Form 1040 Schedule 1: Additional Income and Adjustments to Income (2019)

What Form 1040 Schedule 1 Is For

Schedule 1 is an attachment to your main tax return (Form 1040 or Form 1040-SR) that handles two important categories of tax information that don't fit on the standard two-page return. Think of it as the ""overflow"" form for your taxes—it catches income and deductions that need special attention.

The form has two main sections. Part I collects ""Additional Income"" beyond your regular wages, Social Security, and retirement distributions. This includes things like business income, unemployment benefits, gambling winnings, alimony you received, and rental income. Part II captures ""Adjustments to Income""—these are special deductions you can claim even if you don't itemize, such as student loan interest, IRA contributions, health savings account contributions, and educator expenses. These adjustments reduce your adjusted gross income (AGI), which is an important number that affects your eligibility for many tax benefits.

Schedule 1 was introduced as part of the 2018 tax form redesign to simplify the main Form 1040. Previously, many of these items appeared directly on the longer Form 1040. For 2019, if you have any of the income types or adjustments covered by Schedule 1, you must attach it to your return—you can't skip it even if the amounts seem small. The totals from Schedule 1 flow directly into your main Form 1040: the additional income total goes to line 7a, and the adjustments total goes to line 8a.

When You'd Use Form 1040 Schedule 1 (Including Late or Amended Filings)

You must file Schedule 1 if you have any income or deductions that belong in Part I or Part II. Many taxpayers need this schedule even if they think their taxes are simple. For example, if you received any unemployment compensation in 2019, sold items on a side business, had a small rental property, or made IRA contributions while working, you'll need Schedule 1.

When filing your original 2019 return (which was due April 15, 2020, unless you got an extension), Schedule 1 should be attached right behind your Form 1040. If you're filing late—meaning you missed the deadline and didn't get an extension—you still need to include Schedule 1 with your late return. The IRS will process it the same way, though you may face late-filing penalties if you owe taxes.

For amended returns, if you need to correct any income or adjustment that appears on Schedule 1, you'll file Form 1040-X (Amended U.S. Individual Income Tax Return). You have three years from the date you filed your original return, or two years from when you paid the tax (whichever is later), to amend and claim a refund. When you file Form 1040-X, you must include a corrected Schedule 1 showing the changes. The IRS processes amended returns differently than original returns—they typically take longer, often 8-12 weeks or more, because they require manual review.

Key Rules or Details for 2019

Several important rules govern Schedule 1. First, the virtual currency question that appears at the top of the form is mandatory—you must answer yes or no indicating whether you engaged in any virtual currency transactions during 2019. This question cannot be left blank.

For Part I (Additional Income), you can only report certain types of income that aren't already covered on Form 1040 itself. Regular wages, pensions, and Social Security benefits go on the main form, not Schedule 1. Business income must be reported using Schedule C first, then the net result flows to Schedule 1, line 3. You can't just write in a business income number without the supporting schedule. Similarly, alimony is only reportable as income if it was received under a divorce or separation agreement executed on or before December 31, 2018. Changes in tax law eliminated alimony as taxable income for divorces finalized after 2018.

For Part II (Adjustments to Income), there are contribution limits and income phase-outs that affect many deductions. The educator expense deduction is capped at $250 per eligible educator. Student loan interest deduction maxes out at $2,500 and phases out completely for higher earners (starting at $70,000 of modified AGI for single filers and $140,000 for joint filers). Traditional IRA contributions may be fully deductible, partially deductible, or not deductible at all depending on whether you or your spouse have a retirement plan at work and your income level. The health savings account deduction is only available if you have a qualifying high-deductible health plan.

When claiming alimony paid as an adjustment, you must provide your ex-spouse's Social Security number and the date of the original divorce or separation agreement. Without this information, the IRS will reject or delay your return. Moving expenses are only deductible for members of the Armed Forces on active duty moving due to a permanent change of station—the moving expense deduction for everyone else was eliminated starting in 2018.

Step-by-Step (High Level)

How to Complete Schedule 1

Start by gathering all your tax documents—1099 forms, W-2s, receipts for deductible expenses, and records of any business or rental activity. Before you begin Schedule 1, you should already have your name, Social Security number, and filing status determined for your main Form 1040.

Answer the virtual currency question at the top of the schedule first. Check ""Yes"" if you received, sold, exchanged, or otherwise acquired any financial interest in virtual currency during 2019; otherwise check ""No.""

Complete Part I (Lines 1-9): Work through lines 1 through 8, entering amounts for each type of additional income you received. Line 1 is for taxable refunds of state and local income taxes—use the worksheet in the instructions if you received a state tax refund but didn't itemize in the prior year. Line 2a is for alimony received under pre-2019 divorce agreements (enter the date of the agreement on line 2b). Lines 3 through 6 bring in income from other schedules you've completed: Schedule C for business income, Form 4797 for other gains and losses, Schedule E for rental real estate and partnership income, and Schedule F for farm income. Line 7 is for unemployment compensation shown on your Form 1099-G. Line 8 is a catch-all for ""Other income""—you must write in the type and amount for items like prizes, gambling winnings, jury duty pay, Alaska Permanent Fund dividends, or Medicaid waiver payments. Add lines 1 through 8 and enter the total on line 9. Transfer this line 9 amount to Form 1040, line 7a.

