What Is an IRS 1040 Form

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The IRS 1040 Form is the U.S. Individual Income Tax Return. This Form, published and updated by the IRS, is a central piece in filing your annual income taxes. Anyone who files taxes uses some version of Form 1040. The form helps taxpayers understand what documents they need to calculate their taxes and get an idea of how much they may owe. 

What Are the Types of IRS 1040 Form?

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As of the 2022 tax year, there are four active versions of the IRS 1040 Form in use. All 1040 Forms have the primary purpose of reporting income, expenses, and applicable tax credits and deductions for the tax year. Some taxpayers have unique considerations depending on their age, citizenship status, and other factors. There are four different forms to account for these unique scenarios. 

Form 1040 is the standard and most basic version of the form. This form lists the taxpayer, any dependents, all sources of income, and allowed tax deductions. There is also space for you to tell the IRS where they should send any tax refund that you may receive. 

Form 1040-SR is made specifically with senior citizens in mind. If you take a quick glance at it, you will notice that it is almost completely the same as Form 1040. The most significant difference is that Form 1040-SR is printed in larger font since older adults are more likely to have vision impairment. Form 1040-SR also includes space for certain types of income and deductions that are most common among retirees. Seniors can opt to stick with the standard 1040 form. 

Form 1040-NR is made for taxpayers who are not U.S. citizens. This can include permanent residents. You are a permanent resident if you have a green card. This can also include people who worked temporarily in the United States under a work visa or non-citizens who live abroad while working remotely for a business in the United States. In some cases, a citizen may need to use Form 1040-NR if they are the executor for an estate for a non-citizen. 

Form 1040-X can be used by seniors, non-citizens, and any other taxpayer. You only need to use Form 1040-X if you are amending a tax return. Amending a tax return means you need to change the information you have already received from the IRS. Often, people amend a tax return if they receive an additional tax document or realize they filed erroneous information. For example, you may have calculated your total earnings from a company you’ve done work for as a freelancer to be $10,000. When the company sends you a 1099, you realize you only earned $9,500. You could use Form 1040-X to amend your return. 

What Is the Purpose of an IRS 1040 Form?

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The ultimate purpose of an IRS 1040 form is to calculate how much you owe in taxes. Taxes are calculated as a percentage of taxable income, also known as adjusted gross income. Different taxpayers pay a different percentage based on the tax bracket they fall into. Tax brackets are based on the total taxable income you earn, and people who earn more income pay taxes at a higher percentage. Total income made over a year can often be thousands of dollars greater than total taxable income. Form 1040 helps determine the difference. 

The form helps you account for all forms of income. You may only consider income to be what you earn from your job, but the IRS considers any money you earn that is not explicitly stated to be a gift as income. If you sell your house, the profit you make is a type of income called a capital gain

What Reduces Taxable Income?

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After calculating your income, Form 1040 accounts for all adjustments, expenses, and tax credits. Adjustments are usually related to a taxpayer’s expenses throughout the year, reducing taxable income. For example, there are adjustments for people who pay alimony and adjustments for contributing to a retirement account. There are also certain expenses, like the cost of an in-home workshop for someone who is self-employed, that reduce taxable income. Expenses are usually related to business. 

Tax credits do not change taxable income because they are calculated after determining how much a person owes in taxes or will receive as a refund. Tax credits either reduce the amount of taxes you owe or increase your refund. You can receive a tax credit for owning a house, having health insurance, having a job, or having children. There are several different tax credits for various activities. If you owe $5,000 in taxes but have a $2,000 tax credit, you only need to pay $3,000. If you are not due to receive a tax refund but have a $2,000 tax credit, you will receive a $2,000 refund. 

The total of all the calculations on Form 1040 determines your taxable income. Based on your tax bracket, the IRS uses that total to calculate whether you have already paid all the taxes you owe, paid more than you owe, or still need to pay some taxes. This determines whether you will receive a tax bill or a tax refund. 

How to Get an IRS 1040 Form?

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You can get a 1040 form by downloading it as a fillable PDF from the IRS website. Libraries, post offices, and tax assistance centers also distribute the pre-printed forms to taxpayers for free. If you prefer to receive your 1040 form in the mail, you can order one from the IRS by calling 1-800-TAX-FORM. If you eFile your taxes, you do not need a physical 1040 form. Instead, the software you use will generate a form for you and electronically send it to the IRS. 

When filing taxes, you will always need to use a 1040 form. Familiarizing yourself with this central tax form makes tax season much less daunting.