Schedule B
Interest and Ordinary Dividends

Interest Dividends

Earning Interest from banks or other institutions is a great way to use that extra money you have sitting.

Definitions:

INTEREST — the charge for the use of borrowed money.
INTEREST INCOME — the income a person receives from certain bank accounts or from lending money to someone else.
TAXABLE INTEREST INCOME — interest income that is subject to income tax. All interest income is taxable unless specifically excluded.

Special Cases:

TAX-EXEMPT INTEREST INCOME — interest income that is not subject to income tax. Tax-exempt interest income is earned from bonds issued by states, cities, or counties and the District of Columbia.

Investing into companies can be beneficial for long term investors. Many companies pay their investors Dividends.

Definitions:

DIVIDEND — distribution of a company's earnings to its shareholders.
DIVIDEND INCOME — the income a person receives from a company invested into.
TAXABLE DIVIDEND INCOME — dividends are taxed at qualified or non-qualified rates.
- Qualified: Taxed at 0, 15 or 20%
- Non-Qualified: Taxed as ordinary income

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Schedule B Interest and Ordinary Dividends

Interest Dividends

Let’s Work Together

Schedule B
Interest and Ordinary Dividends