How to Fill and File Schedules A and B

The IRS requires taxpayers to record their itemized deductions on Schedule A and report certain taxable interest and dividends on Schedule B. Schedules A and B are printed on opposite sides of the same sheet in IRS tax-form packages; both schedules are intended for use only with Form 1040. Depending on the circumstances, a taxpayer may file either, neither or both schedules.

Difficulty: Moderate

Instructions

Things You'll Need:

• Schedule A and B blank forms and instructions
• Form 1040

Prepare to Fill in Schedule A and B

1. Gather all necessary records and forms before filling out Schedules A and B, including those that will materially affect your adjusted gross income. Gather records for medical and dental expenses, state and local taxes, real estate taxes, home mortgage interest, gifts to charity, casualty and theft losses and unreimbursed employee expenses. Don't forget records for tax preparation fees, taxable interest income and dividends.

2. Complete the first page of Form 1040 to the first line on the second page. Record your "Adusted Gross Income" from this form on Schedule A. The amount of your adjusted gross income may limit the deductions you are able to take for certain expenses.

3. Read the Schedule A instructions concerning deductible medical and dental expenses, record your total on line 1 and enter your adjusted gross income to calculate your deduction on lines 2, 3 and 4. Your deduction is limited to medical and dental expenses in excess of 7.5 percent of your adjusted gross income.

Fill in and File Schedules A and B

4. Enter your total state, local, personal property and real-estate taxes in accordance with the Schedule A instructions on lines 5 to 8. Total them on line 9.

5. Follow your Schedule A instructions to record home mortgage and other interest, charitable gifts, casualty and theft losses and other deductions.

6. Total your deductions on line 28, and enter the total on line 40 of Form 1040, unless it is less than your standard deduction.

7. Enter interest and dividends, and list payers on Schedule B in accordance with Schedule B instructions.

8. Attach Schedule A and/or Schedule B to Form 1040. File the schedules with your other required forms and schedules.

Tips & Warnings

• Many taxpayers fill out Schedule A, but few actually file it. If the total of your itemized deductions on line 28 is less than your standard deduction, you will lower your taxes more if you just claim the standard deduction.
• If your adjusted gross income exceeds the threshold noted on line 28 on Schedule A, use the worksheet referenced there to calculate the amount you can record on line 28.