Definition of individual US tax return

What is Form 1040 – US Individual Tax Return?

Form 1040 is the standard Internal Revenue Service (IRS) form that individual taxpayers use to file their annual income tax returns. The form contains sections that require taxpayers to disclose their taxable income for the year to determine if additional taxes are owed or if the taxpayer will receive a tax refund.

Key takeaways

  • Form 1040 is what individual taxpayers use to file their taxes with the IRS.
  • The form determines if additional taxes are due or if the filer will receive a tax refund.
  • Personal information, such as name, address, Social Security number, and number of dependents, is requested on Form 1040.
  • A taxpayer must also report wages, salaries, taxable interest, capital gains, pensions, Social Security benefits, and other types of income.
  • Taxpayers may need to file 1040 supplemental tax forms depending on their situation.

Understanding Form 1040: U.S. Individual Tax Return

Form 1040 must be filed with the IRS by April 15 in most years.Everyone who earns income above a certain threshold must file an income tax return with the IRS (businesses have different forms to report their earnings).

The IRS reviewed Form 1040 for tax year 2018 after the Tax Cuts and Jobs Act (TCJA) passed, and examined, according to the agency, “ways to improve the 1040 filing experience.” It was announced that the new shorter 1040 makes it easier to communicate future tax law changes and reduces the number of 1040s that taxpayers must choose from. The 1040 form for tax year 2020, which will be filed in 2021, includes two pages to complete that are available on the IRS website. Form 1040 can be mailed or filed electronically.

Form 1040 asks taxpayers for information about their marital status for filing purposes, such as name, address, social security number (some information about the spouse may also be required), and the number of dependents. The form also asks about health coverage throughout the year and if the taxpayer wants to contribute $ 3 to the presidential campaign funds.

All pages of Form 1040 are available on the IRS website.

Income section 1040 requires the filer to report wages, salary, taxable interest, capital gains, pensions, Social Security benefits, and other types of income. It also allows taxpayers to claim the new higher standard deduction introduced with the Tax Cuts and Jobs Act. For 2020, these deductions are as follows:

  • Single or married filing separately, $ 12,400
  • Married filing joint return or qualified widow (er), $ 24,800
  • Head of household, $ 18,650

For fiscal year 2021, which will be presented in 2022, the numbers have increased and are as follows:

  • Single or married filing separately, $ 12,550
  • Married filing joint return or qualified widow (er), $ 25,100
  • Head of household, $ 18,800

Those who are 65 or older or blind can take an additional deduction (see “Age / Blindness” on the first page of Form 1040):

  • Single taxpayers or heads of household, $ 1,650
  • Married filing jointly, $ 1,300 for each spouse who is 65 or older or blind.

The new tax law eliminated many deductions, including for unreimbursed employee expenses, tax preparation fees, and moving for a job (except for active duty military).

The new 1040 uses what the IRS calls a “building blocks” approach and allows taxpayers to add only the schedules they need to their tax return. Some people may now need to file one or more of six new supplemental schedules with their 1040 in addition to long-standing schedules for items such as business income or loss, depending on whether they claim tax credits or owe additional taxes. Many individual taxpayers, however, only need to file a 1040 and no schedules.

Taxpayers receiving dividends totaling more than $ 1,500, for example, must file Schedule B, which is the section to report taxable interest and ordinary dividends.

Similarly, those who want to claim itemized deductions on their 1040 must complete Schedule A. The IRS also has several worksheets to help taxpayers calculate the value of certain credits or deductions.

Types of Form 1040: Individual US Tax Return

Taxpayers in certain situations may need to file a different variant of Form 1040 instead of the standard version. Below are the options.

Form 1040-NO

A variety of nonresident aliens or their representatives must submit this form:

  • Those who are engaged in commerce or business in the United States.
  • Representatives of a deceased person who would have had to file a Form 1040-NR
  • Those representing an estate or trust that had to file a 1040-NR

Note that for tax years 2020 and later, taxpayers will no longer use Form 1040NR-EZ and will instead use Form 1040-NR.

In addition, the IRS also produces the 1040-SS and the 1040-PR. The 1040-SS is for residents of American Samoa, CNMI, Guam, Puerto Rico, or the US Virgin Islands who have net income from self-employment and do not have to file Form 1040 with Form 1040-SS. U.S. language equivalent of Form 1040-SS.

Form 1040-ES

This form is used to calculate and pay estimated quarterly taxes. Estimated tax applies to income that is not subject to withholding, including earnings from self-employment, interest, dividends, and income. This can also include unemployment compensation, pension income, and the taxable portion of Social Security benefits.

Form 1040-V

This is a statement that accompanies a taxpayer’s payment for any balance on the 1040 or 1040-NR “Amount Due” line.

Form 1040X

If a filer makes a mistake or forgets to include information on any 1040 form, the 1040X form is used to make changes to previously filed 1040 forms.

Form 1040-SR

The IRS introduced a new 1040 form for seniors in 2019. The changes include a larger font, no shading (shaded sections can be difficult to read) and a standard deduction table that includes the additional standard deduction for seniors. Seniors who fill out their taxes online won’t notice the difference, but those who do it on paper should benefit.

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