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IRS Schedule — Interest and Dividend Income

Schedule B — Interest and Ordinary Dividends

Schedule B is required when a taxpayer has more than $1,500 of taxable interest or ordinary dividends, or when they have a financial interest in or signature authority over a foreign financial account (FBAR requirement). For tax professionals, Schedule B is a routine but important form — particularly Part III, which triggers FBAR and FATCA disclosure obligations for clients with foreign accounts.

✓ Verified 2026 Schedule B Requirements
✓ FBAR Threshold Confirmed ($10,000)
✓ FATCA Form 8938 Threshold Confirmed
✓ Qualified Dividend Rules Confirmed
$1,500
Threshold for Filing Schedule B
Part III
Foreign Account Disclosure Trigger
FBAR
FinCEN 114 — Filed Separately from Tax Return
IRC §61
Interest and Dividend Income Authority

Key Rules and Authority

RuleDetail
Schedule B Threshold$1,500 of interest or dividends
FBAR Threshold$10,000 in foreign accounts
FBAR DeadlineApril 15 (auto-extension to Oct 15)
FATCA Form 8938Required for higher thresholds
Qualified Dividends Rate0%, 15%, or 20%
OID ReportingBox 1 of Form 1099-OID

Part III — Foreign Account Disclosure

Part III of Schedule B asks two questions: (1) Did the taxpayer have a financial interest in or signature authority over a foreign financial account? and (2) Did the taxpayer receive a distribution from, or was a grantor of, a foreign trust? If the answer to question 1 is "yes" and the aggregate value of all foreign financial accounts exceeded $10,000 at any time during the year, the taxpayer must file FinCEN Form 114 (FBAR) separately through the BSA e-filing system. The FBAR is not filed with the tax return — it is filed through FinCEN's online portal by April 15 (with an automatic extension to October 15).

FBAR Penalty Warning: The penalty for willful failure to file an FBAR is the greater of $100,000 or 50% of the account balance per violation. Non-willful penalties are up to $10,000 per violation. These are among the most severe penalties in the tax code. Every client with foreign accounts must be asked about Schedule B Part III.

Frequently Asked Questions

My client has a foreign bank account but the balance never exceeded $10,000. Do they still need to file an FBAR?
No — the FBAR is only required if the aggregate value of all foreign financial accounts exceeded $10,000 at any point during the calendar year. However, the taxpayer must still answer "yes" to Part III, Question 7a of Schedule B if they had a financial interest in or signature authority over any foreign financial account, regardless of the balance. The FBAR threshold applies to the aggregate of all foreign accounts — if a client has three foreign accounts each with $4,000, the aggregate is $12,000 and the FBAR is required.
Foreign Account Compliance Advisory

Schedule B Part III triggers FBAR and FATCA obligations — high-stakes compliance with severe penalties for non-filing. Join the Uncle Kam marketplace to serve clients with foreign accounts.

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Quick Reference
Schedule B Threshold$1,500
FBAR Threshold$10,000 aggregate
FBAR DeadlineApril 15 (auto-ext to Oct 15)
FBAR Willful PenaltyGreater of $100K or 50% of balance
FATCA Form 8938Higher thresholds apply
Qualified Dividend Rate0%, 15%, or 20%
Related Forms
Form 1040 — Individual Return Form 8938 — FATCA Form 3520 — Foreign Trusts Schedule D — Capital Gains

Master Interest, Dividend, and Foreign Account Reporting

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