Differences between Tax Forms

December 10, 2013 by in category Taxes tagged as with 0 and 0
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Whether it is your very first time filing your individual federal income tax return or your first time filing with new changes in your personal and home life, deciding which tax form is the right one for you can be a bit confusing. Here we’ll take a look at the differences between each tax form and why it is so important to get things right the first time.

What Basic Forms are Available?

For filing your individual federal income tax return there are 3 different forms available:

  • 1040
  • 1040A
  • 1040EZ
  • What is the Difference Between Each Form?

    1040EZ – This is the simplest of all the forms to complete, hence the name. Taxpayers may use this particular form if they meet the following criteria:

  • You are married and filing jointly or your filing status is single
  • You are not claiming any dependents
  • Your total taxable income is less than $100,000
  • You have only wages, tips, salaries, unemployment wages, taxable scholarship and fellowship grants, Alaska Permanent Funds dividends and all of your total taxable interest does not exceed $1,500
  • You and your spouse are filing jointly, you are both under 65 on January 1, 2014 and neither of you were blind at the end of 2013
  • You are not claiming and credits other than earned income credit
  • If you have any earned tips, they are included in box 5 and box 7 on your W-2 form
  • You are not listed as a debtor in a Chapter 11 bankruptcy claim filed after October 16, 2005
  • You do not currently owe any household employment taxes on wages paid to a household employee
  • You are not claiming any adjustments to your income including: deductions for IRA contributions, student loan interest deductions, educator expense deductions or any type of tuition and fees deduction
  • 1040A – If you are ineligible for the 1040EZ form you may be able to file using the 1040A instead. You must meet the following criteria to qualify for this form:
  • Your taxable income must be less than $100,000
  • You income is from wages, tips, salaries, unemployment wages, taxable scholarship and fellowship grants or Alaska Permanent Funds dividends
  • You do not need to itemize deductions
  • You do not have an alternative minimum tax adjustment
  • The only adjustments you have to your income are an IRA deduction, student loan interest deduction, educator expenses deduction or the tuition and fees deduction
  • You are claiming only earned income credit, credit for child and dependent care expenses, education credits, child tax credit, the additional child tax credit, retirement savings contribution credit or credit for the elderly or the disabled, The 1040A and 1040EZ form are both very similar and fairly easy to use. The 1040A version of the form is better suited for individuals claiming dependents, child care credits, those that are an unmarried head of household and those with IRA deductions.
  • 1040 – This particular form is the more difficult version to complete. The 1040 form must be used if you meet the following criteria:

  • Your total taxable income is $100,000 or greater
  • You currently owe household employment taxes
  • You are self-employed
  • You have certain nontaxable contributions
  • You are the beneficiary of an estate or trust
  • You have capital gains or losses to report
  • When in Doubt

    A simple way for tax payers to think of these 3 forms is to remember that anyone may use the 1040 form to file their individual federal income taxes each year. But the other, more simple, forms were designed to save you time and keep you from filling out more than necessary. While this rule is true for those who qualify for the simpler forms the opposite is true for those individuals who only meet the criteria for the 1040.
    Sources: http://www.irs.gov/taxtopics/tc352.html; http://answers.yahoo.com/question/index?qid=20071021201521AAdcJoA

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