What Was the 1040A Form?

The 1040A Form was a simplified version of the 1040 form for individual income tax. To be eligible to use a 1040A form, an individual had to fulfill certain requirements such as not itemizing deductions, not owning a business, and having a taxable income less than $100,000.

Unofficially known as the "short form," the 1040 A was eliminated for the 2018 tax year filing, due April 15, 2019, in favor of the redesigned 1040 Form that debuted that year.

Understanding Form 1040A

Most US tax payers use the IRS Form 1040 to file their income tax returns. The 1040 Form is a detailed form that gives taxpayers with complex investments, itemized deductions, multiple tax credits, and more than $100,000 annual income more opportunities to lower their tax liability. Since additional tax paperwork is usually required with the 1040 Form, individuals with simpler tax situations previously had the option to use the 1040A form instead.

Form 1040A was a simplified version of Form 1040. The two-page form allowed taxpayers to report ordinary income, some deductions, and credits. Individuals who fell under any of the five status options—single, head of household, married filing separately, married filing jointly, or widowed—could file their tax returns using the 1040A. While the 1040A form was available to taxpayers of any age and filing status, not everyone qualified to use this form.

Tax filers who used the form must have earned less than $100,000 taxable income and not have exercised any incentive stock options (ISO) during the tax year. The income reported must have been earned as a wage, salary, tip, capital gain, dividend, interest income, unemployment compensation, pension, annuity, taxable Social Security and railroad retirement benefit, taxable scholarship or grant, and Alaska Permanent Fund dividend. Any other form of income, such as business income, had to be reported on the more complex form 1040.

How Form 1040A Worked

Form 1040A also gave taxpayers the opportunity to claim several tax deductions to reduce their taxable income. However, the only deductions that could be claimed included student loan interest, post-secondary tuition and fees, classroom expenses, and IRA contributions. Taxpayers using Form 1040A could not claim itemized deduction. This limitation meant that if an individual qualified for other deductions from sources such as charity donations or mortgage interest deductions, and the total itemized deductible amount was more than the standard deductions, it would not have beenadvantageous to use 1040A.

The 1040A Form could also be used to claim tax credits Tax credits reduce the bottom line or total tax bill of a taxpayer. The credits that could be claimed using this form were the American Opportunity Tax Credit (AOTC), Lifetime Learning Credit (LLC), Earned Income Credit (EIC), child tax and additional child tax credit, child and dependent care credit, credits for the elderly or disabled, and retirement savings contribution credit.

Form 1040A vs. Form 1040EZ

Another variant of Form 1040 was Form 1040EZ, which was even simpler and easier to fill out than Form 1040A and was also eliminated starting with the 2018 tax filing. But with Form 1040EZ, the individual had to file as either a single taxpayer or as married filing jointly. No deductions could be claimed and only the EIC tax credit could be claimed using 1040EZ.

While the 1040A form was slightly more complex than the 1040EZ form, it was still relatively simple compared to the 1040. Once their financial situation became complicated with dependents, special deductions, and credits (such as those associated with post-secondary education tuition), most taxpayers needed to switch from filing with the 1040EZ to the 1040A.

The redesigned 1040 Form that debuted with the 2018 tax year is designed to be much simpler to use than its predecessor. For this reason Forms 1040A and 1040EZ were eliminated.