When filing your federal income taxes you will need to know which IRS tax forms you need to use. There are different IRS tax forms for different situations. Everyone's situation is different so there are different forms for those situations.
The 1040EZ is the simplest of all the IRS tax forms. Individuals who earn a wage that is below a certain amount and who do not have a lot of interest income can use the 1040EZ.
There is only one tax credit that can be taken advantage of with this form, which is the earned income credit. If you wish to take advantage of other tax credits then you will need to use one of the other IRS tax forms. You should also note that you may only use the 1040EZ if you are single or you are married filing jointly.
The 1040A is for situations where the taxes are somewhat more complicated. You cannot itemize deductions on the 1040A. You do have the opportunity to subtract possible contributions to IRAs as well as interest that has been paid on student loans on the 1040A. There are also other credits that can be taken advantage of on this form including education, adoption, dependent care and child care credits.
The most complicated of all the individual IRS tax forms is the 1040. Although the 1040 is the most complicated of the IRS tax forms, it also offers the most opportunities for reducing taxes. Along with student loan interest and IRA contributions, the 1040 also allows other deductions such as medical savings account contributions, alimony payments and moving expenses. If you are self employed the 1040 also allows you to deduct part of your self-employment taxes as well as health insurance.
You can also itemize your deductions with the 1040, which is something that you cannot do with other IRS tax forms. There are also other tax credits which can be taken on the 1040 that are not allowed to be taken on the other two individual IRS tax forms. You are required to use the 1040 if you have specific types of income, including self-employment earnings or capital gains and if you pay household help.
If you use a tax preparation program or you consult a professional to help you in preparing your taxes you will receive guidance that will help you to make sure that you are using the correct IRS tax forms.
Ask if you qualify for our senior and student discounts!