The Difference in 1040 Tax Forms
Knowing which tax form to use can sometimes be a little difficult. Fortunately, our software takes on all the decision making process, determining exactly what needs to be filed in each situation. In most cases, a filer's return will use either a 1040EZ, 1040A, or the 1040 tax form. While we make this determination automatically, we know that some visitors may be interested in knowing more about what each of these covers. Below we have provided a basic outline of each as well as some the specifications for using them:
This is the most basic of all of the end of year tax return forms. Individuals who are filing either single or married filing jointly can use this. To use this, a bankruptcy could not have been filed for after October 15th; the total household income must be under $100,000. No deductions or special circumstances, such as children, student loan interest deductions, mortgage, can be claimed. In fact, it does not allow any deductions to be itemized; as a result the standard deduction must be taken. However, the Earned Income Credit (EIC) can be claimed using this.
The 1040A is often referred to as the “Short Form.” It allows for many of the special circumstances that the 1040EZ does not accommodate, including: student loan interest, classroom expenses, college tuition, IRA contributions and more. This form is for anyone regardless of filing status; those who are married but filing separately are also eligible. As with the EZ, expenses cannot be itemized, the standard deduction must be taken. However, extra deductions can be claimed such as: child tax credit, Hope and Lifetime Learning educational credit, credit for the disabled or elderly, or child/dependent care expenses. The EIC can also be claimed with this form.
Under $100,000 must be made from: wages, Social Security benefits, pensions, interest or annuities, unemployment, taxable grants, or Railroad Retirement benefits. There are other provisions such as incentive stock options that must not be taken during the year in order to qualify. The benefit to this form is that it is shorter than the traditional 1040 and often takes less time to complete and averages less time for the IRS to process.
If you want to correct an error or oversight that you made when you filed a tax return using Form 1040, Form 1040EZ, Form 1040A, Form 1040NR or Form 1040NR-EZ, use a Form 1040X to amend your return. There are several reasons for amending a tax return. You might need to change your filing status from single to married or alter the number of dependents that you claimed. Discovering an additional Form W-2 or Form 1099 may make it necessary for you to report additional income or withholding. Making changes to the tax deductions, personal exemptions or tax credits that you claimed would also require you to file an amended return.
If you decided to amend your tax return with a Form 1040X, remember that this form can only be filed after your initial tax return has been processed. A paper copy must be filed; online filing is not available for this form. This is a generic form, so be sure to write the tax year that you are correcting at the top of the form. If you need to fix your returns for multiple years, you will need to file a separate Form 1040X for each year that you are correcting.
Commonly referred to as the “Long Form”, this is the most complex of the three but allows for the most deductions and special circumstances. Anyone who does not qualify for either the EZ or the A must use this. It includes all filing statuses. It also includes all types of wages and income. Those who are self-employed, in partnerships, shareholders in S corporations or households with income over $100,000 must use this. Those who are currently employed but did not have either Medicare or Social Security taxes withheld must file this as well.
Besides all the deductions and credits listed above there are additional deductions such as mortgage interest, foreign taxes paid, allowing for claims of losses in federally declared natural disasters and more. If an adoption was done during the year, this form must be used to file the credit. If you want to itemize your deductions, or have received less common forms such as a K-1, 1042, 1120 or 1041, this is the form that must be used. In general, this is what is used when the filer no longer qualifies for either the EZ or A.
A note regarding printed forms - It is possible for tax law changes to occur after the US Treasury produces its annual 1040 forms. In this instance, if you do not plan to use an electronic software program such as ours, you'll need to wait until the Treasury issues replacement forms. For example, in 2013 the IRS altered the 1040 form based on changes enacted by Congress the previous year, in the American Taxpayer Relief Act (ATRA). This was not available until January 30th of that year.
Besides determining which 1040 to use there are also a number of attachments (known as schedules) which, depending upon your situation, may be necessary to include with your return.
A taxpayer may need to complete one or more schedules to calculate and report various taxable items. The total computed on all schedules is then transferred to and filed with the Form 1040. When using our software, if we determine that these are necessary for your filing our software will include them with your tax return at no additional cost to you.