The 1040A “U.S. Individual Income Tax Return” is the intermediate tax form the IRS provides to taxpayers, to report a more complicated Tax Story that cannot be accommodated on the form 1040EZ. The 1040A builds and expands on the features of the simpler 1040EZ form.
Click to open the 2-page IRS form 1040A into a new browser window, to refer to as we learn about the form. You can then toggle between the several 1040A blog posts and the 1040A form.
Click the link below for the 90-page form 1040A instruction booklet from the IRS, as form 1040A-Instructions. The explanations in these many form 1040A blog posts are substantiated by the Tax Laws explained in the IRS instruction booklet. The instructions are very well written and frequently give terrific examples to demonstrate the Tax Laws pertinent to the form 1040A.
There are (11) blog posts in the series that will explain the 1040A form. Just click the blue underlined hyperlink button at the bottom of each blog post, to progress to the next blog post in the series. We start with the top of page 1 of the form 1040A, then work through each line to the end of page 2 of the form 1040A.
If you have not viewed the two previous posts shown below that explain the form 1040EZ , please do so now. These will give you a solid tax form foundation upon which the form 1040A builds. Some tax history is also explained that is useful to know, before you learn the 1040A form.
The 1040EZ: Who Can Use this Form?
The 1040EZ: Payments, Credits and Tax
You can use the 1040A form if any of the following qualifications apply to you. The 1040A form accommodates many more Tax Story scenarios.
Filing Status: The first improvement the 1040A provides to taxpayers, is the Filing Status is expanded to all (5) available categories. If you remember, the 1040EZ was limited to just the Single and Married Filing Jointly filing status categories.
- The five expanded filing status categories are:
- Married Filing Jointly (even if only one had income)
- Married Filing Separately
- Head of Household (with qualifying person)
- Qualifying Widow(er) with dependent child
The next Blog post will explain the (3) additional filing status categories, and describe in more detail the Single and Married Filing Jointly status.
Exemptions: The second improvement to the 1040A form, is to allow you to list your children and relatives, that you support and live with. These are called Dependents, and qualify you to take the Dependent Exemption deduction for each of them, worth $4,050 for the 2016 tax year. A Blog post will explain Qualifying Children and Qualifying Relatives, and what makes them eligible to be listed as your Dependent on the form 1040A. A blog post also explains the Personal and Dependent Exemptions.
No Age Limitations: Unlike the 1040EZ form, taxpayers 65 and older can use the form 1040A. These taxpayers – over age 65 – also benefit from a higher Standard Deduction, as they get an Additional Standard Deduction of $1,550 for unmarried taxpayers, and $1,250 for married taxpayers.
Taxpayers under the age of 65 must use the normal Standard Deduction for their particular Filing Status. You cannot use the Itemized Deduction feature on the form 1040A. Itemized Deductions can only be reported on the form 1040. Two later blog posts will explain the Standard Deduction and Itemized Deductions.
Income: There are (7) additional categories of income, that are added to the form 1040A, in addition to what is allowed on the 1040EZ. A Blog post will explain these in detail.
- The (4) Income categories that carryover from the 1040EZ form are:
- Wages, Salaries and Tips
- Taxable Scholarships or Grants
- Taxable Interest – that can be over $1,500 on this 1040A form
- Unemployment Compensation
- The (7) Income categories added to the 1040A form are:
- Tax Exempt Interest
- Ordinary Dividends
- Qualified Dividends
- Capital Gain Distributions
- IRA Distributions
- Pension & Annuity Distributions
- Social Security Benefits
Adjustments to Income: The 1040A introduces a new category of deductions called Adjustments. They are subtracted from your Total Income, to reduce your final Adjusted Gross Income (AGI) total. A Blog post will explain these in detail.
- The (4) new Adjustments to Income are:
- Educator Expenses
- IRA Deduction
- Student Loan Interest Deduction
- Tuition and Fees Deduction
Nonrefundable Credits: These credits can reduce your tax liability to zero, but not below zero. Five have been added to the form 1040A. A Blog post will explain these in detail.
- The (5) new Nonrefundable credits are for the:
- Credit for Child and Dependent Care Expenses
- Credit for the Elderly or the Disabled
- Education Credits
- Retirement Savings Contributions Credit
- Child Tax Credit
Refundable Credits: These credits can produce a refund for you, even if your tax liability is zero. Three have been added to the form 1040A, in addition to the Earned Income Credit that was introduced with the 1040EZ form. A Blog post will explain these in detail.
- The (1) refundable credit that carries over from the 1040EZ form is the:
- Earned Income Credit
- This has been expanded on the form 1040A, to include an additional Earned Income Credit value if you can claim one, two, or up to three Qualified Children on your tax return. The maximum credit you can receive if you have three children is $6,269 – if you are in the most advantageous income range – that would qualify you for the maximum credit. The maximum credit with one child is $3,373, and $5,572 if you can claim two children.
- The (3) new refundable credits added to the 1040A form are for the:
- Additional Child Tax Credit
- American Opportunity Credit
- Net Premium Tax Credit
Additional Taxes: One additional tax category is added to the form 1040A, in addition to the Health Care Individual Responsibility tax penalty, that was introduced with the form 1040EZ. It is called the Excess Advance Premium Tax Credit Repayment. A Blog post will explain this in detail.
Disqualifications: You cannot use the form 1040A if you have any of the following in your Tax Story. If these apply, you must use the tax form 1040. If you remember, the 1040 is the most complicated of the (3) tax forms, because it can accommodate any and all Individual tax scenarios – no matter how complex the Tax Story might be.
- Alimony income received from a former spouse
- Business income or loss, typically from self-employment
- Capital gain or loss from investments
- Rental real estate income, partnership income, royalties, trust income, estate income, or income from an S Corporation
- Farm income
- Other income not defined by any previous income category
- Health Savings Account (HSA) contributions or distributions
- Moving expenses
- Self-employment tax, self-employment health insurance or pensions
- Penalty on early withdrawal of savings
- Alimony paid to a former spouse
- If you qualify to Itemize your Deductions
- If you owe the Alternative Minimum Tax
- If you take the Foreign Tax Credit
- If you qualify for any of the Credits not allowed on the form 1040A
- Many of the additional taxes not reported on the 1040EZ or 1040A
Click the link below for the next Blog post to learn about the (3) new categories of Filing Status added to the 1040A.
Feel free to comment on these blog posts, or send me an email at Mike@TaxesAreEasy.com
Blog Written Content ©2017 Michael D Meyer. All rights reserved.
PDF IRS forms, instructions & publications – ©2017 Department of the Treasury Internal Revenue Service IRS.gov
Legal Disclaimer: Nothing written or expressed in this Blog shall be construed as legal, accounting, or tax advice. This Blog is for informational purposes only, to inform Individuals about the IRS tax forms required to file an individual tax return, and the instructions that accompany such IRS tax forms.
This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal or accounting advice. You should consult your own tax, legal and accounting advisors before engaging in any tax transaction or filing any tax form.