The 1040EZ: Who Can Use this Form?

The 1040EZ is titled by the IRS as the “Income Tax Return for Single and Joint Filers with No Dependents.” Click this hyperlink to open the IRS form 1040EZ into a new browser window, to refer to as we learn about the form. You can then toggle between the blog posts and the 1040EZ form.

Click the hyperlink below for the 46-page form 1040EZ instruction booklet from the IRS, as form 1040EZ-Instructions. The explanations in these blog posts are substantiated by the Tax Law explained in the IRS instruction booklet. The instructions are very well written and frequently give terrific examples to demonstrate Tax Laws pertinent to the 1040EZ.

The first requirement to use the 1040EZ is your Filing Status must be only Single or Married Filing Jointly. You must be younger than age 65 at the end of the year on December 31st. You also cannot claim your dependent children or relatives as a deduction, who you might support and live with. To list these Dependents as a deduction on your tax return, you must use either the 1040A or 1040 form.

Income category is the next qualification to use the form 1040EZ. You are limited to income only from Wages, Salaries, Tips, Taxable Scholarships or Grants, Taxable Interest of not over $1,500, Tax Exempt Interest, Unemployment Compensation, and non-taxable Social Security Benefits. These are listed separately in that order on lines 1, 2 & 3 of the form 1040EZ. Three income categories do not have a corresponding line on the 1040EZ form, but they do not disqualify you from using the form.

  • Taxable Scholarships or Grants
  • Tax-Exempt Interest
  • Non-Taxable Social Security Benefits

Taxable Scholarships or Grants are listed in the margin to the left of line 1 and are included as ordinary income. These amounts typically cover room and board, travel and other education-related living expenses that cannot be used to qualify for the (1) Education adjustment deduction and/or the (2) Education tax credits. These are sometimes reported to you on your W-2 from your salary job, as included in your wages.

The amounts of Tax-Exempt Interest you received is listed in the margin to the left of line 2. These amounts are not taxable, but are reported to the IRS on the 1040EZ to match their computer records of interest you received. Tax-Exempt Interest is also included in the formula that determines if any of your Social Security Benefits are taxable.

You could have received Social Security Benefits and still use the form 1040EZ – but none of the benefits can be taxable. A worksheet on page 12 of the instructions helps you determine this. If the worksheet indicates that some of your Social Security Benefits are taxable, you must use the tax form 1040A or the 1040 form. The worksheet is included in all tax software, so this requirement will automatically be verified for you.

The sum of these Income categories is called your Adjusted Gross Income, or (AGI) for short. The AGI appears on line 4 of the form 1040EZ.

On the form 1040EZ, the Standard Deduction and Personal Exemption for your filing status are combined into one deduction number. That value is $10,350 for a Single filer, and $20,700 for Married Filing Jointly filers. This value appears on line 5 of the 1040EZ form. Later blog posts will explain the Standard Deduction and Personal Exemption, as part of the form 1040A explanations.

  • Single taxpayer = $10,350 combined deduction
    • $6,300 Standard Deduction
    • $4,050 Personal Exemption
  • Married Filing Jointly taxpayers = $20,700 combined deduction
    • $12,600 Standard Deduction
    • $4,050 Personal Exemption for each spouse

If you are a Dependent listed on another Taxpayer’s tax return, you cannot take your Personal Exemption value for that tax year. The Taxpayer claiming you as their Dependent – gets to use your Personal Exemption as a deduction on their tax return. Your Standard Deduction is calculated using the worksheet on page 2 of the form 1040EZ, based on your income. This situation is common when Dependent children have jobs that withhold taxes from their paychecks. They still file a tax return to most often get back those withheld taxes as a refund – even though they are listed as a Dependent Child on their parent’s tax return. All the tax software calculates this for you, and recognizes you said you are a Dependent of another Taxpayer. The software knows you cannot use your Personal Exemption, but will calculate your Standard Deduction and refund accordingly. This is all part of the “software interview” process.

The next step is to subtract this line 5 combined deduction from your Adjusted Gross Income (AGI) line 4, to arrive at what is called Taxable Income, shown on line 6. Taxable Income is the income total that the IRS uses to calculate your yearly tax liability, for your particular Tax Story.

To qualify to still use the form 1040EZ, your Taxable Income must be below the $100,000 threshold. That means the total of all your Income categories, minus the combined Standard Deduction and Personal Exemption(s) value for a Single person or Married Filing Jointly couple – must still be below the $100,000 threshold to use the form 1040EZ.

