Interest and Dividend Income for Tax Purpose
If you’re an Australian resident and you receive interest, you must declare it as income. Interest income includes:
- interest earned from financial institution accounts and term deposits
- Interest earned from children’s savings accounts if you opened or operated an account for a child and the funds in the account belonged to you, or you spent or used the funds in the account
- interest we paid or attributed to you
- life insurance bonuses (you may be entitled to a tax offset equal to 30% of any bonus amounts included in your income)
- Interest from foreign sources (you may be entitled to a tax offset for any tax paid on this income).
A dividend can be paid to you as money or other property, including shares. If you are paid or credited with bonus shares, the company issuing the shares should give you with a statement representing demonstrating whether the bonus shares qualify as a dividend.
Dividend income is usually paid from a:
- listed investment company
- public trading trust
- corporate unit trust
- Corporate limited partnership (in the form of a distribution).
Some dividends have an charge or franking credit attached, which you must also state on your tax return. If a company pays or credits you with dividends that have been franked, you’ll generally be permitted to a franking tax offset.
For more information on Etax, myTax ATO and online tax return, please contact us at 1300768284 or you can email us at enquiry@taxrefundonspot.com.au
