What is the difference between the 1040, 1040a and the 1040ez forms?

Your questions answered by eSmart Tax Professionals

1040 tax form

Tax season can be an incredibly confusing time.

There always seem to be new laws and regulations to look out for while filing taxes, and these come with different forms and paperwork to fill out. Even the primarily document, the 1040, has three different formats: the standard 1040, the 1040A and the 1040EZ. If you are new to filing your tax return on your own, or you just are curious as to what the difference is between the three documents, it is worth wild to see exactly what the difference is between these three documents and what document you should use when filing your tax return.

All three of these forms are used for individual federal income tax returns. Any individual is able to use the standard 1040 return, but not every filer is able to use the other two. This is because the 1040A and the 1040EZ are designed specifically for individuals who fall under set guidelines and rules. Due to this, if you are ever in doubt, always go with the standard 1040. While you might have to fill out other documents and forms, this is a form that everyone who is filing a tax return on their own is able to use.

The 1040EZ is the most basic form.

In order to fill out this form you must not claim any dependents, you are single or filing jointly with your spouse and are under the age of 65 at the beginning of the tax filing year. On top of this, your earnings can only come from wages, tips, scholarships and grans for school, salary, unemployment or the Alaska Permanent Fund. Your income also must be less than $100,000. Lastly, you are not able to itemize deductions on your tax return. Due to this, if you own your own business or have a large number of deductions to make on your taxes, the 1040EZ is not something you should use. This is designed more for individuals who have a basic job, students who are working while going to college and doesn't have any children. You must qualify for all of these specifications, otherwise you are not able to use the 1040EZ.

1040A is the bridge between the EZ and standard 1040 document.

It doesn't have as much paperwork for you to fill out, but it is also more in-depth than the EZ. As with the EZ, you can only have income from wages, your salary, tips, scholarships and fellowship grants, unemployment compensation and the Alaska Permanent Fund. However, on top of this, you can receive income from capital gains, pensions, IRAs, Social Security benefits and railroad retirement benefits. Your taxable income must be under $100,000 and you are not able to itemize. However, you are able to claim dependents on this form, although the only actual credits you can claim are for child care, earned income credit, credits for the elderly and disabled, education and retirement savings contribution credits. If there are additional credits you need to file, which are often for small businesses, than you need to go with the standard 1040.

While everyone is able to file the 1040, the 1040 opens you up to the most potential tax credits.

This is why, if you are not sure, it is still desirable to take the extra time and fill this document out. Also, if you run your own small business or you have been experimenting with it this year, even if you haven't incorporated yet, the 1040 is the document for you to use.