Which IRS Form is Right for My Tax Return?

As we move through December and inch closer to 2019, our year-end financials are at the top of our minds. The close of the fourth quarter is the time to close books, balance budgets, and unfortunately, prepare to file your tax return.

If you’ve experienced life changes over the past 12 months, it might make a difference on how you file your taxes, including which form to use and which status to file under. Maybe you got married in 2018 or maybe you started an at-home business; maybe you began collecting pension or alimony, or maybe your child went off to college.

Tax return filing

Once you know the truth about taxes, you know that there’s a huge array of variables that can affect your filing. If you’re not sure which form to use this year, we can help guide you in the right direction. Read through the following pointers and you should be able to walk away with confidence regarding how to file your taxes this year.

1040, 1040A, or 1040EZ?

If you’re a U.S. citizen or a resident alien filing a federal income tax return, you’ll use one of three forms: 1040, 1040A, or 1040EZ.

The 1040EZ is the simplest form to fill out. You may use this form if you meet the following IRS requirements:

  • Your filing status is Single or Married Filing Jointly
  • You claim no dependents
  • You claim no income adjustments
  • You claim no other credit than the Earned Income Credit
  • You (and your spouse, if applicable) are under age 65
  • Your taxable income is less than $100,000
  • Your earned tips (if applicable) are included in boxes 5 and 7 on your W-2

Additional stipulations include no Chapter 11 bankruptcy filed after 2005, no blind disability at the end of 2018, and no outstanding household employment taxes.

If you need to make income adjustments for your IRA deduction, student loan interest deduction, tuition and fees deduction, and/or educator expense deduction, then you may be able to use Form 1040A. However, your income must still be under $100,000, you cannot itemize deductions, and the only tax credits you can claim include:

  • Credit for child and dependent care expenses
  • Credit for the elderly or disabled
  • Education credits
  • Retirement Savings Contribution Credit
  • Child Tax Credit
  • Additional Child Tax Credit
  • Premium Tax Credit
  • Earned Income Credit

If you do not meet either of these requirements, you’ll be required to file a 1040, the most complicated tax return form. This is reserved for incomes upwards of $100,000, itemized deductions, income adjustments, and certain tax credits.

Note: If you are self-employed with net earnings over $400, you will be required to file Form 1040 whether or not you were issued a Form 1099. In some cases, companies will only issue 1099s to freelancers or consultants whom they’ve paid $600 or more, but it’s nonetheless your responsibility to know and report your outstanding tax obligation—even if you were paid under that amount.

For example, you might offer your freelance services to three different clients, each of whom paid you $150 for your work. No one required you to fill out an independent contractor Form 1099, so you receive nothing in the mail that tells you how much you owe in taxes. All the same, you’re still required to report and pay taxes on these earnings using a 1040-SS, or else you risk being audited. If you’re not sure how to estimate your tax bill, remember that it’s always better to pay more and receive a refund than pay less and incur fees or penalties.

Tax filing forms

Additional Tax Forms

If you use the IRS e-file service, you should automatically be prompted to the appropriate tax form to use, but if you’re filing manually, you should choose carefully. If you catch an error on an already-filed return, use the Form 1040X to make an amendment.

Depending on your financial circumstances, you might be required to file additional documents, such as Form 1065 (the “Partnership Tax Return”) and Form 1095 (related to your medical coverage), to name a few.

Always be sure to double check your list of available tax credits and deductions to minimize your payment and maximize your return. If you’re not sure, you should consider enlisting the help of an accountant or qualified tax professional for filing your return—it might cost you a little upfront, but it could save you tremendously in the long run!