Schedule B (Form 1040) 2013: Interest & Dividends Explained

What Schedule B (Form 1040) Is For

IRS Schedule B (Form 1040) 2013 is attached to your federal tax return to report interest and ordinary dividend income. It provides detailed information about the banks, brokerages, or other payers that sent you interest or dividend payments during the tax year. The IRS uses this form to verify that your income matches what financial institutions report on Forms 1099-INT and 1099-DIV.

Schedule B also serves another purpose—it asks questions about foreign financial accounts and trusts to ensure compliance with federal disclosure rules. For the 2013 tax year, Schedule B was applicable to Forms 1040 and 1040A, allowing taxpayers to accurately report investment income and avoid IRS follow-up notices. Access the IRS Form Help Center for tools and resources that support accurate reporting of interest and dividend income on Schedule B.

When You’d Use Schedule B

You must file Schedule B (Form 1040) if you earned more than $1,500 in taxable interest or ordinary dividends during the 2013 tax year. The IRS requires this form to ensure that the income you report matches the amounts reported by banks and financial institutions on Forms 1099-INT and 1099-DIV.

You should also complete Schedule B if any of the following situations apply:

1. Seller-financed mortgages: You received interest from a property buyer who uses the home as a residence.
   
   
2. Nominee income: You received interest or dividends that partly belong to another person, such as a joint account holder.
   
   
3. Foreign accounts or trusts: You had a financial interest in, or signature authority over, foreign financial accounts or trusts.
   
   
4. Amended returns: You discovered missing or incorrect income and must file Form 1040X with an updated Schedule B.

These requirements help ensure accurate income reporting and prevent IRS penalties or mismatches. Get instructions for filing past-due tax returns that require Schedule B to report interest, dividends, or foreign accounts for earlier years.

Key Rules or Details for 2013

Several important rules applied to Schedule B (Form 1040) for the 2013 tax year. Understanding these requirements helps ensure accurate reporting and compliance with IRS and Treasury regulations:

• Filing threshold: You must file Schedule B if your total taxable interest or ordinary dividends were more than $1,500 in 2013.
  
  
• Other filing triggers: The form is required if you have foreign accounts, seller-financed mortgage interest, nominee income, or OID adjustments.
  
  
• Foreign account reporting: If the total value of your foreign accounts exceeded $10,000 at any time in 2013, you had to file FinCEN Form 114 (FBAR) separately through the BSA E-Filing System.
  
  
• No extensions: The FBAR filing deadline was June 30, 2014, with no extensions allowed.
  
  
• Separate forms: Schedule B differs from Form 8938, which reports specified foreign financial assets with higher filing thresholds.

Review how the IRS collection process works when interest or dividend reporting errors result in outstanding federal tax balances.

Step-by-Step (High Level)

1. Gather documents: Collect Forms 1099-INT, 1099-DIV, and 1099-OID from each bank account and brokerage. Confirm payer names match statements and that all income types appear once.
   
   
2. Complete Part I—Interest: List each payer and total the interest earned. If you earn interest through special situations (such as seller-financed mortgages), follow the line instructions so the amounts flow to Form 1040 correctly.
   
   
3. Complete Part II—Dividends: Enter ordinary dividends from 1099-DIV and, where applicable, report qualified dividends separately on your Form 1040. If you hold shares in foreign corporations, ensure payer details are accurate.
   
   
4. Answer Part III—Foreign items: Indicate whether you had a foreign bank account or trust interests. Review whether you need to file additional disclosures and confirm compliance with IRS regulations.
   
   
5. Finish and submit: Attach Schedule B to your return during tax season, check math, and consider available tax credits elsewhere on the return. If a payer reported income directly under a slightly different name, reconcile it before filing.
   
   
6. Get help if unsure: A tax professional can confirm entries, especially when foreign reporting is crucial to your filing.

See how Schedule B entries for interest, dividends, and foreign account disclosures flow directly into your Form 1040 filing.

Common Mistakes and How to Avoid Them

Filing Schedule B (Form 1040) can seem simple, but minor errors often lead to penalties or IRS notices. The following issues are the most common—and the easiest to prevent:

• Incorrect totals: Some taxpayers miscalculate their total interest or overlook small accounts, which affects their tax liability. Always review each statement before filing.
  
  
• Misreporting income: Failing to include all dividend income received or forgetting to record capital gains separately can cause mismatches. Double-check how your received dividend income appears on Form 1099-DIV.
  
  
• Bond adjustments: Errors often occur when reporting original issue discount or adjusting for amortizable bond premium. Use your payer’s 1099-OID for guidance.
  
  
• Foreign reporting gaps: Many individuals fail to disclose foreign accounts, trusts, investments, or other relevant assets. Ensure all required forms are included.
  
  
• Property-related interest: To remain compliant, report interest from a personal residence sale by including the buyer’s name, address, and Social Security number.

What Happens After You File

Once your individual income tax return is filed, the IRS matches the details from Schedule B (Form 1040) with information reported by banks and brokers. This includes savings accounts, brokerage account dividends, and tax-exempt interest. The agency also reviews any qualified dividend income to ensure accurate reporting and tax compliance. The IRS checks for required disclosures if you have foreign investments or trusts.

If everything aligns, your income tax return processes typically. Errors or omissions may trigger a notice. Accuracy is a crucial component of compliance; therefore, file Form 1040X promptly to correct any mistakes.

FAQs

What is the IRS Schedule B Form 1040 for 2013 used for?

The IRS Schedule B Form 1040 (2013) reports interest and ordinary dividends from savings, investments, or foreign sources. It ensures accurate reporting and compliance with IRS income rules.

Do I need to file Schedule B if I have taxable interest income?

Yes, you must file Schedule B if your taxable interest income or dividends exceed $1,500, or if you have foreign accounts or nominee income.

How do I report interest from a bank account or a foreign bank?

You should report interest from each bank account or foreign bank listed on your 1099-INT. Make sure the payer names and amounts match your records.

What if I have ordinary dividends or taxable ordinary dividends?

All ordinary and taxable ordinary dividends must be listed on Schedule B, using information from your Form 1099-DIV.

How do I handle accrued interest or reporting interest adjustments?

If you have accrued interest from bonds or other sources, include it when reporting interest on Schedule B and note any adjustments shown on Form 1099-OID.