How to Fill Out Schedule B - Interest & Ordinary Dividends
If you received interest or dividends over the course of the year, you generally need to report them to the Internal Revenue Service on your federal income taxes and probably pay tax on them. If you had more than $1,500 in interest or dividend income or certain other special circumstances apply, you need to fill out a special tax form called IRS Schedule B.
List each organization that paid you interest or ordinary dividends and how much each paid you on the Schedule B form. If you received a tax form from an organization, use the name and amount listed on that form.
The Schedule B Tax Form
If you only received a small amount of interest and dividend payments, you may not need to use the Schedule B tax form at all. You're generally required to only use the form if you received at least $1,500 in interest or dividends or if you received bond interest, received interest from a seller-financed mortgage on the buyer's personal home, had an interest in a foreign account or other special circumstances apply.
If one of those situations applies, you will need to file Schedule B. You can file this form with a 1040 or 1040A tax form. You will not be able to use the 1040EZ form if you must file Schedule B.
Obtain the Schedule B instructions and the form itself from the IRS if you're not using a digital tool to do your taxes. Even if you are, you may still want to consult the Schedule B sample form and instructions so you can understand and double check what the software is doing before you file your return.
On the first part of Schedule B, list all the interest you received and who paid it to you. Sum up the total amount on line 2, add up any excludable savings bond interest on line 3, according to the form instructions, and write the difference on line 4. Often you will receive 1099-INT forms, spelling out how much interest you received from each institution. Institutions are generally required to send these to you if you received at least $10 in interest over the course of the year. If you think you're missing 1099 forms, contact the organizations that should issue them to you and, if that doesn't help, contact the IRS.
On the second part of Schedule B, list your ordinary dividends and who paid them. Write the total amount on line 6. Transfer the figures from lines 4 and 6 to your 1040 or 1040A forms on the lines identified.
If you had more than $1,500 in interest or dividends, or had foreign accounts or were involved with foreign trusts, you must also complete Part 3 of Schedule B. Indicate whether you had such accounts and, if so, what country they were in.
Other Forms for Foreign Accounts
Note that if you had interests in foreign bank accounts or trusts, you must fill out additional forms as well. For foreign trusts, you may need to fill out IRS Form 3520, and for foreign bank accounts, you may need to report them to the Treasury Department's Financial Crimes Enforcement Network using FINCEN Form 114.
2018 Tax Law Changes
While the 1040 tax form is changing for 2018, drafts of Schedule B show that it's not itself changing other than to reflect new lines on the 1040 form for entering interest and dividend numbers.
Since tax rates are generally lower in 2018, you may owe less tax on your interest and dividends than in previous years.
2017 Tax Laws
Tax rates are higher in 2017 than in 2018, so you may owe more tax on similar amounts of interest and dividend payments.
- IRS: 2018 Instructions for Schedule B (Form 1040)
- IRS: Schedule B: Interest and Ordinary Dividends
- IRS: Instructions for Forms 1099-INT and 1099-OID
- FINCEN: Report Foreign Bank and Financial Accounts
- IRS: 2018 Draft Schedule B
- Forbes: New: IRS Announces 2018 Tax Rates, Standard Deductions, Exemption Amounts And More
Steven Melendez is an independent journalist with a background in technology and business. He has written for a variety of business publications including Fast Company, the Wall Street Journal, Innovation Leader and Ad Age. He was awarded the Knight Foundation scholarship to Northwestern University's Medill School of Journalism.