IRS Form 1040 (Schedule 1) – IRS Forms, Instructions, Pubs 2026

IRS Form 1040 (Schedule 1) – IRS Forms, Instructions, Pubs 2026 – Are you preparing your 2025 tax return and wondering about IRS Form 1040 Schedule 1? This essential attachment to Form 1040 helps report additional income sources and adjustments that lower your taxable income. Whether you’re self-employed, received unemployment benefits, or qualify for new deductions like no tax on tips or overtime, understanding Schedule 1 is key to accurate filing and maximizing your refund. In this comprehensive 2025 guide, we’ll break down what Schedule 1 is, who needs it, line-by-line instructions, and tips for filing correctly.

What Is IRS Form 1040 Schedule 1?

IRS Form 1040 Schedule 1, titled “Additional Income and Adjustments to Income,” is a supplementary form used with Form 1040, 1040-SR, or 1040-NR. It captures income not listed on the main Form 1040 (like business profits or alimony) and “above-the-line” deductions that reduce your adjusted gross income (AGI) without itemizing.

For the 2025 tax year, Schedule 1 remains crucial for reporting various income types and adjustments. Key updates stem from recent legislation, including the “One Big Beautiful Bill,” which introduces new deductions via the attached Schedule 1-A (e.g., for qualified tips, overtime, car loan interest, and enhanced senior deductions). These flow into specific lines on Schedule 1, such as line 13 for tips and line 21 for overtime.

The form is divided into two parts:

  • Part I: Additional Income – Reports extra earnings that add to your total income.
  • Part II: Adjustments to Income – Lists deductions that subtract from your income to calculate AGI.

Totals from Schedule 1 transfer to Form 1040: additional income to line 8 and adjustments to line 10.

Who Needs to File Schedule 1 for 2025 Taxes?

You must attach Schedule 1 to your Form 1040 if you have:

  • Additional income like business profits, rental income, unemployment compensation, or other items not on Form 1040 lines 1–7.
  • Adjustments such as educator expenses, student loan interest, self-employment tax deductions, or new 2025 provisions from Schedule 1-A.
  • Any amounts that would otherwise leave lines 8 or 10 on Form 1040 blank but require reporting.

No separate filing is needed; include it with your return by April 15, 2026 (or extended deadline). If using tax software, it will automatically generate Schedule 1 if applicable. Even if you’re not required to file a return, you might want to for refunds from withholdings or credits.

Special note for 2025: To claim new deductions (e.g., no tax on tips), you need a valid SSN, and married filers must file jointly. Attach Schedule 1-A if eligible.

Part I: Additional Income – Line-by-Line Guide

Part I totals extra income on line 10, which goes to Form 1040 line 8. Use supporting forms like Schedules C, E, or F as needed. For 2025, include erroneous Form 1099-K amounts (e.g., personal sales at a loss) at the top of the form.

Here’s a breakdown:

  • Line 1: Taxable refunds, credits, or offsets of state and local income taxes – Enter from Form 1099-G. Use the State and Local Income Tax Refund Worksheet if you itemized last year. Only the taxable portion counts; exclude if no prior deduction benefit. Example: $1,500 refund from a $2,000 prior deduction.
  • Line 2a: Alimony received – Report pre-2019 divorce agreements. Exclude post-2018 ones. Line 2b: Enter the agreement date.
  • Line 3: Business income or (loss) – From Schedule C (sole proprietorship).
  • Line 4: Other gains or (losses) – From Form 4797 or 4684. Check boxes 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. Reduce by 2025 repayments (check box).
  • Lines 8a–8z: Other income – Catch-all for items like:
    • 8a: Net operating loss (negative).
    • 8b: Gambling winnings (from Form W-2G; $600+).
    • 8c: Cancellation of debt (taxable unless excluded, e.g., insolvency; Form 1099-C).
    • 8d: Foreign earned income exclusion (negative, from Form 2555).
    • 8h: Jury duty pay.
    • 8i: Prizes and awards.
    • 8l: Personal property rental (non-business).
    • 8m: Olympic/Paralympic medals/USOC prizes (if AGI limits met).
    • 8r: Scholarships/fellowships not on W-2.
    • 8s: Nontaxable Medicaid waivers (negative if in earned income).
    • 8t: Nonqualified deferred compensation.
    • 8u: Wages while incarcerated.
    • 8v: Digital assets as ordinary income (e.g., mining, staking; new reporting via 1099-DA optional in 2025).
    • 8z: Other (e.g., bartering FMV, recoveries, illegal activities).
  • Line 9: Total other income – Sum lines 8a–8z.
  • Line 10: Combine lines 1–7 and 9 – This is your additional income.

