What Is Form 1040: U.S. Individual Tax Return?
Tax Returns in the United States of America, are reports filed with the Internal Revenue Service (IRS) or with the state or local tax collection agency (for example, California Franchise Tax Board) containing information used to calculate income tax or other taxes. Tax returns are usually prepared using forms prescribed by the Internal Revenue Service (IRS) or other relevant tax authority.
A tax return gives the IRS or other relevant tax authority the information that will aid them in checking the taxpayer’s calculations, or determine how much debt the taxpayer owes the agency, if the taxpayer is not required to calculate the amount.
Form 1040 is the established Internal Revenue Service (IRS) form that individual taxpayers use to file their annual income tax returns. The form contains segments that require taxpayers to reveal their taxable income for the year to ascertain whether additional taxes are owed or whether the filer will receive a tax refund.
This form contains sections in which a taxpayer is asked to file his Personal information, such as name, address, Social Security number, and number of dependents. A Taxpayer will also be asked to report his or her Financial Information, such as wages, salary, capital gains, pension, taxable interest, Social Security benefits, and other types of income.
Understanding Form 1040:
Form 1040 needs to be filed with the IRS by April 15 in most years. Everyone who earns income over a definite threshold must file an income tax return with the IRS (businesses have distinct forms to give an account of their profits).
The IRS maintained the 1040 form for the 2018 tax year after the passage of the Tax Cuts and Jobs Act and it scrutinized, according to the Internal Revenue Service (IRS), “ways to ameliorate the 1040 filing experience.” The recently developed, shorter 1040 was advertised as mitigating communication of future tax-law changes and decreasing the number of 1040s from which taxpayers must choose.
The 1040 form for the tax year 2019, which will be filed in 2020, includes two pages to fill out.
Form 1040 Page 1.
All pages of Form 1040 are available on the IRS website. Form 1040 can be mailed in or e-filed.
Form 1040 prompts tax filers for information on their filing status, such as name, address, Social Security number (some information on one’s spouse may also be needed), and the number of dependents. The form also asks about full-year health coverage.
The 1040 income section asks the filer to report wages, salary, taxable interest, capital gains, pensions, Social Security benefits, and other types of income. It also allows filers to claim the new higher standard deduction introduced with the Tax and Job Cuts Act. For 2019, these deductions are as follows:
Single or married filing separately, $12,200
Married filing jointly or a qualifying widow or widower, $24,400
Head of household, $18,350
For the tax year 2020, which will be filed in 2021, the numbers have increased and are as follows:
Single or married filing separately, $12,400
Married filing jointly or a qualifying widow(er), $24,800
Head of household, $18,650
An additional deduction may be taken by those who are age 65 or older or blind:
Single or head of household filers, $1,650
Married filing jointly, $1,300 for each spouse who is 65 or older or blind
The new tax legislation got rid of many deductions, including indemnified employee expenses, tax-preparation fees, and moving for a job (except for military on active duty).
The new 1040 uses what the IRS terms a “building block” approach and allows taxpayers to add only the schedules they need to their tax return. Some individuals may now need to file one or more of six new supplemental schedules with their 1040 in addition to long-standing schedules for such items as business income or loss, depending on whether they’re claiming tax credits or owe additional taxes. Many individual taxpayers, however, only need to file a 1040 and no schedules.
Taxpayers who receive dividends that total more than $1,500, for example, must file Schedule B, which is the section for reporting taxable interest and ordinary dividends.
Types of Form 1040:
Taxpayers in certain situations may need to file a different type of the 1040 form instead of the standard version. Below are the different types:
Form 1040NR;
A variety of nonresident aliens or their representatives need to file this form:
Those who are engaged in trade or business in the United States
Representatives of a deceased person who would have had to file a 1040-NR
Those who represent an estate or trust that had to file a 1040-NR
Form 1040NR-EZ;
This is a simplified version of the above form. An individual (Nonresident alien) may be able to use this form if his or her only income sources from the United States are wages, salaries, tips, scholarship or fellowship grants, refunds of state and local income taxes, and he or she has no claim of any dependents.
Form 1040-ES;
This form is used to figure and pay estimated quarterly taxes. The estimated tax applies to income that isn’t subject to withholding, which includes earnings from self-employment, interest, dividends, and rents. This may also include unemployment compensation, pension income, and the taxable portion of Social Security benefits.
Form 1040-V;
Form 1040-V is a statement accompanying a taxpayer’s payment for any balance on the “Amount you owe” line of the 1040 or 1040-NR.
Form 1040X;
If an individual taxpayer filing the IRS form 1040 makes a mistake or forgets to include information on any of the 1040 form, the IRS Form 1040X is used for making changes to the previously filed form 1040s.
Form 1040-SR;
The IRS developed a new 1040 form for seniors for the 2019 tax year. Changes include a larger font, no shading (shaded sections can be hard to read) and a standard deduction chart that includes the extra standard deduction for seniors. Seniors who fill out their taxes online won’t notice the difference, but those who do their form 1040 it on paper should benefit.
