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Donations - tax deductability

Discussion in 'The Family Room' started by kane, Jan 1, 2014.

  1. kane

    kane Dedicated Elf

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    Obviously only relevant to the aussies, but anyone here know about tax deductability of donations received from visitors?

    I was wondering that if you could claim a tax deduction, then you could donate that tax deduction as an additional amount to the charities.. So for example, if you raise $1000, and are on the 30% tax rate, then you could donate an additional $300 if you were to get a receipt for the original $1000.

    I've asked my two charities about this - one said that they can't give a receipt, and the other one is getting back to me, but just thought I'd ask if anyone has looked at this..

    Obviously the more I can get for the charity, the better!
     
  2. ecbailey

    ecbailey Full Time Elf

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    Donations to registered charity's should be tax deductible if a receipt is issued.
     
  3. DeeJai

    DeeJai Is that Magic Smoke?!?

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    The clause here is if you are actually collecting for a charity. If you collect for a charity, you cant claim tax on money that you collect and submit. You have not paid the tax on this money therefore is fraudulent.

    If you provide a donation to a registered charity solely from your own funds, then yes, you are entitled to a receipt from the registered charity and can claim it on tax.
     
  4. multicast

    multicast Senior Elf Generous Elf

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    *only* if you were the donor. If you are collecting money "for" a charity, you are not the donor, You are a collector. I would seriously suggest that the legality of such a thing is dubious.
     
  5. MarcD

    MarcD Full Time Elf

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    If you collect $1,000 then donate that amount to your nominated charity, don't get a receipt and don't try to claim it as a tax deduction. The charity gets the whole amount you collected on their behalf.
     
  6. mborg10

    mborg10 Michael Borg

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    With the Crohns association you can either donate online and a receipt is issued to the person. If they donate in person they can fill out a form and a receipt will be sent to them in 4 to 6 weeks but no one has bothered yet to fill out the form. So I just hand over the cash and all good.
     
  7. OP
    OP
    kane

    kane Dedicated Elf

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    They would get the $1000 regardless - what I was trying to do was make the $1000 become $1300-$1485 (depending on tax rates), therefore getting more for them.

    And yeah, that was my thought in terms of the fact that I shouldn't be able to claim a deduction for someone else's donation - but given they don't get a receipt, someone is missing out on a deduction, so unfortunately the old "house always wins" saying applies (in this case, the government!).

    The main reason I was even thinking about it, is that my accountant, who is very, very conservative, said that if I have a receipt, I can claim it - it doesn't really matter - but it would really come down to the actual charity as to whether they'd want to issue a receipt. I'm obviously not thinking about this in order to get any benefit for myself - just want to maximise the amount the charities receive!
     
  8. fasteddy

    fasteddy I have C.L.A.P Global Moderator Generous Elf

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    My initial thought would be Why should the government get the difference. In my opinion if your putting in the work to get a display up and have donations given then in my opinion it would be a good thing for the charity to get that extra money rather than the tax man. Because in the end the donation will be considerable enough to issue a tax reciept and be tax deductable, which you can give back to the charity.

    Some may see this as still being a bit dubious though and it may not be entirly within the law so I would possibly research this to see where you stand.

    I know some who do claim on Tax and others that dont, so it doesnt seem as clear cut on where this stands.
     
  9. mborg10

    mborg10 Michael Borg

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    I started looking further at what you can and can't claim. My plan for the future is to turn my lights into a branded event to raise funds and awareness for the Crohns and colitis association. This year I sold LED reindeer ears for charity. There is something that I can use the donated money to purchase the products that I sell for the charity and all tax deductible. Then I though well my lights are bought for the charity why can I claim them.

    It was a taxation minefield with lots of boring legal mumbo jumbo so I just bought and paid for all charitable products and ALL monies raised were donated. When it gets bigger I will seek legal advice but not just yet.

    I really would like "Christmas at the myrtle" to turn into something like Red Nose Day etc. I'm in it for the long haul as people suffering from Crohns and colitis really don't have too much of a voice at the moment
     

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