Every tax payer, at least once in its life, has been asked the question whether he wants a Form 1040 or Form 1040A. If you are a regular tax payer or are going to file your federal or state tax for the very first time in your life, the first thing you should is which form to use.
What Is Form 1040?
Form 1040 is the broadest or most
There are also myriad other things that may require you to use the Form 1040. For instance, if you qualify for foreign earned income exclusion, owe household employment tax, are eligible for health coverage tax credit or claiming the adoption credit, Form 1040 is what you need. Furthermore, if you are repaying your first-time homebuyer credit, owe additional Medicare tax, a debtor in a chapter 11 bankruptcy case filed after 16 October 2005 or owe excise tax on insider stock compensation from an expatriated corporation, then again you need it.
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What is Form 1040A?
Form 1040A is slightly less detailed than Form 1040 and only allows you to claim a few tax benefits such as certain credits and deductions. To qualify for Form 1040A, you must have a taxable income of less than USD 100,000. The only deductions that you can claim in this case are student loan interest, allowable tuition and fees, IRA contributions and certain educator expenses.
The American Opportunity Credit, Earned Income Credit (EIC),
Lifetime Learning Credit, child tax credit, additional child tax credit,
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is another form called the Form 1040EZ, which is the shortest and the
simplest of all the tax forms available. However, not a lot of people
qualify to file their return using it. As per IRS’ statistics, merely 16
percent of the individual income tax is
The best-suited form for you depends on