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Form 1040—Lines 21 and 23 Attach Form(s) W-2G to • Any Pay-for-Performance Success Form 1040 if any federal in- Payments that reduce the principal balance Line 21 come tax was withheld. of your home mortgage under the Home TIP Other Income Affordable Modification Program. • Jury duty pay. Also, see the instruc- • Life insurance proceeds received be- Do not report on this line any cause of someone’s death (other than from tions for line 36 on page 35. income from self-employment certain employer-owned life insurance con- or fees received as a notary • Alaska Permanent Fund dividends. CAUTION ! tracts). public. Instead, you must use • Alternative trade adjustment assis- Schedule C, C-EZ, or F, even if you do not • Gifts and bequests. However, if you tance (ATAA) payments. These payments have any business expenses. Also, do not received a gift or bequest from a foreign should be shown in box 5 of Form 1099-G. report on line 21 any nonemployee com- person of more than $14,139, you may • Reimbursements or other amounts re- pensation shown on Form 1099-MISC. In- have to report information about it on Form ceived for items deducted in an earlier year, stead, see the chart on page 11 to find out 3520, Part IV. See the Instructions for such as medical expenses, real estate taxes, where to report that income. Form 3520. general sales taxes, or home mortgage in- Taxable income. Use line 21 to report any terest. See Recoveries in Pub. 525 for de- taxable income not reported elsewhere on tails on how to figure the amount to report. your return or other schedules. See the ex- • Income from the rental of personal amples below. List the type and amount of Adjusted Gross property if you engaged in the rental for income. If necessary, show the required in- profit but were not in the business of rent- Income formation on an attached statement. For ing such property. Also, see the instructions more details, see Miscellaneous Income in for line 36 on page 35. Pub. 525. • Income from an activity not engaged Line 23 Examples of income to report on line 21 in for profit. See Pub. 535. include the following. Educator Expenses • Loss on certain corrective distribu- • Taxable distributions from a Cover- tions of excess deferrals. See Retirement If you were an eligible educator in 2009, dell education savings account (ESA) or a you can deduct on line 23 up to $250 of Plan Contributions in Pub. 525. qualified tuition program (QTP). Distribu- qualified expenses you paid in 2009. If you • Dividends on insurance policies if tions from these accounts may be taxable if and your spouse are filing jointly and both they exceed the total of all net premiums (a) they are more than the qualified higher of you were eligible educators, the maxi- you paid for the contract. education expenses of the designated bene- mum deduction is $500. However, neither ficiary in 2009, and (b) they were not in- • Recapture of a charitable contribution spouse can deduct more than $250 of his or cluded in a qualified rollover. See Pub. 970. deduction relating to the contribution of a her qualified expenses on line 23. You may Nontaxable distributions from these ac- fractional interest in tangible personal be able to deduct expenses that are more counts, including rollovers, do not have to property. See Fractional Interest In Tangi- than the $250 (or $500) limit on Schedule be reported on Form 1040. ble Personal Property in Pub. 526. Interest A, line 21. An eligible educator is a kinder- and an additional 10% tax apply to the You may have to pay an addi- garten through grade 12 teacher, instructor, amount of the recapture. See the instruc- tional tax if you received a tax- counselor, principal, or aide who worked in tions for line 60 on page 46. able distribution from a a school for at least 900 hours during a CAUTION ! Coverdell ESA or a QTP. See school year. • Recapture of a charitable contribution the Instructions for Form 5329. deduction if the charitable organization dis- Qualified expenses include ordinary and poses of the donated property within 3 • Taxable distributions from a health necessary expenses paid in connection with years of the contribution. See Recapture if savings account (HSA) or an Archer MSA. books, supplies, equipment (including no exempt use in Pub. 526. Distributions from these accounts may be computer equipment, software, and serv- • Canceled debts. These amounts may taxable if (a) they are more than the un- ices), and other materials used in the class- be shown in box 2 of Form 1099-C. How- reimbursed qualified medical expenses of room. An ordinary expense is one that is ever, part or all of your income from the the account beneficiary or account holder common and accepted in your educational cancellation of debt may be nontaxable. in 2009, and (b) they were not included in a field. A necessary expense is one that is See Pub. 4681 or go to www.irs.gov and qualified rollover. See Pub. 969. helpful and appropriate for your profession enter “canceled debt” or “foreclosure” in as an educator. An expense does not have You may have to pay an addi- the search box. to be required to be considered necessary. tional tax if you received a tax- able distribution from an HSA Qualified expenses do not include ex- Nontaxable income. Do not report any CAUTION ! or an Archer MSA. See the In- penses for home schooling or for nontaxable income on line 21. Examples of structions for Form 8889 for HSAs or the nonathletic supplies for courses in health or nontaxable income include the following. Instructions for Form 8853 for Archer physical education. • Child support. MSAs. You must reduce your qualified ex- • Economic recovery payments of $250 • Amounts deemed to be income from penses by the following amounts. an HSA because you did not remain an made to certain recipients of social security • Excludable U.S. series EE and I sav- eligible individual during the testing pe- benefits, supplemental security income, ings bond interest from Form 8815. riod. See Form 8889, Part III. railroad retirement benefits, or certain vet- • Nontaxable qualified tuition program erans disability compensation or pension • Prizes and awards. earnings or distributions. benefits. • Gambling winnings, including lotter- • Any nontaxable distribution of Cover- • Vouchers or payments made for such ies, raffles, a lump-sum payment from the dell education savings account earnings. vouchers of $3,500 or $4,500 you received sale of a right to receive future lottery pay- under the CARS “cash for clunkers” pro- ments, etc. For details on gambling losses, • Any reimbursements you received for gram to buy or lease a new fuel-efficient see the instructions for Schedule A, line 28, these expenses that were not reported to on page A-11. automobile. you in box 1 of your Form W-2. - 29 - Need more information or forms? See page 96.