Tax Forms 1040

EZ Does It

What is a Form 1040?

Tax Form 1040, also known as the Individual Income Tax Return, is the most important form published by the IRS.

Every U.S. resident must file some version of a Form 1040 each year to ensure that they pay the appropriate amount of personal income tax.

Components of a Form 1040

To complete Form 1040, you’ll need to input information, including your:

  • Name and address
  • Social Security Number
  • Filing status
  • Dependents
  • Regular Income
  • Capital gains and losses
  • Interest or dividend income
  • Business income, if you own a sole proprietorship
  • Claimable tax credits or deductions

1040 step-by-step

  • Specify filing status and personal exemptions, if any
  • Provide information about:
  • The taxpayer
  • Dependents
  • Income items
  • Adjustments to income, if any
  • Based on the information provided above, calculate allowable:
  • Deductions
  • Credits
  • Calculate your gross tax bill.
  • Subtract any taxes withheld from your paychecks or other tax payments you’ve made during the year.
  • Determine your net tax bill or tax return if you’ve already paid more than you owe.
  • Sign and date your tax return.
  • Submit your Form 1040, W2, and any other necessary tax documents to the IRS for review.

How to file

You can file online or by mail.

Form 1040 has three versions, and the one you use will depend on a number of factors:

Form 1040-EZ

This is a shorter, one-page version of Form 1040 meant to make filing your income tax return easier.

You can use this version if you:

  • Have taxable income under $100,000
  • Have income including only:
  • Wages
  • Tips
  • Scholarship funds
  • Unemployment benefits
  • Interest income of $1,500 or less
  • Are under the age of 65
  • Do not have any dependents
  • Are Single or Married Filing Jointly
  • Don’t have any income adjustments
  • Don’t claim any tax credits or deductions other than the Earned Income Tax Credit

Form 1040-A

This is another simple version of the 1040 but can be used by people who have deductions or income adjustments.

You can use this version if you:

  • Have taxable income under $100,000
  • Have income including only:
  • Income sources listed for 1040-EZ
  • Social Security benefits
  • IRA distributions
  • Pension income
  • Annuity income
  • Interest or dividend income
  • Don’t need to itemize deductions
  • Only claim deductions for:
  • IRA contributions
  • Student loan interest payments
  • Educator expenses
  • Tuition and fees
  • Only claim credits for:
  • Earned income
  • Having children
  • Retirement savings contributions
  • Child care expense
  • Education
  • Being elderly or disabled

“Long form” 1040

This is the full two-page version of Form 1040. It must be used if you cannot use either of the shorter versions.

You must use this version if you:

  • Have taxable income over $100,000
  • Have income including:
  • Business or farm self-employment
  • Unreported tips not included on a W-2
  • Dividends on insurance policies that exceed premiums paid
  • Income received as:
  • A partner in a business
  • A shareholder in an S corporation
  • A beneficiary of an estate or trust
  • Need to itemize deductions
  • Claim credits or deductions not included in the shorter versions
  • Employ staff in your home and owe employment taxes

IRS schedules

IRS schedules are additional forms you may need to complete and attach to Form 1040 if you need to report additional income, deductions, or credits.

  • Schedule A—For reporting itemized deductions, such as medical expenses, taxes paid to other jurisdictions, mortgage interest payments, and gifts to charity. It is only useful if the total of your itemized deductions is higher than the standard deduction allowed by the IRS.
  • Used with: Long Form 1040

 

  • Schedule B—For reporting dividend or interest income. If you receive this type of income, you will receive a Form 1099-DIV or 1099-INT, which is necessary for the completion of Schedule B.
  • Used with: Form 1040-EZ, 1040-A, Long Form 1040

 

  • Schedule C—For reporting business income or losses. The IRS also provides a simpler version, Schedule C-EZ, for business income that meets certain criteria.
  • Used with: Long Form 1040

 

  • Schedule D—For reporting capital gains and losses.
  • Used with: Long Form 1040

Need to know

  • If you have any doubt about whether or not you qualify for the 1040-EZ or 1040-A, using the Long Form 1040 is your best bet.
  • You need all your W-2 and 1099 forms to complete your 1040.

References

  1. https://turbotax.intuit.com/tax-tools/tax-tips/Taxes-101/What-Information-Is-Needed-for-Tax-Returns-/INF14348.html
  2. http://taxhow.net/articles/1040-step-by-step-guide
  3. http://www.money-zine.com/financial-planning/tax-shelter/irs-tax-forms-explained/
  4. http://blogs.marketwatch.com/taxwatch/2014/04/10/finally-tax-form-1040-explained/
  5. https://turbotax.intuit.com/tax-tools/tax-tips/IRS-Tax-Forms/What-Is-an-IRS-1040-Form-/INF14479.html
  6. https://www.irs.gov/taxtopics/tc352.html
  7. https://www.irs.gov/pub/irs-pdf/f1040sce.pdf
  8. https://www.thebalance.com/which-tax-form-to-file-3193190
  9. https://www.irs.gov/pub/irs-soi/soi-a-inpd-id1606.pdf

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