Federal Tax Form 1040A Schedule 1 - 1040 A Interest and Dividends Instructions

General Instructions for Schedule 1 (Form 1040A)

Purpose of Schedule

Use Schedule 1 if any of the following apply.

• You had over $1,500 of taxable interest (fill in Part I).
• You received interest from a seller-financed mortgage and the buyer used the property as a personal residence (fill in Part I).
• You are claiming the exclusion of interest from series EE or I U.S. savings bonds issued after 1989 (fill in Part I).
• You received interest as a nominee (fill in Part I).
• You had over $1,500 of ordinary dividends or you received ordinary dividends as a nominee (fill in Part II).

If you need more space to list your interest or ordinary dividends, attach separate statements that are the same size as Schedule 1. Use the same format as lines 1 and 5, but show your totals on Schedule 1. Be sure to put your name and social security number on the statements and attach them at the end of your return.

Part I

Interest

Line 1

Report on line 1 all of your taxable interest. Interest should be shown on your Forms 1099-INT, Forms 1099-OID, or substitute statements. Include interest from series EE and I U.S. savings bonds. List each payer’s name and show the amount.

Seller-financed mortgages. If you sold your home or other property and the buyer used the property as a personal residence, list first any interest the buyer paid you on a mortgage or other form of seller financing. Be sure to show the buyer’s name, address, and social security number (SSN). You must also let the buyer know your SSN. If you do not show the buyer’s name, address, and SSN, or let the buyer know your SSN, you may have to pay a $50 penalty.

Nominees. If you received a Form 1099-INT that includes interest you received as a nominee (that is, in your name, but the interest actually belongs to someone else), report the total on line 1. Do this even if you later distributed some or all of this income to others. Under your last entry on line 1, put a subtotal of all interest listed on line 1. Below this subtotal, enter “Nominee Distribution” and show the total interest you received as a nominee. Subtract this amount from the subtotal and enter the result on line 2.

TIP: If you received interest as a nominee, you must give the actual owner a Form 1099-INT unless the owner is your spouse. You must also file a Form 1096 and a Form 1099-INT with the IRS. For more details, see the General Instructions for Forms 1099, 1098, 5498, and W-2G and Instructions for Forms 1099-INT and 1099-OID.

Line 3

Did you cash series EE or I U.S. savings bonds in 2007 that were issued after 1989? If you did and you paid qualified higher education expenses in 2007 for yourself, your spouse, or your dependents, you may be able to exclude part or all of the interest on those bonds. See Form 8815 for details.

Part II

Ordinary Dividends

Line 5

Report on line 5 all of your ordinary dividends. Ordinary dividends should be shown in box 1a of your Forms 1099-DIV or substitute statements. List each payer’s name and show the amount.

Nominees. If you received a Form 1099-DIV that includes ordinary dividends you received as a nominee (that is, in your name, but the ordinary dividends actually belong to someone else), report the total on line 5. Do this even if you later distributed some or all of this income to others. Under your last entry on line 5, put a subtotal of all ordinary dividends listed on line 5. Below this subtotal, enter “Nominee Distribution” and show the total ordinary dividends you received as a nominee. Subtract this amount from the subtotal and enter the result on line 6.

TIP: If you received dividends as a nominee, you must give the actual owner a Form 1099-DIV unless the owner is your spouse. You must also file a Form 1096 and a Form 1099-DIV with the IRS. For more details, see the General Instructions for Forms 1099, 1098, 5498, and W-2G and Instructions for Form 1099-DIV.