1040 Form: What is it?

Answer 1

Simply put, a 1040 form is the most basic federal income tax form for the United States, and it is one of the most common tax documents that Americans must fill out in any given tax year. It is comprised of two primary sections: One shows family information and generated income, and the other shows legally allowable credits, deductions and other considerations with regard to tax liability.

This form has been around since as far back as 1916, and it has been altered each year to allow new available credits and modifications. It is therefore important to fully understand the 1040 in order to apply any new or different criteria with the form each year.

There are a few variations of this form as well, meaning that if you need to fill out a 1040, you need to know which one is the right version for yourself. For example, you can fill out a 1040EZ that, as the name suggests, is an easy variation of the 1040 for those who make under $100,000 annually without dependents. It also accounts for standardized deductions rather than itemized. Similarly, the 1040A exists, but there are additional sections to include pensions, income dividends and tips. Finally, the 1040NR forms are intended for non-resident aliens who have also earned income.

Known as schedules, there are additional attachable documents that may be required along with the 1040 tax form. Schedules document capital gains profits or losses, itemized deduction forms, self-employment taxes and farming expenses. Some years featured schedules when there were available temporary tax credits. For example, in 2009, some people were eligible for a tax credit through the stimulus package via schedule M.

Important documents to keep with you when you need to fill out a 1040 include your loan or mortgage statements, your Social Security number, your document of self-employment income or dividends for the year, wage statements as well as tax returns from the previous years. As math is also required, you may also want a calculator nearby.

You can obtain most varieties of the 1040 form in either paper or online formats, with some preferring the latter. This allows them to check tax help websites that can help with performing the calculations and locating the right forms to add to the 1040. You can also file your 1040 online for free at any point before April 15, the federal due date for filing taxes.