Introduction: Ensure you accurately report all investment income in your tax return to stay compliant with the tax regulations. This article provides valuable insights on the different types of investment income you need to declare, including interest income, dividends, rental property income, managed investment trusts, crypto asset income, and capital gains.
Interest Income: Include the following in your tax return as interest income:
- Earnings from financial institution accounts and term deposits.
- Income is derived from various sources, such as penalty interest received on investments.
- Interest is earned from children's savings accounts if you open or operate an account for a child and the funds belong to you.
- Interest paid or credited to you, such as interest on early payments, overpayments, and delayed refunds.
- Life insurance bonuses, with a potential tax offset of 30% for bonus amounts in your income.
- Interest from foreign sources, allows you to claim a foreign income tax offset for the tax paid on this income.
Dividends: Report dividend income from the following sources:
- Listed investment companies.
- Public trading trusts.
- Corporate unit trusts.
- Corporate limited partnerships (in the form of distributions). When receiving franking credits on dividends, ensure you declare the franked amount and the franking credit. Generally, if a company pays or credits you with franked dividends, you can claim a franking tax offset.
Rental Property Income: Declare the full amount of rent and rent-related payments received, including amounts from overseas properties. If you receive goods and services instead of rent, determine and report the monetary value accurately. Seek guidance from a tax adviser to avoid mistakes and comply with regulations.
Managed Investment Trusts: Include any income or credits received from trust investment products, such as:
- Cash management trusts.
- Money market trusts.
- Mortgage trusts.
- Unit trusts.
- Managed funds, like property trusts, share trusts, equity trusts, growth trusts, imputation trusts, or balanced trusts.
Crypto Asset Income: Declare rewards obtained from staking crypto assets, often in the form of additional tokens received while holding the original tokens. Calculate the monetary value of the additional tokens and convert them into Australian dollars at the time of receipt. Declare this as "other income" in your tax return. If you receive crypto assets through an airdrop, declare them as income based on the value of established tokens. Convert the received amount into Australian dollars and report it as "other income."
Capital Gains: Report capital gains resulting from the sale or disposal of capital assets, such as investment properties, shares, or crypto assets. Calculate the difference between your asset's cost base (purchase price) and your capital proceeds (amount received upon sale). Include capital gains and losses in your tax return. Offset allowable capital losses against capital gains to determine your net capital gain or loss. Pay tax on net capital gains, and retain net capital losses for offsetting future capital gains.
Conclusion: To ensure you declare in your tax return, especially concerning investment income, seek professional assistance and start your tax journey with us. We simplify the process, helping you avoid compliance issues and accurately declare your income.
Stay compliant and maximize your tax benefits by reporting all investment income in your return.