Not sure which tax credits or deductions you can claim on your tax return? Watch this video and find out if Form 1040A is right for you.
Hello, I’m Jill from TurboTax with some important information about filing your taxes on the 1040A form.
One of the three most common tax forms that taxpayers use to prepare their returns is the 1040A. The 1040A is longer than the 1040EZ, but doesn’t require as much information as the standard 1040 form.
However, not all taxpayers are eligible to file on a 1040A, and in some cases, you may find it beneficial to use the 1040 despite your eligibility to use the 1040A. In order to use the 1040A, the taxable income you report must be less than $100,000 and must only come from employment wages, interest and dividends, capital gain distributions, taxable scholarships and grants, unemployment compensation, Alaska Permanent Fund dividends, pensions, annuities and IRAs. Therefore, if you earn income from self- employment, for example, you cannot file your taxes on the 1040A—even if your taxable income is less than $100,000.
You should also consider some of the limitations on your tax credits and deductions when using the 1040A form. If you can save more in tax by itemizing your deductions instead of taking the standard deduction, you can only do so on a 1040 form since the 1040A doesn’t permit you to itemize.
The form also limits the types of deductions you can take for purposes of calculating your adjusted gross income. The number of these deductions available on the 1040A can vary each year, but it’s always less than the standard 1040 form allows you to report.
In addition, the tax credits you can take on the 1040A are limited as well.
Remember—it’s always your choice whether to claim the deductions and credits you’re eligible for. This means, for example, that you aren’t prohibited from using the 1040A if your itemized deductions will save you more in tax than the standard deduction.
But why leave money on the table if you don’t have to?
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