How to Fill Out Schedule B - Interest & Ordinary Dividends

by Mark Kennan

    When you have substantial interest or dividend income, the Internal Revenue Service makes you fill out some extra paperwork with your tax return. You must fill out Schedule B with your Form 1040 tax return if you have more than $1,500 of taxable interest or $1,500 of ordinary dividends. If you have more than $1,500 of only one or the other, you need to fill out only that portion of Schedule B. For example, if you have $5,000 of taxable interest but only $1,000 of dividends, you only need to fill out the interest portion of Schedule B. If Schedule B is required, you must file your taxes with either Form 1040 or Form 1040A.

    Step 1

    Enter each person or institution that pays you interest and the amount paid in Part I, line 1, and enter the total on line 2.

    Step 2

    Enter any U.S. savings bond interest that you're able to exclude from your taxable income because you're using it for qualified higher education expenses on line 3. Subtract it from your total taxable interest to figure your total taxable interest, which goes on line 4.

    Step 3

    Copy your total taxable interest from line 4 of Schedule B to line 8a of either Form 1040 or 1040A.

    Step 4

    Report the name of each company you received dividends from in Part II, line 5, and report the total interest on line 6.

    Step 5

    Copy your total ordinary dividends from line 6 of Schedule B to line 9a of either Form 1040 or Form 1040A.

    Step 6

    Complete Part III of Schedule B regarding any foreign accounts you have. As long as you didn't have a financial interest or signature authority over a financial account located in a foreign country, or have a foreign trust, you can check "No" on lines 7 and 8 and be done with Schedule B.

    Items you will need

    • IRS Form 1040 or Form 1040A

    About the Author

    Mark Kennan is a freelance writer specializing in finance-related articles. He has worked as a sports editor for "Ring-Tum Phi" and published articles on a number of online outlets. Kennan holds a Bachelor of Arts in history and politics from Washington and Lee University.

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