If an individual taxpayer receives interest or dividend income, the taxpayer generally includes Schedule B (Interest & Dividends) with their annual Form 1040 (US Individual Income Tax Return).

Taxable interest income and ordinary dividends are generally subject to ordinary federal income tax rates for the taxpayer. The ordinary dividend income, however, must be separated into qualified dividends and nonqualified dividends because the qualified dividend income is subject to reduced tax rates.

Schedule B includes three separate parts, which are the following:
  • Part 1: Interest Income
  • Part 2: Ordinary Dividend Income
  • Part 3: Foreign Accounts and Trusts
Schedule B reports the following information:
  1. Taxable interest income
  2. Excludable interest income from Series EE and U.S. Savings Bonds
  3. Ordinary dividend income
  4. Whether the taxpayer has an interest in a foreign financial account
  5. Whether the taxpayer is required to file an FBAR on FinCEN Form 114 (Report of Foreign Bank Accounts)
  6. Whether the taxpayer received a distribution from a foreign trust or was a grantor of a foreign trust.
Who Must File Schedule B?

A taxpayer must include Schedule B if the taxpayer received more than $1,500 in taxable interest or ordinary dividends during the tax year. However, it is recommended that every taxpayer include Schedule B to provide more details on the source of their investment income.

Schedule B Video Tutorials

For some detailed video tutorials on completing Schedule B, please see our links below:

  1. Reporting Interest from Form 1099-INT
  2. Reporting Accrued Bond Interest on Form 1099-INT
  3. Qualified Dividend and Capital Gain Tax Worksheet
  4. How to Enter 1099-DIV for TurboTax
Additional Information

Taxpayers can find more information on Schedule B by viewing the Schedule B Instructions and visiting the IRS website.