Form 1040(SP) ANEXO 1: Ingreso Adicional y Ajustes al Ingreso (2020)

What the Form Is For

Schedule 1 (Form 1040) – or ANEXO 1 in Spanish – is an attachment to your main tax return that reports two important categories of information the standard Form 1040 doesn't have room for. Think of it as an overflow form that captures financial details that don't fit on the main return's simplified layout.

The form has two parts. Part I captures Additional Income – money you earned that isn't from the typical W-2 wages, interest, or dividends already reported on Form 1040. This includes unemployment compensation, business income, alimony received under pre-2019 divorce agreements, farm income, rental income, and other types of earnings like gambling winnings, jury duty pay, or prize money.

Part II reports Adjustments to Income – commonly called ""above-the-line deductions"" because they reduce your income before you calculate your adjusted gross income (AGI). These are valuable because they lower your taxable income regardless of whether you itemize deductions or take the standard deduction. Common adjustments include educator expenses, student loan interest, IRA contributions, self-employment tax deductions, and health savings account contributions.

The totals from both parts flow directly to your Form 1040: the additional income total goes to line 8, and the adjustments total goes to line 10a. You must attach Schedule 1 to Forms 1040, 1040-SR (for seniors), or 1040-NR (for nonresident aliens) when you have income or adjustments to report in these categories. IRS

When You'd Use It (Including Late or Amended Returns)

You need Schedule 1 if you have any income types listed in Part I or any adjustments listed in Part II. Most taxpayers filing electronically won't even notice they're using it – tax software automatically generates the schedule when you answer questions about your income and deductions.

For 2020 returns, the original filing deadline was postponed to May 17, 2021, giving most people extra time. If you missed that deadline and need to file late, you should still complete Schedule 1 along with your Form 1040. While the IRS may waive failure-to-file penalties if you're owed a refund, you'll still face interest charges and potential penalties if you owe taxes. IRS

If you already filed your 2020 return but discovered you made an error on Schedule 1 – perhaps you forgot to report unemployment compensation or overlooked an IRA deduction – you may need to file an amended return using Form 1040-X. You generally have three years from your original filing date (or two years from when you paid the tax, whichever is later) to amend and claim a refund. Since 2020, the IRS accepts electronically filed Form 1040-X for certain tax years, making the process faster. Amended returns take 8 to 12 weeks to process, though some take up to 16 weeks. IRS

Key Rules or Details for 2020

For Part I – Additional Income

• Unemployment compensation received special treatment in 2020 thanks to the American Rescue Plan. Up to $10,200 per person ($20,400 for married couples filing jointly) is excluded from income if your modified adjusted gross income is less than $150,000
• Alimony is only taxable if received under a divorce or separation agreement dated December 31, 2018, or earlier (unless modified later to include it as income)
• Business income from Schedule C, farm income from Schedule F, and rental income from Schedule E all flow through line 3, 6, and 5 respectively
• Any ""other income"" on line 8 requires you to specify the type – this catches items like Alaska Permanent Fund dividends, prize money, canceled debts, or gambling winnings

For Part II – Adjustments to Income

• Educator expenses are limited to $250 per person ($500 if both spouses are eligible educators)
• Student loan interest deduction caps at $2,500 and phases out at higher income levels
• IRA deductions depend on whether you (or your spouse) are covered by a retirement plan at work and your income level
• Self-employed health insurance can be fully deductible if you show a net profit
• Alimony paid is only deductible if paid under a pre-2019 divorce agreement

Some adjustments require you to attach additional forms – like Form 8889 for health savings accounts, Form 2106 for certain employee business expenses, or Schedule SE for self-employment tax. IRS

Step-by-Step (High Level)

Step 1: Gather Your Documents

Collect all relevant tax forms: W-2s, 1099-G for unemployment, 1099-MISC or 1099-NEC for business income, 1099-INT, receipts for adjustments like educator expenses or student loan interest, and contribution records for IRAs or HSAs.

Step 2: Complete Part I – Additional Income

Work through lines 1-8, entering amounts from your tax documents. Add specialized schedules if needed (Schedule C for business, Schedule E for rentals, Schedule F for farms). Total everything on line 9.

Step 3: Complete Part II – Adjustments to Income

Review lines 10-22 and enter any adjustments you qualify for. Use worksheets in the Form 1040 instructions to calculate complex items like the IRA deduction or self-employed health insurance. Total your adjustments on line 22.

Step 4: Transfer Totals to Form 1040

Enter line 9 (additional income) on Form 1040, line 8. Enter line 22 (adjustments) on Form 1040, line 10a.

