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Tax Deductible Donations

Various stationery

So what does a tax deductible donation mean exactly and how does it affect your taxes?

We asked a special friend of MPA’s – Kerry Grace, who just happens to be an accountant – for her insights!

If you have made a tax deductible donation over $2 and received a receipt you can claim the donation in your income tax return.  The donation is included as a tax deduction.  Your tax deductible donation reduces your taxable income and in turn reduces the income tax payable.

Okay so we’re confused, how will that work?

For example,if in 2017your gross income (before tax) is $50,000 and you have donation receipts for tax deductible donations of $2,000, the income on which you pay tax is $48,000 not $50,000.

Tax payable on the $48,000 is $7,147.00, while tax payable on $50,000 is $8,008.00.

So basically your donation has saved you $650.00 in taxes AND helped out a good cause!  WINNING!

So make a donation to help out MPA (which is a registered charity) to help support patients with melanoma across Australia NOW and you’ll receive a receipt allowing you to claim that donation on this year’s tax return!

As a side note, Australian income tax rates are tiered, so the actual tax saved on your donation could be more or less dependent on your personal tax rate.  Lower levels of income have lower rates while higher income amounts attract higher rates.  Rate variations are 19%, 32.5%, 37% and 47%.

Your actual saving is dependent on your personal income level and appropriate tax rate.  As in the higher your rate of tax is, the higher your tax saving will be.  Use the following table to calculate your personal saving.

Taxable Income Tax On This Income
 0 to $18,200  Nil
 $18,201 to $37,000  19c for each $1 over $18,200
 $37,001 to $87,000  $3,572 plus 32.5c for each $1 over $37,000
 $87,001 to $180,000  $19,822 plus 37c for each $1 over $87,000
 $180,001 and over  $54,232 plus 47c for each $1 over $180,000

This is where you can help.

MPA would like to create a series of videos and booklets which will share ideas on how to cope and move forward with a melanoma diagnosis.  We’ll be discussing the down days, the things that help get you through, the general experience of different treatments as well as hearing from other families and friends to offer their insights.

All donations will go towards the Melanoma & Me series of video and your donation will be acknowledged (with your permission) as one of the supporters of this initiative.

PS. All donations over $2 are tax deductible. Make sure you donate by 30th June to be able to claim for this financial year.