5 Reasons to Donate at the End of Financial Year
The end of the financial year is a great time for many businesses and individuals. It’s a time to reflect on the successes of the past 12 months, a time where we look at what we’ve earned, where money has been spent, and best practices to a beneficial tax return.
Tax isn’t the most exciting topic, but it sure creates a buzz in the weeks leading up to the June 30 deadline. While most people don’t enjoy chasing receipts and the tax process, they’ll go to great measures to reduce their taxable income.
This article is relevant to both businesses and individuals and serves to clarify both the personal and commercial benefits of donating to charities.
Tax is unavoidable and is one of life’s few certainties. Tax time leads companies big and small on a search for ways to minimize the tax they pay. Many have the wrong impression of tax efficient spending and purchase unnecessary or irrelevant things. This is the wrong approach, and these types of expenditures should be either useful or meaningful – or both.
One tax deductible opportunity that is often overlooked is charitable donations.
The advantages are extensive and go beyond your own best interests. Here are the top reasons to donate during the end of the financial year:
1) Reduce your taxable income.
Let’s start with the most obvious one. As stated, making business-related purchases can reduce the amount of tax owed. Any donation over $2.00 is tax deductible, and can be effective in reducing overall tax, and even shifting your tax bracket if you’re near the edge.
2) Know exactly where your taxes go.
We all know we must pay tax, but few people will be able to identify where it all goes. Why not take control of where your hard-earned money is put to work? Many charities are fully transparent and allow you to understand what each donation does. Aligning your tax with your own values adds to the already rewarding feeling of donating.
3) Your dollar goes further.
Let’s say you make a $500 donation. The charity receives every cent and depending on your tax bracket, you’ll only end up paying a much smaller percentage of this. Suddenly, goodwill seems more practical than you’ve ever previously thought, right?
4) Make a difference.
Australia is home to some of the world’s finest charities. With over 54,000 to choose from, it can become overwhelming. The great thing about donating is that there’s no right and wrong answer. Giving back to your own community has never been easier. Local non-profit organisations are easy to find and appreciate all donations more than you know. Providing much-needed financial aid allows these groups to fulfill their important services and while your donation may not have any effect on your life, it has the power to change someone else’s.
5) Getting involved.
There is a multitude of ways to make donating fun. Incorporating an end of financial year fundraising party for staff is a great idea, allowing others to also feel good about helping those in need. It’s also the perfect time to set up workplace giving, which is being adopted by a growing number of Australians as an ongoing charitable initiative.
There is only an upside to donating to charities close to tax time. Take control, reduce your tax, and move positively into the next financial year knowing you’ve made a difference in someone’s life.
If you’d like to donate to Cottage by the Sea, click here.