Form 1040 Schedule 1: Additional Income and Adjustments to Income (2024)

What Form 1040 Schedule 1 Is For

Schedule 1 is a supplemental form you attach to your main tax return (Form 1040 or 1040-SR) when you need to report certain types of income that don't fit on the main form or claim specific deductions that reduce your taxable income. Think of it as an overflow page that captures financial details your basic tax form doesn't cover.

The schedule has two distinct parts. Part I handles ""Additional Income""—money you received during the year from sources like side businesses, unemployment benefits, rental properties, or gambling winnings. Part II covers ""Adjustments to Income""—special deductions you can claim even if you don't itemize, such as student loan interest, contributions to retirement accounts, or classroom supplies purchased by teachers. These adjustments directly reduce your adjusted gross income (AGI), which is the number that determines your eligibility for many tax benefits.

Not everyone needs Schedule 1. If your only income comes from regular wages shown on your W-2 and you don't have any special deductions to claim, you can skip this form entirely. The IRS designed the numbered schedules to keep the main Form 1040 simple while providing space for more complex tax situations.

When You'd Use Form 1040 Schedule 1

Original filing for 2024

You'll use Schedule 1 with your original tax return filed by the April 15, 2025 deadline if any of the situations in Parts I or II apply to you. For 2024, common reasons include receiving unemployment compensation, running a business or farm (even a side gig), earning rental income, taking educator expense deductions, or claiming student loan interest. Starting in 2024, there's also a special reporting area at the top of Schedule 1 for amounts from Form 1099-K that were reported in error or for personal items you sold at a loss—this prevents you from paying taxes on transactions that shouldn't be taxed.

Amended returns

If you discover after filing that you forgot to include income that belongs on Schedule 1 or missed claiming an adjustment you were entitled to, you'll need to file an amended return using Form 1040-X. However, you typically don't need to amend for simple math errors—the IRS will correct those automatically. You should amend if you forgot to report business income, unemployment benefits, or a substantial deduction like an IRA contribution. The IRS generally allows three years from your original filing date (or two years from when you paid the tax, whichever is later) to file an amendment and claim a refund.

Late filing and extensions

If you're filing late and need Schedule 1, attach it to your late return just as you would if filing on time. You can request an automatic six-month extension to file by submitting Form 4868 by the April deadline, but remember that an extension to file isn't an extension to pay—interest accrues on unpaid taxes from the original due date IRS.gov.

Key Rules You Need to Know

How Schedule 1 connects to Form 1040

Schedule 1 must be physically attached to your Form 1040 or 1040-SR—it's not a standalone document. The totals from Schedule 1 flow directly onto your main tax return: the additional income total (line 10) goes to Form 1040 line 8, and the adjustments total (line 26) goes to Form 1040 line 10. These numbers then affect your AGI, which appears on Form 1040 line 11.

Reporting additional income in Part I

For Part I income reporting, you must report all taxable income even if you didn't receive a tax form for it. This includes cash payments for freelance work, bartering transactions, unemployment compensation, and prizes or awards. Business income requires Schedule C attachment; rental income needs Schedule E; and farm income requires Schedule F. Starting in 2024, if you received digital assets like cryptocurrency as ordinary income and it's not reported elsewhere on your return, you'll enter that on line 8v.

Claiming adjustments to income in Part II

Part II adjustments follow specific eligibility rules. The educator expense deduction allows eligible K-12 teachers to deduct up to $300 ($600 if married filing jointly and both are educators) for unreimbursed classroom supplies. Student loan interest is deductible up to $2,500, but the deduction phases out at higher income levels (starting at $80,000 for single filers, $165,000 for joint filers in 2024). IRA contribution deductions depend on whether you or your spouse have access to a workplace retirement plan and your income level. Self-employed individuals can deduct half of their self-employment tax calculated on Schedule SE, plus self-employed health insurance premiums and contributions to self-employed retirement plans.

Form 1099-K reporting rules for 2024

The new Form 1099-K rules for 2024 require special attention. Payment processors must send you Form 1099-K if your business transactions exceed $5,000 (this threshold will drop to $2,500 in 2025 and $600 in 2026). If you receive a 1099-K that includes personal transactions or items sold at a loss, report these amounts in the special entry space at the top of Schedule 1 to avoid paying tax on non-taxable transactions IRS.gov.

Step-by-Step (High Level)

Step 1: Gather your documents

Start by gathering all relevant documents: Forms 1099-MISC, 1099-NEC, 1099-G (unemployment), 1099-K, W-2s showing Medicaid waiver payments, and records of any additional income or qualifying expenses for adjustments. Pull together receipts for educator expenses, student loan interest statements (Form 1098-E), IRA contribution records, and documentation of health insurance premiums if you're self-employed.

