02 8824 4363


How to support the charity of your choice while claiming a tax deduction

Posted by Team AVS on 28 Apr, 2022  0 Comments

With Australians expected to make significant charitable donations to support flood-impacted areas, the Australian Taxation Office (ATO) is urging taxpayers to make sure that if they want to claim a deduction in their tax return for a donation they have made, it meets the criteria to be tax-deductible.

Assistant Commissioner Tim Loh said, “We know Aussies are very charitable and after the recent floods, we are expecting to see a lot of donations and deductions in tax returns this year.”

In the 2019–20 year, around 4.2 million Australians claimed deductions for $3.7 billion in gifts and donations to charities and not-for-profits.

“Before rushing to claim a donation in your tax return, it’s important to understand what makes a donation tax-deductible. The donation needs to be made to a deductible gift recipient (DGR).”

Organisations or funds endorsed as DGRs are entitled to receive tax-deductible gifts or donations. Not all charities and not-for-profits are DGRs. DGRs are either endorsed by the ATO, or in exceptional cases listed by name in the tax law. Additionally, many crowdfunding campaigns that raise money for charitable causes and individuals in need, are not run by DGRs.

“We know crowdfunding campaigns are growing in popularity, but they may not be run by a DGR, so it is important to check whether your charitable gift or donation will be deductible at tax time. Taxpayers can confirm an organisation’s DGR status by checking the ABN Lookup.”, Mr Loh said.

“Further, in return for your donation, you can only accept items that would be considered promotional advertising for the DGR such as pens, wristbands or badges. If you receive something in return for your donation, for example you make a gold coin donation for a sausage sizzle or buy vintage goods from an Op Shop, this isn’t considered a tax-deductible gift.”

“Most importantly, you must have a record of your donation. Most DGRs will usually issue you with a receipt, but they don’t have to. We will accept third-party receipts as evidence if the receipt identifies the DGR and clearly states that the amount is a donation.”

“If you made donations of $2 or more to bucket collections conducted by a DGR for natural disasters, you can only claim a tax deduction of up to $10 for the total of those contributions without a receipt.”

The ATO may ask a taxpayer to provide evidence to support their claim, or amend their tax return to remove the claim. Last year, we had to adjust a large number of charitable claims because the taxpayer incorrectly claimed the donation. Unfortunately, this will delay the tax return from being finalised and any refunds being issued.

“So, if you are claiming a donation this tax time, make sure it’s tax-deductible, you didn’t receive anything of personal use in return, and you have a record of the donation.”

“For those that have had their tax records lost or damaged in the floods, the ATO is here to help you reconstruct them so you can be prepared this tax time.”


If you have any questions, feel free to ask them in the comment section. We will be happy to answer all your queries.


Leave a Reply

Your email address will not be published. Required fields are marked *

Disclaimer : All the content (including Blogs, newsletters, Fact sheets, calculators etc.) provided on this website is general information only and is neither intended to nor be considered personal financial or taxation advice. The content has been prepared without taking into account your personal circumstances, financial situation or objectives. In making any financial, investment or taxation decision, information provided on this website should not be relied upon and you should seek personal advice. AVS Business Services Pty Ltd disclaims any responsibility for any decision that you make, based on the information provided on this website.All the information provided on this website is prepared in good faith and based on AVS’s knowledge and understanding of superannuation, taxation and other relevant laws and is believed to be correct at the time of writing the information. However as the laws, being dynamic by nature, keeps on changing, you should not rely on the information provided on this website without first obtaining advice from qualified professional.