  • In Summary, these are the requirements to be able to use the form 1040EZ
    • Your filing status must be Single or Married Filing Jointly
    • You must be younger than age 65, on December 31st
    • You cannot claim children or relatives as dependents
    • Your income categories are limited to Wages, Salaries, Tips, Taxable Scholarships or Grants, Taxable Interest of not over $1,500, Tax-Exempt Interest, Unemployment Compensation and Non-Taxable Social Security Benefits.
    • All of your Tip income was reported on your W-2 form(s)
    • None of your Social Security Benefits can be qualified as taxable
    • You must use the Standard Deduction
    • You do not claim any Adjustments to Income
    • Your final Taxable Income must be below the $100,000 threshold
    • The only Tax Credit you can claim is the Earned Income Credit (EIC)
    • You cannot use the form 1040EZ if you qualified for health insurance with the Premium Tax Credit through any of the Marketplace exchanges
    • You cannot use the form 1040EZ if you received any Advance Premium Tax Credits to help pay for your monthly health insurance premiums

The next Blog post explains how to report and calculate the Payments, Credits and Tax, on the form 1040EZ. Click that link below to continue.

The 1040EZ: Payments, Credits and Tax


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.

What Tax Form Should I Use? (2016 & 2017 tax years)

The IRS announced in June 2018, that they will retire the forms 1040EZ, the 1040A, and the long form 1040, for the upcoming 2018 tax year. There will be only one form, the single-page 1040 form. Six new Schedules will now support the new single-page 1040 form.

For the tax years 2016 and 2017, the following explanations still apply, to explain the older forms 1040EZ, the 1040A and the long 1040.

The IRS provides taxpayers with (3) 1040-series Individual tax forms with which they can file their taxes. The 1040EZ, the 1040A, and the 1040. The simplicity or complexity of your Tax Story, determines which form to use.

To understand the full range of tax reporting possibilities, I recommend you study the (3) forms separately, to understand what type of Tax Story each form can report. The entire Blog is setup to begin your tax study with the 1040EZ form, then the 1040A form, and finally the 1040 form. This study strategy will build your tax knowledge logically, from the simple 1040EZ form through to the complex 1040 form.

When you or your tax professional use tax software to prepare your taxes, the software will automatically determine which of the (3) 1040-Series tax forms to use, that most efficiently matches your Tax Story.

The tax form explanations below list the requirements to use each form, and what types of Income, Adjustments, Deductions, Credits, Taxes and Payments – that can be reported on each of the (3) tax forms.

There is also a recommendation about being truthful when submitting your Tax Story to the IRS. When you sign and submit your tax return, you give your word – that you told the truth about your Income and Deductions listed and submitted with your tax return.


The IRS form 1040EZ is the simple, one page form, that only Single and Married Filing Jointly filing status taxpayers can use, provided they have no children or dependents they support in their household. You must also be under the age of 65 at the end of the tax year – to use this 1040EZ form. Your Taxable Income cannot exceed $100,000 and you can only report income from Wages, Salaries, Tips, Taxable Scholarships or Grants, Taxable Interest of not over $1,500, Tax-Exempt Interest, Unemployment Compensation and nontaxable Social Security Benefits. You must use the Standard Deduction and can only take advantage of one tax credit – the Earned Income Credit.

You can receive Taxable Scholarships or Grants, Tax Exempt Interest and Social Security Benefits – and still qualify to use the form 1040EZ – even though there are no lines on the form 1040EZ to report these (3) categories of Income.

The amount of Taxable Scholarships and Grants you received, if not included in your W-2 salary income, is noted to the left of line 1 on the form 1040EZ.

The Tax Exempt Interest you earned, is noted to the left of line 2 on the form 1040EZ. It is also used in the formula to determine if any of your Social Security Benefits are taxable.

None of your Social Security Benefits can qualify to be reported as taxable income, if you use the form 1040EZ. The IRS provides a worksheet to determine this, and it is built into all the tax software.


The Affordable Care Act tax reporting issues:

If you did not have health insurance for any month(s) of the year, the 1040EZ form can also calculate the Health Care Individual Responsibility penalty tax. A requirement of the Affordable Care Act – is that everyone has to have qualified health insurance – or you pay a penalty tax. Some taxpayers might qualify for an exemption to this penalty, but generally all taxpayers must have qualified health insurance – or you pay a penalty tax.

