Citizens or residents of the United States can file a tax return on Form 1040, 1040A or 1040EZ. It has some limitations that may change the amount of tax you'll have to pay, or the potential size of your tax refund.
For tax years beginning 2018 (the tax return you submit in 2019), the 1040A and EZ forms are no longer available. They have been replaced with a new, single 1040 form. For those who are filing or amending prior year returns, you can continue to use form 1040A or EZ.
The below is accurate for tax years prior to 2018
If you are a citizen or resident of the United States, you can file a tax return on Form 1040, 1040A or 1040EZ. The 1040EZ is the shortest of the three, but that does not automatically make it the best one for you. It has some limitations that may change the amount of tax you’ll have to pay, or the potential size of your tax refund.
Two filing status options
The only filing status options on the 1040EZ are single and married filing jointly. The head of household and qualifying widow(er) statuses are not available since both require you to claim at least one dependent, which the 1040EZ does not allow.
Forfeiting a dependent exemption just so you can save time preparing your taxes isn’t a good idea. Dependent exemptions are like deductions and can save you a significant amount of money in tax. If you have dependents, you should file using the 1040A or 1040 instead. Also, if you need to file as married filing separately, the 1040EZ isn’t an option for you.
You can’t itemize deductions on the 1040EZ
Itemizing deductions is not an option on the 1040EZ form—you must take the standard deduction. Itemizing deductions is beneficial when the total value of your deductions is more than the standard deduction for your filing status. Since you can take the larger of the two deductions, determine if you have eligible expenses to itemize before you settle on a 1040EZ.
Common expenses deductible on Schedule A include mortgage interest payments, real estate taxes, charitable contributions, unreimbursed employee expenses, medical and dental expenditures and state income or sales taxes.
In a nutshell, if your itemized deductions are greater than the standard amount allowed, you will benefit by filing a 1040 instead of a 1040EZ.
Deductions for AGI
Every tax form calculates your adjusted gross income, or AGI, as the total income you report minus specific deductions the IRS refers to as adjustments to income. No adjustments to income are allowed on the 1040EZ, so your AGI will always equal your total income.
You don’t want to pass up opportunities to take deductions just to fill out a shorter tax form. Therefore, you should familiarize yourself with all adjustments available for the tax year, and only file the 1040EZ if you’re ineligible to take any of them. Common adjustments include the deduction for student loan interest, traditional IRA contributions, self-employment taxes and alimony payments.
The 1040EZ has a cap: your taxable income, including your spouse’s income if you are filing jointly, must be less than $100,000. The income you report can only come from employment wages, taxable scholarships and grants, Alaska Permanent Fund dividends, total interest earnings of $1,500 or less, and unemployment compensation. Lastly, if you use a 1040EZ, you cannot claim any tax credits except for the earned income credit.
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