Schedule B Help

General Instructions

Use Schedule B (Form 1040) if any of the following applies.

  • 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) of less than the amount shown on Form 1099-OID.

  • You are reporting interest income of less than the amount shown on a Form 1099 due to 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.

Future Developments
For the latest information about developments related to Schedule B (Form 1040) and its instructions, such as legislation enacted after they were published, go to IRS.gov/ScheduleB.

Interest Income

Line 2 - Tax-Exempt Interest
If you received any tax-exempt interest (including any tax-exempt OID), such as from municipal bonds, each payer should send you a Form 1099-INT or a Form 1099-OID. In general, your tax-exempt stated interest should be shown in box 8 of Form 1099-INT or, for a tax-exempt OID bond, in box 2 of Form 1099-OID, and your tax-exempt OID should be shown in box 11 of Form 1099-OID. Enter the total on line 2. However, if you acquired a tax-exempt bond at a premium, only report the net amount of tax-exempt interest on line 2 (that is, the excess of the tax-exempt interest received during the year over the amortized bond premium for the year). Also, if you acquired a tax-exempt OID bond at an acquisition premium, only report the net amount of tax-exempt OID on line 2 (that is, the excess of the tax-exempt OID for the year over the amortized acquisition premium for the year). See Pub. 550 for more information about OID, bond premium, and acquisition premium.

Also include any exempt-interest dividends from a mutual fund or other regulated investment company. This amount should be shown in box 12 of Form 1099-DIV

If an amount is shown in box 9 of Form 1099-INT, you generally must report it on line 2g of Form 6251. See the Instructions for Form 6251 at IRS.gov/Form6251 for details.

Line 3 - Nominee Distributions
If you received a Form 1099-INT that includes interest you received as a nominee (that is, in your name, but the interest actually belongs to someone else), report the total on line 3. Do this even if you later distributed some or all of this income to others. 

TIP. If you received interest as a nominee, you must give the actual owner a Form 1099-INT (unless the owner is your spouse) and file Forms 1096 and 1099-INT with the IRS. For more details, see the General Instructions for Certain Information Returns and the Instructions for Forms 1099-INT and 1099-OID.

Line 4 - Accrued Interest
When you buy bonds between interest payment dates and pay accrued interest to the seller, this interest is taxable to the seller. If you received a Form 1099 for interest as a purchaser of a bond with accrued interest, enter on line 4.

Line 5 - Original Issue Discount (OID)
If you are reporting OID in an amount less than the amount shown in box 1 or box 8 of Form 1099-OID, enter the amount on line 5. However, if the payer reported to you a net amount of OID on the bond reflecting the offset of the gross amount of OID by any acquisition premium, no reduction of the amount of OID income reported to you by the payer is permitted on Schedule B for the bond.

Line 7 - Amortizable Bond Premium
If you elect to reduce your interest income on a taxable bond by the amount of taxable amortizable bond premium, enter the amount on line 7. However, if the payer reported to you a net amount of interest income on the bond reflecting the offset of the gross amount of interest income by the amortizable bond premium, no reduction of the amount of interest income reported to you by the payer is permitted on Schedule B for the bond.

Ordinary Dividend

Line 1 - Nominee Distributions
If you received a Form 1099-DIV that includes ordinary dividends you received as a nominee (that is, in your name, but the ordinary dividends actually belong to someone else), report the total on line 1. Do this even if you later distributed some or all of this income to others.

TIP: If you received dividends as a nominee, you must give the actual owner a Form 1099-DIV (unless the owner is your spouse) and file Forms 1096 and 1099-DIV with the IRS. For more details, see the General Instructions for Certain Information Returns and the Instructions for Form 1099-DIV.

Line 3 - Question 1
Check the “Yes” box if at any time during 2025 you had a financial interest in or signature authority over a financial account located in a foreign country. See the definitions that follow. Check the “Yes” box even if you aren't required to file FinCEN Form 114.

Financial account. A financial account includes, but isn't limited to, a securities, brokerage, savings, demand, checking, deposit, time deposit, or other account maintained with a financial institution (or other person performing the services of a financial institution). A financial account also includes a commodity futures or options account, an insurance policy with a cash value (such as a whole life insurance policy), an annuity policy with a cash value, and shares in a mutual fund or similar pooled fund (that is, a fund that is available to the general public with a regular net asset value determination and regular redemptions).

Financial account located in a foreign country. A financial account is located in a foreign country if the account is physically located outside of the United States. For example, an account maintained with a branch of a U.S. bank that is physically located outside of the United States is a foreign financial account. An account maintained with a branch of a foreign bank that is physically located in the United States isn't a foreign financial account.

Signature authority. “Signature authority” is the authority of an individual (alone or in conjunction with another individual) to control the disposition of assets held in a foreign financial account by direct communication (whether in writing or otherwise) to the bank or other financial institution that maintains the financial account. See the FinCEN Form 114 instructions for exceptions. Don't consider the exceptions relating to signature authority in answering Question 1.

Other definitions. For definitions of “financial interest,” “United States,” and other relevant terms, see the instructions for FinCEN Form 114.

Line 4 - Question 2
See FinCEN Form 114 and its instructions at FINCEN.gov to determine whether you must file the form. Check the “Yes” box if you are required to file the form. Check the “No” box if you aren't required to file the form.

If you checked the “Yes” box on line 4, you must electronically file FinCEN Form 114 with Treasury's Financial Crimes Enforcement Network. A U.S. person that has a financial interest in or signature authority over foreign financial accounts must file the form if the aggregate value of foreign financial accounts exceeds $10,000 at any time during 2025.  Do not attach FinCEN Form 114 to your tax return.

For the due date and more information about FinCEN Form 114, see FINCEN.gov.

CAUTION: If you are required to file FinCEN Form 114 but don't properly do so, you may have to pay a civil penalty up to $10,000. A person who willfully fails to report an account or provide account identifying information may be subject to a civil penalty equal to the greater of $100,000 or 50% of the balance in the account at the time of the violation. Willful violations may also be subject to criminal penalties.

Line 5
If you received a distribution from a foreign trust, you must provide additional information. For this purpose, a loan of cash or marketable securities is generally considered to be a distribution. See the Instructions for Form 3520 at IRS.gov/Form3520 for details.

If you were the grantor of, or transferor to, a foreign trust that existed during 2025, you may have to file Form 3520.

Don't attach Form 3520 to Form 1040 or Form 1040-SR. Instead, file it at the address shown in its instructions.

If you were treated as the owner of a foreign trust under the grantor trust rules, you are also responsible for ensuring that the foreign trust files Form 3520-A. Form 3520-A is due on March 16, 2026, for a calendar year trust. See the Instructions for Form 3520-A at IRS.gov/Form3520A for details.