Other Income - Taxable Income for Form 1040, Line 21
What Is "Other Income"?
There are many different kinds of taxable income. Some types of taxable income are pretty uncommon, and fall under the category of what the IRS calls "other income". Other income is reported on Line 21 of Form 1040 when you file or efile your tax return.
See different kinds of taxable income.
Is Self-Employment Income Other Income?
Even if you get a 1099-MISC in the mail, make sure you don't confuse self-employment income with other income. Self-employment income is not reported as other income.
Is Nontaxable Income Other Income?
Nontaxable income is not other income. Other income reported on your tax return is always taxable.
What Kinds of Income Is Considered Other Income?
All of the following kinds of income are taxable and may be reported on Form 1040, Line 21:
- Alaska Permanent Fund dividends (generally reported on a 1099-MISC)
- Alternative Trade Adjustment Assistance (ATAA) or Reemployment Trade Adjustment Assistance (RTAA) payments (generally reported on a 1099-G)
- Barter income (The fair market value of goods or services exchanged by two parties is taxable. Both parties should report the full value received from the transaction as other income.)
- Canceled debts (usually reported on a 1099-C)
- Dividends on insurance policies if the amount is more than the total of all premiums you paid
- Gambling winnings, including awards, prizes, jackpots, and contest winnings (Your winnings and any tax withheld may be reported on W-2G, depending on the amount you won and the type of gambling, but the full amount is taxable regardless of whether you receive a W-2G. You may deduct gambling losses up to the amount of your gambling winnings, but you must list all of your winnings on Line 21.)
- Hobby income (This is income from an activity not performed for profit. You can deduct hobby expenses up to the amount of your hobby income.)
- Jury duty pay (Jury duty pay is reported on a 1099-MISC if it totals $600 or more, but any amount is taxable. You can deduct jury duty pay if you have to pay it to your employer.)
- Losses on certain corrective retirement plan distributions of excess deferrals
- Nonbusiness rental income (Income earned from renting personal property, if you engaged in the rental for profit but were not in the business of renting, is reported as other income. You can deduct expenses related to this rental.)
- Recapture of a charitable contribution deduction (if the charitable organization disposes of the donated property within 3 years, or due to the contribution of a fractional interest in tangible personal property)
- Recoveries (reimbursements you received for previously deducted expenses, such as medical expenses, employee expenses, and other deductions)
- Taxable distributions from a Coverdell Education Savings Account (ESA) or a qualified tuition program (QTP) (generally reported on a 1099-Q)
- Taxable distributions from a health savings account (HSA) or an Archer MSA (These are generally reported on a 1099-SA. You can deduct qualified contributions to an Archer MSA.)
- Taxable HSA distributions deemed to be income because you did not remain an eligible individual during the testing period (generally reported on a 1099-SA)
- Taxable portion of disaster relief payments
How Do I Deduct a Net Operating Loss (NOL)?
If you have a net operating loss deduction carried over from a previous year, you can deduct the amount from the other income entered on Line 21 of Form 1040. The efile.com software will fill out the form correctly for you if you have a NOL deduction.
How Do I Report Other Income on My Tax Return?
Generally, you report other income on Line 21 of Form 1040. Alaska Permanent Fund dividends may be reported as unemployment compensation on Form 1040EZ, 1040A, or 1040. When you prepare your tax return on efile.com, the tax software will figure the total amount of your other income and enter it correctly on the appropriate form.
If your only other income is from Alaska Permanent Fund dividends, then you may qualify for the Free Federal Edition.
Unfortunately, except for Alaska Permanent Fund dividends, you can only file other income on a Form 1040, so if you need to report other income, you will not qualify to use the Free Federal Edition. But our prices for preparing a Form 1040 are the lowest around (and the accuracy, ease-of-use, and peace-of-mind are worth it)! Compare our tax return preparation prices.