What Is Other Income on Form 1040?
Other Income on Form 1040 Explained
Other income on Form 1040 refers to income that isn't assigned a specific line on a 1040 tax return or Schedule 1 form.
Learn more about what counts as other income.
What Is Other Income on Form 1040?
Most forms of income have a specific line on Form 1040. For example, wages, salaries, and tips are entered on line 1 and capital gains (or losses) are entered on line 6.
Other income is taxable income that isn't assigned a specific line of its own on the 1040 tax return or Schedule 1. Instead, it's added together and entered on line 8 of a Schedule 1 and line 7a on Form 1040. Other income includes earnings other than wages or income from self-employment, retirement income, or investments, foreign income, and canceled debts. Other income must be reported and is taxable.
Who Uses Other Income on Form 1040?
You typically have to report other income if you receive money or goods that aren't included on a W-2 or most 1099s. Think prizes, awards, jury duty pay, and lottery winnings.
Additional sources of income that you might report as other income include:
- Cash earned from odd jobs
- Dividends on insurance policies if they exceed the premiums you paid
- Cash for keys
- Recaptures of deductions you erroneously claimed on past tax returns
- Reimbursements for previously deducted expenses
- The taxable portions of disaster relief payments
- Distributions from a Coverdell education savings account (ESA) or a qualified tuition program (QTP)
- Inmate income accounts for worked performed while incarcerated, such as work release programs
You will receive a 1099 for some of these sources of income, but they're still reported as other income.
Cancellation of Debts
Cancellation of a debt is what happens when you owe a lender money and default on repayment, and the lender eventually writes off the balance as uncollectible. You no longer owe it, but the IRS says it's income to you since you don't have to repay it.
The lender typically reports canceled debt on Form 1099-C, then submits it to the IRS and sends a copy to you. It's reportable as other income if you were solvent at the time the debt was forgiven—the value of your assets was more than the total of your liabilities.
The IRS says you must include foreign income as other income even if you paid taxes on it to another country. Convert the total to U.S. dollars, then enter the U.S. figure on your tax return as other income.
You might be eligible to exclude some or all of this income from your taxable income, however. To exclude your foreign income, complete Form 2555 or Form 2555-EZ with your tax return. The IRS provides instructions along with the qualifying criteria for claiming an exclusion.
What Isn't Other Income on Form 1040?
Child support, Roth IRA distributions, gifts, and inheritances are exceptions to the other income rule.
- Child support is tax-neutral. It’s neither deductible to the parent paying it nor reportable by the parent receiving it.
- Alimony received was reported elsewhere on Form 1040 through tax year 2018, and it no longer has to be claimed as income beginning in 2019.
- Roth retirement plan distributions aren't taxed because contributions are made with after-tax dollars.
- Gifts might be taxed, but the donor is responsible for paying this tax, not the recipient.
You wouldn't report self-employment income as other income, either, even if you don’t receive a 1099-MISC for payments and compensation you received. This income is reported on Schedule C, Profit or Loss From Business, if you're an independent contractor or sole proprietor. Businesses are required to issue 1099-MISC forms to nonemployees who earned $600 or more during the tax year.
Earnings for which you don't receive a Form 1099-MISC are considered income for tax purposes and must be reported on Schedule C, although not as other income. Not receiving a 1099-MISC is either an oversight on the part of the payer or it simply means that a 1099-MISC was not required because you earned less than the $600 threshold. The income is still taxable.
How to Report Other Income on Form 1040
Other income is reported on line 8 of Schedule 1 of the 2019 Form 1040, then the total from line 9 of Schedule 1 is transferred to line 7a of the 1040 itself. These lines pertain to the 2020 version of the forms, which cover the 2019 tax year.
The IRS requires that you list “type and amount” on line 8 of Schedule 1 and enter the total. For example, you'd enter $40 and “jury duty" if you were paid $40 for performing that service.
Enter the total and attach a statement to your tax return that itemizes where the income came from if you had many sources of other income during the course of the year.
- Other income on Form 1040 refers to income that isn't assigned a specific line on a 1040 tax return or Schedule 1 form.
- You typically have to report other income if you receive money or goods that aren't included on a W-2 or most 1099s.
- Canceled debt and foreign income are typically reported as other income.
- Child support, alimony, Roth IRA distributions, gifts, and self-employment income aren't reported as other income.
- You report other income by filling in line 8 on Schedule 1 and transferring the total to line 7a of the Form 1040.