How donating to charity can help boost your tax return

More than a tax deduction

This information is general in nature and does not constitute tax advice.

You’ve probably heard the phrase “tax deductible” before, but what does it actually mean for your donation?

When you’re donating to charity, your gift can help create lasting change for children and families, while your tax-deductible donation may also be eligible to claim when you lodge your tax return.

A tax deduction may provide a financial benefit at tax time, while your donation helps support children, families and communities facing challenges around the world.

Every donation, no matter the size, adds up. A gift could help support clean water projects, education programs or initiatives that help children and families build brighter futures.

So if you’ve donated $2 or more to an eligible charity this financial year, now is the time to gather your receipts and see what you may be able to claim. Keep reading to find out how your donation can make an impact beyond tax time.

Are my charity donations tax deductible?

You might be wondering whether the support you’ve given this year can also help at tax time. In many cases, charity donations can be tax deductible – but it depends on who you donate to and whether the organisation is eligible.

To claim a tax deduction, your donation must be made to a charity or organisation endorsed as a deductible gift recipient (DGR) by the Australian Taxation Office (ATO).

A DGR is simply an organisation that has been approved to receive tax-deductible donations. This helps ensure your gift can support a cause you care about while also being eligible for a deduction.

If you’re unsure whether a charity is registered as a DGR, you can check its status through the Australian Charities and Not-for-profits Commission (ACNC) or the ATO.

Want to see what your donation could mean at tax time?

Use our tax calculator to estimate the potential benefit of your tax deduction. Your donation can help create lasting change for children while you may also be eligible to claim it at tax time.

Can businesses claim tax-deductible donations?

Yes. Businesses can generally claim tax-deductible donations in the same way as individuals, provided the donation is made to an eligible DGR charity.

Tax time can also be an opportunity for businesses to support causes that align with their values through workplace giving or charitable partnerships.

Whether you’re an individual supporter or a business, keeping records and receipts for eligible donations is important.

How donating to charity can help at tax time

Whether you’re donating to charity for the first time or are a long-time supporter, these tips can help you make the most of your giving.

1. Make sure your charity is registered

Before claiming a tax deduction, it’s important to check that your donation is going to an eligible charity.

Generally, a donation must be a genuine gift – meaning you give money or property without receiving something of value in return.

Your chosen charity must also be endorsed as a DGR by the ATO. You can check a charity’s registration and DGR status through the Australian Charities and Not-for-profits Commission (ACNC).

Does claiming a tax deduction affect the charity?

No. Claiming a tax deduction doesn’t reduce the amount your chosen charity receives.

Your donation still helps fund the work you care about. The tax benefit simply relates to your taxable income when you lodge your return.

The impact of your gift can be much bigger than the receipt at tax time. A donation can help bring clean water closer to children and families living in rural communities, where reaching a safe water source may otherwise mean a long walk each day.

For a child, that can mean fewer hours spent collecting water and more time in the classroom, with friends, and enjoying childhood.

2. Keep your donation receipts

Donations of $2 or more are generally tax deductible.

Keep your receipts for eligible donations in case you need to provide evidence to your accountant, tax agent or the ATO. The ATO recommends keeping records for five years after lodging your tax return.

Tax tip: You can keep a record of your tax deductions and income in one place on the myDeductions app.

3. Understand gifts and contributions

Not every payment to a charity is treated the same way at tax time.

A gift is when you donate money or property without receiving something of value in return, and these donations may be tax deductible if they meet ATO requirements.

A contribution is different because you receive something in return, such as buying a ticket to a charity fundraising dinner. Depending on the type of contribution, part of the amount may be eligible for a tax deduction.

4. Speak with a tax professional

The amount you can claim depends on the type of donation or contribution The amount you can claim depends on the type of donation or contribution you’ve made and your individual circumstances. If you’re unsure whether your charity donation is tax deductible or what you may be able to claim, a registered tax agent or accountant can help.

5. Support a cause that matters to you

If you’re considering making a charity donation before 30 June, choose a cause that reflects your values.

We see time and time again that supporters give because they want to help create a better future for children and families. Some feel connected to a particular issue or community, while others choose to support causes that help people facing challenges different from their own.

Whatever motivates your giving, your donation to charity can help create meaningful change. When people come together to support a cause they care about, individual gifts can add up to something much bigger.

Make your tax-deductible donation count

If you haven’t made a charitable donation this financial year, there’s still time.

Donations of $2 or more made before 30 June to an eligible DGR charity may be tax deductible and can be claimed when you lodge your tax return.

At tax time, your donation is more than a receipt. It’s a chance to help create change for children and families. A gift can help bring clean water closer to rural communities, so children spend less time walking to collect water and more time learning, playing and being children.

This tax time, turn your donation into a chance for children to stay healthy, keep learning and look towards a brighter future.

For more information about charity donations and tax deductions, visit the ATO and ACNC websites or speak with a qualified tax professional.