Be sure to use the easiest tax form you are permitted to.
The Internal Revenue Service (IRS) has three different tax forms from which you can choose when filing your taxes. 1040EZ is the shortest, but you must meet a number of qualifications and your deductions are very limited. 1040A is longer, but allows a number of above-the-line deductions. 1040 is the longest, and is required for incomes over $100,000 or people with self-employment income. If you want to itemize your deductions, you must use 1040.
Who Should Use Form 1040A?
To be eligible for the 1040A, your taxable income must be below $100,000 and can only come from wages, scholarships and grants, interest, dividends, capital gains, unemployment compensation and qualified retirement income. The only deductions that you can claim on a 1040A are for contributions to a traditional IRA and certain education expenses. If you want to claim other above-the-line deductions or itemize your deductions, you must use Form 1040.
Adjusted Gross Income
Gather your W-2 forms and record all of your taxable income in lines 7 through 14, and add them to get your total income for line 15. If your income from either interest or ordinary dividends exceeds $1,500, you must file a Schedule B detailing from where that income came.
List your deductions, if any, on lines 16 through 19 and then write the total on line 20. Subtract line 20 from line 15 to get your adjusted gross income, then subtract the value of your standard deduction and personal exemptions, calculated in lines 22 through 26, and subtract it from your adjusted gross income. Record it on line 27. This is the amount that you have to pay taxes on.
Total Tax Due
Use the tax tables in the Form 1040A instructions to determine how much tax you owe and record this in line 28. If you are eligible for any of the credits listed in lines 29 through 33, write the total in line 34. These credits include child care credits, education credits and retirement contributions credits. Use line 36 to 40 to record any taxes you have had withheld throughout the year and other credits you may qualify for, and record the total on line 41. These payments include any estimated tax payments you made or your employer made on your behalf. If your payments are greater than your taxes owed, you will receive a refund. If your taxes due are greater, you will have to submit additional payments.
