Filing the correct form during tax season can be crucial and will help you avoid some serious complications in the future. Here is what you need to know about filing a 1040 form:
What is the 1040 form? There are different types of the 1040 form, including the 1040, 1040A, and the 1040EZ. The 1040 EZ is the easiest form to fill out and can be used if you do not have dependents, and if you are not claiming any deductions. A 1040A will allow you to claim certain deductions, such as education and child tax credits. To qualify for the 1040A or 1040EZ, your taxable income cannot exceed $100,000 dollars. You will need an IRS tax ID to file either of these forms.
When do You Need a 1040 Form? If you earn more than $100,000 dollars, own a business, or are self-employed, you must file a 1040 form. If you are applying as an employer, business, or corporation, you must apply for an EIN number before you can fill out your 1040. An EIN, or Employer ID number, is used by the IRS to keep track of corporations. Getting an EIN for your business or corporation, is your responsibility as a business owner or partner, and you should apply for your EIN online, via fax, or by mail before you plan to file your taxes.
Still not Sure Which 1040 is for You? You can check out irs.gov for a full list of criteria for the 1040. If you do not qualify for the 1040, you may still qualify for the 1040A or 1040EZ, depending on your individual situation. Be sure to read the criteria carefully before making your choice, as filing an incorrect form can result in hassle in the long run.
Take charge of tax season by getting your forms in on time and doing your research.