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What is the Difference Between IRS Forms 1040-A, 1040-EZ & 1040?

What is the Difference Between IRS Forms 1040-A, 1040-EZ & 1040?

If you need to file for an individual federal income tax return, you will now use the IRS Form 1040 or 1040-SR for Seniors. The other alternatives above: Forms 1040A and 1040EZ ended in the fiscal year 2018. 

Only Forms 1040-EZ and 1040-A can be used for tax years through 2017. As of the 2018 tax year, these forms are no longer in use. Only Forms 1040 and 1040-SR remain in use.

You can still use Forms 1040-A or 1040-EZ to report your taxes in the years leading up to 2018. Confusing? Let us go through some of the information that compares them. Each form served the same purpose: to report your income and determine if you owe additional taxes or, better yet, receive a refund, but the forms vary depending on the complexity.

The 1040-EZ form is, of course, the easiest to complete. The 1040-A is longer and slightly more complex, and the 1040 is the most detailed and difficult. While anyone can submit Form 1040, they must meet certain conditions to use the shorter 1040-EZ or 1040-A forms. Here's a quick summary to help you choose the right one for your situation.


Form 1040

Use this form if your income is higher, if you have complex investments, and/or if you intend to claim tax credits and itemize your deductions.

If you cannot use Form 1040-EZ or 1040-A, you will use IRS Form 1040. And as of fiscal 2018, 1040 is the only form you can use unless you qualify for the seniors' form, 1040-SR.

This is the most complex form for individual taxpayers; it was simplified in 2018 but offered even more options for claiming deductions and loans. You must submit Form 1040 if:

  • Earn income from the sale of properties

  • You have certain types of income, including unreported tips, self-employment, certain tax-free distributions, an S corporation or partnership, or if you are the beneficiary of property or trust.

  • You itemize your deductions

  • You owe taxes for the use of a household employee

  • Your taxable income is greater than $100,000

Form 1040-A

Use this form if you intend to claim certain tax credits but do not intend to itemize any deductions.

IRS Form 1040-A fell between Form 1040-EZ and the standard Form 1040 in terms of complexity and turnaround time. It offers more room for tax incentives than Form 1040-EZ, including savings for child care, education, and retirement (e.g., IRA contributions). However, it was limited in terms of deductions and credits allowed compared to the standard 1040. If you couldn't use Form 1040-EZ, for example, because you had dependents to claim, you would have been able to use the Form 1040A if:

  • Filing as single, married (filing together or separately), head of household, or qualified widow(er).

  • The only credits for which you can claim are for children and dependents, the credit for work income, the elderly or disabled, education, child tax credit, premium tax credit (for insurance taken out on the health insurance market) or pension savings contribution credit.

  • The only income adjustments are IRA deductions, interest on student loans, educator expenses, and tuition.

  • You do not have an AMT (alternative minimum tax) on shares purchased when exercising a stock option.

  • You do not itemize your deductions

  • Your income comes only from salaries, wages, tips, grants for scholarships, taxable scholarships, interest, regular dividends, distributions of capital gains, pensions, annuities, IRAs, unemployment benefits, taxable social security, or security benefits social. Alaska Permanent Retirement and Dividend Fund

  • Your taxable income is less than $100,000


Form 1040-EZ

Use this form if you do not intend to claim deductions or tax credits. IRS Form 1040-EZ was the most concise of the 1040 forms and the easiest to complete. You can make the standard deduction, but you won't be able to classify the deductions; you can't claim income adjustments (like contributions to an IRA) or claim any tax credits (except for the Earned Income Tax Credit). The Earned Income Tax (EITC) is available to some low-income taxpayers. You can't use the 1040-EZ if you had self-employment income, alimony, dividends, or capital gains.

Form 1040-EZ can be used if all of the following conditions apply:

  • Filing as married filing jointly or single 

  • You (and your spouse, if married, filing jointly) were under 65 on January 1 of the year you filed the taxes and were not legally blind at the end of the year in which you filed.

  • You are not a debtor in a Chapter 11 bankruptcy registered after October 16, 2005

  • You are not required to pay family-wage taxes for wages paid to a domestic employee.

  • You did not itemize deductions

  • You don't claim any dependents

  • Your got tips (if any) are included in boxes 5 and 7 of the W-2

  • Your income comes exclusively from salaries, wages, tips, fellowship grants and taxable scholarships, unemployment insurance, or dividends from the Alaska Permanent Fund Dividend.

  • Your taxable income is less than $100,000

  • Your taxable interest is $1,500 or less


Conclusion 

As a general rule, the longer the tax form, the greater the tax incentives and credits. Filling out Form 1040-EZ or 1040-A instead of Form 1040 was faster and with fewer record-keeping requirements, but you can lose out on tax credits and deductions. As of 2018, the Form-EZ and Form-A versions of the 1040 form were discontinued. If you're unsure of which form is best for your situation, consult an expert like TAXES MADE EZ, INC.


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