IRS Announces Increase in Interest/Dividend Threshold | AccountingWEB

IRS Announces Increase in Interest/Dividend Threshold

Internal Revenue Service tax form Schedule B, "Interest and Dividend Income," will become a distant memory for more than 15 million taxpayers starting with the 2002 tax returns that will be due in the Spring of 2003. The IRS announced on Thursday that the supporting schedule on which individual taxpayers list interest and dividend income will no longer be required of taxpayers whose income from those sources is $1,500 or less.

Interest and dividend income will continue to be taxable, but such income that does not exceed $1,500 in any given year will need only to be reported on page one of the individual tax return instead of Schedule B, or Schedule 1 for those taxpayers who normally file Form 1040A. Previously, taxpayers with interest and dividend income exceeding $400 were required to file the extra schedule.

In addition to the millions of taxpayers who will no longer need to file Schedule B or Schedule 1, the IRS estimates that an additional 800,000 taxpayers will be able to use Form 1040EZ or the TeleFile system for filing their income tax returns instead of the more complicated 1040A or 1040 tax forms.

"We will continue our efforts to reduce the burden on taxpayers and simplify the tax code," said Pam Olsen, acting assistant Treasury secretary for tax policy.

The change will not affect taxpayers who are required to give positive answers to the questions about control over foreign bank accounts in foreign countries. These taxpayers will still be required to file Schedule B with their income tax returns.

Wait, there's more!
There's always more at AccountingWEB. We're an active community of financial professionals and journalists who strive to bring you valuable content every day. If you'd like, let us know your interests and we'll send you a few articles every week either in taxation, practice excellence, or just our most popular stories from that week. It's free to sign up and to be a part of our community.
Premium content is currently locked

Editor's Choice

As part of our continued effort to provide valuable resources and insight to our subscribers, we're conducting this brief survey to learn more about your personal experiences in the accounting profession. We will be giving away five $50 Amazon gift cards, and a $250 Amazon gift card to one lucky participant.
This is strictly for internal use and data will not be sold
or shared with any third parties.