Step 2: Fill out the top portion of Schedule 1

Fill out the top portion of Schedule 1 with your name exactly as shown on Form 1040 and your Social Security number. For 2024, if you received Form 1099-K, check whether any reported amounts were for personal items sold at a loss or included in error—enter those amounts in the special entry space at the top.

Step 3: Complete Part I — Additional Income

Complete Part I by going through lines 1-8 and entering amounts for any additional income you received. Line 1 covers taxable state and local income tax refunds if you itemized last year. Line 2a is for alimony received under divorce agreements finalized before 2019. Lines 3-7 cover business income, gains from Form 4797, rental/partnership income from Schedule E, farm income from Schedule F, and unemployment compensation. Line 8 has numerous sub-categories (a through z) for other income types—carefully review which ones apply, such as gambling winnings (8b), Alaska Permanent Fund dividends (8g), jury duty pay (8h), prizes and awards (8i), or digital assets received as income (8v). Add all applicable amounts and enter the total on line 10, which transfers to Form 1040 line 8.

Step 4: Complete Part II — Adjustments to Income

Move to Part II for adjustments to income. Enter amounts for each adjustment that applies: educator expenses (line 11, up to $300), certain business expenses for qualifying individuals (line 12 with Form 2106), health savings account contributions (line 13 with Form 8889), moving expenses for Armed Forces members (line 14), half of self-employment tax (line 15), self-employed retirement plan contributions (line 16), self-employed health insurance premiums (line 17), penalty on early withdrawal of savings (line 18), alimony paid under pre-2019 agreements (line 19a), IRA contributions (line 20), student loan interest (line 21, up to $2,500), and Archer MSA contributions (line 23). Line 24 covers other adjustments like jury duty pay you gave to your employer, housing deductions, and attorney fees for certain cases. Add lines 11 through 25 and enter the total on line 26, which transfers to Form 1040 line 10.

Step 5: Attach Schedule 1 and file your return

Finally, attach Schedule 1 to your completed Form 1040 along with any other required schedules and forms referenced, then file your return electronically or mail it to the appropriate IRS address.

Common Mistakes and How to Avoid Them

Mistake #1: Filing Schedule 1 when you don't need it

One frequent error is filing Schedule 1 when you don't actually need it. If you only have W-2 wages and take the standard deduction with no additional income or adjustments, leave Schedule 1 blank and don't attach it. Conversely, forgetting to file Schedule 1 when you do have qualifying income or adjustments will result in an incorrect tax calculation. Review the Part I and Part II line items carefully to determine if you need the schedule.

Mistake #2: Putting income on the wrong form

Taxpayers often confuse where different types of income belong. Wages from Form W-2 go directly on Form 1040, not Schedule 1. Freelance income paid with Form 1099-NEC requires Schedule C first, then the net profit flows to Schedule 1 line 3. Social Security benefits go directly on Form 1040 lines 6a and 6b, not on Schedule 1. Make sure you're using the right form for each income source.

Mistake #3: Misunderstanding Form 1099-K

Form 1099-K creates confusion in 2024. Many people receive these forms for personal transactions like splitting dinner bills with friends through payment apps or selling used furniture for less than they paid. These aren't taxable, so enter the non-business amounts in the special entry space at the top of Schedule 1 to avoid being taxed on them. Only report actual business income in Part I IRS.gov.

Mistake #4: Missing documentation for adjustments

With adjustments to income, missing documentation is problematic. You can't deduct student loan interest without Form 1098-E showing the amount you paid. Educator expenses require receipts proving you're an eligible educator and spent money on qualifying supplies. IRA deduction claims need contribution records and verification of the contribution date. Gather documentation before claiming any adjustment.

Mistake #5: Ignoring income phase-out limits

Income phase-out limits trip up many taxpayers. The student loan interest deduction phases out completely at $95,000 modified AGI for single filers ($195,000 for joint filers). IRA deduction limits depend on whether you have a workplace retirement plan and your income level. If your income is near these thresholds, calculate carefully whether you qualify for the full deduction, a partial deduction, or none at all.

Mistake #6: Math and transfer errors

Finally, math errors remain common. Double-check your addition on lines 9, 10, 25, and 26. Ensure the line 10 total matches what you entered on Form 1040 line 8, and the line 26 total matches Form 1040 line 10. Simple arithmetic mistakes delay your refund or result in incorrect tax calculations.

What Happens After You File

Processing and basic checks

Once you submit your return with Schedule 1 attached, the IRS processes it alongside your main Form 1040. If you e-file, expect processing within 21 days for straightforward returns. Paper returns take significantly longer, often six to eight weeks or more during peak filing season. The IRS systems will verify that the amounts from Schedule 1 lines 10 and 26 correctly transferred to your Form 1040 and that your adjusted gross income calculation is accurate.

