Schedule B

Hi all, my wife (US citizen) has had $0 income since living here in the UK, and after checking and double checking, she definitely has had no income (even interest etc) from the 2019 tax year onwards so didn't file IRS taxes for 2019 and technically she doesn't have to for 2020 (I have no connection to the US myself and am only a UK citizen). We were aware of FBAR but since she has only had less than £1000 in her bank account it has never been a concern.

We just learned about Schedule B and are panicking a little. Is this form required even if there is no tax return filing requirement? She has had a UK HSBC bank account since 2019. We really thought we had covered all bases and are now worried 

Schedule B is where interest is reported for us, UK and US.

If your wife is filing married filing separate then if she has as little as $5 income, interest or otherwise, then she is required to file, otherwise no need.

https://www.hrblock.com/tax-center/income/other-income/how-much-do-you-have-to-make-to-file-taxes/

Schedule B is where interest is reported for us, UK and US.

If your wife is filing married filing separate then if she has as little as $5 income, interest or otherwise, then she is required to file, otherwise no need.

https://www.hrblock.com/tax-center/income/other-income/how-much-do-you-have-to-make-to-file-taxes/

Thank you, she has less than $5 income from any source (it is $0) so she isn't required to file IRS taxes. We were just concerned where it says with Schedule B you need to file it if:

You had a financial interest in, or signature authority over, a financial account in a foreign country or you received a distribution from, or were a grantor of, or transferor to, a foreign trust. Part III of the schedule has questions about foreign accounts and trusts.

So, since she doesn't have to file a tax return or FBAR (as only tops around $1,400 in her UK bank account) she doesn't need to worry about Schedule B?

Thank you, she has less than $5 income from any source (it is $0) so she isn't required to file IRS taxes. We were just concerned where it says with Schedule B you need to file it if:

You had a financial interest in, or signature authority over, a financial account in a foreign country or you received a distribution from, or were a grantor of, or transferor to, a foreign trust. Part III of the schedule has questions about foreign accounts and trusts.

So, since she doesn't have to file a tax return or FBAR (as only tops around $1,400 in her UK bank account) she doesn't need to worry about Schedule B?

You only need to complete part III of schedule if you have over  $1,500 in interest and a foreign account.

https://www.irs.gov/pub/irs-pdf/f1040sb.pdf

just complete this part if you (a) had over $1,500 of taxable interest or ordinary dividends;

You only need to complete part III of schedule if you have over  $1,500 in interest and a foreign account.

https://www.irs.gov/pub/irs-pdf/f1040sb.pdf

Ahh, that makes sense we had misunderstood. Thanks so much that is a relief

Part III at the top says: “You must complete this part if you (a) had over $1,500 of taxable interest or ordinary dividends; (b) had a foreign account; or (c) received a distribution from, or were a grantor of, or a transferor to, a foreign trust.”

This type of language should be read as:
You must complete this part if you:
    (a) had over $1,500 of taxable interest or ordinary dividends; or
    (b) had a foreign account; or
    (c) received a distribution from, or were a grantor of, or a transferor to, a foreign trust.

It should not be read as an “and” between (a) and (b).  If you had to complete Part III only where you had a foreign account, then no one would ever answer “no” on question 7a.  This wouldn’t make any sense.

If your income is below the filing threshold for a Form 1040, then I don’t think you need to file at all, even if you have a foreign bank account.  On the other hand, if you have sufficient income to be required to file Form 1040, I think you have to fill out Schedule B, Part III, regardless of whether you have any dividends or interest income.

Part III at the top says: “You must complete this part if you (a) had over $1,500 of taxable interest or ordinary dividends; (b) had a foreign account; or (c) received a distribution from, or were a grantor of, or a transferor to, a foreign trust.”

This type of language should be read as:
You must complete this part if you:
    (a) had over $1,500 of taxable interest or ordinary dividends; or
    (b) had a foreign account; or
    (c) received a distribution from, or were a grantor of, or a transferor to, a foreign trust.

It should not be read as an “and” between (a) and (b).  If you had to complete Part III only where you had a foreign account, then no one would ever answer “no” on question 7a.  This wouldn’t make any sense.

If your income is below the filing threshold for a Form 1040, then I don’t think you need to file at all, even if you have a foreign bank account.  On the other hand, if you have sufficient income to be required to file Form 1040, I think you have to fill out Schedule B, Part III, regardless of whether you have any dividends or interest income.

Fully agree, and it sounds like you agree that since the subject of this thread had $0 in income  then they don’t need to file a tax return at all so Schedule B  will not be filed either.