Interest Income: Types, Distinctions & Taxation

Instructions:

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question 1 of 3

When you have earned over _____ of interest income, you are required to submit a Schedule B.

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1. Which type of interest income is typically tax-exempt?

2. Which tax form do you receive if you have earned over $10 of interest income in a year?

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About This Quiz & Worksheet

In what ways can interest income be earned? Are there any types of interest income that are exempt from taxes? These are some of the facts you will need to know when you use this quiz and corresponding worksheet.

Quiz & Worksheet Goals

When you take this quiz, you should be able to:

  • Recognize the level of interest income that requires a Schedule B
  • Note which type of interest income is tax-exempt
  • Identify the tax form you receive when you earn over $10 of interest income in one year
  • Explain how much in taxes you would pay on $600 of interest income if you are in the 15% tax bracket
  • State how much interest income would be earned on 10 corporate bonds with values of $2,000 each that pay 7% each annually

Skills Practiced

  • Problem solving- use acquired knowledge to solve interest income practice problems
  • Information recall - access the knowledge you've gained regarding tax-exempt interest income
  • Knowledge application - use your knowledge to answer questions about specific tax forms and Schedule B requirements

Additional Learning

If you have an interest in learning more about this topic, you can do so with the lesson titled Interest Income: Types, Distinctions & Taxation. Details covered in this lesson include:

  • A definition of interest income
  • A description of a corporate bond
  • What types of taxation interest income from a savings account is not subject to
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