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The 1040EZ form is a simple alternative that some people may be eligible to file with the Internal Revenue Service (IRS) to report their annual US federal earnings and taxes. There can be advantages to filing this form, which has been available since 1982. For people with very simple tax issues, the form can be completed quickly and is usually fairly self-explanatory when the accompanying form guide is used. Simpler isn’t always better; some people who meet the requirements of the 1040EZ are better off filing a more complex form to take advantage of greater income tax breaks.
At present, those people eligible to file a 1040EZ form are either single or married filing jointly with a combined income no greater than $100,000 US Dollars (USD). Individuals or a couple must be younger than 65 years of age and they can’t make more than $1500 USD a year in interest income. Single people or couples cannot have any dependents and cannot be legally blind.
In most scenarios, the people likely to file the 1040EZ form are young workers like older high school students and young adults. They generally have very simple tax situations. They make a certain amount of money, pay taxes on it and take a standard deduction.
It’s possible that this scenario could apply to older people, but it seldom does. As people go through life, their tax status becomes more complex. Even if they don’t make a lot of money they could still have things like retirement accounts, a savings account, interest payments, a home business, a home they own or many other features that greatly increase the intricacy of their tax filings. In these cases, people are likely to want to file a 1040A or a straight 1040 because they can claim more deductions or credits.
No matter which forms are filed, some requirements are similar. People will need a social security number and statements about their work, such as annual reports on earnings and taxes from employers. The 1040EZ form will need to be filled out, and people will calculate whether they underpaid, exactly paid, or overpaid their taxes. The form is then mailed or transmitted electronically to the government with any payment, if necessary, required. The 1040EZ form for the previous year’s income is due on April 15 each year.
Even with a lower income, people sometimes have involved tax situations that require filing a different form of the 1040. Independent students should definitely avoid this form because they may be eligible for deductions or tax credits while they attend school or pay interest on student loans. Any type of significant investments, trust funds or others may require additional forms. People should plan to look through lists of yearly deductions and tax credits to determine if they can qualify for any of them. Getting advice from free tax filing assistant agencies or programs can also be of use in choosing the right form.
The 1040EZ form is ideal for teenage workers or newly-hired college graduates. Not only does this form simplify tax filing, using it helps introduce young employees to the tax system. Because it is not overwhelming or complicated, the 1040EZ also helps take the confusion out of tax time for young workers with busy lives.
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