Keep in mind these handy tips to help you claim back every dollar you can, as you consider donating to charities or worthy causes in the lead up to Christmas.
Do you have a plan of attack (or survival plan) for the lead up to Christmas? Even if you're determined to avoid what I call the Christmas Crazy period, isn't it ridiculous how often we find ourselves caught up in all the fuss? Sometimes it's at the expense of actually enjoying the festivities and breathing easy at the end of a big year. If you're in business, you might be looking forward to your one holiday of the year.
Want some peace of mind amid the craziness?
If you can, donate to a worthy cause as you go about your Christmas business. I promise it will feel good and with the right know-how, you can also be smart about it. Why not claim back every dollar you can when it's time for next year's tax return?
Here are some handy tips to follow up last month's intouch article about Charlie's Run 4 Kids, which explored why it's good for individuals and business owners to give. It's not the sort of giving that will send you dashing back to K-mart or David Jones for one last present run, before you settle into celebration mode on Christmas Eve. I'm talking about donations to charities and community causes that pack a real punch in changing someone's circumstances, even for a day. For example, the Newcastle-based Samaritans Christmas lunch, which DFK Crosbie will support again this year along with numerous other local businesses.
When you make a donation, keep in mind:
Every donation over $2 you make to a registered charity is tax deductible and even the small ones add up. It might mean the difference between one tax bracket and the next and that's more money in your pocket at the end of the day. During the Christmas Crazy, it's too easy to forget you've made a donation and/or lose the receipt. It sounds so simple but make a system today to stash your receipts in a dedicated place so they're not forgotten at tax time.
Can you claim for crowdfunding donations? Platforms such as gofundme.com are popular and there are so many genuine causes, including plenty in our local community. Just don't be fooled into thinking your contribution can be claimed back on your tax, unless the person or group you're giving to is a registered charity or not-for-profit. The tax office rules on this are clear and it's easy to check online using the Australian Charities and Not-for-profits Commission (ACNC) Register.
Are you a business owner? Make sure you're in the right tax structure. The optimum set up for your situation. Get a business health-check if it's been a while. This really can make a difference in the amount of tax you pay. A lot of unnecessary worry is removed when you feel confident you're not paying more tax than you should. By the way, if you're panicking about your budgets and cash flow now, in the lead up to Christmas, commit to getting on track in the New Year. With six months before the end of financial year to turn things around, your adviser can help you re-group and breathe easier about your business. Then you can relax and enjoy the season.
As we continue the countdown to December 25, I wish you peace of mind despite the Christmas Crazy!
Renae Korsman is a Partner at leading accountants and business advisers DFK Crosbie, which is proudly based in Newcastle.