Form 1040EZ Guide on Filing Income Tax Return
Regardless of whether you are a solopreneur or a small business owner with a modest team, you should always keep an eye on your taxes. This is where the basic tips on filing tax form 1040EZ can come in handy. Though this document has been replaced by Forms 1040 and 1040-SR since 2018, it is essential to be familiar with all these versions to choose the form you need. The guide below will clarify the Form 1040EZ meaning and simplify the procedure for you.
The IRS provides individual taxpayers with three filing options: forms 1040, 1040A, and 1040EZ. Earlier, the easiest and fastest way for individuals with no dependents and a simple tax return to file their income taxes was to use the latter form. However, it is no longer used. Now you can apply either Form 1040 or 1040-SR, taking your tax circumstances into account.
Form 1040EZ, namely Income Tax Return for Single and Joint Filers with No Dependents, is a shorter version of the 1040 form used to file your annual tax return. It covers only basic tax situations that require little data on determining whether any money is owed.
To use Form 1040EZ, each taxpayer must meet a list of particular requirements:
- be no more than 65 years old;
- file the form as single or married filing jointly;
- have no dependents;
- not be visually impaired;
- their taxable income doesn’t have to exceed $100,000 in total;
- get income only from salaries, wages, tips, unemployment, taxable scholarships, or fellowship grants;
- taxable interest must be less than $1,500;
- not be bankrupt;
- not owe money to employ a household worker.
Form 1040EZ was a perfect solution for taxpayers with basic tax situations, offering a fast and simple way to file their income taxes. Still, if you didn’t file a tax return with this form for 2017 and earlier tax years, you may visit the IRS website and do it.
The tax form 1040EZ contains 14 lines to fill out. Six sections serve to record tips, salaries, wages, unemployment compensation, and income interest. While it is considered the simplest option for individual taxpayers to file their federal returns, it is essential to go through all the steps carefully to end up with an errorless document.
- In the upper section, note the primary taxpayer’s full name and SSN. Include your full name stated in the records of the SSA and IRS.
- In the second line, leave your spouse’s name if you are married filing jointly.
- Write your address in the third and fourth lines. Include a P.O. box only in case you receive correspondence to another location, not your home address.
- Line 5 is for those currently living abroad. Fill out the country’s name, province, and postal code.
- The Income section contains data on your gross wages, salaries, and tips. State the sum of your W-2 form(-s) in the first line.
- Insert any taxable interest in the second line.
- Add the data on unemployment compensation and Alaska Permanent Fund dividends to line 3.
- The Payments, Credits, and Tax section defines whether you will owe a tax penalty or get a refund. Indicate the amount of federal income tax withheld in compliance with your W-2 form; this data can be found in box 2 of your W-2 form(-s).
- Add EIC or nontaxable combat pay election to lines 8a-b. Provide the IRS with your banking information if you are eligible for a refund. In case you owe a tax penalty, you will be required to pay the debt by the deadline.
- Provide all the necessary signatures required in the form.
- That is it! Now you can either submit Form 1040EZ electronically or send it to the proper address by mail.
Let’s compare two filing options for individual taxpayers. Form 1040 is more complex but offers numerous options for claiming deductions and credits, like health care saving plan contributions. If you are self-employed, have an adjusted gross income that exceeds $100,000, or underreported tips, you must file this form. The document has 79 lines to fill out.
Though the structure of the tax form 1040EZ is way more straightforward than that of the 1040EZ form, you risk losing out on some essential credits and deductions by filling out the wrong document. The fillable 1040EZ form contains a very small section devoted to credits.
As you can see, Form 1040EZ is a simple way to file your tax return. Use the guide above to avoid a confusing and time-consuming filing procedure. By filing your income taxes correctly and on time, you can devote your valuable resources to running your business. If you used Form 1040EZ in previous years, analyze your current life situation. Perhaps, it’s time to switch to the 1040 version?