Procrastination is a silent and slow killer of savings. Everyone puts things off, of course, waiting until the last minute and then scurrying to finish a longstanding to-do list. Taken to extremes, this course pulverizes your long-term financial plans.
Dividends and interest are the two major types of income investors can receive. The distinction between dividends and interest is determined by what type or classification of investment pays the income. Dividends and interest also have different tax consequences for both the receiving parties and the paying entities.
1 Exempt interest dividends must be reported on your income tax return. 2  These dividends may affect the amount of tax you pay on your social security income. 3  Exempt interest dividends may affect your deduction for investment interest expense and other investment expenses.ax rules that apply to exempt interest distributions you may receive from a mutual fund. Some mutual funds are established to provide a way to invest in municipal bonds and other securities that produce tax-exempt interest. Distributions from these mutual funds are usually composed mainly of tax-exempt interest.