How To Know When To Use the 1040, 1040A or the 1040EZ Form

Getting ready to sit down and manually or electronically file your taxes? Have you yet been confused by the 3 different filing options you have with the 1040 forms? You're not alone. And even if you have a tax pro or some super slick tax software wade the waters for you, perhaps you might find educational the difference between the main 3 forms that one can file and submit to the IRS for tax purposes, being the: 1040EZ, the 1040A, and finally the 1040.

What's the difference?

What I plan to do with this entry is to give straight forward and simple distinctions between the 3 forms, so you can quickly and easily know from now on which form to chose. When it gets to the nitty gritty of the full breakdown of usage, I'll include some helpful, more in-depth links at the bottom, for further and future reference.

And if you want the answer in super simple form, try this out:

1040EZ - just a W2, no extras
1040A - few extras, but no itemized deductions
1040 - it's complicated...

That's more or less how to remember the difference between the 3 forms. Allow me to clarify some more below.

1040EZ

The EZ lettering tells all. Think EaZy, or easy. Means the most simple of the three. Use this form if you:
--Made less than $100,000 for the year
--You aren't claiming any dependents
--Your filing status is single, or married filing jointly
--You are not itemizing deductions, and only wish to claim your EITC (earned income tax credit)

Basically if you simply received a W2 from your employer for the year, and have no other forms or deductions (like student loan deductions) or investments.. grab a 1040EZ. It's a form made so that the IRS can separate the easy filings, from the more complicated.

1040A

This form is for the moderately difficult filers. For people that have income from tips like waitresses (where it is not neatly listed already from your employer on your W2), or any number of investments.. basically any income that was either made, given or saved in more than just the conventional sense of working for a W2 wage, you will need to file a 1040A. Also, you have to have made less than $100,000 on the year.

Your income sources for 1040A filing can only be from:
--Wages, salaries, and tips
--Interest and dividends
--Capital gain distributions
--Taxable scholarship and fellowship grants
--Pensions, annuities, and IRAs
--Unemployment compensation
--Taxable Social Security and railroad retirement benefits
--Alaska Permanent Fund dividends

There are more credits that you can receive, from using the 1040A form over the EZ as well. But you still cannot itemize deductions with this form either. For that, use the...

1040

The form that does everything. There is no income restriction for this form. You can file any and all itemized deductions with this form. All credits and any form of investment, dividend, interest, loan, etc can be filed and claimed accordingly with the 1040. It's the catch-all form. If you are an independent contractor, or are self-employed, you will have to use this form.

It's also the most complicated to navigate. So while you will find it to work for any of the 3 situations all the forms are made specifically for, I would still recommend knowing the difference between the three 1040 variation of forms. No sense filing a regular 1040, when a much simpler 1040EZ or 1040A will work just fine.




The more detailed resources, as promised:

IRS.gov -- Topic 352 - Which Form – 1040, 1040A or 1040EZ?
IRS.gov -- Forms and Publications

Also, on a related note, it might really help to understand fully your W2. I found this article extremely helpful:
Forbes -- Understanding Your Forms: W-2, Wage & Tax Statement