Understanding Investment and Interest Income

Investment income includes earnings from shares, managed funds, and rental properties. Interest income is typically earned from savings accounts, term deposits, and bonds. Both types of income are taxable and must be included in your tax return.

Types of Investment and Interest Income

• Dividends: Income from shares, which may include franking credits to offset tax payable.
• Rental Income: Money earned from renting out property, which allows for deductions like property management fees and repairs.
• Interest Income: Earnings from savings, which are taxed at your marginal tax rate.

For investments, capital gains or losses must also be reported when you sell an asset.

Interest income, while straightforward, must still be declared, even if it's from a joint account. The ATO uses data matching to verify income from financial institutions, so ensure accuracy in your reporting.

FAQs

Are all dividends taxable?

Yes, all dividends are taxable. However, franking credits attached to dividends can offset the tax you owe. Learn more about franking credits on the ATO website

What deductions can I claim on rental income?

You can claim deductions such as property management fees, repairs, and depreciation.