Form 1040 Schedule 1: Additional Income and Adjustments to Income (2022)

What the Form Is For

Schedule 1 is an attachment to Form 1040, 1040-SR, or 1040-NR that serves as a supplemental reporting form for income and deductions that don't fit directly on the main tax return. Think of it as an overflow sheet that captures financial details the standard form can't accommodate. The schedule is divided into two distinct parts: Part I reports additional income from various sources beyond wages, interest, and dividends, while Part II lists adjustments to income—commonly called ""above-the-line"" deductions because they reduce your adjusted gross income before you claim the standard or itemized deductions.

Part I captures diverse income streams including business profits and losses, unemployment compensation, rental property income, gambling winnings, alimony received under pre-2019 divorce agreements, jury duty pay, prizes and awards, and even wages earned while incarcerated. It also handles more complex reporting such as foreign earned income exclusions, distributions from Health Savings Accounts, and income from partnerships and S corporations.

Part II addresses adjustments that lower your taxable income, including educator expenses (up to $300 per eligible teacher, or $600 for married couples filing jointly), contributions to Health Savings Accounts, the deductible portion of self-employment tax, IRA contributions, student loan interest (up to $2,500), self-employed health insurance premiums, penalties on early savings withdrawals, and alimony paid under pre-2019 agreements. These adjustments are particularly valuable because they reduce your adjusted gross income, which can help you qualify for other tax benefits and credits.

The form's architecture reflects the tax code's complexity—it must accommodate everything from straightforward unemployment benefits to sophisticated calculations involving controlled foreign corporations. The total from Part I flows to line 8 of your Form 1040, increasing your total income, while the total from Part II goes to line 10, reducing your income to arrive at your adjusted gross income.

When You'd Use It (Late/Amended)

Filing with Your Original Return

You must file Schedule 1 with your original tax return if you have any reportable additional income or qualify for any adjustments to income during the 2022 tax year. The form should be attached when you file Form 1040 by the standard deadline of April 18, 2023 (extended from April 15 due to the Emancipation Day holiday in the District of Columbia).

Filing an Amended Return

If you discover after filing that you forgot to report additional income or failed to claim adjustments you were entitled to, you'll need to file an amended return using Form 1040-X. When amending, you must include a corrected Schedule 1 along with all other relevant forms and schedules, essentially treating it as if you were filing the original return fresh. The IRS now allows electronic filing of Form 1040-X for the current year and two prior tax periods, making the amendment process considerably faster than the traditional paper method.

Generally, you have three years from the date you filed your original return or two years from the date you paid the tax (whichever is later) to file an amended return claiming a refund. If you're amending to report additional income you initially forgot, there's no time limit—though it's wise to correct the oversight promptly to avoid penalties and interest charges.

Extensions and Special Deadlines

If you need more time to file your original return, you can request an automatic six-month extension using Form 4868, pushing your deadline to October 16, 2023. However, remember that an extension to file is not an extension to pay—any tax owed is still due by the original April deadline, and interest will accrue on unpaid balances. U.S. citizens and resident aliens living abroad or serving in the military outside the United States and Puerto Rico may qualify for an automatic two-month extension to June 15, 2023, without filing Form 4868, though interest will still apply to any unpaid tax from the original due date.

Key Rules or Details for 2022

Reporting Requirements and Documentation

Schedule 1 must be completed accurately and completely—partial or incorrect reporting can trigger IRS scrutiny or delay your refund. Every line that applies to your situation must be filled out with the corresponding documentation attached where required (such as Schedule C for business income, Schedule E for rental income, or Form 8889 for Health Savings Account deductions).

Alimony Rules: Pre-2019 vs. Post-2018 Agreements

For alimony, the critical rule involves the date of your divorce or separation agreement. Only agreements executed before January 1, 2019, allow the payer to deduct alimony payments on line 19a and require the recipient to report it as income on line 2a. Agreements finalized on or after that date follow new rules where alimony is neither deductible nor taxable. You must report the date of your original agreement on the form.

Income Reporting Principles

Income reporting follows the ""all income is taxable unless specifically excluded"" principle. Even if you didn't receive a Form 1099 or other information return, you're still responsible for reporting the income. Conversely, if you receive a Form 1099-K (issued by payment settlement entities and credit card companies) that's incorrect or includes personal items sold at a loss, you may need to report adjustments on line 8z to offset amounts that shouldn't be taxed.

