What this line means
The sum of all taxable interest listed in Part I. This total carries to Form 1040 line 2b. If you have interest from only one or two sources, the amounts still go here — Schedule B is required whenever the total exceeds $1,500, regardless of how many payers you have.
Does this apply to you?
- You earned more than $1,500 in total taxable interest during the year
- You received 1099-INT forms from multiple banks or brokerages
- You earned interest from a seller-financed mortgage or personal loan
- You received interest from a tax-exempt bond that is subject to AMT
Easy to overlook
Interest from accounts closed mid-year If you closed a savings account or CD in March, the interest earned through the closing date still appears on a 1099-INT issued by that bank. Filers who closed accounts early in the year often forget to include these smaller amounts when listing payers in Part I. The IRS receives the same 1099-INT and will match it against your return. 1 CP2000 pattern — unreported interest from multiple accounts
Nominee interest you received on behalf of someone else If a joint account lists you as the primary and the 1099-INT comes in your name, but part of the interest belongs to another person, you must list the full amount in Part I and then subtract the nominee portion. Report the subtracted amount on your own 1099-INT issued to the actual owner. Failing to handle nominee interest correctly overstates your income. 2 IRS Schedule B instructions — Line 4
Watch out for this
Adding interest amounts from 1099-INT Box 8 (tax-exempt interest) into the Part I total. Tax-exempt interest goes on Form 1040 line 2a, not line 2b. Schedule B Part I is exclusively for taxable interest. Including tax-exempt interest here double-reports income you do not owe tax on.
Footnotes
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IRS CP2000 Notice, Automated Underreporter Program, Interest Income Matching. https://www.irs.gov/individuals/understanding-your-cp2000-notice ↩
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IRS Schedule B (Form 1040) Instructions, Part I. https://www.irs.gov/instructions/i1040sb ↩