Schedule 1: Additional Income and Adjustments

What Is Schedule 1?

Schedule 1 is a numbered schedule attached to Form 1040, Form 1040-SR, or Form 1040-NR to report certain additional income and adjustments to income that do not appear directly in the main form's basic income lines.

Part I adds specified income to the return. Part II subtracts eligible adjustments before adjusted gross income is calculated. The schedule does not determine whether every listed category applies; each item has its own tax rules and may require another form or schedule.

Part I: additional income

Schedule 1, Part I may include items such as:

• Taxable state or local income-tax refunds.
• Alimony received under agreements governed by the pre-2019 federal rules.
• Business income or loss from Schedule C.
• Capital gain or loss in certain situations.
• Rental, royalty, partnership, S corporation, estate, or trust income from Schedule E.
• Farm income or loss from Schedule F.
• Unemployment compensation.
• Other income identified by the form and instructions.

For 2025, Schedule 1 also includes a line used for certain Forms 1099-K received in error or for personal items sold at a loss. That line is not permission to offset business sales or hide taxable gain. The underlying transaction and records control the treatment.

Many amounts first require a separate calculation. Schedule C calculates net business profit; Schedule E calculates supplemental income or loss; and Schedule D may calculate capital gain or loss. Schedule 1 generally carries the resulting amount rather than duplicating the complete calculation.

Part II: adjustments to income

Part II reports allowable above-the-line adjustments that reduce total income before adjusted gross income is determined. Common examples include:

• Educator expenses.
• Certain reservist, performing-artist, and fee-basis-government-official business expenses.
• Health savings account deduction.
• Moving expenses for eligible Armed Forces members.
• Deductible part of self-employment tax.
• Self-employed SEP, SIMPLE, and qualified-plan deductions.
• Self-employed health-insurance deduction.
• Penalty on early withdrawal of savings.
• Deductible IRA contribution.
• Student-loan-interest deduction.
• Other adjustments specifically authorized by the form.

These are often called above-the-line deductions. They are not Schedule A itemized deductions, and claiming them generally does not require itemizing.

A Schedule 1 example

Maria's 2025 records show:

Part I contributes $45,000 to total income. Part II contributes $8,967 of adjustments, subject to the separate eligibility rules. The main return uses those totals in calculating adjusted gross income.

This example does not mean the business's gross receipts were $42,000. Schedule C may begin with a larger revenue amount and subtract allowable business expenses to reach the net profit carried to Schedule 1.

Schedule 1 versus Schedule 1-A

The names are similar, but the schedules serve different purposes:

Schedule 1-A deductions are calculated after adjusted gross income under the 2025 Form 1040 structure. They do not belong in Schedule 1, Part II merely because both schedules use "additional" in their titles.

Schedule 1 versus Schedule A

Schedule 1, Part II contains adjustments to income. Schedule A contains itemized deductions such as allowable medical expenses, taxes, interest, gifts to charity, and casualty or theft losses under applicable rules.

A taxpayer may have both schedules, one schedule, or neither. An adjustment to income can be allowed even when the taxpayer takes the standard deduction. Schedule A is used only when itemizing applies.

California treatment

California generally begins with federal adjusted gross income, then uses Schedule CA (540) or Schedule CA (540NR) to apply California additions and subtractions. A federal Schedule 1 amount is not automatically identical for California.

Differences may arise from alimony rules, health savings accounts, self-employed deductions, unemployment compensation, business depreciation, pass-through items, and other conformity provisions. Transfer the federal amount accurately before calculating the state adjustment; do not rewrite federal Schedule 1 to make it match California.

Common mistakes

• Reporting gross business receipts directly as Schedule 1 business income.
• Deducting personal expenses as business adjustments.
• Claiming the same amount on Schedule 1 and Schedule A.
• Confusing Schedule 1 with Schedule 1-A.
• Ignoring a K-1 or rental activity because the cash was not distributed.
• Treating all Form 1099-K amounts as profit.
• Missing California additions or subtractions.
• Using a prior year's line number without checking the current form.

Frequently asked questions

Related terms

• Adjusted Gross Income
• Above-the-Line Deduction
• Schedule 1-A
• Schedule C
• Schedule E
• Form 1040

Official sources

• IRS — 2025 Schedule 1
• IRS — 2025 Instructions for Forms 1040 and 1040-SR
• IRS — Schedule 1-A overview
• California FTB — 2025 Schedule CA (540) instructions

The definitions and examples on this page are for informational purposes only and do not constitute tax advice. Tax laws change frequently and individual circumstances vary. Consult a qualified tax professional before making decisions based on this content.