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INCOME AND DEDUCTIONS FROM INTEREST AND DIVIDEND INCOME

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23
May

According to the ATO, if you earned interest, dividend or other investment income over the tax year, you might be able to claim a tax deduction for any expenses you incurred while earning that income.
When lodging your taxes, it’s important not to forget to include these tax deductions! ATO divides income source expenses into three income categories,

 

  • Interest Income Expenses;
  • Dividend and Share Income Expenses;
  • Forestry Managed Investment Schemes.

 

Interest Income Expenses
What Interest Income Expenses can you deduct?
You can claim account-keeping fees where holding for investment purposes - for example, a cash management account fee listed on your statements or in your passbooks.

Dividend and Share Income Expenses
What Dividend and Share Income Expenses can you deduct?
If you borrowed money to purchase shares or other related investments where you derived assessable interest or dividend income, then you can deduct the interest charged on the borrowed money.
As long as there were costs incurred from managing investments, you can claim the following expenses;

  • Travel expenses;

  • Specialist investment journals and subscriptions;
  • Internet access costs;
  • Borrowing costs.

 

The things that you can’t claim involve:

 

  • You can't claim a fee charged for drawing up purposes unless you were carrying on an investment business;
  • Interest amounts used to purchase share, unit trust and staples securities is not deductible if it is attributed to capital protection under a capital borrowing.

 

Forestry Managed Investment Schemes
Are Forestry Managed Investment Schemes Deductible?
If you have made payments to a forestry managed investment scheme – a FMIS, you may be able to claim a deduction for the payments. You can claim this if you;


  • Currently hold a forestry interest in an FMIS or you held a forestry interest in an FMIS during the tax year;

  • You have paid an amount to a forestry manager of an FMIS under a formal agreement.


Note: Claiming a deduction is possible if the forestry manager has advised you that the FMIS meets the 70% direct forestry expenditure rule.

 

The ATO not only has a tax deduction for interest, dividend and other invest income expenses, but also offers tax deductions for job related costs such as;


  • Clothing;
  • Vehicle expenses;
  • Home office costs.

 

That means when it’s time to lodge your taxes, you’ll be able to save money by claiming
each deduction you are eligible for.


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