June 29, 2015

Line 21 on your Form 1040 return may be confusing because it’s somewhat of a catch-all line where different items are reported.

Basically, use line 21 to report taxable income not reported elsewhere on your return or on other schedules of your return. You should list the type and amount of income.

Some examples of the different types of income to report on line 21 follow:

  • Most prizes and awards
  • Jury duty pay
  • Alaska permanent fund dividends
  • Recoveries
  • Income from the rental of personal property but only if you are not in the business of renting such property
  • Income from an activity not engaged in for profit
  • Taxable distributions from a Coverdell education savings account or a qualified tuition program
  • Taxable distributions from a health savings account or an Archer medical savings account
  • Gambling winnings
  • Re-employment trade adjustment assistance payments
  • Canceled debts
  • Taxable part of disaster relief payments

Net operating loss (NOL) deductions from prior years are also included on line 21. They should be shown in parentheses and serve as a reduction to the other income items listed on the return. In other words, NOLs are deducted from your current-year revenue sources.

Do not report any income from self-employment or fees received as a notary public on line 21. Those items go on Schedule C or F.

In addition, do not include any nontaxable income items on line 21. Some common examples would be:

  • Child support
  • Life insurance proceeds received because of someone’s death
  • Gifts and bequests

It’s important to include all of your sources of income when gathering tax information for your tax professional each year.

This article was originally posted on June 29, 2015 and the information may no longer be current. For questions, please contact GRF CPAs & Advisors at marketing@grfcpa.com.