Complete Part II (Lines 10-22): Work through the adjustments to income section, entering amounts for deductions you qualify for. Line 10 is for educator expenses (up to $250 if you're an eligible K-12 teacher). Line 11 is for certain business expenses using Form 2106 (only for reservists, performing artists, and fee-basis government officials). Lines 12 and 13 require separate forms: Form 8889 for health savings account deductions and Form 3903 for military moving expenses. Lines 14, 15, and 16 are for self-employed individuals: the deductible part of self-employment tax, contributions to self-employed retirement plans, and self-employed health insurance premiums. Line 17 is for penalties on early savings withdrawals shown on your 1099-INT or 1099-OID. Lines 18a through 18c are for alimony paid (pre-2019 divorce agreements only)—you must include the recipient's SSN and date of the divorce agreement. Lines 19 through 21 cover common adjustments: IRA deduction, student loan interest (up to $2,500), and tuition and fees deduction (requires Form 8917). Line 22 is for other adjustments to income—you must write in the specific type using the codes from the instructions, such as ""MSA"" for Archer MSA deduction or ""Jury Pay"" for jury duty pay you gave to your employer. Add lines 10 through 21 (plus any line 22 adjustments) and enter the total on line 22. Transfer this amount to Form 1040, line 8a.

Review and attach: Double-check your math, make sure you've provided all required details (especially SSNs for alimony and proper descriptions for ""other"" categories), and attach Schedule 1 to your Form 1040 right after the main form pages.

Common Mistakes and How to Avoid Them

One of the most frequent errors is forgetting to attach Schedule 1 when it's required. If you have any of the income types or adjustments that belong on this schedule, you must include it—the IRS computers will flag your return as incomplete if the totals on Form 1040 don't match up with a missing schedule. Always review your documents to see if any trigger the need for Schedule 1.

Reporting income on the wrong line causes processing delays. Self-employment income from gig work or freelancing must be reported on Schedule C first, with the net profit flowing to Schedule 1, line 3—don't try to report it as ""Other income"" on line 8. Similarly, don't report hobby income as business income; if you're not engaged in the activity for profit, it generally goes on line 8 as other income, and you cannot deduct expenses against it (after 2017, miscellaneous itemized deductions were eliminated).

For alimony, taxpayers often claim deductions or report income for post-2018 divorces. Remember: alimony is only taxable to the recipient and deductible by the payer if the divorce or separation agreement was executed by December 31, 2018, and hasn't been modified to remove the alimony provisions. For divorces finalized in 2019 or later, alimony is not deductible by the payer and not taxable to the recipient. Another alimony mistake is failing to include the recipient's Social Security number (line 18b) or the divorce date (line 18c) when claiming the deduction—the IRS requires this information to match up the deduction with the income.

Overclaiming the IRA deduction is common. Many people assume they can deduct their full traditional IRA contribution, but if you or your spouse are covered by a retirement plan at work, your deduction may be reduced or eliminated based on your income. Use the worksheets in the instructions to calculate your allowable deduction. Similarly, taxpayers often forget that the educator expense deduction requires you to be a qualified educator—you must work at least 900 hours during the school year as a teacher, instructor, counselor, principal, or aide in a K-12 school. College professors don't qualify.

Not providing enough detail for ""Other income"" and ""Other adjustments"" will slow down processing. For line 8, you must write in what type of income it is (e.g., ""Gambling winnings $1,200"") rather than just entering a number. For line 22, you need to use the specific write-in codes from the instructions.

Math errors remain surprisingly common. Use a calculator or tax software to add lines 1-8 and lines 10-22. Many of the adjustments like IRA and student loan interest require separate worksheets to account for phase-outs—don't skip these calculations or you may overstate your deduction.

Finally, ignoring the state tax refund worksheet (line 1) is a mistake. If you received a state or local income tax refund in 2019, you don't necessarily have to report all of it as taxable income. If you didn't itemize deductions in the prior year (you took the standard deduction instead), the refund isn't taxable at all. Use the worksheet to figure the correct taxable amount.

What Happens After You File

Once you mail your Form 1040 with Schedule 1 attached or e-file it, the IRS begins processing your return. E-filed returns typically process within 21 days, while paper returns can take six weeks or longer. During processing, IRS computers scan your return and match the information against third-party reports like W-2s, 1099s, and Forms 1098. If everything matches and there are no errors or red flags, the return processes smoothly.

If you're due a refund, the IRS will issue it once your return is processed and approved. You can track your refund status using the ""Where's My Refund?"" tool on IRS.gov or the IRS2Go mobile app, usually starting 24 hours after e-filing or four weeks after mailing a paper return. Direct deposit is the fastest way to receive your refund—typically within 21 days of e-filing. Paper checks take longer, sometimes several weeks after the refund is approved.

