In most recent years, the IRS requires individuals to submit Form 1040 by April 15. Anyone whose earnings surpass a specific threshold must complete an income tax return and submit it to the IRS. It’s important to note that various forms are designated for businesses to declare their profits.
You can access Form 1040 on the official IRS website, comprising two pages requiring completion. This form can be either physically mailed or electronically filed (e-filed). Individuals filing taxes are requested to provide their filing status, alongside personal details like their name, address, Social Security number (which may also include specific spouse details), and the count of dependents. Additionally, the form inquires about year-long health coverage and whether the taxpayer intends to donate $3 to presidential campaign funds.
Employing an approach termed a “building block,” the form permits taxpayers to include specific schedules relevant to their tax situation selectively. In conjunction with established schedules addressing aspects like business income or loss, individuals might find it necessary to include one or more of the six newly introduced supplemental programs along with their Form 1040. This pertains to instances where they are asserting tax credits or possess supplementary tax liabilities. Yet, a substantial number of individual taxpayers find themselves needing to submit Form 1040 without any accompanying schedules.
Guidance of Filing Form 1040
Whether you’re self-employed or engaged in a traditional nine-to-five occupation and do not know how to fill out Form 1040, it becomes an inescapable task during the tax season. Navigating the intricacies of this form and ensuring its accurate completion can prove challenging. This all-inclusive manual aims to guide you through every step of the procedure.
Step 1 – Assessing the Need for Form 1040 Submission
In the year 2018, Forms 1040A and 1040EZ were no longer in use. Consequently, submitting Form 1040 becomes obligatory if you fulfill any of the subsequent conditions:
l Your taxable income surpasses $100,000.
l Your income originates from self-employment earnings, tips, alimony, and more.
l You opt for itemizing deductions as opposed to opting for the standard deduction.
l You are obligated to report specific tax categories, such as household employment or self-employment taxes.
Step 2 – Acquire the Form
The most convenient method to procure Form 1040 involves visiting the official IRS website and downloading a printable version. Alternatively, you can access blank forms by consulting a tax preparer or visiting your nearby U.S. Post Office.
Step 3 – Complete Personal Information and Select Filing Status
This section requires your fundamental details, encompassing your name, address, and Social Security number. In cases where you’re filing jointly with your spouse, ensure to provide their name and Social Security number as well.
Located on the right-hand side of the personal information segment is a designated area titled “Presidential Election Campaign.” You have the option to allocate $3 of your taxes to the Presidential Election Campaign Fund, aimed at aiding candidates in constraining campaign expenditures and private contributions. The government finances your $3 contribution, and marking this box won’t augment or diminish your tax refund.
Subsequently, indicate your chosen filing status. Five alternatives are available. While many taxpayers typically opt for single or married filing jointly, if you’re uncertain about the suitable choice, you can refer to pages 14 and 15 within the Form 1040 instructions for guidance.
Step 5 – Recording Income
For this stage, proceed to line 7 and document your earnings, encompassing wages, salaries, tips, and additional sources of income. This data can be readily extracted from the Form W-2 furnished by your employer. It’s possible that you might not need to input details on lines 8a through 21. If you haven’t received a Form 1099 or any comparable income-reporting documents, these lines will remain uncompleted. By summing up the figures from lines 7 to 21, you can then input the total amount on line 22. This final figure reflects your comprehensive income.
Step 7 – Tax Liability and Credits
If your adjusted gross income is below $155,650, you should multiply $4,050 by the number of exemptions you claimed on line 6d. The outcome should then be placed on line 42. To compute your taxable income, subtract the value on line 42 from that on line 41 and insert the total on line 43. Should the total amount be harmful, simply enter 0 on line 43.
For line 44, consult the tax tables in the Form 1040 instructions to determine the tax amount corresponding to your taxable income. Once you identify that specific amount from the tax tables, record it on line 44. Line 45 denotes the owed Alternative Minimum Tax; consult the Form 1040 instructions to ascertain if this tax applies to you. Sum up lines 44, 45, and 46 to obtain your overall tax liability.
Lines 48 to 54 encompass the credits section. If you satisfy the standards for any credits, enter the functional amount on the connected cable. Additionally, if you prepare for a credit, you must attach an additional form. Afterward, combine the credited amounts and input the sum on line 55 to derive your cumulative credits. In the event that you are ineligible for any recognition, leave this section blank and input 0 on line 55. Subsequently, deduct the value on line 55 from that on line 47 to compute your total income tax for the fiscal year.
Step 8 – Additional Tax Obligations
Within lines 57 to 62, various taxes could potentially apply to you, such as self-employment tax or early withdrawals from an IRA. Combine the values on lines 57 to 62, and then deduct this sum from the figure on line 56. Record the resultant value on line 63, which represents your overall tax liability.
Step 9 – Tax Payments
For the majority of taxpayers, completing either line 64 – representing the total taxes withheld from W-2s and Form 1099s – or line 65 – representing the cumulative amount of estimated quarterly payments made – will suffice. This portion additionally accommodates various tax credits. Complete the applicable lines about recognition, then aggregate the figures documented on lines 64, 65, 66a, and 67 through 73. Insert the sum on line 74 to ascertain your comprehensive payment total.
Step 10 – Determine Your Refund or Amount Due
Should line 74 surpass line 63, you’ll be entitled to a refund. Deduct the value on line 63 from that on line 74, and inscribe the resulting number on line 75 to indicate your total refund amount. For convenient receipt of your refund, you have the option of choosing direct deposit by providing your routing and bank details. Additionally, you can allocate a portion of your refund to offset next year’s tax liability by completing line 77.
Conversely, a tax payment is owed if line 63 exceeds line 74. To ascertain the complete owed amount, subtract the value on line 74 from that on line 63 and document this figure on line 78. If relevant, input any applicable penalties on line 79.