Step 5: Attach Schedule 1

Place Schedule 1 directly after your Form 1040 when mailing. E-filers don't need to worry about order – the software handles it automatically. IRS

Common Mistakes and How to Avoid Them

Forgetting the unemployment compensation exclusion

In 2020, many taxpayers overlooked the $10,200 exclusion, resulting in overpayment. Use the Unemployment Compensation Exclusion Worksheet in the instructions to calculate the correct taxable amount.

Reporting alimony incorrectly

Remember the date rule: only pre-2019 agreements make alimony taxable to the recipient and deductible to the payer. Post-2018 divorces work the opposite way. Always include the date of your original divorce decree.

Claiming ineligible educator expenses

You must be a K-12 teacher, instructor, counselor, principal, or aide who works at least 900 hours during the school year. Homeschool teachers and college professors don't qualify.

Entering the wrong account numbers for direct deposit

This is a broader Form 1040 mistake, but it delays refunds significantly. Double-check your routing and account numbers. The IRS won't deposit refunds into accounts that aren't in your name or your spouse's name.

Not attaching required schedules

If you report business income on line 3 but forget to attach Schedule C, the IRS will send you a notice requesting it, delaying your return processing by weeks.

Mixing up gross income and net income

For business income, you report the net profit or loss from Schedule C, not your total receipts. This is already calculated after deducting business expenses.

Overlooking write-in adjustments for line 22

Beyond the numbered lines, certain less-common adjustments must be written in, like jury duty pay you gave to your employer, attorney fees for unlawful discrimination claims, or Archer MSA deductions. Review the complete list in the instructions to make sure you're not missing money. IRS

What Happens After You File

Once you submit your return with Schedule 1 attached, the IRS begins processing it. E-filed returns typically process within 21 days, while paper returns take six weeks or longer. You can track your refund status using the ""Where's My Refund?"" tool on IRS.gov, which updates within 24 hours for e-filed returns.

The IRS will review your Schedule 1 entries and may correct obvious math errors automatically. You'll receive a notice explaining any changes. If they need clarification about income sources or adjustments, they'll send a request for additional information.

Your refund may be smaller than expected if you owe other federal or state debts – the Treasury Offset Program can redirect your money to pay student loans, back taxes, child support, or other obligations. You'll receive a notice explaining any offsets.

If you claimed certain refundable credits like the Earned Income Tax Credit or Additional Child Tax Credit, your refund will be held until mid-February at the earliest, as the IRS conducts additional verification to prevent fraud.

For paper returns, processing takes significantly longer – expect at least six weeks. The IRS is gradually reducing the number of paper processing centers, so mailing addresses may change year to year. Always verify the correct mailing address on IRS.gov before sending your return. IRS

FAQs

Can I file Schedule 1 by itself if I only need to report unemployment compensation?

No. Schedule 1 must always be attached to Form 1040, 1040-SR, or 1040-NR. It's not a standalone form. You must file a complete tax return even if Schedule 1 is the only reason you're filing beyond the basic wage income.

What if I forgot to include Schedule 1 with my original return?

If you e-filed, the software wouldn't have allowed submission without it. If you paper-filed and forgot it, the IRS will likely send a notice asking for the missing schedule. Respond promptly with the completed Schedule 1. If the missing information would result in a larger refund, file Form 1040-X to amend your return properly.

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

Not necessarily. If you have no additional income beyond what's reported directly on Form 1040 and no adjustments to claim, you don't need Schedule 1. However, even if you take the standard deduction, you might still need Schedule 1 for items like student loan interest or IRA deductions.

How does the $10,200 unemployment exclusion work for married couples?

Each spouse can exclude up to $10,200 of their own unemployment compensation, for a potential total of $20,400. However, this only applies if your modified adjusted gross income (MAGI) is less than $150,000. The $150,000 threshold applies to all filing statuses, even married filing jointly.

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

Generally, no. To claim the deduction, you must be legally obligated to pay the interest, you must have actually paid it, and your filing status can't be married filing separately. If your parents paid your loan as a gift, you may be able to treat it as if they gave you the money and you paid the loan yourself, but this requires careful documentation.

What's the deadline to make an IRA contribution for 2020 and still deduct it on Schedule 1?

For 2020 taxes, the deadline was postponed to May 17, 2021 – the same as the tax filing deadline. Contributions made by that date can be designated as 2020 contributions and deducted on your 2020 Schedule 1, even if you file your return before making the contribution (you'll need to file an amended return if you do it that way).

Will my state tax return automatically update if I file an amended federal Schedule 1?

No. Changes to your federal return don't automatically update your state return. If amending your federal Schedule 1 affects your state taxes, you'll need to file an amended state return separately. Contact your state tax agency for specific procedures and forms required for your state.

Sources: All information sourced exclusively from IRS.gov, including the 2020 Form 1040 Schedule 1, 2020 Form 1040 Instructions, Topic 308 - Amended Returns, and IRS Refunds pages.

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