When To Use Form 1040EZ, 1040A, and 1040 in Filing Taxes

The IRS Form 1040, 1040EZ or 1040A are used when filing an individual federal tax return. They will contain a report of your income and will help figure out how much additional taxes you need to pay or, most importantly, how much refund you’re going to get. Although each of them serves the same purpose, they each have their own complexity as well.

You may already know that Form 1040EZ is the easiest to fill out while 1040A is lengthier and a little more complicated. Form 1040, on the other hand, is the most detailed and challenging among the three. Any taxpayer can file their tax returns using Form 1040 but to those who want the shorter 1040EZ or 1040A forms, certain requirements must be met in order to be allowed to use them. If you want to know which form is the right form for your situation, the below break down might be of great help.

What is Form 1040EZ?

The shortest and easiest among the IRS 1040 forms is the Form 1040EZ. It is used if a taxpayer does not have any plan to claim any tax credits or deductions. You can take the standard deduction but you won’t be allowed to itemize deductions, claim adjustments to income (such as contributions to an IRA) or claim any tax credits except for the Earned Income Tax Credit (EIC), which is given to a couple of low-income taxpayers. Do you have any income from self-employment, alimony, dividends or capital gains? You won’t be able to use 1040EZ as well.

Taxpayers that fall under the following situations can use Form 1040EZ:

• Filing as single or married filing jointly
• Does not claim any dependents
• Does not itemize deductions
• Taxpayers (and their spouse, if filing jointly) who are under age 65 on January 1 of the year in which they filed, and not legally blind at the end of the tax year for which they are filing
• Source of income exclusively comes from wages, salaries, tips, taxable scholarship, and fellowship grants, unemployment compensation or Alaska Permanent Fund dividends
• Has a taxable interest of $1,500 or less
• Taxpayers whose earned tips (if any) are included in boxes 5 and 7 of your W-2
• Does not owe household employment taxes on wages paid to a household employee
• Not a debtor in a Chapter 11 bankruptcy case filed after Oct. 16, 2005

What is Form 1040A?

If you’re looking into claiming certain tax credits but do not want to itemize your deductions, then Form 1040A is meant for you to use. Between Forms 1040EZ and the standard Form 1040, 1040A is in the middle when it comes to the complexity and amount of time needed for it complete. 

Although limited when it comes to deductions and credits allowed compared to the standard 1040, the tax breaks it offers is more than Form 1040EZ. If for instance you have dependents to claim and you won’t be able to use Form 1040EZ, then you can use 1040A under the following circumstances:

• Filing as single, married filing jointly or separately, qualifying widow or widower, or head of household
• Has less than $100,000 taxable income
• You income exclusively comes from wages, salaries, tips, taxable scholarships and fellowship grants, interest, ordinary dividends, capital gains distributions, pensions, annuities, IRAs, unemployment compensation, taxable Social Security or railroad retirement benefits and Alaska Permanent Fund dividends
  You do not itemize your deductions
• Have no alternative minimum tax (AMT) adjustment on stock you possessed by exercising a stock option
• Your deductions for an IRA, student loan interest, educator expenses, and tuition and fees are your only adjustments income.
• The only credits you claim are for the child and dependent care expenses, EIC, the elderly or the disabled, education, child tax credit, premium tax credit (for insurance purchased on the health insurance marketplace) or the retirement savings contribution credit

What is Form 1040?

If you have large earnings, has complex investments and/or you’re looking into claiming tax credits and itemized deductions, then you will use Form 1040 when you file your tax return.

Form 1040 is used by taxpayers when Form 1040EZ or 1040A are not applicable to their situation. It offers you a lot of options when claiming deductions and credits but it is the most complex of the forms for individual filers. 

You must file Form 1040 if you fall under the following circumstances:

• Has a greater than $100,000 taxable income
• You itemize deductions
• The sale of property gives you income
• You have other types of income, including that from unreported tips, self-employment, certain non-taxable distributions, a partnership or S corporation, or if you’re a beneficiary of an estate or trust
• You owe taxes for the use of a household employee

Generally, more tax breaks and credits are made available for you if you’re using a longer tax form. You won’t be able to save money from credits and deductions if you file using the Form 1040EZ or 1040 although it’s faster and has fewer record keeping requirements. Form 1040 gives you a greater advantage in saving money from taxes. The IRS has an Interactive Tax Assistant that can help you determine which form is best for your situation. Hiring a tax professional can also assist you in taking a full advantage of credits and deductions available.