Picking the Right Tax Form

Picking the Right Tax Form

When can you use form 1040EZ?

When can you use form 1040A?

When must you use form 1040?

What forms are used for other purposes?

When can you use form 1040EZ?

• Single or married filing jointly
• Under age 65 and not blind
• No dependents
• Taxable income less than $50,000
• Interest income less than $400
• No advance earned income credit payments
• No itemized deductions
• No small business or rental income
• No alimony paid or received
• No IRA deduction
• Only used by about 15 percent of filers

When can you use form 1040A?

• Taxable income less than $50,000
• No small business or rental income
• No alimony paid or received
• Over age 65 or blind are OK
• Dependents are OK
• Interest income less than $400
• No itemized deductions
• IRA deduction is OK
• Only used by about 20 percent of filers

When must you use form 1040?

• Must be used by those who don't qualify for 1040EZ or 1040A
• Taxable income over $50,000
• Small business owners
• Rental property owners
• To itemize deductions
• Interest income over $400
• Capital gains transactions
• Receive or pay alimony
• Used by 65 percent of filers

What forms are used for other purposes?

Partnerships and limited liability companies use form 1065

C corporations ("normal" corporations like IBM) use form 1120

S corporations (small business corporations) use form 1120S