For some taxpayers, tax time is easy -- as in EZ. They are the ones who can use the IRS’s simplest tax form to complete their annual duty. (If you file electronically, the software automatically selects the simplest form for you. E-filing also speeds up the processing of your return and the delivery of your refund.)
Sign up for Tax Tips in your e-mail throughout the filing season
You can use Form 1040EZ if you are single or married with no dependents, you have taxable income of $100,000 or less, and you are younger than age 65. Plus, your taxable interest income from bank accounts and bonds can’t exceed $1,500 in order for you to use the simplest tax-filing form.
The Long and Short of It
If your tax situation is a little more complicated, choose Form 1040A, also known as the short form. You can use this form if your taxable income is $100,000 or less and you do not itemize your deductions.
Sign up for Kiplinger’s Free E-Newsletters
Profit and prosper with the best of expert advice on investing, taxes, retirement, personal finance and more - straight to your e-mail.
Profit and prosper with the best of expert advice - straight to your e-mail.
However, unlike Form 1040EZ, the short form lets you claim a number of “above the line” deductions, including up to $250 of out-of-pocket expenses for educational supplies if you are a teacher or educational professional; tax-deductible contributions to an IRA; and deductions for college tuition and fees or interest paid on a student loan.
Choosing the short form also allows you to take advantage of a variety of tax credits, which are even more valuable than tax deductions. A tax credit reduces your tax bill dollar-for-dollar; a tax deduction merely reduces the amount of income that is taxed. For example, if you are in the 25% tax bracket, a $1,000 deduction would reduce your tax bill by just $250, but a $1,000 tax credit would slash your tax liability by the full $1,000.
If you have taxable income of $100,000 or more, you itemize your deductions on Schedule A, or you need to file any special forms to report self-employment income, investment gains and losses, or rental or partnership income, you must use Form 1040, also known as the long form.
-
Stock Market Today: Stocks End Higher in Whipsaw SessionThe main indexes were volatile Thursday with Nvidia earnings in focus.
-
Trump Picks Dr. Oz as Head of Medicare and MedicaidPresident-elect Donald Trump picked Dr. Mehmet Oz to lead the Centers for Medicare and Medicaid Services. Here's what to know about the former TV host.
-
Tax Credit vs. Tax Deduction: What’s the Difference?Tax Breaks Your guide to tax deductions and credits, how the IRS treats them differently, and how they impact your tax bill.
-
Premium Tax Credit: Are You Eligible For This Health Insurance Tax Break?Tax Credits The tax credit can help qualifying individuals pay for coverage from the Affordable Care Act’s health insurance marketplace.
-
FSA Contribution Limits Are Higher for 2025FSA A flexible spending account allows you to build tax-free savings for certain medical expenses.
-
Florida Tax Deadline Extension: What You Need to KnowTax Relief The IRS extended federal tax return file time due to severe storms.
-
IRS: Here’s How to Recover Your Tax Records After a Natural DisasterTax Records Your tax documents can help you get federal relief faster, the IRS says.
-
Voters Approve New Veteran Property Tax ReliefTax Relief Thanks to the election, some Veterans will soon see expanded property tax exemptions.
-
Nevada Approves Diaper Tax Relief Amid Childcare CrisisTax Relief Nevada voters have expanded sales tax relief to diapers. But are prices still too high?
-
Earned Income Tax Credit (EITC) 2024: How Much Will You Get?Tax Credits The refundable amount for workers with or without children is slightly higher this year. Here’s what you need to know.
