Do You Have A "Simple" Tax Return?

Using the Incorrect Tax Form Can Cost You

tax forms What qualifies as a "simple" tax return? Are you certain that you know? Are you using the correct form? Do you need to use the 1040EZ, the 1040A, or the 1040? There are special qualifications for the use of each form, and if you use the incorrect one when filing your taxes it can cost you.

The simplest form is the 1040EZ. To qualify to use the 1040EZ:

Your filing status is either single or married filing jointly.
You and your spouse (if married) are both under age 65.
Neither you nor your spouse are legally blind.
You have no dependents.
Your interest income is less than $1,500.
Your income, singly or combined, is under $100,000.
You cannot have income and expenses from self employment nor can you received 1099-Misc forms.
The only credit you can claim is the Earned Income Credit and Federal Income Tax Withholding.

The 1040A is a little bit less strict. You can file the 1040A using any of the 5 filing status options: single, married filing jointly or separately, qualifying widow(er), or head of household. The following qualifications apply to the 1040A:

Your taxable income, or combined incomes is below $100,000.
You have capital gain distributions, but no other capital gains or losses.
You do not itemize deductions.
You may make adjustments to income for educator expenses, IRA deductions, student loan deductions and tuition and fees.
You may claim the following credits:

The Child and Dependent Care Credit
The Credit for the Elderly or Disabled
Education Credits
Retirement Savings Contribution Credit
Child Care Tax Credit
The Earned Income Tax Credit
Additional Child Tax Credit

You did not have an AMT tax adjustment on stock you acquired from the exercise of an incentive stock option.

If you cannot use form 1040EZ or form 1040A you must use form 1040. You can use form 1040 to report all types of income, deductions and credits. By this time, we are no longer talking about a "simple" tax return.

The tax specialists at The Tax Office, Inc. take the extra time to discuss with your business and personal plans for the future. We talk about what your financial outlook happens to be in order to be certain that every deduction and credit is applied to your return. With proper tax planning in place, we can assist you with attaining your goals.