Hello, I'm Jill from TurboTax with some important information for all taxpayers.
If you are a citizen or resident of the United States, the Internal Revenue Service allows you to prepare your tax return using one of three standard forms. Of the three options, the one-page Form 1040EZ requires the least amount of information, allowing you to complete it fairly quickly.
But before you start filling out a 1040EZ, you need to evaluate whether you satisfy four important eligibility criteria. First, your taxable income must be less than $100,000. Even if you file a joint return with your spouse, your combined income must still be under the $100,000 threshold in order to file a 1040EZ form.
Second, it matters where your income comes from. To use a 1040EZ, the taxable income you report can only come from employment wages, tips, taxable scholarships and grants, state unemployment compensation, Alaska Permanent Fund dividends and a maximum of $1,500 in taxable interest. Otherwise, you must prepare your tax return on Form 1040, or if you're eligible, on Form 1040A.
To satisfy the third requirement, you must also be eligible to file your tax return using the married filing jointly or single filing status. For example, if you are married but choose to file a separate tax return from your spouse, your only filing status options are married filing separately, and in some cases, head of household. Therefore, you cannot use the 1040EZ to file your tax return.
Lastly, taxpayers who are 65 and older or blind are also ineligible to use the 1040EZ form.
If you satisfy these eligibility requirements, it’s important that you consider some of the disadvantages of filing your taxes on the 1040EZ, all of which can result in paying more income tax than you need to. For example, the 1040EZ does not allow you to claim any deductions other than the standard deduction and personal exemptions, nor does it allow you to claim any credits other than the earned income tax credit. This means that if you are eligible for a lot of deductions and credits on your taxes, like a mortgage deduction or education credits, for example, you'll be leaving money on the table if you file with a 1040EZ.
Remember, the 1040EZ may save you time when preparing your tax return, but if you are eligible for other tax credits and deductions that can reduce your tax bill, it may be beneficial to file your return on the 1040A or 1040 form instead. Not sure which form to use? When you file with TurboTax, you don't need to know a thing about tax forms. We'll ask you simple questions and determine the filing status and forms that will give you your biggest tax refund.