Search
  • Latoya J. Jessamy

Which Tax Form is right for you?


There are three different 1040s that can be used when filing your tax return. The following can assist taxpayers with determining which form is right for them:

Form 1040EZ can typically be used if all of the following apply:

  • Your taxable income is below $100,000 and you only had wages, taxable scholarship, unemployment income and taxable interest

  • Your filing status is single or married filing jointly

  • You do not claim any dependents

  • You do not claim any adjustments to income

  • Your interest income is $1,500 or less

Form 1040A can typically be used if all of the following apply:

  • Your taxable income is below $100,000

  • You have capital gain distributions, IRA distributions, etc.

  • You claim certain tax credits, such as the child tax credit, education credits, etc.

  • You claim dependents

  • You claim adjustments to income for IRA contributions, student loan interest, tuition & fees and educator expenses.

However, you must use form 1040 if any of the following apply:

  • Your taxable income is $100,000 or more

  • You claim dependents

  • You claim itemized deductions

  • You report self-employment income, income from the sale of property and all other forms of income

  • You claim adjustments to income, other than and including those required for 1040A

  • You claim tax credits, other than and including those required for 1040A

Note: The EITC can be claimed on all forms

Business owners can also find it helpful to know if the Schedule C-EZ is more appropriate for reporting business income.

Schedule C-EZ can typically be used if all of the following apply:

  • You did not have a net loss from your business

  • Your expenses are not greater than $5,000

  • You use the cash method of accounting

  • You have no employees

  • You have no inventory

  • You are not depreciating business property

  • You are not deducting home office expenses

  • You are not carrying over passive activity losses from an earlier tax year

However, a Schedule C must be used in all other instances for reporting business income and expenses, including the Schedule C-EZ requirements. Also, a Schedule C can be used to report certain cash income, income reported on a 1099-MISC, wages and expenses as a statutory employee and income and deductions of qualified joint ventures.


2 views

Recent Posts

See All

© 2016 Precise Accounting Services | All Rights Reserved