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

What the Form Is For

Schedule 1 is a two-page supplement to your main Form 1040 tax return that captures income and deductions that don't fit on the basic 1040 form itself. Think of your Form 1040 as the cover page of your tax story—it shows your wages, standard deduction, and basic tax calculation. Schedule 1 is where you tell the IRS about the extra chapters: side business income, unemployment benefits, alimony you received or paid, student loan interest you can deduct, and dozens of other financial details that make your tax situation unique.

The form has two main sections. Part I, ""Additional Income,"" reports earnings beyond your regular W-2 wages—things like freelance work, rental property income, gambling winnings, jury duty pay, and even prizes you won. Part II, ""Adjustments to Income,"" lists special deductions you can claim even if you don't itemize—educator expenses, contributions to retirement accounts, self-employment tax deductions, and penalties you paid for early withdrawal from savings accounts. These adjustments reduce your adjusted gross income (AGI), which is a critical number that determines eligibility for many tax benefits.

You'll need Schedule 1 if your financial life extends beyond a simple paycheck. For example, if you drove for a rideshare company, rented out a vacation property, cashed out savings early and paid a penalty, received unemployment compensation, or paid student loan interest, Schedule 1 is where these items get reported. The total additional income from Part I flows to line 8 of your Form 1040, while the total adjustments from Part II flow to line 10, directly reducing your taxable income before you calculate your final tax bill.

When You'd Use Schedule 1

For your original 2022 tax return, you would have filed Schedule 1 alongside your Form 1040 by April 18, 2023 (the deadline was pushed from April 15 because of the Emancipation Day holiday in Washington, D.C.). If you're filing late because you requested an extension using Form 4868, your deadline would have been October 16, 2023—but remember, an extension to file isn't an extension to pay. Any taxes owed were still due by the original April deadline, or you'll face interest and potential penalties.

If you need to amend your 2022 return to add or correct information on Schedule 1, you'll use Form 1040-X (Amended U.S. Individual Income Tax Return). Perhaps you forgot to report freelance income, or you discovered you're eligible for a student loan interest deduction you didn't claim originally. 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 and claim a refund. For most 2022 returns filed by the April 2023 deadline, this means you have until April 2026 to amend.

When filing Form 1040-X, you must attach a corrected Schedule 1 showing the proper amounts. The IRS now allows electronic filing of amended returns for current and prior two-year periods, which speeds up processing considerably compared to paper filing. Be sure to explain in Part III of Form 1040-X exactly what you're changing and why—the IRS needs this explanation to process your amendment efficiently.

Key Rules

Several important rules govern Schedule 1. First, you must attach Schedule 1 to your Form 1040 or 1040-SR; it cannot be filed separately. The totals from Schedule 1 are transferred directly to specific lines on your main tax return, so the forms must be submitted together as a complete package.

For Part I income reporting, accuracy is crucial because the IRS receives copies of many forms you receive—such as Form 1099-G for unemployment compensation, Form 1099-MISC for freelance income, and Schedule K-1 from partnerships or S corporations. The IRS computer systems match what you report against what employers and financial institutions report. Omitting income that was reported to the IRS will trigger notices and potentially penalties.

The alimony rules deserve special attention because they changed dramatically. If your divorce or separation agreement was executed before January 1, 2019, and wasn't modified after 2018 to specifically apply the new tax law, alimony you received is taxable (report on line 2a) and alimony you paid is deductible (report on line 19a). However, for agreements dated 2019 or later, alimony is neither taxable to the recipient nor deductible by the payer. You must enter the recipient's Social Security number and the date of the original divorce or separation agreement when claiming the deduction.

For Part II adjustments, several have income limitations. The student loan interest deduction (line 21) phases out for modified adjusted gross incomes above $70,000 for single filers and $145,000 for married couples filing jointly, disappearing entirely at $85,000 and $175,000 respectively. The maximum deduction is $2,500. Similarly, if you're claimed as a dependent on someone else's return, many adjustments—including the student loan interest deduction—aren't available to you at all.

