What Is a 1040EZ?

The Internal Revenue Service (IRS) offers three different filing options for individual taxpayers: Form 1040, Form 1040A, and Form 1040EZ. Form 1040 is the most complex out of the three choices for individual tax filers, but it also provides the most number of options for claiming deductions and credits. Although longwinded, a general rule of thumb posits that the longer the tax form, the more room for tax breaks available. Anyone can file a Form 1040, but some people are required to. A 1040 is required amongst taxpayers who are self-employed, those with an adjusted gross income of more than $100,000, and those who underreported tips, among other situations.

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Form 1040A is simpler than the 1040, yet more complex than the third option. Whereas anyone can file a 1040, tax payers must meet specialized requirements to file a 1040A. For example, they must have a taxable income of $100,000 or less and claim the standard deduction rather than itemizing.

Finally, the Form 1040EZ is known by its acronym: the “easy” or simplest option for individual taxpayers to file their federal income tax. It’s the fastest way to file, but only intended for taxpayers with basic tax situations using little information to determine whether or not money is owed. For most individuals, the 1040EZ will be the first income tax form they will ever fill out, composed of only six sections. Whereas the Form 1040 has 79 lines to fill out, the 1040EZ only has 14. The 1040EZ only has a few spaces to record wages, salaries, tips, income interest, and unemployment compensation, while the Form 1040 has 16 different income categories. The 1040 also has an extensive list for deduction options, such as education costs and health care saving plan contributions. Comparatively, the 1040EZ boasts a very small section devoted to credits, composed of a line for earned income credit (EIC) and a spot for nontaxable pay election. If you’re unsure of which option is best for you, take advantage of the Community Tax income tax preparers for advice based on your own unique circumstances.

Who Should File a 1040EZ?

Taxpayers must meet a set of specific requirements to use the Form 1040EZ. They must file as single or married filing jointly. Additionally, the taxpayer (and spouse, if filing jointly) must be under the age of 65, not blind, and without any dependents by the end of the year for which he or she is filing. Total taxable income must be under $100,000 and the taxpayer cannot be in a state of bankruptcy. The income must only come from wages, salaries, tips, unemployment, or taxable scholarships and fellowship grants. If any tips were earned, they must be listed in boxes 5 and 7 on the taxpayer’s Form W-2, and any taxable interest has to be $1,500 or less. Furthermore, the filer cannot owe any taxes on the employment of a household employee, such as a maid. These stipulations make the 1040EZ a good option for students and younger generations. However, the filer cannot claim any income adjustments – including student loan interest deductions, deductions for retirement contributions, or any other credit other than the earned income credit. Young adults working part-time jobs are excellent candidates for the 1040EZ, provided they have no real estate assets, no tax shelters, and no foreign income.

If you meet these criteria, filing a 1040EZ might be the right option for you. Keep in mind that although the 1040EZ might be simpler than the 1040, it could result in losing out on some important credits and deductions. If you’ve filed your federal income tax with the 1040EZ in previous years, consider any life changes that might demand a switch over to 1040 or 1040A. Some common examples include having a child, buying real estate, or earning a significant amount in investment income. Try using the CTax Monitoring Service to review and manage your financial situation before deciding which form to file.

How Can I File a 1040EZ?

First, check the above requirement to make sure you’re eligible to file your federal income taxes using a Form 1040EZ. If your tax situation is basic and meets these requirements, gather the W-2 forms provided your employer. If you have multiple jobs, you will need all W-2s provided to you, as you will only be submitting one Form 1040EZ to the IRS. If you have any forms used to report income other than W-2s, you’ll need to use form 1040 instead. Obtain the blank 1040EZ for the current tax year from the IRS website. You can also get a copy at a local library or post office. If you need a form for a prior tax year, you can search for it at on the IRS website, as well.

Fill in the upper portion of the document using primary taxpayer’s full name and Social Security number. This should be your full, legal name, as matched to the records of both the Social Security Administration and IRS taxpayer records.

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If you add your spouse’s name to the second line, it means that you will be filing jointly. For married joint filers, it does not matter which name goes on top, so long as you file the same way each year. If you’re single, leave this line blank.

Write your address on the third and fourth lines, only including a P.O. box if you will not receive mail to your house.

Line 5 is only for those living in a foreign country and otherwise left blank.

Next, complete the Income Section by combining the sum of your W-2’s into line 1 to account for your gross wages, salaries, and tips.

Enter any taxable interest on line 2 and any unemployment compensation on line 3. Adding lines 1-3 will provide your adjusted gross income. After completing this portion, follow the instructions to complete the Payments, Credits and Tax Section.

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This information will determine your refund or what you owe. Complete the banking information to finish and file your return. To save yourself the hassle of filing your 1040EZ, get a free consultation from one of our trusted Community Tax agents and learn how our services can make your tax season stress-free.