Schedule B

Schedule B is an attachment to Form 1040 used to report taxable interest, ordinary dividends, and certain foreign account or foreign trust information. For U.S. expats, Schedule B is especially important because Part III asks about foreign financial accounts, FBAR filing, and foreign trust activity.

Why it matters for U.S. expats

Schedule B is often where foreign account reporting first appears on a U.S. tax return. Even if a foreign bank account earned little or no interest, a U.S. expat may still need to answer the foreign account questions, identify countries where reportable accounts are held, file FBAR separately with FinCEN, and check whether Form 8938 or foreign trust reporting applies.

Common questions

1. What is Schedule B used for?

Schedule B is used to report taxable interest, ordinary dividends, and certain foreign account or foreign trust information with Form 1040.

2. When is Schedule B required?

Schedule B is required when taxable interest or ordinary dividends exceed $1,500, or when another Schedule B trigger applies, including certain foreign financial account or foreign trust situations.

3. Do U.S. expats need Schedule B if they have a foreign bank account?

Yes, if they had a financial interest in or signature authority over a foreign financial account during the year, they may need Schedule B Part III even if the account earned no income.

4. Does Schedule B replace FBAR?

No. Schedule B asks whether the taxpayer may have an FBAR obligation, but FBAR is filed separately as FinCEN Form 114 through FinCEN’s BSA E-Filing system.

5. What is Schedule B Part III?

Part III asks about foreign accounts and trusts. It includes questions about foreign financial accounts, whether FBAR is required, the countries where accounts are located, and certain foreign trust transactions.

6. What does Schedule B line 7a ask?

Line 7a asks whether the taxpayer had a financial interest in or signature authority over a foreign financial account during the year, and whether the taxpayer is required to file FBAR.

7. Should Schedule B line 7a be marked “Yes” if FBAR is not required?

Yes, when the taxpayer had a financial interest in or signature authority over a foreign financial account. The Schedule B instructions say to answer “Yes” to the first foreign-account question even if FBAR is not required.

8. What does Schedule B line 7b ask?

Line 7b asks for the name of the foreign country or countries where the reportable foreign financial accounts are located if FBAR is required.

9. What does Schedule B line 8 ask?

Line 8 asks about foreign trust activity, including whether the taxpayer received a distribution from, was a grantor of, or transferred property to a foreign trust.

10. Does Schedule B report foreign interest income?

Yes. Taxable interest from foreign bank accounts and other foreign payers is reported as interest income, even when the taxpayer did not receive a U.S. Form 1099-INT.

11. Does Schedule B report foreign dividends?

Yes. Ordinary dividends from foreign corporations, foreign funds, or foreign investment accounts may be reported on Schedule B when Schedule B is required. PFIC rules may also need to be reviewed for foreign funds.

12. Does Schedule B trigger Form 8938?

No. Schedule B does not trigger Form 8938 by itself, but a taxpayer with foreign financial assets should separately review the FATCA reporting thresholds.

13. Does Schedule B trigger Form 3520?

No. Schedule B asks about foreign trust activity, but Form 3520 is a separate form with its own rules, deadlines, and filing address.

14. What records help with Schedule B?

Keep foreign bank statements, brokerage statements, dividend reports, interest records, account numbers, country locations, signature authority records, FBAR calculations, foreign trust documents, Forms 1099, and exchange-rate records.

Related forms

• Schedule B: Interest and Ordinary Dividends
• Form 1040: U.S. Individual Income Tax Return
• FinCEN Form 114: FBAR reporting
• Form 8938: FATCA reporting for U.S. expats
• Form 3520: Foreign trust and foreign gift reporting
• Form 1099-INT: Interest Income

When to get help

Professional guidance is important when:

• You had foreign bank, brokerage, pension, investment, or insurance accounts.
• You had signature authority over an employer’s or company’s foreign account.
• Your foreign accounts exceeded the FBAR threshold at any point during the year.
• You received foreign interest or dividends without a U.S. tax form.
• You received distributions from a foreign trust or transferred assets to one.
• You are unsure whether Form 8938, Form 3520, or Form 8621 applies.
• You answered Schedule B incorrectly in a prior year and may need to amend.

Bright!Tax can review your foreign accounts, interest, dividends, and trust activity, then prepare Schedule B alongside any required FBAR, FATCA, PFIC, or foreign trust reporting. Get started with Bright!Tax.

Related Bright!Tax guides

• Got foreign bank accounts? When U.S. expats file FinCEN Form 114
• FBAR filing requirements for Americans living abroad
• FBAR vs. Form 8938: Which one applies to you

Official sources

• IRS: About Schedule B
• IRS: Instructions for Schedule B
• FinCEN: Report Foreign Bank and Financial Accounts
• IRS: About Form 8938
• IRS: About Form 3520

Reviewed by

Katelynn Minott, CPA & CEO

Last reviewed

July 2026