Differences Between Various Federal Income Tax Forms
Differences Between Various Federal Income Tax Forms
The Internal Revenue Service (IRS) of the United States is constantly improving the taxation system thus a remarkable change has been seen in to tax payment as well as increasing numbers of taxpayers each year. Federal tax form is a widely used term hitherto puzzling in terms of the tax situation. In a simple manner it is understood by the IRS tax forms used by the taxpayers and tax-exempt organizations to report financial situations to the Internal Revenue Service of the United States. Every tax payers are entitled to report income and calculate taxes to be paid to the federal government of the United States. However, it is important to know which form a taxpayer should use in order to pay for taxes. Making mistake in the use of a form could be serious to a person's business or any organization particularly when you are logging after the deadline that make you understood that you must fill up another form and mail or email it again to which you could be penalized for late submission of the federal tax returns.
Different titles of Federal tax forms :
# IRS form 990 with the title of "Return of Organization Exempt from Income Tax" is the form that will be used by tax exempt and nonprofit organizations to provide the Internal Revenue Service with their financial situations. It provides the public with the financial information regarding a certain organization which is exempt from tax. Disclosure of such information is the measure used by the government to prevent abuse from these organizations that are exempt from federal taxes.
# Form 1040 with title of "U.S. Individual Income Tax Return" which was the first ever tax form for individual or personal income tax return. It was used during the tax years 1913, 1914, and 1915. Nevertheless in 1916 Form 1040 was changed to an annual form which has two other variants namely; Form 1040A referred to as the short form and Form 1040EZ as the easy form.
# The form 1040EZ (easy form) allowed for " Income Tax Return for Single and Joint Filers with No Dependents"
# The form 1040A (short form) which is a shorter version of form 1040 imitates the calculation of taxpayers with taxable income below $100,000. Only a standard deduction will be calculated for the taxpayers under this category.
# The form 1040NR and 1040NR-EZ are used by nonresident aliens in filing their income tax returns.
# Forms 1040X entitled "Amended U.S. Individual Tax Return" is the form used to make corrections for Forms 1040, 1040A, 1040EZ which have been successfully filed but have incurred errors.
# The form 1041 is the form to be filled up for the trust and estate tax returns.
# The form 1065 is the form to be filled up for tax returns of partnerships.
# The form 1098 is the form used to report various types of income excluding your wages.
The list is ongoing respective to its criteria though it is not significant to know all the forms. The most important thing is to know which form is suitable for your tax situation as well as which form will be benefited for you. The IRS has given an option to file your tax return online instead of using the traditional way of preparation and filing with the pen and paper as it is more confusing and costly. The online tax preparation is not that difficult task as anyone can do it without being a master of it as it guides you step-by-step and calculate accurately.
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