Wages Salaries and Tips

Your employer reported your wages, salaries, tips, and other compensation in box 1 of your Form W-2.

Include the full amount of tip and overtime income in the calculation of earned income when determining eligibility for the earned income tax credit, even if all or part is deductible.

Include all amounts reported in box 1 of Form W-2 for both you and your spouse if you're filing a joint tax return with your spouse.

Don't include your Form W-2 pre-tax contributions in the pre-tax contributions section.

Military & Combat Pay

You can also choose to include your nontaxable combat pay in earned income for the EITC. Your employer reported your nontaxable combat pay in box 12 with code Q on your Form W-2.

This choice may increase or decrease your EITC. Calculate your EITC both ways to see which option provides the greater benefit. For more information, see Nontaxable combat pay in Publication 596, Earned Income Credit.

Temporary & Short-term Disability Insurance

If you took parental leave or were temporarily disabled during the year and your employer paid you, they reported your income on your W-2. Enter that income here.

Report income earned from gig work, even if it's a side job, part time or temporary.

Enter income here if you earn money from a job even if income taxes were not withheld. You may or may not have received a Form 1099 for all income.

The income may have been earned through an app or website to:

• Drive a car for booked rides or deliveries
• Run errands or complete tasks
• Provide creative or professional services
• Provide other temporary, on-demand or freelance work

Your gross income includes all the income you received. We will subtract your expenses later.

For more information, visit Manage Taxes for Your Gig Work

If you:

• Are self-employed (You may or may not receive a Form 1099 for all income)
• Provide a good or service
• Selling goods online
• Run a business or farm
• Are a minister or member of a religious order

Your gross income includes all the income you received. We will subtract your expenses later.

For more information, visit Self-employed individuals tax center

If you retired on disability, we consider the taxable benefits you received under your employer's disability retirement plan earned income for the purposes of the EITC until you reach minimum retirement age.

The minimum retirement age is the earliest age at which you could have received a pension or annuity if you weren't disabled.

Include temporary or short-term disability in your wages.

Pay you received for work you performed while an inmate in a penal institution isn't earned income when figuring the earned income credit.

This includes paid work performed while in a work release program or while in a halfway house.

For more information, see Publication 596, Earned Income Credit, Earnings while an inmate.

Foreign earned income is income earned while living and working outside the United States, District of Columbia, or U.S. possessions or territories.

If you’re a U.S. government employee working outside the United States, that income is not considered foreign earned.

If you're not a government employee and you work at an embassy, we consider that income as foreign income for the EITC.

For more information, see Form 2555, Foreign Earned Income.

Note: If you elect to file Form 2555, you are not eligible to claim the EITC.

If you receive retirement benefits in the form of pension or annuity payments from a qualified employer retirement plan, all or some portion of the amounts you receive may be taxable.

It's all taxable if:

• You didn't contribute anything or aren't considered to have contributed anything for your pension or annuity
• Your employer didn't withhold contributions from your salary, or
• You received all your contributions tax-free in prior years

Part of it's taxable if:

• You contributed after-tax dollars (use the General Rule and Simplified Method to calculate)

Additional rules apply if you received payments before age 59 and a half, are a survivor or beneficiary, or have other situations. For more information visit Tax Topic 410.

For the EITC, include your full unemployment compensation benefits. You find this income on Form 1099-G.

If your employer's fund provided supplemental benefits, include any amounts reported on Form W-2, box 1.

For the EITC, include only the taxable amount of your Social Security and railroad retirement benefits.

IRS Notice 703 can help you determine if any of your Social Security benefits are taxable. For more information visit Tax Topic 423.

To compute the taxable amount of your benefits, see "Which worksheet to use" in Publication 915, Social Security and Equivalent Railroad Retirement Benefits.

Enter any amount of taxable scholarship not reported on your Form W-2.

This amount includes scholarship or grant money not found on your W-2 if the money was:

• Used for incidental expenses, such as room and board, travel, and optional equipment
• Received as payment for teaching, research, or other services required as a condition for receiving the scholarship or fellowship grant

Don't include amounts you received for services required by the National Health Service Corps Scholarship Program, the Armed Forces Health Professions Scholarship and Financial Assistance Program, or a comprehensive student work-learning-service program operated by a work college.

For more information visit Tax Topic 421.

When you were self employed, a gig worker, or owned and operated a business, you may have been able to deduct certain business expenses from your income so you paid less tax.

Business expenses can include:

• Home office expenses
• Car and truck expenses
• Rent
• Employee pay and pensions
• Insurance
• Interest on debts
• Legal and professional fees
• Taxes
• Travel and meals

These deductions are different from the personal deductions you made if you chose to itemize your deductions. You can deduct your business expenses here and still choose the standard deduction later.

How to check last year's tax return?

If you were self-employed in you can find your deductible expenses on line 28 of Schedule C.

Learn more about business expenses

Common types of interest income include interest earned from bank accounts or from lending money.

How to check last year's tax return

If you earned interest income in , check for an amount in:

• Line 2b on Form 1040 of your federal tax return

Investment income for the EITC includes:

• Interest (both taxable and tax-exempt)
• Dividends
• Capital gain income (not losses)
• Some rent and royalties or
• Net income from passive activities

See Publication 550, Investment Income and Expenses for more information.

