By Grace Mugabe
No one wants to be paying more tax than they are obligated to but it’s also important to be aware of the rules and requirements for claiming a tax deduction. Failing to follow rules surrounding tax deductions can land you in hot water with the ATO. However when tax deductions are claimed in line with the rules set out by the ATO and are used in the most beneficial way they can provide a great way for businesses and individuals to keep a few more dollars in their own pocket.
Any business owner will tell you that there are many expenses relating to being in businesses and the majority of these can be used to reduce your tax payments the end of financial year. But there are other ways to get that tax bill down.
One of the easiest way to reduce your tax obligations is to donate to an endorsed DGR charity. On top of that you are also contributing in a meaningful way to a worthy cause and one that you get to pick.
Unlike other tax deductions there does not need to be any connection between your business and the charity. You can donate to animal welfare, homeless youth or overseas aid, as long as the charity has DGR endorsement.
This means that you can choose an organisation that is close to your heart and also in line with your ethics and priorities. 100 Women supporters choose us in order to make a meaningful contribution to women and girls worldwide. It doesn’t matter whether they are lawyers, doctors, retail business owners or tradies – the deduction is available to all of them.
So, what exactly is a DGR charity?
According to the ATO a deductible gift recipient (DGR) is “an entity or fund that can receive tax deductible gifts. There are two types of DGR endorsement:
- An entity that has DGR endorsement in its own right
- An entity that is only a DGR in relation to a fund, authority or institution it operates. In this instance, only gifts to the fund, authority or institution are tax deductible”
Generally a DGR will state on their website or publications that donations to them are tax deductible but if you are unsure you can check the register here { https://abr.business.gov.au/DgrListing.aspx}
An example of what you would see on a DGR’s website is this declaration on the 100 Women site:
This tells you that 100 Women has DGR endorsement so you will be able to claim any donations you make.
As we come into the last month of the financial year it’s a good time to not only assess this year’s tax position but also where you sit as a business and individual for next year in order to do some forward planning. If you are looking for some additional tax deductions maybe it is time to consider donating to a DGR endorsed charity like 100 Women.
