A Brief Guide to Choosing the Right Tax Form

Almost every American with a certain amount of salary is required to fill one of the many IRS tax forms to report their income, expenses, and other financial data. Therefore, learning about some of the most commonly used tax forms can help you choose the correct tax form from the ocean of options available and claim the tax deductions, tax credits, and other financial benefits available to you. Let’s take a look

E-filing the Return

Though many people prefer filing returns through paper forms, doing it online is one of the easiest ways to file a complete and an error-free return. Also, E-file helps you get the tax credit and the deduction you are entitled to claim. There are three e-filing options available for individual taxpayers on IRS.gov, and you can let the site’s software choose the correct tax form.

Choosing the Right Tax Form

There are three most common types of tax forms used for filing federal income tax:

Form 1040EZ

The shortest and simplest version of tax form with least filing time. You are qualified, if you:

  • Have no dependents
  • Are younger than 65
  • Earn less than $100,000
  • Have no plans to itemize your deductions

Note: You can’t use Form 1040EZ to claim the Premium Tax Credit. Moreover, you can’t use Tax form 1040EZ if you have already received advance payments of the premium tax credit in preceding year.

Form 1040A

The U.S. Individual tax form 1040 A is more comprehensive than 1040EZ but simpler than 1040 form. You can use this form if you:

  • Earn less than $100,000
  • Don’t have self-employed income
  • Have capital gain distributions
  • Claim certain tax credit
  • Make certain adjustments to your taxable income such as child tax, student loan interest

Note: Though form 1040A lets you make adjustments, it doesn’t let you itemize deductions.

Form 1040

The standard U.S. Individual tax form, also called “the long form”, applies to those who are not eligible for other two tax return forms. Qualifications include:

  • Your taxable income is $100,000 or above
  • You plan to itemize deductions
  • You are self-employed
  • You report income from the sale of a property

A Word of Advice

If you e-file a tax return, there is no need to mail any paper form to the IRS. For e-filing, you can visit IRS.gov and click on the ‘IRS e-file’ to check the available options. In addition, before filing any form, check IRS Free File. If you are not too tech-savvy and prefer a paper form, you can download it from IRS.gov/forms. Lastly, every taxpayer has a set of fundamental rights, also known as the “Taxpayer Bill of Rights”, which they should be aware of when dealing with the IRS. In the case of any doubt regarding the tax form to use, or wish to learn more about your rights, feel free to contact us for a no-obligation consultation.

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