Navigating Gross Income Reporting
This tool provides an interactive guide to the complex process of reporting and reconciling gross income on Form 1040. Here, you can visually trace how income flows from various sources to your tax return, a foundational step in ensuring accuracy and avoiding compliance issues with the IRS.
The Flow of Income to Form 1040
Source Documents
Schedules
Final Destination
Income Explorer
The integrity of your tax return begins with correctly identifying and reporting income from all sources. Select a source document below to understand its key components and see exactly where it should be reported on your tax return. This is the first line of defense against automated IRS notices.
Select a form to see the details.
Discrepancy Detective
Income reporting errors fall into several common categories. Understanding the type of error is the first step toward resolving it. The chart below shows the relative frequency of common reporting errors, with omissions being the most prevalent due to the IRS's automated matching programs.
Common Reporting Errors
What's the issue?
Select a scenario to diagnose the potential error type.
Select a scenario to see the diagnosis.
Resolution Center
Once a discrepancy is found, choosing the correct resolution path is critical. Filing an amended return (Form 1040-X) when you should have responded to a notice can cause significant delays. Answer the questions below to find the proper course of action for your situation.
Risk Assessment
Failing to report income accurately can lead to significant financial consequences. The IRS assesses interest on underpayments and can impose substantial penalties. The most common is the 20% accuracy-related penalty for negligence, which is often presumed when you omit income reported to the IRS on a Form 1099.
Penalty Calculator
Enter the amount of tax you underpaid to see the potential accuracy-related penalty. This does not include interest, which accrues daily.
Enter an amount and calculate.
