Schedule 1 is the form that catches income and deductions that do not fit on the main Form 1040: self-employment income, unemployment, taxable state refunds and above-the-line deductions.
This guide explains each part, gives the main limits and shows a worked example of how the totals reach Form 1040, using the 2025 Schedule 1 and the 2025 Form 1040 instructions (the forms used to file in 2026).
Schedule 1 is titled Additional Income and Adjustments to Income and is attached to Form 1040, 1040-SR or 1040-NR. Part I lists income that does not have its own line on the main form; line 10 totals it and carries to Form 1040 line 8. Part II lists adjustments to income, often called above-the-line deductions; line 26 totals them and carries to Form 1040 line 10. This guide covers the 2025 schedule used to file in 2026. The 2025 Form 1040 instructions also introduce a separate Schedule 1-A for the new deductions for tips, overtime, car loan interest and the enhanced deduction for seniors, so those are not claimed on Schedule 1.
The 2025 schedule begins with an entry space: for 2025, enter the amount reported to you on Form 1099-K that was included in error or for personal items sold at a loss. See our Form 1099-K guide.
| Line | Item | IRS instruction in brief |
|---|---|---|
| 1 | Taxable refunds, credits or offsets of state and local income taxes | Report any taxable refund even if you did not receive Form 1099-G |
| 2a | Alimony received | Not income if the divorce or separation agreement was entered into after December 31, 2018; older agreements are included unless later changed to say otherwise |
| 3 | Business income or (loss) | Sole proprietors report on Schedule C |
| 4 | Other gains or (losses) | Form 4797 line 18b amount, with the 4797 box checked |
| 5 | Rental real estate, royalties, partnerships, S corporations, trusts | Schedule E |
| 6 | Farm income or (loss) | Schedule F |
| 7 | Unemployment compensation | Form 1099-G box 1 amount |
| 8a to 8z | Other income, such as cancellation of debt and digital assets received as ordinary income | Listed individually on the form |
| 10 | Combine lines 1 through 7 and 9 | Carry to Form 1040 line 8 |
See our Schedule C guide, Schedule E guide, Form 1099-G guide and Form 1099-C guide.
| Line | Adjustment | Notes from the IRS instructions |
|---|---|---|
| 11 | Educator expenses | Up to $300 of qualified expenses; $600 if both spouses are eligible educators but neither can deduct more than $300; eligible educators work at least 900 hours in a K-12 school year |
| 13 | Health savings account deduction | Attach Form 8889 |
| 15 | Deductible part of self-employment tax | Attach Schedule SE |
| 16 | Self-employed SEP, SIMPLE and qualified plans | |
| 17 | Self-employed health insurance deduction | |
| 18 | Penalty on early withdrawal of savings | Shown on Form 1099-INT or 1099-OID |
| 19a | Alimony paid | Only for agreements entered into on or before December 31, 2018 |
| 20 | IRA deduction | |
| 21 | Student loan interest deduction | Do not enter more than $2,500; you must also have modified AGI below $100,000 (single, head of household, qualifying surviving spouse) or $200,000 (married filing jointly), and cannot file as married filing separately |
| 26 | Add lines 11 through 23 and 25 | Carry to Form 1040 line 10 |
See our Form 8889 HSA guide, Schedule SE guide, self-employed health insurance deduction guide and student loan interest deduction guide.
| Part | Items | Total |
|---|---|---|
| Part I | $600 taxable state refund (line 1) + $20,000 business income (line 3) + $4,000 unemployment (line 7) | $24,600 on line 10, to Form 1040 line 8 |
| Part II | $300 educator expenses (line 11) + $2,000 IRA deduction (line 20) + $1,200 student loan interest (line 21) | $3,500 on line 26, to Form 1040 line 10 |
The adjustments of $3,500 reduce the $24,600 of additional income on the way to adjusted gross income, here before any other income on Form 1040. This is an illustration of the line arithmetic only, ignoring limits that may apply to the IRA and student loan deductions.
Use our Schedule 3 guide for credits and payments and, for nonresident aliens, the Form 1040-NR guide.
Looking ahead: the IRS has posted an early-release draft 2026 Schedule 1 (marked not for filing) with the same line layout as 2025. The 2026 Form 1040-ES package says that beginning in 2026 an eligible educator may claim educator expenses on Schedule 1 and also as an itemized deduction on Schedule A. These are draft and preview items; use the final 2026 forms and instructions when filing in 2027.
IRS: Schedule 1 (Form 1040), Additional Income and Adjustments to Income, IRS: Instructions for Form 1040 and 1040-SR.