What you need to know about tax form 1040. The 1040 tax form can be complex but our basic online tax filing process makes it easy for you to file your federal taxes online or at our tax offices.
Most people use IRS Form 1040 to file their individual tax return. This official document is a requirement for many US taxpayers reporting their income to the IRS. The form has several sections, all of which are required to be completed with accurate information. In short, IRS Form 1040 tax form allows a place for individuals to report their income and deductions for a given year. This form also helps you to calculate the amount of taxes you owe or, in some cases, if you are owed a refund.
What You Need to Know
Tax form 1040 can be complex. In short, you will be calculating your adjusted gross income (often called ‘AGI’), your taxable income, your actual tax, and any credits that may offset your tax using this form. You will need to use the top section of the form to enter all of your income from various sources including your retirement accounts, local tax refunds, wages, salary, tips, pensions, unemployment income, and any other benefits you receive.
You will then complete any tax deductions that apply to you, which may include unreimbursed business expenses, medical expenses, and mortgage interest. The IRS allows for many types of deductions for AGI, which reduces any taxes you owe. It is very important that you know about any deductions available to you and claim them as such.
You will then calculate any tax deductions that may be claimed in determining your AGI (often referred to as above-the-line deductions). These deductions include items like educator expenses, moving expenses, IRA contributions, alimony that you pay, student loan interest, and tuition expenses.
After determining your AGI on page 1 of Form 1040 you will have the option of taking the standard deduction (an amount determined by the IRS) or claiming itemized deductions (often referred to as below-the-line deductions). Itemized deductions include items like unreimbursed employee business expenses, medical expenses, charitable contributions, mortgage interest and certain taxes you have paid.
After subtracting the standard deduction or claiming itemized deductions from AGI you will claim exemptions for yourself and your dependents to determine your taxable income, which is the amount that is used to determine the actual amount of taxes for the year. After your taxes are determined they may be offset by various tax credits and withholdings to determine the amount that you may owe the IRS, or what you are owed by the government as a refund.
It is a challenge to complete this tax form 1040. However, you do not have to do it on your own. Let H&R Block help you to complete all required forms for your tax filing . You'll never miss a deduction and you'll always get the biggest return possible or reduce your taxes as much as possible.