This article provides a brief overview of the most common federal income tax forms individuals will use when completing a tax return. This includes the three versions of Form 1040, as well as Schedules A and B.
Finding Tax Forms
Anyone looking for a more comprehensive list of IRS forms can find one in our article: Federal Income Tax Forms, which contains links to nearly 100 different PDFs published by the IRS. Those forms are grouped into categories, making the various documents easier to locate.
Form 1040
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The Form 1040, also known as the U.S. Individual Income Tax Return, is perhaps the single most important document published by the IRS. Nearly all of the publications discussed later on provide backup calculations or worksheets that feed into the 1040.
The IRS makes available to taxpayers three different versions of this document, depending on the complexity of the return. One of the three 1040s is known as the "long form" because it's the most comprehensive of the three. The IRS tries to make the tax return preparation process as easy as possible by allowing individuals to complete the shortest form needed to capture a complete set of data.
Form 1040 Guidelines
The simplest versions of this tax form are the 1040EZ and 1040A. These forms are abbreviated versions of the long form. They're designed for individuals that make less than $100,000, and don't have a lot of tax deductions. The following paragraphs provide a more detailed guide to choosing the right Form 1040.
Form 1040EZ
Taxable income below $100,000
Interest income must be $1,500 or less
Under the age of 65
Tax filing status of Single or Married Filing Jointly
The filer cannot have any dependents
Form 1040A
Taxable income below $100,000
The filer can have a capital gain distribution, but no other capital losses or gains
The only deductions allowed are those for IRA contributions, student loan interest, education expenses, or higher education tuition and fees
The only tax credits allowed are those for children, education, earned income, child and dependent care expenses, adoption expenses, elderly and retirement savings account contributions
Form 1040A does not allow for itemized deductions
Individuals that need to file a more complex tax form must file Form 1040, the long form.
IRS Forms Schedule A & B
Schedule A is used to determine a taxpayer's total itemized deductions, which lower the filer's total tax liability, or tax bill.
Each taxpayer is allowed standard deductions as determine by the IRS code. If a taxpayer can "beat" these standard deductions using Schedule A, they are allowed to take the higher deduction. The following table contains the standard deductions for the tax years 2019 and 2020:
2020 and 2019 Standard Deductions
2020 | 2021 | |
Single | $12,400 | $12,550 |
Married Filing Jointly | $24,800 | $25,100 |
Married Filing Separately | $12,400 | $12,550 |
Head of Household | $18,650 | $18,800 |
Qualifying Widow(er) | $24,800 | $25,100 |
The following are the most common types of deductions appearing on Schedule A.
Medical and Dental Expense
These are the total medical and dental related expenses, subject to a 7.5% threshold. This means only costs in excess of 7.5% of a taxpayer's Adjusted Gross Income can be deducted.
Taxes Paid
This deduction includes taxes paid to other jurisdictions or authorities such as state and local income taxes, property, and real estate taxes. Most federal taxpayers also pay state income taxes, and that deduction is taken on Schedule A. Homeowners that paid property taxes directly should keep a record of those payments. If taxes are collected by a mortgage company and sent to local authorities, those payments will be reported on Form 1098.
Interest Paid or Interest Expense
Homeowners that have a mortgage can deduct the interest expense associated with their monthly payments. Mortgage companies typically send a statement of interest paid sometime in January: Form 1098, Mortgage Interest Statement. Interest expenses, along with property and state income taxes, are usually the three largest deductions found in Schedule A.
Gifts to Charity
Donations and gifts to charity, including those made to a church or place of worship, are reported in this section. For donations in excess of $500 and / or non-cash donations, the IRS requires extensive recordkeeping. For example, the IRS has very specific rules when donating a car.
IRS Schedule B
Schedule B is used to report interest income and ordinary dividends. Individuals that have money in an interest-bearing savings account will receive from their bank and / or financial institution a Form 1099-INT. If dividends were received, then a bank and / or financial institution will also send Form 1099-DIV. The information found on 1099-INT and 1099-DIV is required when completing Schedule B.
While the purpose of Schedule A is to identify tax deductions, which lower taxable income; Schedule B identifies additional income sources, which adds to taxable income.
Special IRS Forms
Schedule A, Schedule B, and Form 1040, are the most common tax forms individuals will file with the IRS. There are several specialized forms that are worth a quick mention too:
Schedule C or C-EZ: used to report to the IRS any business income or losses
Schedule D: used to report long and short term capital gains
Form 2441: used to report child and dependent care expenses
Form 8863: used to report education credits
Form 8812: used to report additional child tax credits
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