Schedule B (Form 1040) 2022 Tax Year Checklist
Purpose
Schedule B (Form 1040) is used to report interest income and ordinary dividends for the 2022 tax year. This form must be attached to Form 1040 or Form 1040-SR and cannot be filed as a standalone document. Understanding when Schedule B is required and how to properly complete it ensures compliance with IRS reporting obligations.
You must file Schedule B if any of the following conditions apply:
- You received more than $1,500 of taxable interest or ordinary dividends during 2022
- You received interest from a seller-financed mortgage where 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 shown on Form 1099-OID
- You are reducing interest income due to the 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 for another person
- You had a financial interest in or signature authority over a financial account in a foreign country at any time during 2022
- You received a distribution from, or were a grantor of, or transferor to, a foreign trust during 2022
Part III of Schedule B addresses foreign financial accounts and trusts. The instructions emphasize the use of FinCEN Form 114 and include explicit cautionary language regarding substantial penalties for noncompliance. This section works in conjunction with separate reporting requirements under the Foreign Account Tax Compliance Act (FATCA).
Checklist
Preliminary Requirements
Step 1: Confirm Form Selection
Verify that you are filing Form 1040 or Form 1040-SR for the 2022 tax year. Schedule B cannot be filed independently and must be attached as Attachment Sequence No. 08. The attachment sequence number determines the proper order for assembling your complete tax return.
Step 2: Enter Identifying Information
Enter your Social Security number in the designated field at the top of Schedule B before completing any income sections. This ensures proper matching with your primary tax return and IRS records.
Part I: Interest Income
Step 3: List All Interest Payees
Report all payers of interest income on Part I, line 1. Taxable interest should generally be documented on Forms 1099-INT, Forms 1099-OID, or substitute statements from financial institutions.
Special handling is required for seller-financed mortgage interest. If you received interest payments from a buyer who purchased property from you and that buyer used the property as a personal residence, you must list this interest first on line 1. Include the buyer's Social Security number and address as required by the 2022 instructions. You must also provide your Social Security number to the buyer. If you or the buyer does not have an SSN, use the appropriate taxpayer identification number (TIN) for the filer or recipient of Form 1098. Failure to provide this information may result in a $50 penalty.
Include all forms of taxable interest: interest from checking and savings accounts, certificates of deposit, bonds (including Series EE, H, HH, and I U.S. savings bonds), accrued market discount includible in income, and gains on contingent payment debt instruments reported as interest income.
Step 4: Report Brokerage Interest
For payers that issued Form 1099-INT, Form 1099-OID, or substitute statements from brokerage firms, list the firm's name as the payer and enter the total interest shown on that form. This simplifies reporting when you have multiple interest sources consolidated on a single brokerage statement.
Step 5: Calculate Total Interest
Add all amounts listed on line 1 and enter the total on Part I, line 2. This represents your gross taxable interest before any exclusions.
Step 6: Apply Savings Bond Exclusion
Complete line 3 only if you cashed Series EE or I U.S. savings bonds issued after 1989 during 2022 and paid qualified higher education expenses for yourself, your spouse, or your dependents. To claim this exclusion, you must complete and attach Form 8815. Attachment of Form 8815 is mandatory—there is no alternative method to claim this exclusion. Enter the excludable amount on line 3.
Step 7: Determine Net Taxable Interest
Subtract line 3 from line 2 and enter the result on Part I, line 4. This is your net taxable interest for 2022. Transfer this amount to Form 1040 or Form 1040-SR, line 2b.
Note: If line 4 exceeds $1,500, you must complete Part III of Schedule B.
Part II: Ordinary Dividends
Step 8: List All Dividend Payers
Report all payers of ordinary dividends on Part II, line 5. Ordinary dividend amounts should be shown in box 1a of your Form 1099-DIV or substitute statements received from financial institutions.
Step 9: Report Brokerage Dividends
If you received a Form 1099-DIV or substitute statement from a brokerage firm, list the brokerage firm's name as the payer and enter the total ordinary dividends shown on that form. This approach consolidates reporting when multiple dividend sources appear on a single statement.
Step 10: Calculate Total Ordinary Dividends
Add all amounts listed on line 5 and enter the total on Part II, line 6. Transfer this amount to Form 1040 or Form 1040-SR, line 3b.
Note: If line 6 exceeds $1,500, you must complete Part III of Schedule B.
Part III: Foreign Accounts and Trusts
Part III must be completed if ANY of the following independent conditions apply. These triggers are separate—meeting even one condition requires Part III completion:
(a) You had over $1,500 of taxable interest OR ordinary dividends (the combined total from Part I, line 4, and Part II, line 6), OR
(b) You had a financial interest in or signature authority over a financial account located in a foreign country at any time during 2022, OR
(c) You received a distribution from, or were a grantor of, or a transferor to, a foreign trust during 2022
It is essential to note that foreign account holders must complete Part III, regardless of whether their interest or dividend income exceeds $1,500. The foreign account disclosure requirement is independent of income thresholds.
