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About 1040 IRS Form
Whether you are employed or self-employed, you need to file your taxes every year. Tax season can be one of the most intimidating times for many individuals especially when it comes to understanding which forms to fill for filing your taxes.
One such tax form to understand is the 1040 IRS form. In this post, we will learn what is a 1040 tax from and how it works.
What Is A 1040 IRS Form?
Form 1040 is a form sued by US taxpayers to file their tax returns. Form 1040, formerly known as the personal income tax return in the United States, has sections that require taxpayers to provide their annual taxable income and deductions that help to understand if tax is owed or if a tax refund will be provided to the applicant.
Depending on the type of income you are reporting, you may also attach additional forms called schedules.
Before 2018, individuals could file their individual income tax returns using Form 1040A or Form 1040EZ instead of Form 1040 if they had relatively simple taxes.
However, at the beginning of the 2018 tax year, these forms have been eliminated and replaced with the shorter Form 1040.
1040 IRS form has fewer lines to fill as most of the lines from old forms are moved on the additional schedules.
How Does A 1040 IRS Form Work and What Does It Do?
Form 1040 must be submitted to the Internal Revenue System by April 15 every year.
Anyone who earns income above a certain income limit must file an individual tax return with the IRS. (Corporations and businesses have to submit different forms to report their income)
The IRS revised Form 1040 for the fiscal year 2018 following approval of the Tax Cuts and Jobs Act (TCJA), looking at, according to the agency, it was done to improve the filing experience for the taxpayers using the new shorter from 1040.
The form was billed as facilitating communication of future tax code changes and reducing the number of 1040 forms that the taxpayers needed to choose from.
The new Form 1040 has two pages to complete which are available on the IRS website. 1040 form can be sent by post or filed electronically on the IRS website.
1040 tax form asks tax applicants for information about their filing statuses, such as name, address, social security number, and the number of dependents.
The filing status can be married filing jointly, single, head of household, married filing separately, or qualifying widow.
The form also asks about year-round health insurance and whether the individual wishes to contribute $3 to presidential campaign funds.
Income Section in the 1040 tax form requires the applicant to report salaries, wages, capital gains, taxable interest, social security benefits, pensions, and other income types.
It also allows individuals to claim the new higher standard deduction set by the TJCA.
This form calculates the taxable income for the year plus the deductions you want to claim. One of the steps is to calculate your adjusted gross income subtracted by any allowable adjustments.
When reporting the annual gross income, you can reduce the tax amount owed to the IRS through standard deductions or detailed deductions.
Subtracting your detailed or standard deduction from your annual gross income will show your final taxable income.
Most filers use the standard deduction, but you can use detailed deductions if the latter is greater than the former based on your status of filing.
Detailed deductions include interest paid on the mortgage, charitable deductions, local and state taxes, and medical expenses, with specific claim limits.
When you are filing your taxes, you must indicate the amount of income tax payable to the IRS; this is known as tax liability.
You can claim tax credits if you have any dependents that you have mentioned in the form. For example, you can apply for a child tax credit or other eligible tax credit.
1040 IRS form also determines if you have paid all of your income taxes or if you still owe anything.
If you have paid over and above your taxable income, you are entitled to receive a tax refund. If you paid less, you owe the IRS and must pay the full balance by the tax filing deadline to avoid interest and penalties.
If you owe the full amount and cannot pay it, it is recommended that you always submit the 1040 IRS form on time so that you don’t have to pay any failure to file a penalty.
Any amounts due after the filing deadline will continue to miss penalties and interest, even if you ask the IRS for a payment arrangement.
What Are The Different Types Of 1040 IRS Forms?
FORM 1040 – NR: This form is for any non-residential alien, representing a deceased person, or an estate or trust who is filing income tax.
FORM 1040 – ES: This form is used by individuals who are paying an estimated every quarter.
FORM 1040 – V: This form needs to be filed if you have a balance due under the “amount you owe” line on your original 1040 form.
FORM 1040 – X: This is used by the individuals if they have made any errors while submitting the original 1040 form.
FORM 1040 – SR: This is the form to be filed if the individual is a senior citizen over the age of 65 years.
Conclusion
It is always suggested to file your taxes on time to avoid any discrepancy in the future.
Make sure that you have all your income documents readily available while you are filing your tax returns.
This will ensure that the filing is done correctly and on time. To file your taxes using the 1040 IRS form, you can download it from the IRS website and fill the form and mail it, submit it electronically or use third-party software.
