Form 1040 helps the citizens of the United States to report their taxes with the Internal Revenue Service. This is the standard tax Form that the taxpayers use to file their tax returns. There are many dedicated sections in this tax Form that allows the taxpayers to disclose their taxable income for the financial year and also determine if they owe a tax refund or additional taxes to pay.
What is asked in Form 1040?
Form 1040 enquires the taxpayer about their identity details such as name, address, number of dependents, social security number, etc. The taxpayer is also expected to report their wages, pensions, social security benefits, and other types of income. The income section of this Form asks the tax filer to report their wages, salary, capital gains, social security benefits, taxable interest, and other forms of income.
Depending on the nature of their income and its sources, the taxpayer would require supplemental 1040 Forms. Taxpayers who receive dividends that are more than $1500 should file Schedule B along with Form 1040. Filers who claim itemized deductions on their 1040 Form should attach Schedule A. The Form also enquires about the full health coverage of the taxpayer and if they wish to contribute $3 for the presidential campaign funds. The due date to file Form 1040 with the IRS is April 15th of the tax year.
Purpose of Form 1040
1040 is a federal tax return Form that is used by the citizens of the US to calculate the tax on their income. By filling out this form, the taxpayers will first report their total income and claim allowable adjustments. The taxpayers will also report their Adjusted Gross Income by filing their taxes in the 1040 tax Form. The Line 11 of Form 1040 expects the taxpayer to report their AGI (adjusted gross income). Taxpayers can decrease it further either through their standard deduction or the total of all the itemized deductions as reported on Schedule A.
The itemized deduction includes all the expenses such as mortgage interest, contributions towards charity, additional medical expenses, sales tax, state and local income taxes, etc. If the total itemized deductions don’t exceed the standard deductions in the filing status of the taxpayer, then their taxable income would be lower and they can claim the standard deduction. From the start of the year 2018, such exemption deductions have been replaced with higher child tax credits and dependent tax credits.
Filing Form 1040 with the IRS could be complex and confusing if you have many sources of income such as interests and dividends. The calculations could be hectic and failing to file the Form before the due date will incur penalties and fines. Tax2efile will do all the complex calculations for you and will offer an expert recommendation of whether to choose the standard deductions or to itemize your income, so as to lower the tax payments at your best interest. E-filing Form 1040 will also help prevent errors and delays.