It really is that simple – donate to a recognised charity, and your donation will reduce your taxable income, so you’ll pay less tax (or get a bigger refund from the ATO).
As we get closer to June 30, it’s often a good idea to think about how to reduce one’s tax burden. Donations are one way to do it, that is 100% legitimate, as well as extremely worthy and community minded.
Tax deductible donations are certainly not a 1:1 ratio, but they are a win-win for you and the charity involved. Depending on your tax rate, a donation of $100 to Médecins Sans Frontières could knock $45 off your tax bill, so really that $100 donation has only cost you $55. Not bad for you, and you’re helping out people in real need.
Note that to claim a deduction, the organisation must have a status of deductible gift recipients (DGRs) with the Australian Tax Office.
Also, note that there are a few things that cannot be claimed, even though they may seem like they should. Some examples include raffle or art union tickets, such as Yourtown (formerly Boystown) or Surf Lifesaving Lotteries, membership fees and purchase of items from charity organisation such as chocolates and pens.
For more information, take a look at the ATO website.