What Is Form 1040: U.S. Individual Tax Return?
Form 1040 is the standard Internal Revenue Service (IRS) form that individual taxpayers use to file their annual income tax returns. The form contains sections that require taxpayers to disclose their taxable income for the year to determine whether additional taxes are owed or whether the filer will receive a tax refund.
- Form 1040 is what individual taxpayers use to file their taxes with the IRS.
- The IRS overhauled the 1040 form starting in tax year 2018.
- The most commonly used lines on the previous years' 1040 forms remain on the new version.
- Electronic filers may not notice any changes because their software will automatically use their answers to complete the new 1040 and needed schedules.
- Many individual taxpayers, however, only need to file a 1040 and no schedules.
Who Needs to File Form 1040?
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 (businesses have different forms to report their profits).
The 1040 form changed for the 2018 tax year after passage of the Tax Cuts and Jobs Act and the IRS examined, according to the agency, "ways to improve the 1040 filing experience." The new, shorter 1040 is billed as easing communication of future tax-law changes and reducing the number of 1040s from which taxpayers must choose.
The most commonly used lines on the previous years' 1040s remain on the new form. Other lines are now on new schedules (see below) and are organized by categories. Electronic filers may not notice any changes because their tax return preparation software will automatically use their answers to the tax questions to complete the new 1040 and needed schedules.
Understanding Form 1040
The 1040 form for tax year 2019 includes two pages to fill out.
All pages of Form 1040 are available on the IRS website. Form 1040 can be mailed in or e-filed.
Form 1040 prompts tax filers for information on their filing status, such identifying information as name, address and Social Security number (some information on one's spouse may also be needed), and the number of dependents. The form also asks about full-year health coverage and whether the taxpayer wishes $3 contributed to presidential campaign funds.
The 1040 income section asks the filer to report wages, salary, taxable interest, capital gains, pensions, Social Security benefits, and and other types of income. It also allows filers to claim the new higher standard deduction introduced with the Tax and Job Cuts Act. For 2019 these deductions are: single or married filing separately, $12,200; married filing jointly or a qualifying widow(er), $24,400; and head of household, $18,350. An additional deduction may be taken by those who are age 65 or older or blind (see "Age/Blindness" on the first page of Form 1040): for single or head of household filers, it's $1,650; for married filing jointly, it's $1,300 for each spouse who is 65 or older or blind.
The new tax legislation eliminated many deductions, including for unreimbursed employee expenses, tax-preparation fees, and moving for a job (except for military on active duty).
The new 1040 uses what the IRS terms a "building block" approach and allows taxpayers to add only the schedules they need to their tax return. Some individuals may now need to file one or more of six new supplemental schedules with their 1040 in addition to long-standing schedules for such items as business income or loss, depending on whether they're claiming tax credits or owe additional taxes. Many individual taxpayers, however, only need to file a 1040 and no schedules.
Taxpayers who receive dividends that total more than $1,500, for example, 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
Taxpayers in certain situations may need to file a different variant of the 1040 form instead of the standard version. Here are the options.
A variety of nonresident aliens, or their representatives need to file this form:
- Those who are engaged in trade or business in the United States
- Representatives of a deceased person who would have had to file a 1040-NR
- Those who represent an estate or trust that had to file a 1040-NR
This is a simplified version of the above form. Nonresident aliens can use this form if they claim no dependents and their only income from U.S. sources is wages, salaries, tips, refunds of state and local income taxes, or scholarship or fellowship grants.
This form is used to figure and pay estimated quarterly taxes. Estimated tax applies to income that isn’t subject to withholding, which includes earnings from self-employment, interest, dividends, and rents. This may also include unemployment compensation, pension income, and the taxable portion of Social Security benefits.
This is a statement accompanying a taxpayer's payment for any balance on the "Amount you owe" line of the 1040 or 1040-NR.
If a filer makes a mistake or forgets to include information on any 1040 form, Form 1040X is used for making changes to previously filed 1040s.
The IRS designed a new 1040 form for seniors for the 2019 tax year. Changes include a larger font, no shading (shaded sections can be hard to read) and a standard deduction chart that includes the extra standard deduction for seniors. Seniors who fill out their taxes online won't notice the difference, but those who do it on paper should benefit.
The Bottom Line
Even taxpayers who use a paid preparer should familiarize themselves with the new 1040, the basic form used to file federal taxes. The new 1040 is simpler to fill out than its direct predecessor, and some taxpayers will definitely benefit from the ease of using the "building block" approach to additional schedules. Taxpayers with questions are best off working with a tax preparer or expert.