Filing the Right Tax Form
Author: Noah Gordon
It's time to file taxes and you now have to figure out which are the right forms to fill out. Are you getting a refund or having to pay more? What you don't want is to miss out on possible tax credits which can make your tax refund larger or make you owe less. Use the easiest tax form possible to get your taxes filed, as a general rule of thumb. If you have no tax credits and are entitled to a refund or might owe money, there are a few options to consider when it comes to tax forms. Some offer more advantages than others. One of those is the easiest form to complete. The 1040EZ is for those that have no credits and no deductions other than the standard deduction. In order to take advantage of the head of household filing status, you must file on 1040A or 1040 tax forms, however. The 1040EZ is specifically for those that have a W-2 or 1099 and 1098 forms and no other deductions. You can complete this form on your own, if you follow the instructions and it only takes a few minutes if you have received your W-2 or 1099 or 98 form. The easiest way to remember the 1040EZ is it is an "EZ" and short form. If you are filing head of household or have a more complicated tax situation, you will need to file a 1040A form which is easier than filing a 1040 tax return form, also referred to as a "long form". You can get a more beneficial tax rate deduction by filing head of household, even though you have to file on a slightly more complicated form like a 1040A or 1040 tax form. Retirement savings and contributions credit is another reason you need to file a 1040A versus a 1040EZ and other deductions like tax credits for state and local real estate taxes or new vehicles, requires you to use one of these forms versus 1040EZ. If you can itemize deductions on a Schedule A and the deductions exceed $5,700 for a single person or $11,400 for married couples, filing a 1040 tax return form is the most beneficial way to go. You will also need to file this form to take advantage of other tax credits and deductions, as well. The most common reason for filing a 1040 tax return form and itemizing deductions on Schedule A is when mortgage interest exceeds the standard deduction amounts. For those that are first-time home buyers, the new tax credit is $8,000 or $4,000 for married couples filing separately. The American opportunity credit replaces the Hope education credit and the tax credit has been increased to $2,500 for those that have college students or might be taking college courses. Both of these situations require a 1040 itemized filing. If you have purchased energy efficient heating and cooling systems or added extra insulation to your home, you can get a tax credit. Purchasing an electric vehicle allows you a tax credit and both of these tax credits necessitate the filing of a 1040 long tax return form. A CPA can help you get the largest tax refund or lowest tax liability if you are unclear about the best tax form to file. The difference can be substantial, if there are credits you are allowed to take advantage of.About the Author:
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