Just like in any government agency, filing for something like a federal tax refund needed forms. The IRS (Internal Revenue Service) has form 1040-A, form 1040 EZ, form 1040 ES, form 1040 Sch-A, form 1040 Sch-B, form 1040 Sch-C, form 1040 Sch-D, form 1040 Sch SE and form 1040-X just for filing for a tax refund. Links to the numerous forms are provided for in the irs.gov website in downloadable and printable formats for taxpayers to fill out with their corresponding purpose and/or issues regarding their income taxes. Some of the forms are also available in Braille formats. All forms are, of course, for free.
Generally, form 1040 is f a very popular form amongst taxpayers. This fame may probably be attributed to the fact that it is human nature to want to get more money or to be rewarded. Although there are many different kinds of form 1040, the standard type can be used by everyone. The standard format is a simple back-to-back sheet that has six parts or sections. This form lists the final tax calculations based on the given, corresponding schedules.
The first part, which is the identification part, need details like the taxpayer’s name, date of birth, address, social security number, filing status, and number of dependents. The second part is the Income section. It details the salary/wages, self-employment income, retirement benefits, fringe benefits, dividends and interest payments, business profits and any other sources of income. It also details the total incoming payments, gross income and taxable income, which already has the appropriate deductions and exemptions.
On the Gains and Losses section, it details the profit and losses gained from investments. The fourth section is all about Adjustments to Income like student loans, alimony, moving expenses, self-employment tax and retirement arrangements. The Standard Deduction and Itemized Deductions section shows the amount the IRS will allow o reduce the adjusted gross income, which varies depending on the filing status and used to determine the taxable income.
The Taxes and Credits is where the computed taxable income is provided. It also includes the adjustments made and the alternative minimum tax and any tax credits owed. It is recommended to use the IRS Tax Table or Tax Computation Worksheet to help in determining the total federal tax.
Last but not the least and the most important section is the Sign and Date section. To take responsibility for all the detailed information provided in the sheet, taxpayers must affix their signatures and supply the appropriate date of filing. Neglecting to sign and place the date will invalidate the form. For those who filed electronically, e-signatures are required before sending the completed form online.
For those with a more straightforward tax computation and for single people without any dependents, the 1040 EZ format can be used. The form 1040 Sch-A is for itemized deductions and ordinary dividends from interest statements provided by a broker or a bank. Form 1040 Sch-B is for interest and ordinary dividends from real estate properties, personal residence and foreign accounts and trusts. Form 1040 Sch-C is for profit/income or loss from business (sole proprietorship), business expenses and business owned car/truck expenses. Form 1040 Sch-D is for both long term and short tem capital gains and losses. Form 1040 Sch SE is for self-employed income tax that provides detailed instructions and methods on how to determine the taxable income of a self-employed individual.
Form 1040-X is the amended U.S. individual tax return form as of December 2011. It details the income and deductions, tax liabilities, tax payments from the previous year, refundable credits, refunds and amounts owed like overpayments and the amount already refunded, tax exemptions, presidential election campaign fund and explanation of the changes plus the supporting documents needed to verify the new or changed forms and schedules used.
During federal tax season or the fiscal period, people are making sure that everything is in order before filing. Doing your own taxes is not like rocket science. It is quite easy once you know the right forms and information to use. It will also save money to do your own taxes compared to hiring someone to do it for you. There are also some federal tax computing and filing software out in the market. It may sound convenient, but it can be hard to learn how to work it since it still needs some knowledgeable input from the user. Be mindful of the tax schedules in order to immediately file taxes before it is too late and get penalized for late filing.
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