It's tax season once again and you are faced with a list of various tax forms identified by a number that makes no sense to you.
Here is a brief description of the most common forms used by both individuals and businesses to file their returns: 1040EZ is used by individuals who are married or single, under the age of 65 and not blind, do not claim any dependents, taxable income is under $100,000 and claim no adjustments to income such as health deductions, real estate taxes, mortgage interest, etc.
You also can only claim the tax credits for earned income and federal telephone excise tax.
Your income must only consist of wages, tips, taxable scholarship or fellowship grants, unemployment compensation or Alaska Permanent Fund dividends and your taxable interest must not exceed $1500.
Use Form1040A if you only had income from wages, 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, jury duty pay and the only adjustments you can claim are penalties on early withdrawal of savings, IRA deduction, student loan interest deduction, jury duty pay your gave your employer and you do not itemize deductions.
Your taxable income must be less than $100,000 and the only tax credits you may claim are the child tax credit, additional child tax credit, education credits, earned income credit, credit for child and dependent care expenses, credit for the elderly or disabled, retirement savings contribution credit and credit for federal telephone excise tax paid.
You also must not have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option.
You can also use this form if you received earned income credit payments, dependent care benefits or if you owe tax from the recapture of an education credit or the alternative minimum tax.
Form 1040X is used to file an Amended Individual Tax Return where you wish to make changes to a 1040 Form already filed with the IRS.
1040 can used for all individuals income reporting and may include the filing of several other forms as well.
It must be used for individual tax reporting when the criteria for Forms 1040 EZ or Form 1040A are not met.
Some of these forms are a Schedule A, Schedule B, Schedule C or CZ, and Schedule D.
Other forms you might include are Schedule E, Schedule F, Schedule SE, Schedule EIC, and Forms 2106 or 2106EZ, 2210, 2441, 3903, 4562, 4684, 4687, 4797, 4868, 5695, 8829, 8839, 8863, 8910, and 8911.
Schedule A is used to itemize your adjustments to income such as health costs, real estate and excise taxes, mortgage interest, donations, casualty losses not related to your business.
Form 2106 or 2106 EZ to report nonreimbursed Employee Business Expenses Schedule B is used to report taxable interest and dividends Schedule C is used to report business income and expenses.
Some business may be able to use Schedule CZ if you have expenses of $5000 or less.
However if your business is owned jointly by you and your spouse do not use either Schedule C or CZ as you are in fact a partnership and must file Form 1065 (partnership return).
Schedule D is used to report losses and gains on investments, sale or exchange of a capital asset, gains from involuntary conversions of capital assets not held for business or profit and nonbusiness bad debts.
This assumes that none of these items have been reported on other forms within the tax return.
Schedule E is used to report rental property income and expenses not subject to self employment tax.
Schedule F is used to report farming income and expenses.
Schedule SE is where you determine and pay your self-employment taxes on income from any trade or business.
Form 4562 is used to claim depreciation on assets placed into service in the current year, claim amortization that began in 2006 or to make an election under section 179 to expense allowed property or to report information on listed property.
Use Form 4687 to report a casualty or theft gain or loss for property used in your trade of business or income producing property.
Form 4797 is used to report sales, exchanges and involuntary conversions of trade or business property.
Form 8829 is used to report expenses for the business use of your home.
Form 8910 is used to claim a credit for placing a new alternative motor vehicle in service after 2005 for business use.
While Form 8911 is used to claim a credit for placing a qualified alternative fuel vehicle property in service after 2005 for business use.
Form 2210 If you have underpaid your estimated taxes for the year you will be required to file this form which will determine what if any penalties will be accessed.
Form 2441 for reporting child and dependent care expenses Form 3903 to report moving expenses incurred when moving was required for your job.
Form 4684 to report casualties and theft losses and gains for personal property.
Form 4868 is used to extend your time to file.
However this does not extend the time to pay your taxes.
Form 5695 is used to report qualified energy efficiency improvements or residential energy property costs made to your main home within the United States.
Use Form 8839 to claim qualified adoption expenses Form 8863 lets you claim education credits such as the HOPE and Lifetime Learning credits.
Use Schedule EIC to claim the Earned Income Credit If your business is incorporated then you will use either Form 1120 or 1120A along with the various forms and schedules needed.
A partnership will use Form 1065 with the relevant forms and schedules needed.
There are many other forms and schedules that may be required depending on your individual circumstances.
Consult your tax preparer for specific information relevant to your return.