What is Taxable Interest?
Interest received from bank accounts, interest received on loans made to others, and interest from other sources are termed as taxable interest. Some other examples of taxable interest are interest on money market certificates, and deposited insurance dividend. In other words interest that can be withdrawn and received comes under taxable income. Knowing what is taxable interest will make life very easy for you when you are filing your tax returns. Here are some sources of taxable interest: Dividends: Certain distributions on deposits of share accounts in cooperative banks, domestic saving and loan associations, mutual funds, and credit unions are commonly referred to as dividends. These dividends are interests and should be included as part of your tax return. Debt instrument: If you have been issued a debt instrument or a bond note at a discount, you will have to include part of the original issue discount as interest in your income which is taxable. Interest on insurance dividends:
