Which Tax Form Should You File?
No one loves doing taxes. Some do not like how much time it takes, some worry over the potential for making mistakes, others worry over having to pay the IRS a sizable amount of money and others are confused by all of the forms.
Before you get started on your tax return in the coming year, one thing that we can shed some light on is those forms! Here is all you need to know to figure out which form you should file.
What Are Your Options?
This form is by far the simplest form to file with the IRS.
It is ideal for those who have an annual taxable income of less than $100,000 and no dependents. This may also be the best form to choose if you are filing as a single individual or are married filing jointly.
It is a one page form that has four simple sections to complete including personal information, sources of income, payments, credits and tax. There is an area where you calculate your refund or amount owed and you sign verifying that all information is correct.
The only downside to completing this form is that it is possible that you may miss out on some important tax benefits (important deductions) by completing the shorter form.
The 1040A form allows for some additional complexities. With it, you must still make less than $100,000 in taxable income, but you can have capital gains distributions from a mutual fund or IRA. You can also claim certain credits like education credits, child tax credits, earned income credit and others.
You still cannot itemize your deductions using the Form 1040A, so like with the 1040EZ, you may be missing out on some important tax savings by using this form. Both the 1040EZ and 1040A are intended for those whose tax returns are uncomplicated.
3. Form 1040
Anyone can complete the Form 1040 for their annual tax return. It is much more complex and allows taxpayers to itemize deductions and get credit for many things that you cannot if you use the other two forms. When you have various types of income, it is best to use Form 1040.
There are also some instances in which you must file using the 1040 form. For example, if you receive any self-employment income, are in Chapter 11 bankruptcy, have income from a foreign trust or if you are claiming the adoption credit.
There are other groups of individuals who must use the 1040 form as well. So if there is anything complicated about your taxes, the best rule of thumb is to use this form.
Still Have Questions?
If you are still left wondering which tax form is the best match for your needs, you may want to consider getting input from a tax professional.
Success Tax Relief can quickly review all of your tax and income documents and let you know which form to complete for your next return.
And, if it turns out that you need to complete the 1040 Form, our team can help you complete it thoroughly and accurately so that you do not have to worry.
Give our team a call at 877-825-1179 now with any questions you have.