If you have made charitable donations this year, then your act of generosity may just give your tax refund a boost at tax time.
You just need to know whether your donation is tax-deductible or not.
To find out whether your donation may be tax-deductible, take a look at your invoice. If it says that the donation is tax-deductible, then you can claim it on your tax return.
Pretty cool, right?
If you’re still unsure, you can provide us with the charities ABN and we will check for you.
Tip: Make sure you keep a copy of the receipt to ensure you can claim the deduction in your income tax return.
We take a look at donations and whether they are tax deductible.
So, does making a donation result in less Income Tax to pay, the answer is yes. But that comes with a caveat, It does increase your tax refund but not to the extent that most people think. For instance if you donate $100, most taxpayers think they will get the $100 back in their refund. Actually you only get the “tax effect” refunded, which is determined by your tax rate. Most taxpayers are on a 30% tax rate, so your refund on your donation would amount to $30. The net cost to you of being charitable is $70.
Hope that helps or discuss your situation with one of our tax consultants when you are getting your tax return done.