You cannot use the 1040EZ form if you purchased or received qualified health insurance through the Marketplace, and also qualified for the Premium Tax Credit. The Marketplace is the State or Federal insurance web site designed to provide health insurance that can be subsidized by tax credits provided by the Affordable Care Act. These are called Premium Tax Credits – because they can help you pay for your monthly health insurance premiums. If you choose to have these credits forwarded to the health insurance company on your behalf every month, they are called Advance Premium Tax Credits. Taxpayers can also choose to just receive the total amount of the Premium Tax Credit they qualified for when they file their tax return each year.

This type of Government subsidized health insurance has to be reported on the form 1040A or form 1040. You must reconcile (or compare) any Advance Premium Tax Credits you received during the tax year to help pay for your monthly health insurance premiums – to your final total-year Premium Tax Credit value calculated on your tax return. All tax software will complete this reconciliation process for you.

Update: The penalty for not having qualified health insurance will still be in effect for the 2018 tax year. The “Tax Cuts & Jobs Act” then reduces this penalty to zero, starting with the 2019 tax year, and all tax years after that.


The IRS form 1040A is the 2-page intermediate form, that allows taxpayers to claim children and any dependents they support that live within their household. All (5) of the Filing Status categories are supported on this 1040A form. You also can be over the age of 65 to use this form.

The taxable income is still limited to $100,000, but you can report many more types of income, such as Taxable Interest over $1,500, Tax-Exempt Interest, Dividends and Capital Gain Distributions from stocks and mutual funds, IRA and Pension distributions, and Social Security Benefits.

The 1040A form also allows you to reduce your taxable income with (4) deductions called Adjustments. These are Educator Expenses as a teacher, an IRA Contribution Deduction, the Student Loan Interest Deduction, and the Tuition and Fees Education Deduction. You must again use the Standard Deduction, but several more tax credits are available to you.

The 1040A form offers you (5) non-refundable and (4) refundable tax credits. These can reduce your tax liability to zero, and can also possibly increase your refund. These build on the Earned Income Credit – the only tax credit that was available on the simple 1040EZ form.

Non-refundable tax credits on the form 1040A – those that can reduce your tax liability to zero – are the Child and Dependent Care Credit, the Elderly or Disabled Credit, two more Education Credits, the Retirement Savings Contribution Credit, and the Child Tax Credit.

Tax credits that are refundable to you on the form 1040A – even if you have no tax liability – are the Earned Income Credit, the Additional Child Tax Credit, the American Opportunity Credit, and the Net Premium Tax Credit. These can substantially increase your refund each year.

The 1040A can report any circumstance you had regarding your health insurance coverage, except contributions to, and distributions from an HSA (Health Savings Account).


The IRS form 1040 is also a 2-page form. It is the most complicated of the (3) tax forms because the 1040 can handle any Tax Story. It is designed to report all possible types of Income, Adjustments, Deductions, Credits, Taxes and Payments. Many additional schedules and worksheets are added to the 1040 form – to help explain your more complicated Tax Story.

You can also report Itemized Deductions on the form 1040, which further reduces your taxable income, as compared to using the Standard Deduction. These include Medical Expenses, State, Local and Real Estate taxes, Mortgage Interest, Charitable Contributions, Casualty and Theft Losses, and Unreimbursed Business and related Education Expenses.

If you are self-employed or have rental income, you must use the 1040. You must also use the 1040 if you received income from a Partnership, an S-Corporation, Trust or Estate. It can also show the profit or loss you had on your more sophisticated investments, such as Stock Sales or the Sale of your Primary Residence.

If you owe any of the many additional taxes, you can calculate those with the form 1040. These include the Alternative Minimum Tax, and the many additional Affordable Care Act taxes for high-income taxpayers.

If you made Estimated Payments during the tax year, or made a payment when you submitted an Extension to file your tax return, you can report these advanced payments on the 1040 form.

Any and all Individual tax scenarios that you could imagine – can be solved with the form 1040. It is the dean of tax forms!


All tax software will manage these rules and qualifications for you as your Tax Story is entered into the software. It is useful, though, to understand the tax logic that defines your Tax Story. That will give you the confidence the software properly created an accurate tax return, that exactly matches your Tax Story – for that tax year.

