IRS 1040 Form - Internal Revenue Service Individual Tax
As a CPA I have prepared
many IRS 1040 form's for individuals that needed to file their taxes. The truth is as a CPA I am not the only
address for tax filing. It is quite possible to utilize the World Wide Web
to get your taxes done also. In addition
to software and accountants that can help prepare taxes that are also specific individuals and companies that are
known as tax preparers. Usually tax preparers limit themselves to working in the first four months of the year,
this is also known as tax season or busy season.
You could easily find a downloadable IRS1040 form maybe even be a
fill-in form, which means that the form can be filled out on your computer and printed and filed with out having to
use a pen other than to sign the 1040 form. Even though the forms could be found that does not mean that it is a
good idea to prepare a tax return by hand. Unless your tax return is quite simple it is probable that are many ways
that you could save money by knowing what to deduct and take credit for.
So the thrust of this page will be to give you a background about
the 1040 form as well as the associated forms that may be filed with it such as Schedule A, Schedule B, Schedule C,
Schedule D, Schedule E, Schedule F, Schedule EIC and Schedule SE just to name a few. Even if you use the services a
CPA or tax preparer it is worth your while to have an idea about such things as deductions, exemptions, and filing
status. The time of the year known as tax season can be very hectic for the individual who is preparing your taxes.
So the more you know the less likely it is that they will miss out on something that can save you money. After all
you really want a tax refund that is as much as possible or at least not to have a tax liability or balance
Internal Revenue Service 1040EZ
The one exception to
self-service tax filing could possibly be the IRS 1040EZ form. As the name of the form sounds it is meant to be
easy. So if you are single as a filing status and just earn wages and get a W-2 form at the end of the year it is
possible that you could use this form and instructions to prepare a manual tax return.
IRS 1040X To file an amended return
There is a reason that
pencils come with the erasers, as we all make mistakes. So it is natural when dealing with something as complex as
filing an individual tax return to make an error and then need to amend the original tax return. When this happens
one needs to file a 1040 X. Keep in mind that when filing a 1040X the response from the IRS may take a little
while. This is because amended tax returns are generally reviewed by a human being and their workload may be very
IRS 1040 Schedule A – Itemized Deductions
One of the best ways to
get a large tax refund is to be able to the deduct for several expenses that will reduce your tax bill. In case you
have large medical outlays that go beyond 7.5% of your adjusted gross income you will want to Itemize them on
schedule A. Taxes paid to states and local governments for real estate or local income tax can be used as a
deduction on Schedule A. It also pays to be charitable and the deduct it on your Schedule A. The other thing that
could be deducted on schedule a interest and sometimes even gambling losses to the extent gambling income.
Investment expenses and business expenses not reimbursed by an employer can also be deducted on this form. It is
important to note that individual deductions as well as overall amounts on Schedule A maybe subject to limitations
and thresholds that will limit the value of these expenses. So as they say in the legal disclaimer – please consult
your tax advisor.
IRS Schedule B – Interest and Dividends
Schedule B is where you
must list interest income and dividend income. It is important to know that not all dividends or interest are
necessarily taxable. In fact it pays to know one's marginal rate of tax when investing in bonds in order to save
money. Some bonds pay interest that is fully taxable while others may be partially taxable or what is known as
triple tax free, that means it's not taxable anywhere.
IRS Schedule C – Sole Proprietorship
If you own your own business that is not a corporation or
partnership then it is likely you will be filing IRS Schedule C. as a sole proprietor. When running a business
there are many chances to reduce your tax bite. Sometimes by simply doing a transaction in a different way it may
clear the hurdle of deductiblity thus saving you a significant amount of money. In addition tax planning is
worthwhile to assure that the business is paying the least tax allowed under law. Even the bill for the tax advisor
can be used to lower the taxes due.
IRS Schedule D – Capital Gains
Buying or selling stocks, bonds or other investment properties
can trigger a capital gain or loss. These gains or losses will be reported on Schedule D. Though most all gains are
reported in the year they are sold, losses that do not offset other gains are limited to $ 3,000.
IRS Schedule E – Rental Properties, Partnerships and S
There are many tax benefits to owning real estate besides once
home. If you own real estate in your own name or even at times in a LLC it is likely that you will need to file
Schedule E. Also if you are a partner in a partnership or S Corporation then you will need to report them on the
second page of Schedule E.