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How do I report more than two Additional Income sources in FTUSA

WestsideTaxpayer

Hi there,

I haven't had this problem before but I have more than two additional income sources that aren't categorized and no form is given. For example, class-action checks or the like. As far as I know, the FTUSA software caps out at adding two entries. Is there a way to add more entries or do I have to just combine things and hope things are fine?

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Accepted answers

KristineS

Hi WestsideTaxpayer.

Yes, you may need to combine income if you have more than two types of income that fit no where else in the software's Income section. You're correct that the Miscellaneous Income section has only two line entries available.

Typically, settlements or judgments from class-action or similar type lawsuits are reported on Form 1099-MISC, which would be added in the 1099-MISC income section. If however no form is issued, settlement income ends up being reported as 'other income' reported in the Miscellaneous Income section as you mention.

The income descriptor line allows you a number of character spaces to describe the income type. You could abbreviate or use single words such as "settlement" instead of "settlement income from lawsuit" for instance, to indicate what type(s) of income are being included. The description ends up being reported on Schedule 1, Line Z, so you can check to see what written information is included. Keep good records should the IRS ask for more information.

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KristineS

Hi WestsideTaxpayer.

WestsideTaxpayer

https://community.freetaxusa.com/discussion/comment/343#Comment_343

Thanks for answering. I'm assuming if this is the case for additional income, then for miscellaneous adjustments, we're capped at only one entry for Schedule 1 lines 24a-z? As well, how do I enter items for line 24z?

KristineS

https://community.freetaxusa.com/discussion/comment/346#Comment_346

Westside Taxpayer,

Yes, it's the same for miscellaneous adjustments as it is for additional income. As you answer questions in the income or deductions sections, the program will automatically place Schedule 1 information on the appropriate line. You can always select VIEW at the end of the Summary tab to double check your work.

Line 24z is entered under INCOME>UNCOMMON INCOME>OTHER INCOME. On the page titled "Did you have any of this other income?" scroll to the bottom to Miscellaneous Income. Here there are two lines to enter income amounts and descriptions. What you enter here will show up on Line 24z of Schedule 1.

Since there is only one line available for almost all of the miscellaneous types of income or adjustments on Schedule 1, you may need to add up all the same type of income or adjustments and make a single entry. Take for instance student loan interest paid. This is an adjustment to income.

Many people have several student loans they're paying throughout the year and receive multiple Form(s) 1098-E as a result. There's only one line on Schedule 1 for student loan interest paid, Schedule 1, Page 2, Part II, Line 21. The instructions in the 2023 software state: "Enter the total interest you paid in 2023 on qualified student loans," so you have to add up all the student loan interest amounts and make one entry.

When the IRS receives your tax return, their systems will cross check the single amount you report for student loan interest paid with all the Form(s) 1098 reported to them by the different loan service providers. Your one line of the total student loan interest paid should match the total of what was reported to the IRS under your name and SSN.