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Tax Deductible Donations

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Claiming deductions at tax time can be a massive headache for the average person as well as private and corporate businesses. However, claiming tax-deductible donations such as those made to IHO Global, will place you in a stronger position regarding tax deduction certainty. Tax-deductible donations are the government’s way of both rewarding and encouraging the public to donate to charities.

Tax time can be a much brighter time of the year for you after all. It will change your perspective and even prove rewarding, knowing you will be helping those who are less fortunate, whilst saving on your tax.

So, what are considered tax deductible donations? How do you make wise donations to minimize your tax burden?

We have provided answers for all the questions that are most commonly asked.

What Constitutes Tax Deductible Donations in Australia?

The Australian Taxation Office states;

“Organisations that are entitled to receive tax deductible gifts are called ‘deductible gift recipients’ (DGRs). You can only claim a tax deduction for gifts or donations to organisations that have a DGR.”

When you donate to an organisation such as IHO Global that has Deductible Gift Recipient (DGR) status, then you are eligible to claim that donation as a tax deduction.

Your tax-deductible donation must:

    1. Be more than $2.00.
    2. A gift is voluntary transfer of:
      a) money,
      b) property where you receive no advantage or material benefit,
      c) financial assets such as shares.
    3. Your gift must give you no material benefit or advantage.

    Talk to Your Tax Accountant

    It is to your advantage to have a talk with your tax accountant with a view to making prudent tax-deductible donations to IHO Global.

    However, for general guidance, if the total amount of your tax deductions places you in a lower tax bracket, then you will potentially be eligible to receive a greater amount back from the ATO. The deduction is subtracted from your taxable income. If you are a high-income earner, you can potentially minimise your tax by making tax deductible donations.

    This means that you are able to give to worthy projects, whilst saving money on tax. By giving to humanitarian causes undertaken by IHO Global, your dollars go to the poor, destitute and needy instead of going to the ATO.

    If you make regular donations to IHO Global throughout the year, you can estimate the amount required to significantly reduce you tax bill.

    You can calculate the potential tax benefit available to you by going to the Tax Benefit Calculator on the IHO Global website. However, your tax accountant will likely be more familiar with these great tax deduction benefits in relation to your unique personal tax situation.

    These tax-deductible benefits are well known to high income earners, the rich and wealthy.

    Further, there are other benefits that kick-in from reducing your taxable incomes such as – increased child care entitlements and other levy rates.

    Small businesses can receive a similar impact on their tax returns if tax-deductible donations done wisely. Small businesses can make tax-deductible donations to a registered charity like IHO Global. Sole traders can also make a claim for a tax-deductible donation on your personal tax return instead of claiming the donation on your registered business.

    Just be aware that tax-deductible donations cannot be used to create or increase a tax loss.

    Remember that when you or your tax agent are preparing your tax return, you will need to supply an official receipt from IHO Global stating the date and amount as evidence of your donation.

    Overall tax-deductible donations are a great way to both potentially reduce the tax that you owe the government while also helping the poor and those in need. We hope that this guide has helped to clarify and make that process a little easier.