A Schedule 1 is a form used to report additional income and adjustments to income.
Here are some of the most common additional income or adjustments reported on Schedule 1:
- Schedule C Net Income
- Rental property Net Income
- S-Corp Income
- Health Savings Account (HSA) contributions
- Deductible Portion of Self-Employment Tax
- Self-Employed Health Insurance Deduction.
The totals from this form are then used to adjust the gross income on the main 1040 tax form.
Here are the most important sections of form Schedule 1:
PART 1: ADDITIONAL INCOME:
Line 3 - Business income or (loss). The breakdown of the net amount will be detailed on Schedule C
Line5 - Rental real estate, royalties, partnerships, S corporations, trusts, etc. You will need to attach a Schedule E report with the detailed information for this line.
PART 2: ADJUSTMENTS TO INCOME:
Line 13 - HSA: this is where you record your HSA contributions.
Line 15 - Deductible part of self-employment tax - this is the portion of self-employment tax that self-employed individuals can deduct on their federal income tax return. You will need to attach Schedule SE with the detailed information.
Line 16 - is where you record your Self-employed SEP, SIMPLE, and qualified plans contributions
Line 17 - is where you record your Self-employed health insurance deduction
These are the main lines on the Schedule 1 that are effected by businesses, whether it is a Schedule C or an S-Corp.