Limits and Phaseouts for Adjustments

For adjustments to income, you cannot claim more than you're entitled to based on your specific circumstances. For example, the IRA deduction has income phase-out ranges that may reduce or eliminate your deduction if you or your spouse are covered by a retirement plan at work. The student loan interest deduction begins phasing out at modified adjusted gross income of $70,000 ($145,000 for married filing jointly) and is completely eliminated at $85,000 ($175,000 jointly). Educator expenses are limited to $300 per eligible educator ($600 if both spouses qualify), and you must work at least 900 hours during the school year in a school serving kindergarten through grade 12.

Self-Employment-Related Rules

Self-employment tax calculations require completing Schedule SE, and you can only deduct one-half of that tax on line 15. Self-employed health insurance premiums reported on line 17 cannot exceed your net profit from the business under which the insurance plan was established, and you cannot claim this deduction for any month you were eligible to participate in an employer-subsidized health plan (including through your spouse's employer).

Step-by-Step (High Level)

Step 1: Gather Your Records

Begin by gathering all your income documents—Forms 1099-MISC, 1099-NEC, 1099-G (unemployment), 1099-INT, W-2s showing tips, and any records of other income sources. Also collect documentation for potential adjustments: receipts for educator expenses, Forms 1098-E for student loan interest, Form 1099-SA for HSA distributions, and records of self-employed health insurance premiums and retirement contributions.

Step 2: Complete Part I — Additional Income

Start with Part I, working through lines 1 through 10. Report any taxable state and local tax refunds on line 1—this typically applies if you itemized deductions in the prior year and received a refund in 2022. If you received alimony under a pre-2019 agreement, enter it on line 2a and the agreement date on line 2b. Complete and attach the relevant schedules for business income (Schedule C, line 3), other gains or losses (Form 4797, line 4), rental real estate and partnerships (Schedule E, line 5), and farm income (Schedule F, line 6).

Report unemployment compensation from box 1 of Form 1099-G on line 7. Lines 8a through 8z capture miscellaneous income—read each line carefully to determine what applies. Common items include gambling winnings on line 8b, jury duty pay on line 8h, prizes and awards on line 8i, and stock options on line 8k. If you have income that doesn't fit any specific category, describe it on line 8z. Add lines 8a through 8z and enter the total on line 9, then combine lines 1 through 7 and 9 to get your total additional income on line 10, which transfers to Form 1040, line 8.

Step 3: Complete Part II — Adjustments to Income

Move to Part II for adjustments. If you're an eligible educator, enter up to $300 of qualified expenses on line 11 ($600 if married filing jointly with both spouses as eligible educators). Line 12 captures specific employment expenses for reservists, performing artists, and fee-basis government officials—attach Form 2106. Calculate your Health Savings Account deduction using Form 8889 and enter it on line 13.

Military members who moved due to a permanent change of station complete Form 3903 and enter the deduction on line 14. If you're self-employed, calculate the deductible portion of your self-employment tax using Schedule SE and enter half that amount on line 15. Self-employed retirement plan contributions go on line 16, and self-employed health insurance premiums go on line 17 (after confirming you weren't eligible for employer-sponsored coverage).

Report any penalties for early withdrawal of savings shown on Forms 1099-INT or 1099-OID on line 18. If you paid alimony under a pre-2019 agreement, enter the amount on line 19a, your recipient's Social Security number on line 19b, and the agreement date on line 19c. Calculate your IRA deduction using the worksheet in the instructions and enter it on line 20. Use the student loan interest deduction worksheet for line 21, with a maximum deduction of $2,500.

Line 23 is for Archer MSA deductions (complete Form 8853). Lines 24a through 24z capture other adjustments such as jury duty pay you gave to your employer (line 24a), attorney fees for certain discrimination claims or IRS whistleblower awards (lines 24h and 24i), and the housing deduction from Form 2555 (line 24j). Add lines 24a through 24z and enter the total on line 25. Finally, add lines 11 through 23 and 25 to get your total adjustments on line 26, which transfers to Form 1040, line 10.

Common Mistakes and How to Avoid Them

Mistake 1: Forgetting to Attach Schedule 1

The most frequent error is forgetting to attach Schedule 1 when required. If you have any of the income or adjustment types listed on the form, you must complete and attach it—even if the amounts seem small. E-filing software typically catches this, but paper filers sometimes submit Form 1040 alone, causing processing delays.

Mistake 2: Math Errors and Skipping Worksheets

Math errors plague Schedule 1, particularly in calculating complex adjustments like the IRA deduction or student loan interest deduction. Use the worksheets provided in the IRS instructions rather than estimating. These worksheets account for income phase-outs and other limitations that may reduce your deduction. Double-check all addition and subtraction, especially when combining the numerous lines in the ""Other income"" and ""Other adjustments"" sections.

