Pick the right tax-return form
Which form you use to file your taxes depends on your circumstances. The simpler forms can only be used for simpler returns, for example.
This post is by Kelly Phillips Erb at Forbes.com.
Of course, many years and a couple of degrees later, I’ve figured out that I was wrong. There are actually a number of tax forms available for taxpayers.
Here’s the skinny on a number of them, to help you figure out which one makes the most sense for you.
Federal form 1040EZ, Income Tax Return for Single and Joint Filers With No Dependents. The key part of the 1040EZ is the "easy" in the title. It’s a very simple return. You can opt to file a federal form 1040EZ if you’re filing as single or married filing jointly with no dependents (remember, when it comes to kids, nothing is ever easy). (Post continues below video.)
If you have dependents or if you’re filing as head of household, qualifying widow(er) or married filing separately, you may not use the federal form 1040EZ no matter how easy you believe your return to be. You also can’t file using a federal form 1040EZ if you’re blind or over age 65 -- those additional standard deductions are only available on the federal form 1040.
Assuming you pass the first test, onto the second: Your taxable income must be less than $100,000. Your income must consist only of wages, salaries and tips, taxable interest of less than $1,500 and unemployment compensation or Alaska Permanent Fund dividends.
You cannot file a federal form 1040EZ if you have self-employment income, rental income or capital gains and losses.
You may not itemize deductions if you use the federal form 1040EZ; you must claim the standard deduction. Additionally, your available credits are limited to the earned income credit or the nontaxable combat pay election.
That means that even if you can use federal form 1040EZ, that doesn’t mean you should. For example, if you’re going to lose deductions for tuition and other expenses, a simpler return doesn’t justify paying more than you should to Uncle Sam.
Federal form 1040, U.S. Individual Income Tax Return. The most common federal income tax is the federal form 1040. There are no real restrictions (other than residency) that affect your ability to file a federal form 1040. It’s the longest, most complicated of the form 1040 but it’s also the safest. If you can’t decide which form to use, there’s usually no harm in filing the federal form 1040.
Federal form 1040-A, U.S. Individual Income Tax Return. A nice compromise between the federal form 1040 and the federal form 1040EZ is the often neglected federal form 1040-A. You can file a form 1040-A if your taxable income is less than $100,000 and your income is from the same kinds of income as the form 1040EZ plus interest and dividends; capital gain distributions; IRA distributions; distributions from pensions and annuities; and taxable Social Security and Railroad Retirement Benefits.
Unlike with the federal form 1040EZ, certain "above the line" adjustments may be claimed on a form 1040-A, including educators expenses, IRA deductions, student loan interest deductions and tuition and fees deductions.
You may not itemize deductions on a form 1040-A. You may claim some credits using the form 1040-A, including the child tax credit, education credits, earned income credit, credit for child and dependent care expenses, credit for the elderly or the disabled and the American Opportunity Credit.
Federal form 1040NR, U.S. Nonresident Alien Income Tax Return.Like it or not, the United States imposes a tax on worldwide income for its citizens and residents. If you’re a nonresident alien, you pay federal income tax only on U.S. source income. In most cases, you must file a tax return if you are a nonresident alien even if you have no income from your trade or business in the United States, you have no U.S. source income or if your income is exempt from U.S. tax under a tax treaty.
There is an exception: You don’t need to file if, as a nonresident alien, your only U.S. trade or business was the performance of personal services with wages of less than $3,650 and you don’t need to file to claim a refund of over- withheld taxes, satisfy additional withholding or claim partially exempt income. Exceptions also apply if you’re a nonresident alien student, teacher or trainee in the U.S. temporarily on an F, J, M or Q visa, and you have no taxable income.
Federal form 1040NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents. You can pretty much guess the rules for filing this form. If the rules for filing a form 1040NR apply (see above) and you have no dependents, you can file a form 1040NR-EZ so long as your taxable income is less than $100,000 and your income from U.S. sources is from wages, salaries, tips, refunds of state and local income taxes, and scholarship or fellowship grants. You can’t take any deductions or credits, though, to be fair, those are pretty limited even with the form 1040NR.
Federal form 1040-SS, U.S. Self-Employment Tax Return. The form 1040-SS is a short form for reporting self-employment income if you or your spouse (if filing a joint return) do not have to file a form 1040 but had net earnings from self-employment of $400 or more (or you had church employee income of $108.28 or more); and are a resident of Guam, American Samoa, the U.S. Virgin Islands, Commonwealth of the Northern Mariana Islands or Puerto Rico.
Federal Form 1040-PR, Planilla para la Declaración de la Contribución Federal sobre el Trabajo por Cuenta Propia (Incluyendo el Crédito Tributario Adicional por Hijos para Residentes Bona Fide de Puerto Rico). The form 1040-PR is the Spanish equivalent of the form 1040-SS for residents of Puerto Rico.
Federal form 1040-C, U.S. Departing Alien Income Tax Return. This is my favorite tax form just because it’s so wacky and complicated. The form 1040-C is sometimes called "your sailing papers" and is used by foreigners who intend to leave the United States (or any of its possessions) for more than an incidental period of time. The purpose of the form is to report and pay federal income tax on income received or expected to be received for the entire tax year. And here’s the part that confuses people: Despite what I just said, a form 1040-C isn’t a final return. You must still file a final income tax return (either a form 1040 or form 1040NR) after your tax year ends.
Federal form 1040ES, Estimated Tax for Individuals. You use a form 1040ES to make estimated payments to the IRS throughout the year if you expect to owe tax of $1,000 or more when you file your federal income tax return. Unlike many of the other forms 1040, this form will be filed more than once during the year since estimated taxes must be paid quarterly.
Federal form 1040-V, Payment Voucher. This is the form the IRS loves best since it’s the form you use to mail in your tax payment. Of course, you can always pay online.
Federal form 1040X, Amended U.S. Individual Income Tax Return. So what happens if you choose the right return, file on time and then you make a mistake? It’s not the end of the world. You fix it by filing a federal form 1040X. Do not simply file another return; it will just confuse IRS and you don’t want to do that.
If, after all that, you have questions about which form to use, check with your tax professional or give the IRS a call at 1-800-829-1040.
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