What Changes Are Coming to 2022 Form 1040 and Schedule 1? Key Updates You Need to Know

I just saw that the IRS released drafts of the new Form 1040 and Schedule 1 for 2022 yesterday. Wanted to share some of the major changes I noticed since these will affect how we all file next year. The crypto/digital asset question got way more detailed. It used to just ask if you "received, sold, exchanged, or disposed of virtual currency" in 2021. Now for 2022, it specifically asks if you: "(a) received (as a reward, award, or compensation) or (b) sold, exchanged, gift or otherwise disposed of a digital asset (or financial interest in a digital asset)." Looks like they're casting a wider net. The biggest change I see is on Line 1 for wage reporting. Instead of just a single line for wages, they've expanded it into 10 parts (a-i, & z): - Line 1a: W-2 Wages - Line 1b: Household employee wages not on W-2 - Line 1c: Unreported tip income - Line 1d: Medicaid waiver payments - Line 1e: Taxable dependent care benefits - Line 1f: Employer adoption benefits - Line 1g: Form 8919 wages - Line 1h: Other earned income - Line 1i: Nontaxable combat pay - Line 1z: Total of all the above They've also added a checkbox on line 6c for the lump sum Social Security reporting method. On Schedule 1, there are changes to the "Other Income" section with new specific lines for: - Scholarship/fellowship grants not on W-2 - Nontaxable Medicaid waiver payments included on Form 1040 - Pension/annuity from nonqualified deferred comp or non-gov section 457 plans - Wages earned while incarcerated Also, they removed the section blocks on page 2 and made some changes to the EIC reporting. Anyone else notice anything significant in these drafts?

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17 comments

Isabella Costa

•8M

Tax preparer here. These changes are definitely significant and will affect many taxpayers. The digital asset question is the biggest shift in my opinion. The IRS is clearly expanding their focus beyond just cryptocurrency transactions. Under the old wording, simply purchasing crypto didn't require a "yes" according to IRS FAQs. This new language specifically mentions receiving digital assets as rewards or compensation, and even mentions gifting digital assets. This could capture NFTs, mining rewards, staking rewards, and many other digital asset activities. For wage reporting, the breakdown is actually helpful for tax pros but might be confusing for self-preparers. It's essentially taking items that were previously reported on worksheets or other forms and putting them directly on the 1040. The same total will flow through, but now there's more transparency about what makes up that total. The Schedule 1 changes for "Other Income" follow a similar pattern - the IRS is creating specific lines for items that were previously lumped together. This should actually reduce errors and make it easier to properly report these specialized types of income. For those worried about these changes, remember the draft forms may still be revised before final publication. And most tax software will guide you through these changes automatically.

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Isabella Costa

•8M

Based on the new wording, if you only purchased cryptocurrency in 2022 and didn't receive any as rewards/compensation or sell/exchange/gift any, you should still be able to answer "no" to the question. The new language is more specific but doesn't explicitly capture simple purchases where you're just holding the assets. However, if you received any cryptocurrency through mining, staking, airdrops, or as payment for goods/services, you would need to answer "yes" - and those activities would generally be taxable. Similarly, if you sold, exchanged, or even gifted any digital assets during the year, you'd need to answer "yes" as well.

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Freya Andersen

•8M

I had a confusing experience with tax documents this year and found this amazing AI tool called taxr.ai that literally saved me hours of frustration. Looking at these new 1040 changes got me worried because my situation involves crypto staking rewards and some freelance income that would fall under these new categories. I uploaded my documents to https://taxr.ai and it interpreted exactly how my staking rewards should be reported under the new digital asset question. It also figured out which of the new line items my various income sources belonged to. The tool explains complex tax concepts in plain English and even shows you where each item goes on the new forms. With all these Form 1040 changes coming for 2022, I'm definitely using taxr.ai again next filing season to make sure I get it right.

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Freya Andersen

•8M

It's specifically designed for parsing crypto transactions from different exchanges and wallets, and categorizes them correctly. It identifies mining income, staking rewards, and NFT sales separately and shows you exactly where to report each. Much cheaper than what tax preparers charge for crypto! For scholarships and grants, it actually does understand the distinction between what goes on Form 1040 line 1 versus Schedule 1. If the scholarship/grant appeared on a W-2, it guides you to report it as wages. If not, it directs you to the new Schedule 1 line r. It's surprisingly accurate at determining which category your income falls under.

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Leila Haddad

•8M

Just wanted to update everyone after trying taxr.ai for my situation with crypto staking rewards and scholarship income. I was skeptical at first, but this tool is seriously impressive! I uploaded my crypto transaction history and my 1098-T form from my university, and it immediately identified which parts of my scholarship would go on the new Schedule 1 line r versus what would be reported as wages on Form 1040. For my crypto, it correctly categorized my staking rewards as income that needs a "yes" answer to the new digital asset question, and showed me exactly where to report these amounts. The explanations were super clear and it even gave me a preview of how the new form sections would look with my information. Such a relief to feel prepared for these 2022 tax form changes! Definitely recommend giving it a try if you have complicated income sources that will be affected by these new line items.

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Emma Johnson

•8M

These 1040 changes are going to be a nightmare for people with complicated tax situations. I tried calling the IRS three times last year with questions about crypto reporting and couldn't get through after waiting 2+ hours each time. With these new changes, I'm dreading trying to get help next year. I finally found a service called Claimyr that got me through to an actual IRS agent in under 30 minutes. You can check out how it works at https://claimyr.com or see a demo at https://youtu.be/_kiP6q8DX5c. They basically hold your place in the IRS phone queue and call you when an agent is ready to talk. When I eventually got through, the IRS agent gave me specific guidance on how to report my digital assets correctly. With all these new changes to Form 1040 and Schedule 1, I'm definitely using Claimyr again to get official clarification directly from the IRS.

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Emma Johnson

•8M

It works by using their system to navigate the IRS phone tree and wait in the queue for you. You enter your phone number on their website, and when they reach an agent, they call you and connect you directly to that IRS agent. It's your own private conversation with the IRS - Claimyr just handles the waiting part. They don't have access to your conversation with the IRS at all. They simply connect the call once an agent is available and then drop off the line completely. They're essentially just holding your place in line. It's the same queue everyone else is in, but you don't have to be the one sitting there listening to hold music for hours.

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Astrid Bergström

•8M

I feel like I need to update my previous comment after trying Claimyr yesterday. I was super skeptical, but with these Form 1040 changes, I had specific questions about reporting my NFT transactions that I needed answered directly by the IRS. I signed up, provided my phone number, and got a call back in about 45 minutes connecting me to an actual IRS representative. I was shocked it worked! The agent confirmed how the new digital asset question would apply to my NFT activities and explained which of the new Schedule 1 lines I'd need for my specific situation. Having that official guidance straight from the IRS gave me so much peace of mind. Still can't believe I didn't have to waste half a day on hold. If you need answers about these new tax form changes, this service is legitimately helpful.

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Isabella Costa

•8M

Your gig work from Uber and DoorDash shouldn't go on Line 1h. That income is considered self-employment income and should continue to be reported on Schedule C. The "Other earned income" on Line 1h is generally for earnings that are treated as wages but don't fit in the other categories. As a self-employed gig worker, you'll still report your income and expenses on Schedule C, calculate your net profit or loss, and then that flows to Schedule 1 and ultimately to Form 1040. These changes to Line 1 don't change the fundamental way gig workers report their income.

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