Jun 11, 2024 Emily Pell

Is my donation tax deductible?

You may be familiar with the saying “it is better to give than to receive” and indeed, the act of giving feels rewarding.  Receiving a tax benefit is a bonus, but keep in mind that not all gifts and donations lead to a tax deduction, and in some cases, there may be a maximum threshold for a tax deduction.

GoFundMe

This has become an increasingly popular platform for fundraising.

Typically, GoFundMe has 2 types of fundraising campaigns – registered charities and personal.

Donations of $2 or more to a registered charity fundraiser on GoFundMe are most likely eligible for a tax deduction. The donation is made into a PayPal Giving Fund (the endorsed Deductible Gift Recipient, or DGR), that will issue a donation receipt directly to your email after your donation is made. You can check that you are donating to a registered charity on GoFundMe by visiting the fundraiser page and looking out for this certified charity badge next to the organisation’s name:

An example of a registered charity’s profile is shown below.

Donation

Beware that donations to a personal fundraiser will generally not be tax deductible.  To be sure, you can go to ABN Lookup to check the DGR status.

Donations going overseas

There may be an overseas disaster relief appeal or a developing country relief fund you would like to donate to. The Overseas Aid Gift Deduction Scheme allows Australian organisations to issue tax deductible receipts for donations that go towards their Overseas Aid Fund, which is endorsed by the ATO as a DGR. You can go to the ABN Lookup website to check that the organisation’s Overseas Aid Fund has been endorsed as a DGR.

Donations to political parties

Individuals who make gifts or contributions to political parties or an independent member/candidate may claim a tax deduction up to a limit of the following amounts each income year.

  • $1,500 for contributions and gifts to political parties
  • $1,500 for contributions and gifts to independent candidates and members.

These donations have to be made in a personal capacity for them to be claimed.

A further note that in Victoria, political donations over the disclosable threshold (currently $1,080) are required to be disclosed by both donors and recipients to the Victorian Electoral Commission (VEC) within 21 days via their online system VEC Disclosures.

Donations to school or church

Contributions made to a school or church are only tax deductible when they are specifically made to a fund which has DGR status (eg building fund or library fund)

Donations that come with a benefit

There is no tax deduction allowed for a donation where you receive something of substance in return. For example, if you made a donation to the Good Friday Appeal and received a raffle ticket in return, your donation would not be eligible for a tax deduction.

Other important reminders

  • Make your donation before 30 June if you wish to claim it as a tax deduction for that financial year
  • Obtain a receipt as evidence of your tax deductible donation
  • Donations do not give rise to a tax loss. If your tax deductible donations exceed your assessable income, the excess is not carried forward to offset next year’s assessable income. However, you can spread the tax deduction over up to 5 income years. An election form has to be completed before lodging the income tax return for the year in which the donation is made.
  • If you made donations to a non-DGR, you may still be able to reduce your tax by treating the donations as profit distributions from your Family Trust (if allowed by the Trust Deed).

Your RDL accountant can guide you in getting the best tax outcome for your charitable giving.