Mistake 3: Misclassifying Taxable vs. Non-Taxable Income

Many taxpayers incorrectly report income that's actually non-taxable or fail to report taxable income thinking it's exempt. For example, child support payments are never taxable income, and you shouldn't report them anywhere on Schedule 1. Conversely, unemployment compensation is fully taxable even though it may not feel like regular income. Prizes and awards are generally taxable, though certain Olympic and Paralympic medals and USOC prize money may be excluded if your adjusted gross income doesn't exceed $1 million ($500,000 if married filing separately).

Mistake 4: Alimony Confusion After the 2019 Rule Change

Alimony confusion is rampant due to the 2019 rule change. Check your divorce or separation agreement date carefully. Only agreements executed before January 1, 2019, use the old rules where alimony is deductible by the payer and taxable to the recipient. If your agreement was modified after 2018 to expressly adopt the new rules, the new non-deductible/non-taxable treatment applies regardless of the original agreement date.

Mistake 5: Misusing Educator and Self-Employed Health Insurance Deductions

For educator expenses, some teachers claim the deduction without meeting all requirements. You must be a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide who worked at least 900 hours during the school year. The $300 limit ($600 jointly) applies even if you spent far more, and only unreimbursed expenses for books, supplies, equipment, and professional development qualify—general clothing or commuting costs don't count.

The self-employed health insurance deduction trips up many taxpayers who claim it even when they were eligible for employer-sponsored coverage (including through a spouse's plan) for any month. You cannot claim the deduction for months when you could have participated in an employer plan, even if you didn't actually enroll. Additionally, the deduction cannot exceed the net profit from the business under which the insurance plan was established.

Mistake 6: IRA Deduction and Coverage Confusion

IRA deduction errors often stem from misunderstanding the rules when you or your spouse have a retirement plan at work. Being ""covered"" by a plan doesn't necessarily mean you contributed—if your employer offers a 401(k), you're considered covered even if you didn't participate. Use the worksheets to determine if your income falls within the phase-out range that reduces or eliminates your deduction.

Mistake 7: Missing Required Supporting Forms

Omitting required documentation causes processing delays. When reporting business income on line 3, you must attach Schedule C. Rental income on line 5 requires Schedule E. HSA deductions on line 13 require Form 8889. Failing to include these forms means the IRS cannot verify your numbers, potentially resulting in rejected deductions or requests for additional information.

What Happens After You File

IRS Processing and Matching

Once you submit your return with Schedule 1 attached, the IRS begins processing. E-filed returns are generally processed within 21 days, with refunds issued soon after if your return is error-free. Paper returns take significantly longer—the IRS is currently processing paper Form 1040 returns received in September 2025, creating a substantial backlog. This processing time doesn't include returns requiring error correction or special handling.

The IRS matches the income you report on Schedule 1 against information returns filed by payers (Forms 1099, W-2, etc.). If there's a discrepancy—you reported less income than the IRS received on information returns—you'll likely receive a CP2000 notice proposing changes to your return. This isn't technically an audit, but rather an automated matching process. You have the right to respond with an explanation or documentation showing the IRS records are incorrect or that you reported the income elsewhere on your return.

Verifying Adjustments and Deductions

For adjustments to income, the IRS may request documentation to verify your eligibility. If you claimed educator expenses, you might need to provide receipts and proof of employment. Self-employed health insurance deductions may require premium payment records and evidence that you weren't eligible for other coverage. Student loan interest deductions might need Form 1098-E or statements from your lender.

Refunds, Balances Due, and Notices

If you're due a refund, you can track its status using the ""Where's My Refund?"" tool on IRS.gov, typically available 24 hours after e-filing or four weeks after mailing a paper return. Direct deposit is the fastest way to receive your refund, usually arriving within three weeks of the IRS receiving an error-free return. Paper checks take longer—sometimes several weeks beyond the typical processing time.

If you owe additional tax, the IRS will send a notice detailing the amount due and providing payment instructions. Interest accrues from the original filing deadline (April 18, 2023, for 2022 returns) regardless of any extension to file. Late payment penalties also apply if you didn't pay at least 90% of your tax liability by the original deadline.

Examinations and Amended Returns

Should the IRS examine your return more closely, you'll receive a notice specifying which items are being questioned and what documentation you need to provide. Respond promptly to all IRS correspondence, as deadlines are strict and missing them can result in automatic adjustments against you. Keep copies of your return, Schedule 1, all supporting documents, and related forms for at least three years—longer if you have specific situations like unreported income or bad debt deductions.

