September 5 marks the International Day of Charity — a time to reflect on the importance of giving back to our communities and supporting those in need. Established by the United Nations in 2012 in honour of Mother Teresa’s passing, the day commemorates her life and work that was dedicated to helping the poor. Serving to mobilise people worldwide for philanthropic and volunteer activities, and encourage acts of kindness, International Day of Charity is not just a call to compassion, but also a great reminder that charitable giving can be both a meaningful and financially smart decision for you as an individual and/or for your business.

More often than not, people align themselves with others who have similar values. Whether it be choosing a sporting club, an accountant or an energy provider. By making regular monetary donations or volunteering your time with a particular charity, you’ll likely meet people who value what you do and create meaningful connections. So, as a business owner, your support of certain charities is not only good for your tax return, but can be an excellent way to gently promote what you stand for in a community and attract likeminded people to your business.

As tax agents, we often get asked: "Can I claim a tax deduction for my donations?" The short answer is, YES! But there are some particular stipulations. Find out more about what constitutes a tax-deductible donation.

What Counts as a Tax-Deductible Donation?

To claim a deduction, your donation must meet specific ATO criteria:

• The charity must be registered as a Deductible Gift Recipient (DGR).
• The donation must be $2 or more.
• It must be a genuine gift, meaning you don't receive any personal benefit (e.g., raffle tickets, fundraising dinners, or merchandise don't qualify).

How Charitable Donations Reduce Your Tax

When you donate to a DGR, you can claim the amount as a tax deduction on your return, which can reduce your taxable income — and potentially your tax bill.

Let’s say you earn $90,000 per year and donate $1,000 to an eligible charity. That $1,000 can be deducted from your taxable income, so you’re only taxed on $89,000. This could save you up to $325 in tax, depending on your marginal tax rate.

Tax Tips for Charitable Giving

1. Keep Your Receipts

The ATO requires written evidence of your donations. Most charities issue tax-deductible receipts.

2. Check DGR Status

Not all charities are DGRs. You can confirm a charity's status on the ATO's ABN Lookup.

3. Plan Your Giving

If you’re close to financial year-end, consider donating before June 30 to claim in the current tax year.

4. Claiming Donations Over Time

Large donations (over $2,000) can often be spread over five years. This is ideal if you want to manage how the deduction impacts your annual return.

Make a Difference — and Save on Tax

On this International Day of Charity, consider making a donation that aligns with your values. Whether it’s humanitarian aid, environmental causes, medical research, or local animal rescue services — your generosity can help transform lives. And with the right approach, it can also bring valuable tax benefits.

Need Help Maximising Your Donation Deductions?

At Tax Store we help individuals, businesses, and families make the most of their giving — while staying ATO-compliant and tax-efficient.

Contact us today to review your donation receipts, check eligibility, or plan strategic giving for your next tax return.