Are you new to tax form 1040EZ? This simplified guide will cover everything you need to know about this tax form and how to fill it out.
You will learn who can use this form, common mistakes people make, and where to find more information.
Reading this blog post allows you to file your taxes using tax form 1040EZ confidently.
What Is It, and What Does It Cover?
Tax form 1040EZ is no longer available as of 2018, but it was the simplest tax form available before that year. Tax form 1040EZ is a simplified version of the regular 1040 tax return.
It was designed to help you file your taxes when your finances are relatively simple.
It was designed for individuals or joint filers who earned $100,000 or less with under $1,500 in interest income. It is also claimed no dependents under the age of 65 and not blind at the end of 2017
The 1040EZ form only covers certain types of income, deductions, and credits.
These include wages, salaries, tips, the taxable interest of $1,500 or less, unemployment compensation, and Alaska permanent fund dividends.
You cannot itemize deductions or claim tax credits other than the Earned Income Tax Credit (EITC).
Who Can Use Tax Form 1040EZ?
In previous years, only those with uncomplicated financial situations were allowed to file Form 1040EZ.
This included people making up to $100,000 per year or less in wages, no more than $1,500 in interest income, and who could claim no dependents under the age of 65 at the end of 2017.
Filing tax form 1040EZ was also not an option if you itemized deductions or claimed certain tax credits, such as the Earned Income Tax Credit (EITC).
You might be able to take the EIC if you earned less than $15,010 ($20,600 if married and filing jointly)
How Do I Complete Tax Form 1040EZ?
Tax form 1040EZ can be reasonably straightforward to complete if your financial situation is relatively simple.
In general, you will need to provide your personal information in the top section of the form.
In the income section, you will list your taxable wages, interest income of $1,500 or less, unemployment compensation, and Alaska permanent fund dividends.
Next, you will list tax payments you had already made through employer withholding or estimated tax payments if you were eligible for the Earned Income Tax Credit (EITC).
You could also claim two tax credits on Form 1040EZ: the EITC and EIC.
You then add up all of your payments and credits before calculating the tax on your taxable income—the form provided tax tables you could use to calculate this amount.
If your total tax payments and credits exceeded your income’s calculated tax, you were entitled to a refund for overpayment.
If you calculated a refund, you could enter your bank information and deposit it directly into your account. If you were underpaid, you needed to pay for the remaining balance.
Finally, the last section required the signatures of both filers if you were filing jointly. If you were filing electronically, you would have also signed the form.
Tax Form 1040EZ vs. Tax Form 1040: Key Differences
- Tax form 1040EZ is no longer available as of 2018, but it was the simplest tax form available before that year.
- It is designed for individuals or joint filers who earned $100,000 or less with under $1,500 in interest income.
- It only covers certain types of income, deductions, and credits. These include wages, salaries, tips, the taxable interest of $1,500 or less, unemployment compensation, and Alaska permanent fund dividends.
- You cannot itemize deductions or claim tax credits other than the Earned Income Tax Credit (EITC) on tax form 1040EZ
- If your total tax payments and credits exceeded your income’s calculated tax, you were entitled to a refund for overpayment on tax form 1040EZ.
- If you filed jointly on tax form 1040EZ, your spouse needed to sign it too.
- Tax form 1040 is still available as of 2018 and is more complex than tax form 1040EZ because it includes more sections for taxpayers to report their information in than tax form 1040EZ.
Tax Form 1040EZ vs. Tax Form 1040-SR: Key Differences
Tax form 1040-SR is a new tax form introduced in 2019 for seniors 65 and older.
It has the same information as tax form 1040 but with more straightforward instructions, larger font sizes, and larger boxes.
It provides an itemized deduction worksheet allowing taxpayers to enter their deductions quickly. It also allows taxpayers to claim the standard deduction or itemize deductions.
Tax form 1040-SR allows for additional tax credits such as the credit for the elderly and disabled, foreign tax credit, and the residential energy efficient property credit.
It also includes a simplified worksheet to calculate any refundable credits taxpayers may be eligible for.
Finally, tax form 1040-SR does not require the signatures of both filers if taxpayers are filing jointly.
Conclusion
Tax form 1040EZ is no longer available, but it used to be the simplest. It allowed individuals and joint filers to report their wages, unemployment compensation, and Alaska permanent fund dividends.
Don’t let tax season overwhelm you! Our blog offers easy-to-understand guides on how to file your taxes, including the new tax form 1040-SR for seniors.
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