Chapter 5: Interest, Dividends and Other Income

In the Chapter 5 of Free Tax Course, you will learn about interest income, dividend income and other income. In Chapter 4 of Free Tax Course, you learned about earned income such as wages, salaries and tips, in this chapter, you will learn about unearned income and other income.

The objective of this chapter of the Free Tax Course is to familiarize you with different types of interest and dividends as well as how to distinguish between taxable and tax exempt interest and dividends. For tax purposes, you need to know how to report interest and dividends as well as taxable refunds of state and local income taxes. You will also learn what taxable alimony and unemployment compensation are and how to report them.

Interest and Dividends

• Substitute 1099 Form

Taxable Interest

U.S. Savings Bonds

• Tax on Interest of US Savings Bonds

Other Interest

Tax Exempt Interest

Dividends

• Tax on Ordinary Dividends
• Capital Gain Distributions
• Nondividend Distributions

Taxable Government Refunds

Tax on Alimony Received

• What is Alimony?

Unemployment Compensation Tax

Other Income

Summary of Interest, Dividends, Other Income