12 December 2010
If you're getting into the spirit of Christmas and planning to make a donation to charity, there are some things to consider if you're planning to include the donation as a deduction.
You can only claim a deduction for donations made to deductible gift recipients (DGRs).
If you receive any form of merchandise - biscuits, teddies, balls or you buy something at an auction - then it's not deductible. This is simply because you purchased something rather than giving a gift. The same goes for charity balls and dinners. You cannot claim the cost of the dinner unless the organisers have arranged for part of the cost to be deductible and are able to provide you with a confirmation receipt.
The most (tax) effective way to give is to make a direct donation to a DGR. This way, you get a tax deduction for the donation and the charity does not have to spend time, money, and resources creating and supporting events.
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This article is provided for information purposes only and correct at the time of publication. It should not be used in place of advice from your accountant. Please contact us on 02 9957 4033 to discuss your specific circumstances.