Which schedule includes additional income and adjustments to income?

The correct answer is Schedule 1, which is used to report additional income and adjustments to income. This schedule provides taxpayers with a way to include various types of income that are not reported directly on the main Form 1040, such as unemployment compensation, jury duty pay, or other earnings. Additionally, Schedule 1 allows for adjustments that can reduce a taxpayer's overall income, such as educator expenses, student loan interest, or the health savings account deduction. This helps in calculating the adjusted gross income (AGI) more accurately.

Using Schedule 1 is crucial because it helps to ensure that all relevant financial details are captured effectively on an individual's tax return. By allowing taxpayers to report these additional incomes and adjustments, it contributes to an accurate assessment of their tax liability.

Other schedules, such as Schedule A, B, and C, serve different purposes. Schedule A is used for itemized deductions, Schedule B is specifically for reporting interest and dividend income, and Schedule C pertains to profit or loss from a business. Understanding the purpose of each schedule is key to effectively filing taxes and optimizing the potential for deductions and credits.