Step 11: Answer Foreign Account Questions
Question 7a asks whether, at any time during 2022, you had a financial interest in or signature authority over a financial account located in a foreign country. Check "Yes" or "No" as appropriate.
A financial account includes securities accounts, brokerage accounts, savings accounts, demand accounts, checking accounts, deposit accounts, time deposit accounts, commodity futures or options accounts, insurance policies with cash value, annuity policies with cash value, and shares in mutual funds or similar pooled funds. A financial account is considered to be located in a foreign country if it is physically situated outside the United States.
Check "Yes" even if you are not required to file FinCEN Form 114 (FBAR). The disclosure requirement on Schedule B applies regardless of whether FBAR filing obligations are met.
Step 12: Determine FinCEN Form 114 Filing Requirement
If you answered "Yes" to having a foreign account, determine whether you must file FinCEN Form 114 by referencing the FinCEN Form 114 instructions available at FINCEN.gov.
A U.S. person who has a financial interest in or signature authority over foreign financial accounts must file FinCEN Form 114 if the aggregate value of all foreign financial accounts exceeded $10,000 at any time during 2022. This is a cumulative threshold—if you have multiple accounts with a combined balance exceeding $10,000 at any point during the year, all accounts must be reported.
Answer the second part of Question 7a accordingly: check "Yes" if you are required to file FinCEN Form 114, or "No" if you are not required to file.
The IRS emphasizes that failure to file FinCEN Form 114 when appropriately required may result in substantial penalties. Civil penalties for non-willful violations can reach up to $10,000. A person who willfully fails to report an account or provide account-identifying information may be subject to civil penalties equal to the greater of $100,000 or 50% of the account balance at the time of the violation. Willful violations may also be subject to criminal penalties.
Step 13: Identify Foreign Country Locations
On line 7b, list the name(s) of the foreign country (countries where your financial accounts are located if you are required to file FinCEN Form 114. If you need more space than provided on line 7b, attach a separate statement with the additional country names.
FinCEN Form 114 must be filed electronically with the Treasury's Financial Crimes Enforcement Network. Do not attach FinCEN Form 114 to your tax return. For the due date and detailed filing information, visit FINCEN.gov.
Step 14: Answer Foreign Trust Question
Question 8 asks whether, during 2022, you received a distribution from a foreign trust, or whether you were the grantor of, or transferor to, a foreign trust. Answer "Yes" or "No" as appropriate.
For this purpose, a loan of cash or marketable securities from a foreign trust is generally considered a distribution. If you answer "Yes," you may be required to file Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts. Refer to the Instructions for Form 3520 at IRS.gov/Form3520 for detailed information.
If you were the grantor of, or transferor to, a foreign trust that existed during 2022, you may have to file Form 3520. Do not attach Form 3520 to Form 1040 or Form 1040-SR. File it separately at the address shown in the Form 3520 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. For a calendar year trust, Form 3520-A is due on March 15 of the following year. See the Instructions for Form 3520-A at IRS.gov/Form3520A for complete details.
Step 15: Attach Completed Schedule B
Attach the completed Schedule B to your Form 1040 or Form 1040-SR following Attachment Sequence No. 08. Do not file Schedule B separately as a standalone document.
2022 Tax Year Considerations
Form 8938 Complementary Requirement
Regardless of whether you are required to file FinCEN Form 114, you may also be required to file Form 8938, Statement of Specified Foreign Financial Assets, with your income tax return. Form 8938 has been a continuous reporting requirement since 2011 for taxpayers with specified foreign financial assets exceeding certain thresholds.
Form 8938 is a complementary filing requirement to Schedule B Part III—it is not an alternative. The two forms serve different purposes and have different thresholds.
Generally, U.S. taxpayers must file Form 8938 if specified foreign financial assets exceed $50,000 on the last day of the tax year or $75,000 at any time during the year for single filers (higher thresholds apply for joint filers and taxpayers living abroad).
Failure to file Form 8938 may result in penalties and extension of the statute of limitations. For more information, visit IRS.gov/Form8938.
Penalty Emphasis
The 2022 instructions contain explicit cautionary language regarding substantial penalties for failure to file FinCEN Form 114 when required. This emphasis reflects the continued IRS enforcement focus on compliance with foreign account reporting.
Thresholds and Structure
The interest and ordinary dividend threshold triggering Part III completion remained at $1,500 for 2022, consistent with prior years. The Schedule B attachment sequence number was maintained as No. 08 for the 2022 tax year. The line numbering and part structure remained unchanged from the preceding year, providing consistency for filers.
The 2022 instructions retained the seller-financed mortgage interest identification requirement, emphasizing that such interest must be listed first with the buyer's Social Security number and address provided.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