Self-employed individuals have unique opportunities on Schedule 1. The deductible portion of your self-employment tax (line 15) equals half of the self-employment tax calculated on Schedule SE. Self-employed health insurance premiums (line 17) may be fully deductible if you weren't eligible for employer-sponsored coverage through your own or your spouse's employer. Contributions to self-employed retirement plans like SEP-IRAs (line 16) can be substantial—up to 25% of your net self-employment income for SEPs, with specific calculations detailed in IRS Publication 560.

The educator expense deduction (line 11) allows eligible teachers and school employees to deduct up to $300 of unreimbursed expenses for classroom supplies, books, and equipment. If you're married filing jointly and both spouses are educators, you can deduct up to $600 total (but no more than $300 per person).

Step-by-Step (High Level)

Step 1: Gather Your Documents

Collect all relevant tax forms and receipts before starting. For Part I income, you'll need forms like 1099-G (unemployment), 1099-MISC or 1099-NEC (freelance/contract work), Schedule K-1 (partnership/S corporation income), and records of any other income not on a W-2. For Part II adjustments, gather Form 1098-E (student loan interest), receipts for educator expenses, health insurance premium statements if self-employed, and documentation of IRA or retirement plan contributions.

Step 2: Complete Part I—Additional Income (Lines 1 Through 10)

Start with line 1 if you received a state or local income tax refund in 2022. You'll only report this if you itemized deductions on your prior year return and received a tax benefit from the deduction. Use the worksheet in the instructions to determine the taxable amount.

Report alimony received on line 2a for pre-2019 agreements. Enter your ex-spouse's Social Security number in box 2b and the date of the original agreement in box 2c. For business income or loss, complete Schedule C first and transfer the result to line 3. Similarly, real estate rentals and royalties require Schedule E (line 5), farm income requires Schedule F (line 6), and certain business asset sales require Form 4797 (line 4).

Unemployment compensation (line 7) comes directly from Box 1 of Form 1099-G. Lines 8a through 8z cover miscellaneous income items. Common ones include gambling winnings (8b)—note that gambling losses are claimed elsewhere as an itemized deduction, not here. Report jury duty pay on line 8h, prizes and awards on line 8i, and scholarship or fellowship grants not reported on W-2 on line 8r. For anything that doesn't fit the specific categories, use line 8z ""Other income"" and describe the type and amount. Add lines 8a through 8z and enter the total on line 9. Combine lines 1 through 7 and line 9; enter this total on line 10 and also on Form 1040, line 8.

Step 3: Complete Part II—Adjustments to Income (Lines 11 Through 26)

Educators enter classroom expenses on line 11 (maximum $300). Reservists, performing artists, and fee-basis government officials use line 12 with Form 2106. If you contributed to a Health Savings Account, complete Form 8889 and enter the deduction on line 13. Active-duty Armed Forces members moving due to military orders can deduct moving expenses on line 14 using Form 3903.

Line 15 is for the deductible part of self-employment tax—complete Schedule SE first and multiply your self-employment tax by 0.5 (50%). Self-employed retirement plan contributions go on line 16. Line 17 is for self-employed health insurance premiums; use the worksheet in the instructions to calculate the allowable amount. If you paid a penalty for early withdrawal from a certificate of deposit or savings account, enter it on line 18—the bank should provide Form 1099-INT or 1099-OID showing this amount.

For alimony paid (line 19a) under pre-2019 agreements, enter your ex-spouse's Social Security number (19b) and the original agreement date (19c). IRA contributions go on line 20—use the worksheet in the instructions to calculate your deduction limit based on your income and whether you're covered by a workplace retirement plan. Student loan interest (line 21) is entered from Form 1098-E, subject to the $2,500 maximum and income phase-out rules.

