 Most of this information comes from the Form 1040 Instructions Tax Year 2022, Instructions for Schedule 1, Additional Income and Adjustments to Income, Adjustments to Income section you can find online at the IRS website, irs.gov, irs.gov, looking at the income tax formula we're focused online to that being the adjustments to income, remembering that the first half of the income tax formula is in essence an income statement, although it's strange when we've got the income minus the equivalent of the expenses those being the deductions getting us down to the equivalent of net income that being taxable income the objective flipped on its head we want taxable income as low as possible in other words in opposed to or as opposed to normally where we want net income as high as possible so we looked at the income line in prior sections now we're focusing in on the adjustments to income which you can think of as kind of like an expense kind of like an adduction a deduction let's do deductions you might hear it called above the line deduction a schedule one deduction and you might say why does it say adjustment to income instead of a deduction and you couldn't think of it as a contra income account but it's basically decreasing the income coming to a subtotal to get us down to the taxable income the reason you might call it like a like a contra income account adjustment to income is because that subtotal is called adjusted gross income and that's an important subtotal because it allows us then to to calculate the phase outs on deductions and credits usually based on this number as opposed to the top line number the income number also just remember the adjustments to income do not have that kind of threshold that we have to clear a standard deduction before they start to benefit as with the itemized deduction so if we qualify for the adjustments to income then we typically can take that adjustment although there's somewhat more limited than the itemized deductions okay so here's the schedule one we're focused on the we're focused here on the moving expenses the deductible part of the self self-employment tax and the self-employed set so let's just give a quick recap of these and then we'll dive into the line by line instructions so the moving expense expenses for members of the armed forces you'd have to attach form 3903 the main thing to remember here is there was a big like restriction in the type of moving expenses that can be deductible you might have people asking you well I have to move I have to move for my job don't I get a deduction for that it used to be that you'd get more capacity for deduction for moving expenses for normal people the justification being that allowing people to deduct their moving will make it easier for them to be to be more flexible and be able to move from place to place as their jobs are needed which is a decent justification but in any case they they remove that and restricted it severely so that now you have the moving expenses for members of the armed forces which kind of simplifies the tax code and it kind of makes sense that they kept the members of the armed forces because the armed forces often have these special kind of tax provisions because of their particular situation and oftentimes the military moves and they might have to move suddenly suddenly so so it would make sense there but even then oftentimes the armed forces will reimburse them for the move and if that's the case then you may not be able to take the moving expenses as a deduction because you already got reimbursed for the moving and that would be like a like a double dipping situation and then you've got the deductible part of self-employment tax so we talked a little bit about self employment tax when we looked at the Schedule C income we'll talk more about it when we talk about Schedule C or business type of income on a Schedule C in future presentations it's kind of a complex scenario but the general outline would be remember that if you're a W-2 employee you're paying income tax and you're also paying Social Security and Medicare those are the the payroll taxes and your employer is matching Social Security and Medicare and having to pay those as well if you're a Schedule C person meaning you have a sole proprietorship then you have to pay your income tax but the IRS also wants to force you to pay the Social Security and Medicare kind of like the payroll taxes which they call the self-employment tax on in essence the net income of the Schedule C schedule C being the most common kind of form that we would think of subject to self-employment tax and so so then you have to calculate that