Form 1040 is the basic tax form everyone who pays taxes must fill out when filing Federal income taxes. Today, there’s just a single version of Form 1040.
Depending on your tax situation, you may need to attach other forms and schedules to your 1040.
Table of Contents
Why Do I Need to File Form 1040?
These changes were brought in as part of the Tax Cuts and Jobs Act (TCJA), enacted by President Donald Trump in 2017.
Nonresident aliens may use Form 1040NR, however.
How to Fill Out Form 1040
Form 1040 is made up of two pages. You’ll supply your personal details on page one. These will include your name, your filing status, and your Social Security Number (SSN).
You’ll need to add the same information for your spouse if married and filing jointly.
Anyone claiming dependents must also add the personal information of these dependents. Since the TCJA, all dependents must have their own SSNs.
If claiming the child tax credit or another credit for dependents, you’ll need to tick a box next to the space for your dependents’ information.
There’s also a box you need to tick that tells the IRS whether you have health insurance, as well as any healthcare exemptions for the tax year. You’ll also need to list your occupation and sign the first page.
Listing Your Income
Now we move onto the second page. Lines one to seven are where you’ll tell the IRS about your income for the tax year.
You should also include any other sources of income, such as any interest income, annuities, dividends, and Social Security benefits.
You can find a full list of the different sources of income you should include via the guidance on the IRS website.
Using the different sources of income you have, you’ll then calculate them and add the total figure for your adjusted gross income. This should be included on line seven.
How to Calculate Your Adjusted Gross Income
So how do you adjust your income?
These are known in tax filing as types of above-the-line deductions. They get this name because these deductions are removed from your total income.
The adjusted gross income figure is how the Federal government determines how much tax you pay. Tax is based on this figure only.
To take these deductions, you’ll need to include different forms together with Form 1040. The previous version of Form 1040 included 15 lines that allowed you to make these deductions.
These lines are now spread through Schedules 1 to 6. So, you only need to include these schedules if you’re claiming specific deductions.
For example, Schedule 4 and Form SE is only used if you’re claiming deductions on the self-employment tax.
Take note that deductions available in previous years have now been removed. For example, you can no longer claim deductions for college tuition and moving fees.
Considering Taxes and Credits
Now that you’ve worked out your adjusted gross income, it’s time to work out the different tax credits you’re able to claim.
Either you’ll claim the standard deduction on line eight, or you’ll itemize your deductions. For qualified business income deductions, you’ll need to use line 9. On lines 10 to 15, you can enter the different amounts for tax credits.
For example, line 12a will be where you enter the amount for the child tax credit. Any withheld Federal income taxes can be entered on line 14.
Claim a Tax Refund
The following section will consider your tax refund if you’re eligible for one.
For this section, look at line 18 and line 15. If the amount on line 18 is larger than the amount on line 15, this means you’re able to claim a tax refund.
Just take away the amount from line 15 from that on line 18 and enter the amount on line 19. That’s how much the Federal government owes you.
Through the rest of the refund section, if you’re eligible for one, you’ll need to enter your bank details. You may also attach Form 8888 if you wish to get your refund in the form of savings bonds.
It’s also possible to claim your refund as a paper check.
How Much Do I Owe to the Federal Government?
If you’re not eligible for a refund and you owe money to the Federal government, you’ll need to pay the IRS. This is what appears at the end of the second page of Form 1040. It’s called Amount You Owe.
The amount you need to pay should be entered on line 22. If you owe any penalties, include these on line 23. Form 1040 includes instructions for underpayment penalties.
How to File Form 1040
This is the most basic form used for filing your income taxes via the IRS. It doesn’t matter what situation you’re in because Form 1040 is the base form, so every taxpayer must submit one to the IRS at the start of the year.
Finally, if you want to make filing your 1040 easy, you should consider using some online tax preparation software. You’ll be able to follow some step-by-step instructions on how to fill out Form 1040.
The software will plug all the numbers into the right places, thus taking all the stress and hard work out of filing your taxes.