If you filed an amended return (Form 1040-X) with a corrected Schedule 1, expect a longer wait. Amended returns take up to three weeks to appear in the IRS system and generally require 8 to 12 weeks to process, though some may take up to 16 weeks. You can check the status using the ""Where's My Amended Return?"" tool on IRS.gov approximately three weeks after filing.

FAQs

Do I need to file Schedule 1 if I only have one small item of additional income or a single adjustment?

Yes, if you have any additional income or adjustment that belongs on Schedule 1, you must complete and attach the form to your return regardless of the amount. There's no minimum threshold or de minimis exception. Even $50 in unemployment compensation or $100 in educator expenses requires filing the schedule. E-filing software will automatically generate Schedule 1 when you enter qualifying items, but paper filers must remember to include it manually.

Can I deduct the full amount of my self-employment tax on Schedule 1, line 15?

No, you can only deduct one-half (50%) of your self-employment tax. First, complete Schedule SE to calculate your total self-employment tax, then multiply that amount by 0.5 to determine your deduction for line 15. This deduction compensates for the employer portion of Social Security and Medicare taxes that self-employed individuals must pay, making the tax treatment more comparable to traditional employees whose employers pay half of these taxes.

I received Form 1099-K for items I sold online at a loss, like used furniture and clothing. How do I handle this on Schedule 1?

Personal items sold for less than you paid for them generally result in a non-deductible loss, and the sale proceeds aren't taxable income. If the Form 1099-K is incorrect, contact the issuer to correct it—the IRS cannot fix incorrect forms. If correction isn't possible, report an offsetting adjustment on Schedule 1, line 8z (""Other income"") as a negative number with a clear description like ""Form 1099-K personal items sold at loss."" This prevents the IRS from treating the proceeds as unreported taxable income.

My divorce was finalized in 2020, but the separation agreement is from 2018. Can I deduct the alimony I paid in 2022?

Yes, the critical date is when the divorce or separation agreement was executed, not when the divorce was finalized. Since your agreement is from 2018 (before January 1, 2019), you can deduct alimony payments on Schedule 1, line 19a, and your ex-spouse must report it as income on line 2a. Make sure to enter your ex-spouse's Social Security number on line 19b and the agreement date on line 19c. If your 2018 agreement was modified after December 31, 2018, and the modification expressly states that the new non-deductible/non-taxable rules apply, then you cannot deduct payments—the agreement terms control.

I'm a teacher, but my school reimbursed me for some of my classroom expenses. Can I still claim the educator expense deduction?

You can only deduct unreimbursed qualified expenses. If your school reimbursed $150 of your expenses and you spent $500 total, you can claim up to $300 (the maximum) of the remaining $350. The expenses must be for books, supplies, computer equipment (including software and services), other equipment, and supplementary materials used in the classroom, plus professional development courses related to your curriculum. You must have worked at least 900 hours as a kindergarten through grade 12 teacher, instructor, counselor, principal, or aide during the school year.

What's the difference between adjustments to income on Schedule 1 and itemized deductions on Schedule A?

Adjustments to income (Schedule 1, Part II) are ""above-the-line"" deductions that reduce your adjusted gross income regardless of whether you itemize or claim the standard deduction. Itemized deductions (Schedule A) are ""below-the-line"" deductions you can only benefit from if your total itemized deductions exceed the standard deduction for your filing status. Adjustments to income are generally more valuable because they lower your AGI, which can help you qualify for other tax benefits that phase out at higher income levels, whereas itemized deductions only help if you don't take the standard deduction.

I contributed to an IRA, but my employer offers a 401(k) plan. Can I still deduct my IRA contribution on Schedule 1?

It depends on your income and whether you participated in the 401(k). If you or your spouse are covered by a retirement plan at work (which includes merely being eligible for a 401(k), even if you didn't contribute), your IRA deduction may be reduced or eliminated based on your modified adjusted gross income. For 2022, if you're single and covered by a workplace plan, the phase-out range is $68,000 to $78,000; for married filing jointly, it's $109,000 to $129,000 if the spouse making the IRA contribution is covered by a plan, or $204,000 to $214,000 if only the other spouse is covered. Use the IRA deduction worksheet in the Form 1040 instructions to calculate your allowable deduction.

All information based on official IRS Form 1040 instructions and Schedule 1 form for tax year 2022, along with related IRS guidance on amended returns and processing timelines.

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