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Taxable Interest
What, exactly, is taxable interest? If it is income, then isn't all interest taxable? I am so confused! Can anyone simply explain the difference between taxable and non-taxable interest in a simple way for me?
Thank you!
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"Taxable Interest
Taxable interest includes interest you receive from bank accounts, loans you make to others, and other sources. The following are some sources of taxable interest.
Dividends that are actually interest. Certain distributions commonly called dividends are actually interest. You must report as interest so-called “dividends” on deposits or on share accounts in:
Cooperative banks,
Credit unions,
Domestic building and loan associations,
Domestic savings and loan associations,
Federal savings and loan associations, and
Mutual savings banks."
I hope this site is of some help to you. I feel it explains it very clearly and simply. :)
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