You may earn your income in more ways than just from your job and ignorance is not an excuse from the ATO. There are many ways people may make an income and it all adds to your taxable income.
Receiving interest is deemed income, as you are the recipient and beneficiary of payments. There are many forms of interest you may receive, some of which are commonly overlooked by many people.
This includes interest from:
- a financial institution
- term deposits
- interest on investments
- children savings accounts
- credited interest
- life insurance bonuses
- foreign income sources
- interest from trust accounts where an estate agent has held onto the proceeds from the sale of your home
A dividend doesn’t always mean a monetary payment. Property, shares , reinvestments or credits payed with shares, or from a company issuing shares, can form dividends.
Dividends come from many avenues, such as:
- listed investment companies
- public trading trusts
- corporate unit trusts
- corporate limited partnerships
Some dividends have imputation or franking credits attached that you must also declare on your tax return. You’ll be entitled to a franking tax offset if a company pays you or credits you with dividends that have been franked.
Rent qualified as an income stream. Whether or not you rent a room, a house or a holiday hide-a-way, it’s still an assessable income. Lesser known income rent streams include the return of unused bond money, an insurance payout, booking fee or reimbursement for repairs. It’s not limited to money. Goods and services in lieu of rent are also declarable in which a monetary value is given.
If you are a co-owner in a property, your share of the rent and expenses need to be lodged on your tax return.
Managed investment trusts
Managed investment funds include cash management trusts, money market trusts, mortgage trusts, unit trusts and any managed funds.
A capital gain is the difference between your asset’s cost base (what you paid for it) and your capital proceeds (what you received for it). A capital gain is recognised as part of your total income and is not taxed separately. It is deemed a component of your whole assessable income.
Business, partnerships and trust income
Business income includes cash and any other form of goods or services you receive as an income. There are many possible forms and it can get confusing. Your tax agent will be able to shed light on what forms a business income and will guide what your obligations are and how you should report them. No need to be stressed.
There’s no doubt that lodging a tax return can be complex, especially when several streams of income need to be declared. Tax agents are fully certified accountants who are specialised in tax law. They understand the latest changes and what you need to include on your return – even if you don’t. All ITP Income Tax Professionals are registered with the Tax Practitioners Board of Australia. Book an appointment and speak with our professional tax accountants today.