Part II: Adjustments to Income – Line-by-Line Guide

Part II reduces income for AGI on line 26, transferred to Form 1040 line 10. These are valuable as they apply even if you take the standard deduction. For 2025, new deductions from Schedule 1-A (e.g., tips on line 13, overtime on line 21) enhance this section.

  • Line 11: Educator expenses – Up to $300 ($600 joint) for K-12 supplies.
  • Line 12: Certain business expenses – For reservists, artists, officials; attach Form 2106.
  • Line 13: Health savings account deduction – From Form 8889. Also includes qualified tips deduction from Schedule 1-A (cash tips in tipped occupations, up to net profit; phaseout at MAGI >$150K single/$300K joint).
  • Line 14: Moving expenses – For Armed Forces; attach Form 3903. Check for storage fees.
  • Line 15: Deductible part of self-employment tax – From Schedule SE.
  • Line 16: Self-employed SEP, SIMPLE, and qualified plans – Contributions per Pub. 560.
  • Line 17: Self-employed health insurance deduction – Premiums limited to net profit; use worksheet.
  • Line 18: Penalty on early withdrawal of savings – From 1099-INT.
  • Line 19a: Alimony paid – Pre-2019 agreements. 19b: Recipient’s SSN. 19c: Agreement date.
  • Line 20: IRA deduction – Traditional IRA contributions; limits $7,000 ($8,000 if 50+); phaseout based on MAGI (e.g., full if ≤$79K single).
  • Line 21: Student loan interest deduction – Up to $2,500; phaseout $80K single/$165K joint. Also includes qualified overtime from Schedule 1-A (up to $12,500 single/$25K joint; FLSA overtime pay).
  • Line 22: Reserved for future use.
  • Line 23: Archer MSA deduction – From Form 8853.
  • Lines 24a–24z: Other adjustments – E.g., 24a: Jury duty repayments; 24b: Personal rental expenses; 24c: Nontaxable Olympic prizes; 24z: Other (e.g., reforestation, whistleblower fees).
  • Line 25: Total other adjustments – Sum 24a–24z.
  • Line 26: Add lines 11–23 and 25 – Your total adjustments.

How to File IRS Schedule 1 for 2025?

  1. Gather documents: W-2s, 1099s, receipts for deductions.
  2. Complete supporting schedules (e.g., C for business income).
  3. Fill Part I and II line by line, using worksheets from IRS instructions.
  4. If using Schedule 1-A, calculate MAGI first (starts with AGI from Form 1040 line 11b, adds exclusions).
  5. Transfer totals to Form 1040.
  6. E-file or mail with your return. Use tax software for accuracy.

For digital assets, answer the Form 1040 question and report ordinary income on line 8v.

Common Mistakes to Avoid on Schedule 1

  • Forgetting to attach supporting forms (e.g., Schedule C).
  • Misreporting alimony (only pre-2019 taxable).
  • Ignoring phaseouts for deductions like student loans or new tips/overtime.
  • Not reducing unemployment by repayments.
  • Overlooking new Schedule 1-A for eligible deductions.

Where to Download IRS Form 1040 Schedule 1 PDF?

Download the official 2025 Schedule 1 PDF from the IRS website: https://www.irs.gov/pub/irs-pdf/f1040s1.pdf. For instructions, see the 2025 Form 1040 Instructions or Publication 17.

Final Thoughts on Schedule 1 for 2025 Taxes

Mastering IRS Form 1040 Schedule 1 ensures you report all additional income accurately while claiming every eligible adjustment, potentially lowering your tax bill. With 2025 updates like Schedule 1-A for tips and overtime, consult IRS resources or a tax professional for personalized advice. File early to avoid penalties and secure your refund faster. If you have questions, visit IRS.gov for more details.