Various tax rules and regulations allow taxpayers to claim tax deductions for dividends, interest and other investment income. However, you can claim these deductions if you have enough knowledge regarding this. If you are busy growing your business, then you can hire a professional accountant near your town by searching ‘accountants near me’. Tax accountants have vast knowledge regarding tax deductions to help businesses and individuals save money on taxes. According to the tax law, taxpayers can claim some deductions in relation to some of the costs and expenses that are generated when receiving dividends, earning interest or getting other investment income. In today’s blog, we’ll discuss this concept in detail. Let’s get started:
Interest Income Expenses
According to the ATO, a taxpayer can claim account-keeping fees where the account is used for investment. For instance, a cash management account can be used for investment. Generally, you can see these fees mentioned in your passbook or on your statement. On the other hand, if you have a joint account, in that case, you are allowed to claim your share of fees, taxes or charges on the account. For instance, if you have an equal share in an account with your partner, then you are allowed to claim your share or account-keeping fees that you pay on that account. If you need someone to handle your tax-related matters or give you business advice, then you can look for a chartered accountant near your area by searching ‘chartered accountant near me’.
Investment Income Expenses
If you attend an investment seminar concerning an existing investment, then you may be allowed to claim a deduction for some portion of costs related to investment income activities.
Dividend and Share Income Expenses
You are allowed to claim a deduction for interest which is charged on money that you have borrowed to purchase shares and other investments that you derive dividend income or assessable interest from. Keep one thing in your mind and that is only interest expenses incurred for income generation are deductible. If you are supposed to use money that you borrow for both income-generating and private purposes, then it is expected that you must allocate the interest between each purpose. If you are receiving an exempt dividend or other types of exempt income, then you are not allowed to claim a deduction. For more details, you can ask your accountant and if you don’t have one, then you can hire near your area by searching ‘small business accountants near me’.
Deductions you can claim
You are allowed to claim a deduction for expenses that you incur to invest in your shares, such as:
- Ongoing management fees
- Payments you make for suggestions related to modifications in a mix of investment
- A part of other expenses that you incur in investment management, such as:
- Travel expenses
- Expenses of investment journals and subscriptions
- Borrowing costs
- Internet access costs
- The decline in computer value
- You can claim 50% of the LIC capital gain amount – if you were an Australian citizen when a listed investment company (LIC) paid you a dividend and keep one thing in your mind and that is the dividend includes a LIC capital gain amount.
Deductions you can’t claim
You are not allowed to claim when you invest in shares:
- You will not be able to claim a fee charged for making an investment plan unless you were having an investment business.
- Some interest on money that you borrowed to buy shares, units in unit trusts and stapled securities. In this case, interest is considered the expense of the capital protection feature.
Rental and Holiday Home Expenses
You can claim a deduction for interest and borrowing costs that are related to your rental property for a specific time period your property is rented. You are allowed to claim a deduction for part of any rental and holiday home expenses that are related to income-generating use. However, you can’t claim deductions if the travel cost you incur concerning your residential rental property unless you are either:
- An excluded entity
- Part of the business of letting rental properties
If you don’t know about these types of tax deductions, then you can take help from a chartered accountant, and if you are looking for CA in Victoria, then you can enter the term ‘chartered accountant near Victoria’ to choose the best one.
Conclusion
The blog is all about tax deductions for interest, dividends and other investment income. If you want to save money on taxes, then it is important for you to know about these tax deductions. For more details, you can contact Accounting Melbourne.