IRS notices and information requests

During processing, the IRS computer systems automatically check for mathematical errors and common inconsistencies. The agency will correct simple math mistakes without contacting you, then send a notice explaining the change and any impact on your refund or amount owed. However, if Schedule 1 shows income that doesn't match information reports the IRS received (like a 1099 form), you may receive a notice requesting explanation or documentation.

If the IRS needs clarification about items on your Schedule 1—perhaps unusual income sources, large deductions, or missing forms that should have been attached—you'll receive a letter asking for additional information. Respond promptly with the requested documentation to avoid delays. Common requests involve substantiating business income, providing proof of educator expenses, or explaining entries in the ""other income"" or ""other adjustments"" sections.

Impact on AGI and other tax benefits

Your Schedule 1 information becomes part of your official tax record and helps determine your AGI, which affects numerous tax benefits. A lower AGI from claiming adjustments on Schedule 1 Part II can make you eligible for credits like the Earned Income Tax Credit, premium tax credit for health insurance, or education credits. Your AGI also determines your modified AGI (MAGI) used for IRA contribution limits, student loan interest deduction phase-outs, and other tax calculations.

Amending your return later

If you later discover an error on your Schedule 1, file Form 1040-X (Amended U.S. Individual Income Tax Return) with a corrected Schedule 1 attached. Explain what you're changing and why in Part III of Form 1040-X. If the change increases your refund, you'll eventually receive the additional amount (plus interest if the IRS took too long to process). If it increases what you owe, pay the difference immediately to minimize interest charges IRS.gov.

FAQs

Do I need Schedule 1 if I only received unemployment benefits?

Yes, unemployment compensation is taxable income that must be reported on Schedule 1, line 7. Even though you received Form 1099-G showing the amount, it doesn't go on the main Form 1040—it belongs on Schedule 1. The total from Schedule 1 then flows to your Form 1040, increasing your AGI and taxable income. You cannot skip Schedule 1 if you had any unemployment compensation during 2024.

Can I claim the educator expense deduction if I'm a college professor?

No, the educator expense deduction on Schedule 1, line 11 is specifically for K-12 teachers, instructors, counselors, principals, or aides who work at least 900 hours per year in a school that provides elementary or secondary education. College and university educators don't qualify for this particular deduction, though they may be able to deduct unreimbursed employee expenses through other means if they itemize deductions and meet specific criteria.

What if I sold items on eBay or Facebook Marketplace and got a 1099-K—is that taxable?

It depends. If you sold personal items for less than you originally paid (like used clothes, furniture, or household goods), those sales aren't taxable income. Report the amount from your Form 1099-K in the special entry space at the top of Schedule 1 to zero it out. However, if you're running an actual business buying and selling items for profit, that's business income that goes on Schedule C, and the net profit flows to Schedule 1, line 3. Personal sales at a loss are not taxable; business operations are IRS.gov.

I contributed to my IRA in 2024 but haven't filed my taxes yet—can I still deduct it?

Yes, you can deduct IRA contributions made during 2024 on your 2024 tax return. You can also deduct contributions made between January 1, 2025 and the April 15, 2025 tax filing deadline if you designate them for your 2024 tax year when you make the contribution. The deduction goes on Schedule 1, line 20. However, deduction eligibility depends on whether you or your spouse have access to a workplace retirement plan and your income level. For 2024, the contribution limit is $7,000 ($8,000 if you're 50 or older).

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

Adjustments to income (Schedule 1, Part II) reduce your income before calculating your AGI and are available to everyone who qualifies—you don't have to choose between taking these and the standard deduction. Itemized deductions (Schedule A) are an alternative to the standard deduction and only make sense if your itemized total exceeds the standard deduction amount ($14,600 for single filers in 2024). Schedule 1 adjustments are generally better because they lower your AGI, which can increase eligibility for other tax benefits that phase out at higher income levels.

If I file Schedule 1, will it trigger an audit?

Filing Schedule 1 doesn't automatically increase your audit risk—millions of taxpayers use it every year. However, certain items may draw attention if they're disproportionate to your income or inconsistent with information the IRS receives from employers and financial institutions. Large business losses, substantial gambling winnings without offsetting losses, or unusual ""other income"" entries might prompt questions. The best protection is accurate reporting with proper documentation and making sure all income matches the forms the IRS receives.

Can I e-file my return if I need to attach Schedule 1?

Absolutely. When you e-file, the tax software includes Schedule 1 electronically as part of your complete return package. Most tax software automatically generates Schedule 1 when you enter information that requires it—you won't need to manually fill out a separate form. E-filing with schedules attached is actually faster and more accurate than paper filing because the software checks for errors and the IRS processes e-filed returns much more quickly than paper ones.

For the most current information and to access Schedule 1 and instructions, visit IRS.gov/Form1040.

‍