IRS Schedule B – Interest and Ordinary Dividends

Schedule B (Form 1040), Interest and Ordinary Dividends, lists sources of taxable interest and ordinary dividends and asks questions about foreign financial accounts and foreign trusts. The commonly quoted filing test is more than $1,500 of taxable interest or ordinary dividends, but that is not the only reason the schedule may be required.

A taxpayer can need Schedule B with less than $1,500 because of seller-financed mortgage interest, bond adjustments, nominee distributions, foreign accounts, or foreign trusts.

Download the current final Schedule B PDF from IRS.gov and consult the current IRS instructions. This page covers the 2025 revision for tax year 2025, verified 2026-08-10.

How the IRS classifies and files this form

Document type: interest, dividend, and foreign-account information schedule.

Schedule B is attached to Form 1040 or 1040-SR when a filing test applies. Its interest and dividend totals flow to the corresponding lines on the return; Part III supplies information rather than an income total.

Part I: taxable interest

Part I lists each payer and taxable amount before the total is carried to the return. The instructions address seller-financed mortgages, accrued interest, original issue discount reported differently from Form 1099-OID, amortizable bond premium, savings-bond interest exclusions, and nominee interest. Tax-exempt interest is handled under the return instructions and should not be silently combined with taxable interest.

Part II: ordinary dividends

Part II lists ordinary dividends by payer. Qualified dividends are a subset reported separately on the main return for the preferential-rate calculation; Schedule B’s total is ordinary dividends, not only qualified dividends. Nominee dividends require the reporting steps specified by the instructions.

The $1,500 tests

Schedule B is required when taxable interest exceeds $1,500 or ordinary dividends exceed $1,500. The tests are not applied only to the portion above $1,500. Once required, the schedule lists the relevant payer amounts and totals.

Part III and foreign financial accounts

Part III asks whether the taxpayer had a financial interest in or signature authority over a financial account in a foreign country and asks for the country. It also asks about distributions from, or grantor or transferor relationships with, foreign trusts. These questions must be answered based on the definitions, not solely on whether the account produced taxable income.

Schedule B is not the FBAR

Schedule B is part of the federal income tax return. The FBAR, FinCEN Form 114, is a separate Bank Secrecy Act report filed electronically with FinCEN when its own aggregate-value and filing rules apply. Answering Schedule B does not file an FBAR, and an FBAR obligation can exist independently of income tax due.

Frequent reporting errors

• Omitting a payer because withholding was zero.
• Entering qualified dividends as though they were the entire ordinary-dividend amount.
• Ignoring Part III because the foreign account earned no interest.
• Assuming the $1,500 threshold eliminates an FBAR requirement.
• Failing to apply nominee or seller-financed mortgage reporting rules.

Nominee income and payer lists

A nominee receives an information return for income that actually belongs to someone else. Schedule B does not solve the issue merely by omitting the other person’s share. The nominee follows the IRS nominee-distribution reporting procedure, which can include issuing the appropriate information return and reporting the payer and adjustment as instructed.

Payer names should be recognizable and totals should reconcile with Forms 1099-INT, 1099-OID, and 1099-DIV after valid adjustments. Consolidated brokerage statements often contain several categories; only the relevant interest and ordinary-dividend amounts belong in Parts I and II.

Foreign account questions deserve a separate review

Signature authority can trigger a “yes” answer even when the taxpayer does not own the money. Conversely, an interest in a foreign entity may involve different reporting from a direct bank account. The Schedule B instructions define exceptions and direct taxpayers to FBAR and foreign-trust rules.

Part III is not limited to accounts that generated a Form 1099. Taxpayers should inventory foreign bank, brokerage, and other financial accounts and review trust transactions before answering. Other international forms may also apply; Schedule B answers do not replace them.

Documents to reconcile before filing

This cross-check identifies the records and calculations that should agree before Schedule B is filed. It is especially useful when several statements or supporting forms feed one line.

Resolve any Schedule B difference at the source rather than forcing it into the final total. Retain this reconciliation and the documents behind it with the tax records even when the worksheet itself is not submitted to the IRS.

Questions taxpayers commonly ask

Do I need Schedule B if interest is under $1,500?

Possibly. Other filing tests—including foreign-account questions, nominee income, and certain bond or mortgage situations—can require it.

Is Schedule B the same as an FBAR?

No. Schedule B is attached to the income tax return; the FBAR is a separate FinCEN filing.

Do qualified dividends go on Schedule B?

The payer’s ordinary dividends are listed in Part II. Qualified dividends are also reported separately on the main return for tax-rate purposes.

FederalFormGuide.com is an independent informational resource, not the IRS. This guide provides general information and does not replace the current IRS instructions or professional advice for a taxpayer’s facts.

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