The IRS may select your return for further review, which can delay processing. This doesn't necessarily mean you did something wrong—returns are flagged for many reasons, including random selection, unusual deductions compared to your income, or mismatches with third-party information. Schedule 1 items sometimes trigger extra scrutiny, particularly large business losses, substantial ""Other income"" that's vaguely described, or adjustments that don't match up with supporting forms.

If the IRS finds an error or needs clarification, you'll receive a notice in the mail. Common notices related to Schedule 1 include requests for proof of educator expenses, documentation of alimony agreements, or clarification about the nature of ""Other income"" reported on line 8. Respond promptly to any IRS notices with the requested documentation. If the IRS makes changes to your return, they'll send a notice explaining the adjustments and any impact on your refund or balance due.

If you owe additional tax and filed Schedule 1, the amount you owe will be calculated along with any interest and penalties. You'll receive a bill with payment instructions. The IRS offers payment plans if you can't pay the full amount immediately.

The IRS generally has three years from the date you filed your return (or the due date, if later) to assess additional taxes, and you have the same period to claim a refund by filing an amended return. Keep your tax records, including all supporting documents for Schedule 1 items, for at least three years (though seven years is safer if you have business income or rental property).

FAQs

Do I need Schedule 1 if I only have W-2 income and take the standard deduction?

Probably not, unless you have adjustments to income to claim. If your only income is from wages on a W-2, you don't report those wages on Schedule 1—they go directly on Form 1040. However, you still need Schedule 1 if you have any adjustments to income in Part II, such as student loan interest, IRA contributions, or educator expenses. These adjustments reduce your taxable income even when you take the standard deduction, so they're worth claiming.

I received unemployment benefits in 2019. Where do I report this?

Unemployment compensation goes on Schedule 1, line 7. You should receive Form 1099-G from your state workforce agency showing the total amount paid. Enter the amount from box 1 of Form 1099-G on line 7. Unemployment is fully taxable for federal income tax purposes, even though you may have elected to have taxes withheld from your payments.

Can I deduct my IRA contribution if I have a 401(k) at work?

It depends on your income. If you or your spouse are covered by a retirement plan at work (check box 13 on your W-2), your traditional IRA deduction may be reduced or eliminated depending on your modified adjusted gross income. For 2019, if you're single and covered by a workplace plan, the deduction begins phasing out at $64,000 of income and is completely gone at $74,000. For married filing jointly, if the spouse making the IRA contribution has a workplace plan, the phase-out range is $103,000 to $123,000. Even if you can't deduct your traditional IRA contribution, you can still make it—it just won't provide a current tax benefit. Use the worksheet in the Form 1040 instructions to figure your exact deduction.

What if I paid alimony under a divorce finalized in 2019—can I deduct it?

No. The Tax Cuts and Jobs Act eliminated the alimony deduction for divorce or separation agreements executed after December 31, 2018. If your divorce was finalized in 2019, alimony payments are not deductible by you and are not taxable income to your ex-spouse. This change only affects newer divorces. If your divorce agreement was in place by December 31, 2018, and hasn't been modified to specifically eliminate the alimony deduction and exclusion, you can still deduct alimony paid on Schedule 1, line 18a.

I forgot to include Schedule 1 with my original return. What should I do?

If you've already filed your return without Schedule 1 when you should have included it, you need to file an amended return using Form 1040-X. Attach the completed Schedule 1 to your Form 1040-X and explain the changes in the ""Explanation of Changes"" section. If Schedule 1 would increase your refund or decrease your tax owed, file the amendment as soon as possible—you have three years from the original filing date to claim a refund. If it would increase your tax owed, file immediately to minimize interest and penalties.

How do I know if I'm an eligible educator for the $250 deduction?

You qualify for the educator expense deduction if you were a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide for at least 900 hours during the school year. You must work in a school that provides elementary or secondary education as determined under state law. The expenses must be unreimbursed amounts you paid for books, supplies, computer equipment (including software and services), other equipment, and supplementary materials used in your classroom. Professional development courses also qualify. College instructors and professors do not qualify. If both you and your spouse are eligible educators filing jointly, you can each claim up to $250 (for a total of $500), but each person's expenses must be tracked separately.

What counts as ""Other income"" on line 8, and do I have to report small amounts?

Line 8 is for miscellaneous income that doesn't fit elsewhere on your return. Common examples include prizes and awards (except qualifying Olympic medals and USOC prize money), gambling winnings (even casual gambling), jury duty pay that you didn't give to your employer, Alaska Permanent Fund dividends, income from occasional rental of personal property, cancelled debts (with some exceptions), and certain distributions from health savings accounts or education savings accounts. Even small amounts should be reported—the IRS receives copies of many 1099 forms showing this income, and failing to report it can trigger a notice. You must write in the type of income next to line 8, not just the dollar amount. If you have several types, you can attach a separate statement listing each item.

Sources

Sources: All information sourced from official IRS publications at IRS.gov:

• 2019 Schedule 1 (Form 1040)
• 2019 Instructions for Form 1040 (including Schedule 1 instructions)
• About Form 1040-X (Amended Returns)

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