There are only a few days left for Australians to make tax-deductible charitable donations for the End Of Financial Year 30 June 2020.
Besides making yourself feel great about giving to the charitable organisations that you love, remember that the Commonwealth Government will significantly subsidise your gift.
If you make a donation to a Deductible Gift Recipient (DGR) charity you will be refunded a material portion of it in your next income tax return.
Here’s how it works:
If you have taxable income of $180,001 or more this FY, the government will refund you 47 cents of each dollar donated – that’s the marginal tax rate of 45% plus the 2% Medicare levy.
So, all other things equal, for every $1,000 that you give to a DGR charity, the Commonwealth will reduce your tax liability for 2019-2020 by up to $470. Make a gift of $1,000, but your out of pocket cost is only $530. Sweet!
If you have taxable income between $90,001 and $180,000 the government will refund you 39 cents (the marginal tax rate of 37% plus the 2% Medicare levy) of each dollar donated.
If you have taxable income between $37,001 and $90,000 the government will refund you 34.5 cents (the marginal tax rate of 32.5% plus the 2% Medicare levy) of each dollar donated.
And when making your donations, please keep in mind:
- The average annual donation is approximately $765.
- 81% of our adult population make annual charitable donations.
- Despite making less money on average than men, women donate a higher percentage of their annual income to charity.
- 40% of Australians with annual taxable income of $1,000,000 ($1m) or more make no tax-deductible donations at all – not even a single $2 dollar donation. OUCH! Hard to believe, but the ATO data is irrefutable.
Please make your donation today. It will make your day. It’s the EOFYthing.
