Australians could soon be able to claim more donations on their tax returns under proposed changes announced by the federal government.
Currently, donations must be at least $2 in order to be claimed as deductions on tax returns.
But the government plans to change that and remove the threshold entirely, which would allow smaller donations, such as small 'rounds up' given when paying at stores to be included.
This would apply to donations made on or after 1 July this year but is subject to the passage of legislation. The government has not confirmed when it will introduce the legislation, but parliament is set to reconvene in early February.
More than 4.26 million tax returns included donation deductions in the 2021-22 financial year, the most recent comprehensive data available, and the median amount claimed was $148.
In late October, in the lead-up to this year's lodgement deadline, the Australian Taxation Office told SBS News more than $19.1 billion had been refunded in the 2023-24 financial year, and the average refund for individual tax returns was $2,687 — up slightly on the same time in 2023 when it was $2,487.
In order to claim a donation, it must have been given to an organisation that has deductible gift recipient status — an entity or fund that can receive tax-deductible gifts.
For something to qualify as a donation, it must genuinely be given without expectation of any material benefit or return.
However, receiving a "token item" like a lapel pin, wristband, or sticker still classifies as a donation.
If your donation is more than $10, you need a receipt in order to claim it on your tax return.
For smaller donations, such as bucket donations, Australians can claim a deduction of up to $10 for the income year without a receipt.
The information presented in this article is general in nature and is not intended as financial advice; you should consult with a licensed professional to make the decisions that are right for you.
