A:

When you file your annual income tax return with the Internal Revenue Service, there are three forms you may be able to use: 1040EZ, 1040A and 1040. 1040EZ is the simplest form, but only taxpayers who meet certain qualifications can use it.

You must choose single or married filing jointly as your filing status and you must not claim any dependents. You (and your spouse) must be 64 or younger at the end of the tax year and not blind.

Your taxable income must be less than $100,000 and can only come from the following sources: wages, salaries, tips, taxable scholarship and fellowship grants, unemployment compensation, and Alaska Permanent Fund dividends. If you received taxable interest, it must be $1,500 or less (if it is $1,500 or more, you must file Schedule B, and you can’t file schedules with form 1040EZ). Also, if your job pays tips, they must be accounted for in boxes 5 and 7 on your W-2.

You must not claim any tax credits other than the earned income tax credit (available to certain low-income taxpayers) and you can’t take any deductions other than the standard deduction. You must not owe any household employment taxes (which would only apply if you had a household employee) and, finally, you must not be in Chapter 11 bankruptcy if you filed for bankruptcy after October 16, 2005.

The IRS does not say that you must file form 1040A or form 1040 if you have dependents or if you have a deductible expense like student loan interest. You are allowed to file form 1040EZ in these circumstances; it just isn’t the best choice since it will cost you money. While form 1040EZ is faster to fill out and has minimal recordkeeping requirements, the savings you can achieve by taking all the credits and deductions you’re entitled to on one of the longer tax forms will usually be worth the effort. 

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