The simplest of the three tax forms you can use to file your federal income taxes is the IRS 1040EZ form.
As with all tax forms, the top of Form 1040EZ requires you to provide your personal information such as name, address and Social Security number. You can only file Form 1040EZ if your filing status is single or married filing jointly. Since you cannot claim any dependents, you move on to reporting your income in the next section after providing this basic information.
Sources of income
The only types of income you can list on Form 1040EZ is wages, salaries, tips, taxable interest of $1,500 or less, unemployment compensation and Alaska permanent fund dividends. If you have income from sources other than these, such as stocks or dividends, then you will have to file your taxes on either Form 1040 or Form 1040A.
After providing your income, the form subtracts your allowable standard deduction from your gross income to arrive at your taxable income. This is the amount that you will pay tax on.
Again, when you use TurboTax, these calculations will be done for you.
Payments, credits and tax
The next section, payments, credits and tax, is where you list tax payments you have already made through employer withholding or making estimated tax payments. If you had federal tax withheld from your paycheck, your employer will issue you a W-2 reporting the total amount withheld.
If you are eligible for the earned income credit, you can claim it in this section. However, these are the only two tax credits you can claim when filing on Form 1040EZ. You then add up all of your payments and credits before calculating the tax on your taxable income. Use the tax tables in the instructions to find the amount of tax you owe for your filing status and taxable income.
TurboTax will automatically determine which credits you can claim and apply the right tax tables, etc. You’ll just need to answer some simple questions.
Calculating refunds and amounts due
If your total tax payments and credits exceed the calculated tax on your income, then you have overpaid and are entitled to a refund. When you calculate a refund, you can enter your bank information and have it direct deposited. If you’ve underpaid, then you need to make a payment for the remaining balance. You can find directions on how to pay your balance in the instructions for Form 1040EZ.
Again, TurboTax will do these calculations for you and tell you how big a refund you're getting, or how much you’ll owe.
Signing your return
It may seem obvious, but many taxpayers forget to sign their returns before mailing them to the IRS. Since a tax return is not valid without signatures, be sure to sign it in the last section. If you are filing jointly, your spouse must sign it too. If you are filing electronically, you will electronically sign your tax return.
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