Form 1040 instructions: your easy guide on filing your IRS tax returns

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Edited by Pat Bitton

June 3, 2021

What is form 1040?

IRS released a new version of form 1040, U.S. individual tax return. The new form combines the previous three into a more straightforward, shorter version of the original. The recent changes eliminate the 1040ez and 1040a forms and replace them with new supporting schedules.

The new tax form 1040 is all you'll need to file if you want to claim the standard deduction. If you're going to itemize your deductions, you'll need to file additional schedules with your 1040. You won't have to worry about alternative forms, schedules, or instructions when you file with the new 1040 form because you'll get them automatically and filled out.

So, what is a 1040? An IRS 1040 form is part of the official paperwork used by American taxpayers to file individual annual income tax returns. The 1040 form has several sections, including income, deductions, and taxable income, which help you figure out how much tax to pay or how much refund you'll get. You may need to include additional forms, such as schedules, depending on the amount of income you report.

Form 1040 has a significant impact on how much money you owe or get paid. Your 2019 taxes, which you were to file at the end of 2020, will be on this form.

As of 2019, taxpayers must use one version of Form 1040. Filers with straightforward tax returns could previously use 1040EZ or 1040A. But with President Trump's tax reform package, the tax forms are no longer invalid. Form 1040NR is the only exception for non-resident aliens.

You may need to file a 1040 tax form if you receive the following income or losses:

  • Self-employment earnings of $400 or more
  • Money from a business partner
  • The shareholder of an S you must attach two forms corporation
  • A trust or estate's beneficiary
  • Dividends from your insurance policy that exceed your premiums
  • Interest on securities transferred between interest payment dates that you received or paid
  • Your original issue discount differs from that shown on Form 1099-OID. An investment made by a partner
  • They transferred the IRA funds from your IRA into an HSA
  • Your employer provides adoption benefits or Adoption Credit benefits
  • Your insider stock compensation from an expatriate
  • Federal government-declared disaster has caused you to suffer a loss

Other situations you file a form 1040:

  • You reported no tips to your boss
  • Besides Alternative Minimum Tax AMT, you pay household work taxes
  • Premium tax credits are available to you
  • Your manager did not deduct Social Security and Medicare taxes from your paycheck
  • You are repaying the first-time homebuyer allowance
  • You own a foreign account
  • You received payments from an offshore trust
  • Earnings from abroad

Traditionally, Puerto Rico and American Samoa are bona fide citizens of the U.S. For this reason, they may be eligible to exclude income from these sources.

To fill out a form 1040, you can use PDFChef by Movavi. Click below to get started with PDFChef and to get a free sample form.

Understanding the 1040 instructions

Besides the current Schedule A, the revised Form 1040 includes three new numbered schedules and comprises two pages. On the first page, you enter your basic personal information that includes:

  • Your name
  • Address
  • SSN
  • Filing status

For joint returns, you'll also need your partner's name and Social Security number. You must list all dependents along with their names, Social Security numbers, and their relationship with you. The options to check for child tax credits and dependent tax credits are next to each option.

There will also be a box that you can check to certify that you, your spouse (if filing jointly), and all dependents had qualifying health care coverage for the entire year. If your tax preparer or accountant helps you file your 1040, provide their details as well.

  1. Enter your total income

    Things get more mathematical. Line 1 through 7 is all about your earnings. If you have a W-2, enter the earnings information from that form here. Include all your W-2 forms as well and enter information about any: interest; dividends; pensions; annuities; Individual Retirement Account (IRA) distributions; Social Security benefits.

    Using these sources of income, calculate and enter your adjusted gross income (AGI) on Line 8b.

  2. Calculate your gross income AGI

    Your AGI is the income figure used by the federal government to calculate how much tax you owe. After you've entered all of your income, it's time to make any necessary adjustments to that income. The IRS named these adjustments "above-the-line deductions." They get the title because they must deduce from your total income before you can calculate your AGI.

    These deductions will require you to attach additional forms to your tax return. Previously, 1040 included a 15-line section describing above-the-line deductions. However, because not all tax filers make adjustments, the IRS removed this section from the 1040 and spread it across Schedules 1 through 6.

    For example, you must attach two forms if you want to claim above-the-line deductions for self-employment tax. Schedule 4 now allows you to state that you claim the deduction, but you must attach Form S.E. to claim it. There are some deductions that are no longer available under the new tax laws, such as moving expenses and college tuition and fees.

  3. Examine potential taxes and credits

    Once you adjust your AGI, you need to consider a few other taxes and credits.

    On-Line 9, enter either your standard deduction or your itemized deductions. You will enter any qualified business income deductions on line 10.
    Enter the amounts of tax credits you may be eligible for in lines 11 through 14. For example, you can enter the amount of your child's tax credit in line 13a.
    If you have already had federal tax withheld from your earnings, enter that amount on Line 17.
    You must also attach Schedule 4 if you paid other taxes.

  4. Check your refund

    What follows is all about your refund. If the amount on Line 19 (your total payments) exceeds the amount on Line 16 (your total tax), you have overpaid the government, and you deserve a refund.
    Subtract Line 16 from Line 19 to calculate the amount you overpaid and enter it on Line 20.
    In the remainder of the refund section, enter the bank information (account number and routing number) for the checking or savings account where you want your refund deposited.
    If you want your refund as a paper check or buy savings bonds, you must show this on Form 8888.

  5. Calculate how much you owe

    If the amount on Line 19 (taxes paid) is less than the amount on Line 16 (taxes owed), you must pay the IRS more money. That is the purpose of the last section of Form 1040. It's appropriately titled "Amount You Owe."

    Subtract the amount on Line 19 from Line 16 to get Line 23. Enter any penalties owed on Line 24 if applicable.

The difference between types of form 1040

The 1040 form is now available in four variants (the 1040A and 1040EZ are no longer available):

    Type of 1040 FormPurpose/Difference
    Form 1040The vast majority of taxpayers will use the form to report their income and calculate their tax for the year and any refund or additional tax owed.
    Form 1040-SRThey intend this version for senior citizens (age 65 and older). Form 1040-SR is nearly identical to Form 1040, but they print it in a larger font and include a chart to help the taxpayer determine their standard deduction.
    Form 1040-NRThis form is for non-citizens who do not have a green card and is several pages longer than the other 1040 forms.
    Form 1040-XTaxpayers who need to change their tax returns after filing Form 1040 use this form.

Tax planning is an integral part of any comprehensive financial plan. Most financial advisors offer this service to their clients. Start immediately. If your income varies, double-check how the changes will affect your federal income tax return.

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