The vast majority of individual taxpayers will file the Form 1040 to file their taxes. However, there are many other types of forms. The one that works best for you and your family will depend on your individual tax situation. EB Tax Consultants in Brooklyn, NY can help you determine which form to use to get your maximum deductions and credits. Read on to discover the different types of forms and who should use them.
Taxes are anything but simple, but federal Form 1040EZ tries its best to be straightforward and easy. It is specifically designed for taxpayers who are either single or filing jointly and have no dependents. This means that a significant number of taxpayers cannot use this form right off the bat. Those over 65 or who are blind also cannot use this form because the additional standard deduction that is only available to them is not included on the Form 1040EZ.
Other restrictions for this form include:
· Cannot have income over $100,000
· Your income can only include wages, salaries, tips, unemployment income, and interest is limited to $1,500
· You cannot have self-employment income, rents, or capital gains
· No itemized deductions
There are also only two available credits on this form—the earned income credit and the nontaxable combat pay election. If you are entitled to any other credit, you should definitely use a different form.
This is the longest and most complicated tax form available. Unfortunately, it also usually the one that you will need to file at tax time. There are no real restrictions on credits or deductions for this form (although you will need to meet certain residency requirements). If you are unsure which form to use, go with Form 1040.
This often-neglected form ranges in complexity between Form 1040EZ and 1040. It is sometimes referred to as the “short form.” Most of the restrictions regarding income are lifted in this form, but you must still make under $100,000 to use it. However, there are still some income types that are unavailable on this form. It can also be used by all filers, regardless of their filing status or whether they have dependents.
Unlike Form 1040EZ, Form 1040-A has some of the most common adjustments available, including:
· Educator expenses
· IRA deductions
· Tuition and fee deductions
· Student loan interest deductions
· Child tax credit
· Education credits
· Child and dependent care expense credits
· Earned income credit
· American Opportunity Credit
· Credit for the elderly or disabled
You still cannot itemize your deductions by using Form 1040-A, but many of the most commonly used deductions and credits are available using this form.
You must meet certain residency requirements to fill out a Form 1040. If you do not meet these requirements, you may need to fill out a Form 1040NR. This form is specifically designed to meet the needs of Nonresident Alien tax filers.
The United States imposes an income tax on all income earned in the United States, even if the earner is not a resident of the United States. If fact, nonresident aliens may even have to file a return if they have earned no income in the United States or their income is exempt because of a tax treaty. There are certain exceptions, especially those that apply to students.
Those without dependents can file a 1040NR-EZ as long as their income is below $100,000. There are special tax considerations that must be dealt with in all non-resident returns. Seek the advice of an experienced Brooklyn tax preparer for information about your unique situation.
There are several other types of tax forms that you may need as well. Each serves a different purpose. Remember—when in doubt, use Form 1040.
· Form 1040-SS: This form is a short form that is designed for those who are self-employed. If you do not have to file a Form 1040, but you still have self-employment income of over $400, and are a resident of Guam, Puerto Rico, Commonwealth of the Northern Mariana Islands, the U.S. Virgin Islands, or American Samoa, then you may need to use Form 1040-SS.
· Form 1040-PR: This form is the Spanish version of the Form 1040-SS, specifically for residents of Puerto Rico.
· Form 1040-C: This extremely complicated form is for departing aliens. Those who are going to be away from the United States for a significant period of time may need this form to report and pay income tax on income that has been received or is expected to be received for the year. You must file this form in addition to your regular annual return.
There are still other forms that you may need to effectively file your income tax return. Complex tax situations can be overwhelming, and getting them wrong can be a costly mistake. Don’t risk it—use an experienced tax professional. EB Tax Consultants can help you get your return right the first time. Click on the profile link below or use the Contact button to get started.
ERNIE BUSTAMANTE