Giving to charity this Christmas is a great way to give to those less fortunate while receiving some extra tax perks.
Charitable donations are tax deductible which only adds to the incentive to be generous this holiday season.
Here are some tips for maximising your tax breaks on charitable donations:
The charity must be registered Make sure the charity you donate to has been endorsed by the ATO as a deductible gift recipient (DGR) organisation. It is important to note that not all charities are endorsed as a DGR.
The gift must truly be a gift The donation must be a gift, not an exchange for something material. This means if you have received items in return that provide you with some personal benefit, such as raffle tickets, you cannot claim the deduction as a gift or donation.
Check relevant gift conditions The ATO considers a gift as a voluntary transfer of money or property, including financial assets such as shares. For some DGRs, the income tax law adds extra conditions affecting the types of deductible gifts they can receive. If you are considering a sizeable donation, discuss the tax implications with your accountant.
The ATO reported that 45% of working Australians were not aware that they had multiple super accounts in 2016. Having multiple super accounts is particularly common for individuals who have had more than one job. If this is you, it is important to identify and manage your super accounts because having more than one can be costly as a result of account fees from multiple funds.To combat this, you may want to consolidate your super, which moves all your super into one account. Not only does this save on fees, but it also makes your super easier to manage and keep track of.
Before consolidating your super, it is important to do the following:
Research your funds’ policy Compare your active super accounts so you can make the right choice about which one you should close. Things to assess include:
Exit fees
Insurance policies
Investment options
Ongoing service fees
Performance of the funds
Check employer contributions Changing funds may affect how much your employer contributes, as some employers contribute more to certain funds. Check your current accounts to see if changing funds will affect this. Once you have selected a super fund, regardless of whether you choose a new super fund or one of your existing ones, provide your employer with the details they need to pay super into your selected account.
Gather the relevant information When consolidating your super, you will need to have the following details ready:
Your tax file number.
Proof of identity. This could include your driver’s license, birth certificate or passport.
Your fund’s superannuation product identification number (SPIN).
Your fund’s unique superannuation identifier (USI).
