It is tax refund time and if you have given funds to an approved charity or other donee organisation, you can bundle up your tax receipts and submit a claim for a tax rebate of one third of the amount donated.
A list of approved donee organisations can be foundon the IRD website. Many people are unaware that 'voluntary' school fees can be claimed as a donation as long as you have a receipt with the word 'donation' written on it. State run kindergartens are also approved donee organisations. The total amount of donations you can claim a rebate for is limited to your taxable income for the year.
Saving up receipts over the course of year is a hassle. They are likely to get either lost or forgotten about. There is a way of giving that is much easier both on paperwork and your pocket. It is called 'payroll giving'. It is simple to set up, however it needs the co-operation of your employer.
Payroll giving works well if there are organisations you support on a regular basis. Your employer makes the donation to your chosen charity each payday and you immediately receive the tax credit. So if you donate $15 it only costs you $10. Giving a small amount each payday is much easier to budget for than giving one large amount annually. You don't have to save pieces of paper or fill out the rebate form at the end of the year. There is a small amount of work for your employer to make the appropriate deductions and payments but these steps are easily put into a payroll system. Many employers are not aware of the payroll giving scheme, so if it is of interest to you, bring to their attention.
- More information is available at www.payrollgivinginfo.org.nz.
-Liz Koh is an authorised financial adviser. The advice given is general and does not constitute specific advice. A disclosure statement is free. Call 0800 273 847. For free e-books, see moneymax.co.nz and moneymaxcoach.com.
