1040 Tax Forms Made Simple

Main differences between tax forms: 1040 vs 1040A vs 1040EZ?

The three 1040 versions have you a little confused as a taxpayer of which form to file with the IRS?

Below is a summary of when to use which 1040 federal tax form for your taxes.

Can I use the IRS 1040EZ federal tax return form?

The IRS Form 1040EZ is the simplest of the three federal tax return forms. You can use this tax return if all of the following below holds true for you.

  • Your filing status is single or married filing jointly.
  • You don’t claim dependents.
  • Your taxable income is less than $100,000.
  • Your taxable interest is $1,500 or less.
  • You don’t claim adjustments to income, like student loan interest deduction or an IRA deduction.
  • The only credit you claim is the Earned Income Tax Credit.
  • You, and your spouse, if filing a joint return, were under age 65 and not blind at the end of 2013. If you were born before Jan. 1, 1949, you’re considered to be age 65 and can’t use Form 1040EZ.
  • You don’t owe household employment taxes on wages you paid to a household employee.
  • You aren’t a debtor in a Chapter 11 bankruptcy case filed after Oct. 16, 2005.
  • You don’t owe Alternative Minimum Tax (AMT).
  • Your income sources were only wages, salaries, tips, taxable scholarships, taxable fellowship grants, unemployment compensation or Alaska Permanent Fund dividends.
  • With the 1040EZ, you will not be able to itemize tax deductions. You also can not have income from self-employment, alimony, dividends or capital gains.

Can I use the IRS 1040A federal tax return form?

Your taxable income must be less than $100,000 to use the 1040A. Your income can come only from the sources below:

  • Wages, salaries, and tips
  • Interest and dividends
  • Capital gain distributions
  • Taxable scholarship and fellowship grants
  • Pensions, annuities, and IRAs
  • Unemployment compensation
  • Taxable Social Security and railroad retirement benefits
  • Alaska Permanent Fund dividends

The only adjustments to income you can claim are the IRA deduction and the student-loan interest deduction — and you can also claim educator expenses and the tuition and fees deduction.

The only credits you can claim on the 1040A are:

  • Child tax credit
  • Additional child tax credit
  • Education credits
  • Earned Income Credit (EIC)
  • Credit for child and dependent-care expenses
  • Credit for the elderly or the disabled
  • Retirement savings contributions credit

You can also use a 1040A if you receive dependent-care benefits or owe tax from the recapture of an education credit or the Alternative Minimum Tax (AMT).

You will not be able to itemize deductions on a 1040A federal tax return form.

If your tax return cannot be filed as a 1040EZ or a 1040A, you will need to file a 1040 federal tax return form. This form is the complex tax return form and offers tax breaks not available the simpler forms: Form 1040EZ or Form 1040A..

If you receive these types of income, you must file a 1040 federal tax return:

  • Self-employment income
  • Tips you didn’t report to your employer
  • Income you receive as a partner in a partnership, a shareholder in an S corporation or beneficiary of an estate or trust
  • Insurance policy dividends totaling more than the premiums you paid
  • Distributions from a foreign trust
  • You also must file a 1040 if any of these apply:
  • You qualify for the foreign earned income exclusion.
  • You qualify to exclude income from sources in Puerto Rico or American Samoa because you were a bona fide resident of either.
  • You have an Alternative Minimum Tax (AMT) adjustment on stock acquired from exercising an incentive stock option.
  • You owe excise tax on insider stock compensation from an expatriated corporation.
  • You’re reporting an original issue discount (OID) amount that doesn’t match the amount on Form 1099-OID.
  • You owe household employment taxes.
  • You’re eligible for the health coverage tax credit.
  • You’re claiming the adoption credit or you received employer-provided adoption benefits.
  • You’re a debtor in a Chapter 11 bankruptcy case filed after Oct. 16, 2005.
  • Your employer didn’t withhold Social Security and Medicare taxes from your pay.
  • You had a qualified health savings account (HSA) funding distribution from your IRA.
  • You’re repaying the first-time homebuyer credit.
  • You owe additional Medicare Tax or had Additional Medicare Tax withheld and must file Form 8959.
  • You owe Net Investment Income Tax and must file Form 8960.
  • You have adjusted gross income of more than $150,000 and must reduce the dollar amount of your exemptions.

Please be aware that filing the simpler tax return forms may cause you to forfeit credits and deductions that you may be entitled to. Feel free to call us at Jack Trent & Company CPA and one of our tax accountants will give one-on-one guidance regarding your tax situation.