IRS Schedule B is a form used to report interest and ordinary dividends received by a taxpayer during the tax year. Individuals, estates, and trusts typically use this form.

Interest income is generally considered taxable income and must be reported on a taxpayer’s federal income tax return. Interest income includes, but is not limited to, interest earned on savings accounts, checking accounts, money market accounts, CDs, and bonds. Taxpayers must report the total interest income they received during the tax year, regardless of whether it was paid directly to them or credited to their account.

Ordinary dividends are also considered taxable income and must be reported on a taxpayer’s federal income tax return. Ordinary dividends are paid to shareholders of a corporation and are typically paid out of the corporation’s earnings and profits. Taxpayers must report the total amount of ordinary dividends they received during the tax year, regardless of whether they were paid in cash or the form of additional shares of stock.

It’s important to note that some dividends received by taxpayers may be qualified dividends. Qualified dividends are taxed at a lower rate than ordinary dividends, and are subject to the same tax rates as long-term capital gains. To be considered a qualified dividend, the dividend must be paid by a U.S. corporation or a qualified foreign corporation, and the taxpayer must have held the stock for more than 60 days during the 121-day period that begins 60 days before the ex-dividend date.

Taxpayers must report all interest and ordinary dividends received during the tax year on Schedule B. The form lists the payer’s name, address, and taxpayer identification number, as well as the amount of interest or dividends received. Taxpayers must attach Schedule B to their Form 1040 when they file their federal income tax return.

It’s essential to keep accurate records of all interest and dividends received during the tax year. Taxpayers should retain all forms, statements, and other documentation that show the amount of interest and dividends received, including Form 1099-INT for interest and Form 1099-DIV for dividends.

In summary, IRS Schedule B is used to report interest and ordinary dividends a taxpayer receives during the tax year. Interest income is generally considered taxable income and must be reported on a taxpayer’s federal income tax return. Ordinary dividends are also considered taxable income and must be reported on a taxpayer’s federal income tax return unless they are Qualified dividends which are taxed at a lower rate. Taxpayers must report all interest and ordinary dividends received during the tax year on Schedule B. It’s essential to keep accurate records of all interest and dividends received during the tax year and retain all forms, statements, and other documentation showing the interest and dividends received.