If you received more than $1,500 in interest
or dividend income, chances are you will need to file a Schedule B. Here are the details.
Introduction
Schedule B reports the interest and dividend income you receive during the tax year. However, you
don’t need to attach a Schedule B every year you earn interest or dividends. It is only required
when the total exceeds certain thresholds. In 2018 for example, a Schedule B is only necessary when
you receive more than $1,500 of taxable interest or dividends.
Taxable interest income
Most types of interest you earn are subject to federal income tax. This includes the interest you
earn in a bank savings account or from corporate bonds you invest in. However, if you earn interest
on Series I or EE savings bonds issued after 1989 or from certain municipal bonds, you can exclude
this income from your tax return and the Schedule B.
Generally, the bank or entity paying the interest will report the taxable interest to you on a Form
1099-INT. You can use this information to determine whether you need to complete Schedule B, and if
so, your 1099 provides all the essential information you need to fill it out.
Taxable ordinary dividends
Ordinary dividends are distributions of property that a corporation pays to shareholders when it is
profitable. Not every stock you own will pay dividends, but if it does, that income is also taxable.
For the typical investor, a dividend is usually a cash payment. When your annual dividends exceed
the IRS reporting threshold, then you must report them on Schedule B.
In addition to the amount of dividends you receive, you must also provide the name of each company
that is paying it. Each corporation that sends you a dividend payment will also report your annual
total on a Form 1099-DIV. Your 1099-DIV form provides sufficient information for you to prepare the
Schedule B.
Foreign accounts and trusts
The final section of Schedule B is where you must disclose any foreign bank or investment accounts
you have and whether you receive distributions from certain foreign trusts. If you have sufficient
dividends or interest requiring you to fill out Schedule B, then you must answer these questions. If
you answer affirmatively to any question, you may have to fill out Form TD F 90-22.1.
Transferring totals to your tax return
If you earn $1,500 or less in total interest and dividend income during the year, you still have to
pay tax on those amounts even though you don’t file a Schedule B. Enter the total amount of dividend
and interest payments from your 1099s directly on the appropriate line of your personal income tax
return.
When you do complete a Schedule B, there should be no difference in the amount of dividend and
interest income on your 1099s and the schedule. Therefore, you should double check that the amounts
your report on your return match what you report on Schedule B.
