- 1). Enter any amount in box 1 (Rents) on Schedule E Supplemental Income and Loss. This amount goes on line 3. If you have royalties follow step 2. If not, complete Schedule E to find the total for line 26 to enter on Form 1040 line 17 only if Parts 2, 3 and 4 do not apply to you. If you must complete Parts 2, 3 and 4, you will enter the amount from line 41 on Form 1040 line 17.
- 2). Enter the amount in box 2 (Royalties) in Schedule E line 4. If you have an amount in box 1 (Rents), you should have entered that according to step 1. Then complete Schedule E to find the total for line 26 to enter on Form 1040 line 17 only if Parts 2, 3 and 4 do not apply to you. If you must complete Parts 2, 3 and 4, you will enter the amount from line 41 on Form 1040 line 17.
- 3). Enter the amount in box 3 (Other Income) on line 21 of Form 1040. You must write what type of income this is in the space provided before the amount box.
- 4). Enter any amount in box 7 (Nonemployee Compensation) on Schedule C line 6. If you were a self-employed person, you must pay self-employment taxes. Follow the steps on Schedule C to determine your net profit for self-employment tax liability.
- 5). Enter any amount in box 13 (Golden Parachute Payments) on line 61 of Form 1040. This only pertains to you if you received any excess payments, which shows in box 13. Then you must pay a 20 percent tax on the money.
- 6). Enter any amount in box 15b on line 32 of the Form 1040. This amount may be subject to tax.
- 7). Enter the amount, if any in box 7 on your federal income tax Form 1040 with all other tax withheld from wages.
- 8). Enter the amount in box 16 if any, on your state tax return as tax withheld from wages.
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