Schedule 1 Form 1040 Instructions – If you’re filing your 2025 U.S. federal income tax return, you may need Schedule 1 (Form 1040) to report extra income or claim above-the-line adjustments that don’t fit directly on Form 1040 or 1040-SR. This guide provides clear, step-by-step instructions based on the official IRS documents for tax year 2025.
What Is Schedule 1 (Form 1040)?
Schedule 1, titled “Additional Income and Adjustments to Income,” is a supplemental form attached to your main Form 1040, 1040-SR, or 1040-NR. It has two parts:
- Part I calculates your total additional income (flows to Form 1040, line 8).
- Part II calculates your adjustments to income (flows to Form 1040, line 10, reducing your adjusted gross income or AGI).
You only complete the lines that apply to you. The IRS updated the form for 2025 with clearer reporting for items like Form 1099-K errors and specific income types.
Who Needs to File Schedule 1 in 2025?
File Schedule 1 if any of these apply:
- You have additional income (e.g., business income, unemployment compensation, taxable state tax refunds, or other income not reported on Form 1040 lines 1–7).
- You qualify for adjustments to income (e.g., educator expenses, self-employment tax deduction, student loan interest, or IRA contributions).
- Your return involves complex items like alimony, farm income, or certain other gains/losses.
Most simple returns skip Schedule 1 entirely, but e-filing software usually adds it automatically when needed. New for 2025: Note any erroneous or personal-sale amounts from Form(s) 1099-K at the top of the form (these are not reported as income here).
How Schedule 1 Fits Into Your 2025 Tax Return?
- Part I total (line 10) → Form 1040 line 8 (added to your total income).
- Part II total (line 26) → Form 1040 line 10 (subtracted to arrive at AGI).
This directly affects your taxable income, tax bracket, and eligibility for credits/deductions.
Complete Guide to Schedule 1 Part I: Additional Income (Lines 1–10)
Report only amounts not already included elsewhere on your return.
- Line 1: Taxable refunds, credits, or offsets of state and local income taxes (use the State and Local Income Tax Refund Worksheet in the Form 1040 instructions if needed).
- Line 2a: Alimony received (only for pre-2019 divorce/separation agreements).
- Line 2b: Date of original divorce or separation agreement (month and year).
- Line 3: Business income or (loss) — attach Schedule C.
- Line 4: Other gains or (losses) — attach Form 4797 or 4684 if applicable.
- Line 5: Rental real estate, royalties, partnerships, S corporations, trusts, etc. — attach Schedule E.
- Line 6: Farm income or (loss) — attach Schedule F.
- Line 7: Unemployment compensation (from Form 1099-G; check the box and enter any 2025 overpayment you repaid).
- Line 8: Other income (use sublines 8a–8v and 8z for items like gambling winnings, cancellation of debt, Alaska Permanent Fund dividends, jury duty pay, prizes/awards, digital assets received as ordinary income, etc.).
- Line 9: Total other income (add lines 8a–8z).
- Line 10: Total additional income (add lines 1–7 and 9). Enter this on Form 1040, line 8.
Pro Tip for 2025: If you received a Form 1099-K for personal items sold at a loss or in error, enter only that amount at the top of Schedule 1. Report legitimate business income elsewhere based on the transaction type.
Complete Guide to Schedule 1 Part II: Adjustments to Income (Lines 11–26)
These reduce your AGI and are “above-the-line” deductions.
- Line 11: Educator expenses (up to $300 per eligible educator).
- Line 12: Certain business expenses of reservists, performing artists, and fee-basis government officials (attach Form 2106).
- Line 13: Health savings account (HSA) deduction (attach Form 8889).
- Line 14: Moving expenses for members of the Armed Forces (attach Form 3903).
- Line 15: Deductible part of self-employment tax (attach Schedule SE).
- Line 16: Self-employed SEP, SIMPLE, and qualified plans.
- Line 17: Self-employed health insurance deduction.
- Line 18: Penalty on early withdrawal of savings.
- Line 19a: Alimony paid (pre-2019 agreements only; include recipient’s SSN on 19b and date on 19c).
- Line 20: IRA deduction (check box if married filing separately and lived apart all year).
- Line 21: Student loan interest deduction.
- Line 22: Reserved (leave blank).
- Line 23: Archer MSA deduction.
- Line 24: Other adjustments (use sublines 24a–24z for items like jury duty pay returned to employer, reforestation expenses, attorney fees for certain claims, etc.).
- Line 25: Total other adjustments (add lines 24a–24z).
- Line 26: Total adjustments to income (add lines 11–23 and 25). Enter this on Form 1040, line 10.
2025 Updates and Important Reminders for Schedule 1
- Form 1099-K threshold: Payment apps and marketplaces issue 1099-K only for business transactions over $20,000 and more than 200 transactions. Personal sales at a loss go in the special entry space at the top.
- Alimony rules remain the same: Post-2018 agreements are generally not taxable to the recipient or deductible by the payer.
- Digital assets: Report ordinary income from digital assets on line 8v if not reported elsewhere.
- New deductions like no tax on tips or overtime: These go on the separate Schedule 1-A, not Schedule 1.
Always attach required forms (Schedule C, E, F, SE, etc.) when applicable.
Common Mistakes to Avoid on Schedule 1
- Forgetting to attach supporting schedules (C, E, F, SE, 4797, etc.).
- Reporting post-2018 alimony as income or a deduction.
- Missing the 1099-K correction entry at the top.
- Overlooking adjustments that lower your AGI (they can increase eligibility for other credits).
- Not using the correct worksheets for taxable state tax refunds.
Double-check your entries against Forms 1099-G, 1099-MISC, W-2G, K-1s, and 1099-K.
How to File Schedule 1 with Your 2025 Return?
- E-filing: Tax software automatically generates and attaches Schedule 1.
- Paper filing: Mail the completed Schedule 1 with your Form 1040.
- Free options: Use IRS Free File if eligible, or Free File Fillable Forms.
Download the latest forms and instructions directly from IRS.gov/Form1040.
Get Help with Schedule 1 and Your Taxes
- Official IRS Instructions for Form 1040 (includes full Schedule 1 details): IRS.gov/instructions/i1040gi
- Schedule 1 form: IRS.gov/pub/irs-pdf/f1040s1.pdf
- Questions? Use the IRS Interactive Tax Assistant or call 800-829-1040.
- Consider a tax professional for complex situations involving business income, self-employment, or multiple adjustments.
Important: This article is for informational purposes only and is based on 2025 IRS forms and instructions as of April 2026. Tax laws can change, and your individual situation may vary. Always verify with the latest official IRS publications or a qualified tax advisor before filing.
Filing accurately with Schedule 1 helps you avoid delays and maximize your refund or minimize what you owe. Bookmark this guide and review your documents early for a smooth 2025 tax season!