Lines 24a through 24z handle miscellaneous adjustments. If you served on jury duty and had to give your jury pay to your employer because they continued paying your salary, deduct the jury pay on line 24a. Line 24h covers attorney fees for certain discrimination claims, and line 24j is for housing deductions for those living abroad (from Form 2555). Add lines 24a through 24z and enter the total on line 25. Finally, add lines 11 through 23 and line 25; enter this grand total on line 26 and also on Form 1040, line 10.

Step 4: Transfer Totals and Attach to Form 1040

Double-check that the line 10 amount from Schedule 1 Part I matches what you entered on Form 1040, line 8. Similarly, verify that the line 26 amount from Schedule 1 Part II matches Form 1040, line 10. Attach Schedule 1 to your Form 1040 behind the main form, before other schedules like Schedule A or Schedule C.

Common Mistakes and How to Avoid Them

One frequent error is forgetting to report unemployment compensation on line 7. Every dollar of unemployment benefits is taxable and must be reported. The IRS receives Form 1099-G showing your unemployment income, so omitting it guarantees a mismatch notice. Review your records carefully to catch all 1099-G forms.

Another common mistake involves Form 1099-K. If you sold personal items at a loss (like used furniture through an online marketplace), you might receive a 1099-K even though you have no taxable income from the transaction. Starting in 2022, third-party payment processors issue 1099-K forms more broadly. If the 1099-K is incorrect or reflects non-taxable transactions, report the amount on line 8z as ""Form 1099-K Personal Item Sold at a Loss"" and then show a corresponding negative adjustment on line 24z with the same description. This zeros out the amount while explaining the situation to the IRS.

Many taxpayers overlook the educator expense deduction (line 11). If you're a teacher, instructor, counselor, principal, or aide working at least 900 hours in a school, you can deduct up to $300 of unreimbursed expenses without itemizing. Keep receipts for books, supplies, computer equipment, and professional development courses.

The self-employed health insurance deduction (line 17) is frequently miscalculated. You can only deduct premiums paid for months you weren't eligible for employer-sponsored coverage through your own or your spouse's employer. Additionally, the deduction can't exceed your net self-employment income. Use the worksheet in the instructions to calculate the correct amount rather than simply entering your total premium payments.

For the student loan interest deduction (line 21), remember that only interest counts—principal payments don't. Also, the $2,500 limit applies even if you paid more interest. If your income exceeds the phase-out threshold ($70,000 single, $145,000 married filing jointly), your deduction may be reduced or eliminated. The lender should send Form 1098-E showing the interest paid, but if you paid less than $600 in interest, they're not required to send the form. You still must report the deductible amount.

Failing to include required Social Security numbers is another common error. When claiming alimony received or paid, you must provide the ex-spouse's SSN in boxes 2b or 19b respectively. Similarly, when reporting the original divorce or separation agreement date in boxes 2c or 19c, be sure to use the date of the original agreement, not the date of any subsequent modifications unless the modification specifically changed the alimony terms to apply the post-2018 tax law.

What Happens After You File

Once you file your Form 1040 with Schedule 1 attached, the IRS processes your return. E-filed returns are typically processed within 21 days, while paper returns take six weeks or longer. You can check your refund status using the ""Where's My Refund?"" tool on IRS.gov, which updates about 24 hours after you e-file or four weeks after you mail a paper return.

The IRS computers compare the income you reported on Schedule 1 against information returns filed by employers, banks, and other payers. If the IRS identifies a discrepancy—for example, you reported $5,000 in freelance income but a business filed a 1099-NEC showing they paid you $8,000—you'll receive a notice, typically a CP2000, proposing additional tax, interest, and possible penalties. You'll have an opportunity to respond and explain the discrepancy or provide additional documentation.

For adjustments to income in Part II, the IRS may request documentation during processing or through a later audit. For instance, if you claimed a large educator expense deduction, you should retain receipts proving you're an eligible educator and the expenses were unreimbursed and work-related. Keep records for at least three years from the filing deadline, or longer if certain conditions apply.

