The landscape of tax forms can appear very mountainous and daunting to those taxpayers who are unfamiliar with the process of filing yearly taxes. However, the Internal Revenue Service, or IRS, has created several shortened forms to make this process easier to end users. The intricacies of the standard irs 1040 form, or long form, can be avoided by using either the 1040EZ or 1040A versions. The 1040EZ form is an excellent way to file for people who have no dependents to declare and have a maximum taxable income of $100,000.

The irs 1040EZ, or easy form, is used by many people who have relatively uncomplicated returns to file, such as part-time workers and others who have no specialized deductions. The form is broken into six sections and is available to both joint and single filers. However, some restrictions do apply to use of the form. Filers must be younger than 65 and cannot be blind. The 1040EZ uses standard deductions, therefore a person who wants or needs to use itemized deductions is not able to use this form. The only special deduction that can be used is the Earned Income Tax Credit, or EITC. If a taxpayer has received any advanced EITC credits, then the 1040EZ may not be used.

While the 1040EZ is widely used by many taxpayers because of its simplicity, a person should take care to make sure that this form is the best one to use in their particular situation. For many people, additional deductions can be found by using the standard 1040. In particular, students may qualify for certain state and federal deductions that are not available on the 1040EZ. Additionally, taxpayers who keep good records of their expenses may find that their itemized deductions are greater than the standard deductions utilized with this form.

This entry was posted on Wednesday, January 27th, 2010 at 12:41 am and is filed under Banking & Financial Tips. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.