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SBQ
11-07-2020, 08:40 AM
Can someone confirm as i'm looking to make a generous donation to a registered charity. This is my 1st time looking to donate.

Am I correct that the maximum amount in a year I can donate is the lessor of the total income for the year or the amount i'm donating?

https://www.ird.govt.nz/income-tax/income-tax-for-individuals/individual-tax-credits/tax-credits-for-donations

I would like to hear from any accountants here and the processes involved.

Apart from the charitable organisation issuing me a receipt, what else would I require to have IRD know - any forms I need to submit? etc?

In Canada you file the donation along AT THE TIME you file your tax return. This way the tax credit is applied immediately to offset the taxable income to be filed. Also there's a maximum limit one can benefit as a 100% tax free donation. But in NZ, i've been told you fill out a separate form and submit it separately to IRD?

Bjauck
11-07-2020, 09:18 AM
I am not an accountant so donít rely on this
My mother has an accountant. She makes donations and at the end of the tax year, along with her tax return, I think there is an IRD form for the donation details together with the receipts provided by the charities. The form should be available on the IRD website.

I think the donation rebate maximum is limited to 1/3 of your taxable income.

So if you donated $1000 and your taxable income is $50,000, your rebate is $333.33. I think. If you donated $100,000 with $50,000 taxable income your rebate would be $16,666.67

However I have never filed a donation rebate form as all my donations are small and I never get receipts!

Beagle
13-07-2020, 11:43 AM
You've answered your own questions correctly and the information is clearly displayed in the link you provided.
The form to claim this on an annual basis is here https://www.ird.govt.nz/-/media/project/ir/documents/forms-and-guides/ir500---ir599/ir526/ir526-2020.pdf

GTM 3442
13-07-2020, 01:40 PM
I am not an accountant so don’t rely on this
My mother has an accountant. She makes donations and at the end of the tax year, along with her tax return, I think there is an IRD form for the donation details together with the receipts provided by the charities. The form should be available on the IRD website.

I think the donation rebate maximum is limited to 1/3 of your taxable income.

So if you donated $1000 and your taxable income is $50,000, your rebate is $333.33. I think. If you donated $100,000 with $50,000 taxable income your rebate would be $16,666.67

However I have never filed a donation rebate form as all my donations are small and I never get receipts!

Have you considered making fewer but larger donations, claiming the rebate, and then donating the rebate?

SBQ
14-07-2020, 05:39 PM
You've answered your own questions correctly and the information is clearly displayed in the link you provided.
The form to claim this on an annual basis is here https://www.ird.govt.nz/-/media/project/ir/documents/forms-and-guides/ir500---ir599/ir526/ir526-2020.pdf

It seems to be all there - I just wanted an outside opinion as I recall some years ago there was a limit on how much you can donate before there's no tax benefit. So from what I read, the limit is based on the year's total salary and any portion that is left unused in the donation, can be shared to the partner or spouse and within a 4 year time frame. IMO, this is VERY generous in NZ's tax perspective.

Beagle
16-07-2020, 01:31 PM
It seems to be all there - I just wanted an outside opinion as I recall some years ago there was a limit on how much you can donate before there's no tax benefit. So from what I read, the limit is based on the year's total salary and any portion that is left unused in the donation, can be shared to the partner or spouse and within a 4 year time frame. IMO, this is VERY generous in NZ's tax perspective.

Yes that's correct and it has been a major change from the pretty tight limit that prevailed a few years back. Makes giving decent amounts of money to very worthy causes even more of a rewarding experience than it used to be :)

Its good to give back into the community, its the gift you give yourself, food for one's own soul. https://www.christianity.com/church/tithing-and-giving/10-reasons-why-it-is-more-blessed-to-give-than-to-receive.html