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IRS 1040 Schedule B Tax Form

What is Form 1040 Schedule B – Interest and Ordinary Dividend?

Form 1040 is an IRS Form used to report the individual income tax return. Form 1040 consists of diverse Schedules, and each is categorized by type of income. Taxpayers use Schedule B along with Form 1040 to report interest and ordinary dividend earned during the tax year. As per the IRS (Internal Revenue Service) norms, if the taxpayer received $1500 or more interest or dividend income through a bank account, investment, bonds, and stocks during the tax year are required to attach Schedule B.

Who needs to File Form 1040 Schedule B?

Attach schedule B along with your 1040 tax return if any of the following apply,

  • You had over $1,500 of taxable interest or ordinary dividends.
  • You received interest from a seller-financed mortgage and the buyer used the property as a personal residence.
  • You have accrued interest from a bond.
  • You are reporting original issue discount (OID) in an amount less than the amount shown on Form 1099-OID.
  • You are reducing your interest income on a bond by the amount of amortizable bond premium.
  • You are claiming the exclusion of interest from series EE or I U.S. savings bonds issued after 1989.
  • You received interest or ordinary dividends as a nominee.
  • You had a financial interest in, or signature authority over, a financial account in a foreign country or you received a distribution from, or were a grantor of, or transferor to, a foreign trust. Part III of the schedule has questions about foreign accounts and trusts.

If taxable interest or ordinary dividends are more than $1500: Generally, this information is typically reported on Form 1099-INT or 1099-DIV which you received from banks, investments, bonds, and stocks.

Seller-Financed Mortgage: Interest received through any rental property.

Bonds: Accrued interest earned through bond value. This interest typically reported in Form 1099-OID

Instructions To E-File 1040 Schedule B

Schedule B details all your interest and ordinary dividend income and any applicable adjustments. Here's a breakdown of the key sections,

  • Lists all interest income received from various sources.
  • Reports on ordinary dividends received from corporations.
  • Calculates any foreign tax withheld from your dividends.
  • Reports any investment expenses you can deduct (limited in some cases).
  • Summarizes your total interest and ordinary dividend income after adjustments.
  • For specific situations like interest from seller-financed mortgages or accrued bond interest.
  • Asks about foreign accounts and trusts you may hold.
IRS 1040 - How to Efile

How to E-File Form 1040 Schedule B with Tax2efile

Streamline your 1040 Schedule B with Tax2efile effortlessly. Our intuitive user-friendly interface offers simplified tax E-filing process that helps the taxpayers to quickly submit their tax return to IRS.

  • Register and Login with Tax2efile
  • Choose 1040 Form and enter the personal information and Income information.
  • List the interest and ordinary dividends that received from various sources.
  • Submit your Schedule B

Still Have Questions?

If your taxable interest does not exceed $1500 Schedule B is not required. But still, you need to report your 1040 tax return.

No, there are generally no exclusions for ordinary dividends. However, capital gains distributions (reported on Form 1099-DIV) are treated differently and may be subject to lower tax rates.

Yes, Part IV of Schedule B allows you to deduct certain investment expenses, however there are limitations on the amount you can deduct.

You can find the information on Forms 1099-INT and 1099-DIV that are provided by your financial institutions.

If you have more questions, please refer to our FAQ page.

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