If you're due a refund, the fastest way to receive it is through direct deposit to your bank account—refunds typically arrive in 21 days for e-filed returns. Paper checks take several additional weeks. If you owe tax, payment is due by the filing deadline regardless of when you file. If you filed an extension to October 16, you still had to pay at least 90% of your tax liability by April 18 to avoid underpayment penalties.

The IRS may audit your return, though most returns aren't audited. Schedule 1 items that often attract scrutiny include large business losses, substantial cash transactions, high charitable deductions relative to income, and significant fluctuations in income from year to year. If selected for audit, you'll receive written notice by mail—the IRS doesn't initiate audits by phone or email. Respond promptly with requested documentation and consider consulting a tax professional if the issues are complex.

FAQs

Can I deduct student loan interest if my parents paid the loan?

Generally, no. You can only deduct student loan interest if you're legally obligated to pay the loan and you actually made the payments. If your parents made payments on your behalf for a loan in your name, they're considered gifts to you, and you can deduct the interest. However, if the loan is in your parents' names, neither you nor they can deduct the interest on your return.

What if I received a 1099-K for selling personal items on eBay or Facebook Marketplace?

Starting in 2022, payment processors must issue Form 1099-K for transactions exceeding $600, even for personal item sales. If you sold personal belongings at a loss (for less than you originally paid), this isn't taxable income. Report the 1099-K amount on Schedule 1, line 8z as ""Form 1099-K Personal Item Sold at a Loss"" and report an offsetting negative amount on line 24z with the same description. If the items sold for a gain, you may owe capital gains tax.

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

Not necessarily. Schedule 1 is only required if you have income types beyond what's reported directly on Form 1040 (like self-employment or unemployment income) or if you're claiming adjustments to income (like student loan interest or IRA contributions). If your only income is wages from a W-2 and you're taking the standard deduction without any adjustments to income, you can file just Form 1040 without Schedule 1.

Is alimony I paid in 2022 deductible?

It depends on when your divorce or separation agreement was executed. If the agreement is dated before January 1, 2019, and wasn't modified after 2018 to specifically reference the new tax law, your alimony payments are deductible on Schedule 1, line 19a. You must include your ex-spouse's Social Security number and the date of the original agreement. For agreements dated 2019 or later, alimony is neither deductible by the payer nor taxable to the recipient.

Can I deduct health insurance premiums if I'm self-employed?

Yes, if you had a net profit from self-employment and weren't eligible to participate in an employer-sponsored health plan through your own or your spouse's employer. Report the deduction on Schedule 1, line 17. The deduction is limited to your net self-employment income minus the deductible part of your self-employment tax and any retirement plan contributions. Use the worksheet in Form 1040 instructions to calculate the exact amount.

What's the difference between adjustments to income and itemized deductions?

Adjustments to income (Schedule 1, Part II) reduce your adjusted gross income (AGI) and are available whether you itemize or take the standard deduction. They're often called ""above-the-line"" deductions because they appear before the AGI line on your tax return. Itemized deductions (Schedule A) are ""below-the-line"" deductions that you can only claim if you forgo the standard deduction. Adjustments to income are generally more valuable because they reduce your AGI, which affects eligibility for other tax benefits.

How do I report unemployment compensation if I repaid some of it in the same year?

Report the full amount of unemployment compensation shown on Form 1099-G on Schedule 1, line 7. If you repaid any of it in the same year you received it, subtract the repayment from the amount on Form 1099-G before entering it on line 7. If you repaid more than $3,000 in a later year, you may have a choice between claiming a deduction or taking a credit. See IRS Publication 525 for detailed instructions on reporting unemployment compensation.

Sources: All information in this summary comes from official IRS.gov publications, specifically the 2022 Form 1040 Schedule 1 and 2022 Instructions for Form 1040 and Schedules 1-3.

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