Tax Preparation Checklists To Help You Get Your Tax Documentation In Order

Schedule B, Schedule Of Contributors & Foreign Trade Income
Tax Preparation Checklist

A Guide for determining who is required to fill out IRS Form Schedule B, Foreign Trade Export

Federal laws require U.S. citizens and resident aliens to report their worldwide income, including income from foreign banks, foreign trusts and securities accounts. Most cases require taxpayers to fill out and attach a Schedule B to their federal tax return. Some taxpayers may also be required to fill out and attach Form 8938, Statement of Foreign Financial Assets to their return.

Taxpayers who receive more than $1,500 in taxable interest and/or ordinary dividends are required to complete Schedule B, with IRS form 1040.

Additionally, taxpayers must file Schedule B (Form 5713) if they:

  • Participated in or cooperated with an international boycott and
  • Figure the loss of tax benefits by attributing taxes and income.
    • If you do not specifically attribute taxes and income for this purpose, you must compute the international boycott factor on Schedule A (Form 5713).
    • Do not use Schedule B (Form 5713) to figure the reduction to foreign trade income qualifying for the extraterritorial income exclusion. Instead, use Schedule A (Form 5713).

Schedule B requires the taxpayer to provide

  • The name of each payer (such as an investment firm or bank)
  • The amount of interest or dividends received from each payer.

The information taxpayers must report on form Schedule B is typically reported to the IRS by the payer, with a copy sent to the taxpayer, using form 1099-INT for interest and form 1099-DIV for dividends.

Taxpayers must report the interest and dividends they receive to the IRS when they exceed a certain level.

Schedule B is used to report your interest and dividend income received when the total exceeds a certain thresholds. Schedule B is only necessary when you receive more than $1,500 (based on 2014) of taxable interest or dividends.

Non-Taxable interest income

If you earn interest on Series I or EE savings bonds issued after 1989 or from certain municipal bonds, you are allowed to exclude this income from your tax return and Schedule B.

Generally, the bank or entity paying you interest will report this taxable income to you on a Form 1099-INT. This information can be used to determine if you need to complete Schedule B, If you do, your 1099 provides the essential information needed to prepare schedule B.

Ordinary taxable dividends

Ordinary dividends are distributions of property that a corporation pays to shareholders when profitable. When your annual dividends exceed the current IRS reporting threshold, you must report them on Schedule B.

Foreign accounts and trusts

You must also disclose any foreign bank or investment accounts you have and whether you received distributions from certain foreign trusts. If you have enough sufficient interest or dividend income, you are required to report this on Schedule B.

Transferring Schedule B totals to your tax return

If you earn $1,500 or less in total interest and dividend income during the year, you are still required to pay taxes on those amounts even though your not required toi file a Schedule B. You will need to enter the total amount of dividend and interest payments from your 1099s on the appropriate line of your personal income tax return.

Schedule B (Form 990-EZ or Form 990) What Organizations must file Schedule B?

Every organization filing Form 990-EZ or Form 990 must complete and attach Schedule B, unless certifying that they do not meet the filing by checking the box on Line H of Form 990-EZ. Unless the organization is covered by one of the Special Rules, it must list.

  • Every contributor who, during the year, gave the organization, directly or indirectly, money, securities, or any other type of property that total $5,000 or more in the organization's tax year.

What is considered a contribution?

Contributions are donations, grants, bequests, devises, and gifts of money or property, whether or not for charitable purposes. All individuals who contribute to a tax-exempt organization are considered a contributor.

What is noncash property?

Noncash property are contributions of anything other than money. These contributions require an explanation and value.

What are exclusively religious charitable contributions?

A religious, charitable contribution is a contribution or gift to or for the use of a corporation, trust, or community chest, fund, or foundation organized and operated exclusively for charitable or religious purposes.

Tax Forms for Taxpayers With Foreign Assets

Form 8938: Statement Foreign Financial Assets

This Statement of Foreign Financial Accounts is used to report your specified foreign financial assets if the total value of all the specified foreign financial assets in which you have an interest is more than the appropriate reporting threshold.

Form 8621: Information Return for Passive Foreign Investment Company (PFIC)

Taxpayers are required to file this form for each PFIC in years that they realized funds from any gain or distribution. These funds can include shares in a Passive Foreign Investment Company, such as a foreign-domiciled mutual fund, offshore investment scheme, or resident country tax-deferred fund, etc.

Form 2555: Foreign Earned Income

With this form taxpayers may be able to exclude foreign-earned (salary) income up to a qualified limit, and potentially exclude or deduct housing costs using on their tax return.

Form 1116: Foreign Tax Credit

Taxpayers may be able to take a credit against any U.S. taxes owed by filing this form if they have paid foreign taxes on foreign income (either from a salary or investments)

Form 5471: Information Return of U.S. Person with Respect to Certain Foreign Corporations

Shareholders of a Controlled Foreign Corporation are generally classified as (CDC) if your holdings equal 10%+ of the shares or control 10% of the voting rights.

Form 926: Return of a U.S. Transferor of Property to a Foreign Corporation

Use this form in the year you transfer cash, assets, or property (tangible or intangible) to a foreign corporation. This form may be required for U.S. citizens who are setting up initial capital to a foreign business or injecting new capital assets into an existing foreign business.

Form 8865: Information Return of U.S. Persons with Respect to Certain Foreign Partnerships

Participation in a foreign partnership with five or fewer U.S. partners, each owning 10% or more interest and in aggregate total more than 50% of the partnership, may be required to file form 8865 to report income and transactions between the partners.

Form 3520: Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts

This form is used to report transactions with foreign trusts, and large gifts from foreign persons or corporations or partnerships.

Form 3520A: Information Return of Foreign Trust with a U.S. Owner

This form is used to provide information about foreign trusts, its U.S. beneficiaries, and anyone treated as a partial owner of the trust.

Form TD F 90-22.1: Report of Foreign Bank and Financial Accounts (FBAR)

This form is required if you have ownership or authority over a foreign financial account, including a bank account, brokerage account, mutual fund, unit trust, or other types of financial accounts, with an aggregate value over US$10,000 at any time during year.