What is a 1040 Form
Form 1040 is the standard Internal Revenue Service (IRS) form that taxpayers use to file their annual income tax returns. The form contains sections that require taxpayers to disclose their taxable income for the year in order to ascertain whether additional taxes are owed or whether the filer is due a tax refund.
BREAKING DOWN 1040 Form
Also known as the U.S. individual income tax return or the long form, Form 1040 needs to be filed with the IRS by April 15 in most years. Everyone who earns income over a certain threshold must file an income tax return with the IRS. Individuals file one of several versions of Form 1040, while businesses have different forms to report their profits.
What Information Does Form 1040 Require?
Form 1040 prompts tax filers for information on their filing status and number of dependents. It has an income section where the filer can note wages, salary, taxable interest, capital gains and other types of income. It also allows filers to claim deductions for education expenses, eligible moving expenses (this deduction ends in 2018, under the new tax bill), retirement account contributions and several other categories. Based on the details on this two-page form, the IRS determines an individual's tax liability.
Taxpayers may also need to fill out extra sections called schedules. For example, taxpayers who receive dividends that total more than $1,500 must file Schedule B, which is the section for reporting taxable interest and ordinary dividends. Similarly, those who want to claim itemized deductions on their 1040 have to complete Schedule A. The IRS also has several worksheets to help taxpayers calculate the value of certain credits or deductions.
Other Types of 1040 Forms
There are several variations of Form 1040 depending on the tax filer's individual tax situation. The standard version is the 1040, outlined above.
- Taxpayers who qualify can fill out Form 1040EZ, which is a less comprehensive form. To qualify to use the 1040EZ, tax filers must claim no dependents, have a taxable income that is less than $100,000 per year, and be single or married filing jointly.
- The 1040A falls in between these two extremes, and to file a 1040A, the tax filer must have less than $100,000 in income and must claim the standard deduction, rather than itemizing. They are permitted certain deductions and tax credits, however.
- Form 1040NR is reserved for nonresident aliens who are engaged in trade or business in the United States, and the 1040NR-EZ is a simplified version of this form.
- Finally, if a tax filer makes a mistake or forgets to include information on any of his 1040 forms, he can use Form 1040X for making changes to previously filed 1040s.
For example, imagine two taxpayers each have $9,000 in income but only one of the filers has a child. In this case, the filer with the child or dependent must fill out Form 1040 or 1040A, but the filer with no dependents can submit Form 1040EZ.