What are Tax Schedules?
If you elect to itemize your deductions rather than claim the standard deduction, then you must prepare a Schedule A and attach it to your Form 1040. Schedule A is the tax form where you report the amount of your itemized deductions. Some of the itemized deductions listed on Schedule A include medical and dental expenses, various state taxes, mortgage interest, charitable contributions and work-related expenses. If your Schedule A total exceeds the standard deduction, you are typically better off itemizing your deductions.
Schedule B is an income schedule that requires you to separately list the sources of interest and dividend payments you receive during the year. You can use Schedule B with both Forms 1040 and 1040A. However, preparation of the schedule is only necessary when your interest or dividend income exceeds the IRS threshold for the year. For example, if you only earn $200 of bank interest this year, you must include this amount in your taxable income, but preparing a Schedule B is not necessary.
Schedules C and C-EZ are forms that you use to report self-employment income. Essentially, both forms separately report your business earnings and deductions to arrive at your net business profit or loss, which is then added to your other income on Form 1040. If you have a single business with simple accounting that meets IRS qualifications, you can use the shorter Schedule C-EZ, rather than Schedule C.
If you sell a capital asset during the year, then you must report it on a Schedule D attachment to your tax return. Capital assets transactions commonly report the gains and losses when you sell stocks, but can include any other property you sell during the year such as your home or car. The form separates the transactions into short-term and long-term transactions depending on whether you own the property for more than one year or not. Your short-term capital gains are taxed at the same rate as your other income, but your long-term gains are taxed at lower rates.
Schedule EIC is where you report your qualifications for claiming the earned income tax credit. The earned income tax credit is a refundable tax credit you can claim if you have qualifying children, and your income falls below a certain level. You can use Schedule EIC for both Forms 1040 and 1040A.
If you are self-employed, you are responsible for paying Social Security tax on your earnings since an employer is not withholding it for you. You compute the amount of your self-employment tax on Schedule SE.
Remember, when you file your taxes with TurboTax, you don’t need to know which schedules to fill out. We’ll ask you simple questions about your life and put your answers on all the appropriate forms.