As an Enrolled Agent, I have the experience to know what the final output of your tax returns should look like, before they are even entered into the software. My job then, is to manage the tax software to produce that correct, accurate tax return – as expected. By studying tax theory explained in these Blog posts, you will acquire that same knowledge to also understand every line of your tax return.

Filing a tax return is then just a simple annual report of our finances, we as citizens have to complete each year, and submit to the IRS and the State(s).

Through that yearly tax return, we self-declare our tax obligation, based on our income and deductions. We then receive a refund, or owe tax, based on our tax payments credited to the IRS during the year, compared to that self-declared tax obligation.

If our payments and credits are more than the tax obligation, we get a refund when we file the tax return. If the tax obligation is more than our payments and credits, we owe the IRS a tax bill when we file the tax return.


You must tell the Truth about your sources of income for each tax year!

The IRS rule for income is “You must report all income, except income that is exempt by law.” This includes Cash income and tips that you earn, that is not reported to you on a W-2, 1099-MISC or other income reporting form.

Each of the (3) Individual tax forms have the perjury statement shown below, at the bottom of their last page in the section labeled Sign here. Each taxpayer has to “sign” their tax return, either with a pen if the tax return is mailed in, or with an electronic signature if the tax returns are e-filed. By signing your IRS Individual tax return, you are agreeing to the following statement, under penalty of perjury to the IRS.

“Under penalties of perjury, I declare that I have examined this return and accompanying schedules and statements, and to the best of my knowledge and belief, they are true, correct, and accurately list all amounts and sources of income I received during the tax year. Declaration of preparer (other than taxpayer) is based on all information of which preparer has any knowledge.”

Your paid tax preparer also is part of this perjury statement, in that he or she is declaring they prepared the tax return with the information you provided them. They also are declaring they took into consideration all the knowledge of which the preparer had of your tax situation, at the time they prepared your tax return for a fee. Paid preparers also have to sign this perjury statement, either by pen, or through the e-filing process.

Please take this perjury statement seriously, as the IRS expects you to be truthful in all ways, when you file your yearly tax returns. The States also hold you to the same level of truthfullness – regarding your Tax Story.


Cash Business IRS Audit Warning!

You should be particularly diligent if you own and run a cash-based business. You should regularly deposit ALL of your cash earnings into a business bank account, so you can prove to the IRS the cash-based income you report on your tax return. Keep detailed records of the legitimate expenses you incurred to run the business, including the business use of your home or apartment – if that applies to you.

The IRS frequently audits self-employed businesses reported on the form Schedule C, that they suspect have not reported all their cash earnings. To pass the audit, you MUST show the IRS proof of your cash receipts and expenses. Otherwise you will incur penalties, interest, and taxes owed.

Tax professionals, including myself, cannot help you file your tax return, if we have valid suspicions you are hiding and not reporting cash income.


Many people have challenged this perjury clause as unconstitutional, with limited success. The IRS – through the U.S. Tax Courts, U.S. District Courts, U.S. Court of Federal Claims, and Bankruptcy Courts – has convicted many people of misdemeanors and felonies – as a result of them lying on their tax returns, and were thus found guilty by submitting false tax documents to the IRS.

See this PDF file, authored by the IRS, explaining the legal tax law arguments, against taxpayers filing Frivolous Tax Claims. IRS-The Truth About Frivolous Tax Arguments (March 18, 2018).

This is what happened to Al Capone in 1931, as the IRS convicted him of Income Tax Evasion. He went to Federal prison, ending his control as a Chicago crime boss.

The original and most famous incarnation of Studio 54 was shut down in the early 1980’s because the two owners of the club did not report all of the cash earnings from this very famous Disco. One of the owners even bragged about this to friends, saying “Only the Mafia makes more money than Studio 54”. The IRS did not take kindly to this, subsequently audited them, and they both were convicted of tax evasion and sentenced to prison terms. The IRS literally found bags of unreported cash in the Club.

Please do not lie to the IRS. It will never end well.

This is why the IRS or the States audit taxpayers to prove tax compliance. They see an irregularity or inconsistency in the tax returns, and audit you – to make you prove to them that your tax return is indeed true, correct, and accurately lists all amounts and sources of income I received during the tax year.”


Click the hyperlink below for Blog #2 that begins the 1040EZ explanation.

The 1040EZ: Who Can Use this Form?


Feel free to send me an email at Mike@TaxesAreEasy.com

Blog Written Content ©2018 Michael D Meyer. All rights reserved.

PDF IRS forms, instructions & publications – ©2018 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.