The one tax deduction you are missing this tax time

Millennials are 55 per cent more likely to claim donations on their tax returns, compared to 48 per cent of Gen X, 40 per cent of Gen Z and 31 per cent of Baby Boomers. They also show a greater commitment to regular donations.

Victorians are the most generous (14 per cent), followed NSW (12 per cent) and South Australia (12 per cent). Residents in non-capital cities are also giving more than those in capital cities ($2609 compared to $2025).

TPG Telecom Foundation's Charity Tax Check Report revealed 73 per cent of Australians have not made tax deductible charitable donations this financial year even though more than half (58 per cent) are aware of the tax benefits associated with charitable donations.

According to the report, 51 per cent of respondents are motivated to donate by the desire to help others. However, 87 per cent face challenges in making charitable donations mostly because of financial constraints (59 per cent).

TPG Telecom Foundation's Jonathan Kirkham said the current economic climate was limiting people's ability to contribute.

"With the financial year drawing to a close, we're calling on Australians to embrace the benefits of charitable giving," he said.

"It's not just about tax savings; it's an opportunity to make a meaningful difference in the lives of those who depend on charitable organisations."

Those intending to claim charitable donations on their tax return this year, 77 per cent are planning to claim up to $1,000, while 23 per cent anticipate claiming more than this amount and an overall estimated average of $2,208 is expected to be claimed.

All tax deductible gifts over $2 to registered Deductible Gift Recipients (DGR) could be taken off your taxable income for the year.

Not all charities are DGRs. For example, crowdfunding campaigns are a popular way to raise money for charitable causes. However, many of these crowdfunding websites are not run by DGRs.

READ MORE: ATO warns of crackdown on three common errors