating under your name or a manager donating on behalf of your company, an influencer and eCommerce accountant can expertly sort out the tax intricacies of the situation.

If you are looking for award-winning accountants in the Gold Coast, look no further than the Ecommerce Accountant. Let our experienced and highly qualified accounting team handle the tax returns and claims while you help make the world a better place. Partner with us today!