Use Worksheet 1 in Publication 596, Earned Income Credit, to figure your investment income if any of the following statements are true for 2025:

• You are filing Schedule E (Form 1040).
• You are reporting income from the rental of personal property not used in a trade or business.
• You are reporting from Form 8814 (relating to election to report child's interest and dividends).
• You have income or loss from a passive activity.
• You are filing Form 4797 (relating to sales of business property).

'Other types of income include

• Individual Retirement Account (IRA) distributions (except qualified distributions from Roth IRAs) Trust and 401k distributions
• Capital losses (not gains)
• Alimony payments you received under a divorce or separation agreement executed before 2020
• Rental real estate, royalties, partnerships, S corporations, trusts, etc.
• Income from rental of personal property if you engaged in the rental for profit but were not in the business of renting such property
• Taxable distributions from a Coverdell education savings account (ESA) and qualified tuition program earnings.
• Qualified tuition program earnings
• Prizes, awards, and gambling winnings
• Jury duty fees
• Alaska Permanent Fund dividends
• Reimbursements or other amounts received for items deducted in an earlier year, such as medical expenses, real estate taxes, or home mortgage interest

'Do not include:,'

• Alimony payments you received under a divorce or separation agreement entered into after 2019
• Child support
• Welfare benefits such as Temporary Assistance for Needy Families (TANF), food stamps, section 8 housing allowance
• Nontaxable foster care payments
• Nontaxable employee benefits such as education assistance
• Veterans' benefits, including VA rehabilitation payments
• Workman's compensation
• Life insurance proceeds received because of a person's death
• Money or property that was inherited, willed to you, or received as a gift
• Unemployment benefits

See Publication 525, Taxable and Nontaxable Income

Enter up to of the interest you paid on your qualified student loan. You can find this on your Form 1098-E if you paid more than $600 in interest.

The loan must have paid qualified higher education expenses to attend an eligible educational institution. Also, the expenses must have been:

• For you, your spouse, or a person who was your dependent when you took out the loan;
• Paid or incurred within a reasonable period of time before or after you took out the loan; and
• For education provided during an academic period for an eligible student.

You can't claim the deduction if you aren't legally obligated to make payments on the loan.

For more information, see Publication 970, Tax Benefits for Education (opens in a new tab).

If you're a teacher, enter up to ( if married filing jointly and both you and your spouse are teachers) of unreimbursed expenses such as:

• Fees for participation in professional development courses
• Books and supplies
• Computer equipment (including related software and services)
• Other equipment
• Supplementary materials that you use in the classroom

For more information, see IRS Topic 458 (opens in a new tab).

Enter any IRA contributions you made outside of your payroll contributions.

For more information see, IRA Deduction Limits (opens in a new tab).

If you or your spouse were self employed and made contributions to qualified retirement plans in , you may have been eligible for the self-employed retirement plan deduction.

To qualify, you or your spouse must have:

• Been a sole proprietor
• Been a working partner in a partnership, or
• Had a limited liability company

Eligible plans may have included:

• Simplified Employee Pension (SEP) plan
• Savings Incentive Match Plan for Employees
• Solo-401(k)
• Other qualified retirement plans

Don't include Individual Retirement Arrangement (IRA) contributions.

You must have used a special rule to calculate retirement plan contributions for yourself.

Learn more about self-employed retirement contributions. (opens in a new tab)

Enter any Health Savings Account (HSA) contributions that you didn't include under HSA, FSA, or other “cafeteria plan” above.

For more information visit About Publication 969, Health Savings Accounts and Other Tax-Favored Health Plans (opens in a new tab).

If you made alimony or separate maintenance payments under a court order that was executed before January 1, 2019 and the order didn't specifically state that you can't deduct your payments, enter the amount you paid during year here.

Don't include amounts you paid for:

Family or child support

Also don't include amounts if the court order was modified and states that you can't deduct your payments.

Alimony or separate maintenance made under a court order executed after December 31, 2024

For more information, see Tax Topic 452 (opens in a new tab).

If you withdraw funds from a certificate of deposit or other deferred interest account before maturity, you may be charged a penalty. You can find this penalty on your Form 1099-INT in box 2. Enter that amount here.

If you are a member of the armed forces on active duty, and the military ordered you to permanently change your duty station, enter any moving expenses the military didn't reimburse you for here. Moving expenses include:

• Direct travel from your old home to your new one
• Cost of packing and moving your personal belongings

For more information, see Tax Topic 455 (opens in a new tab).

If you are a/an:

• Armed Forces reservist
• Qualified performing artist
• Fee-basis state or local government official
• Employee with impairment-related work expenses

You may include expenses that are common and accepted in your field of trade, business, or profession, or expenses for things that are helpful and appropriate for your business.

If you don't fit into one of the listed categories, you may not claim adjustments for these expenses.

For more information and a list of qualified expenses, see Form 2106, Employee Business Expenses (opens in a new tab).

If you or your spouse were self employed and had a net profit for the year, you could have deducted your health insurance premiums.

Eligible premiums were medical, dental, vision, and long-term care insurance. The policy could be for yourself, your spouse, and your dependents. The policy could also cover your child who was under the age of 27 at the end of the year, even if the child wasn't your dependent.

Learn more about self-employed health insurance. (opens in a new tab)