It is a great idea for everyone to know how to fill out a 1040 Income Tax Form. Some people might get an impression that Form 1040 looks long and complicated. They believe that completing the form is a hassle. Therefore, they just hire a tax professional for help. It is a waste of money if you realize the process is a piece of cake! To avoid this situation from happening, just simply follow the instructions below on how to fill out a 1040 Income Tax Form.
To fill out a 1040 Income Tax Form, you will need:
- 1040 Instructions
- Form 1040 – Federal Income Tax Return
- Form W-2 (If applicable)
- Form 1099 (If applicable)
- Enter all the basic information. You must put your name, Social Security number, address, filing status (married or single), etc. at the very top portion of the form. Note that you can be unmarried to claim "Head of Household" as long as you are supporting someone who is living with you. As a result of the situation, you will get more deductions and a lower tax rate.
- Figure out your exemption status. You count yourself as one exemption. Same principle applies to the followings: one for your spouse, one for each child and each dependent. Be very aware that the individuals that you are claiming for exemptions cannot be on other person's tax return!
- Calculate your total income. You must indicate all the types of work and the amounts you have made throughout the entire tax year. The information can be obtained from your Form W-2, Form 1099, etc. which are provided by your employers. Failure to report all your income can result in penalties.
- Apply all the deductions and compute your adjustable gross income. Most people should be able to qualify for the standard deductions. Depending on your situation, you might be eligible to itemize your deductions. Review 1040 Instructions for details. Keep in mind that you must have all the supporting documents such as canceled checks, receipts and invoices as references for all your deductions.
- Determine the tax amount you owe. You will also need to determine the tax credits you can qualify for. The amount of tax you owe will be decreased by your tax credits. Remember that the tax credits are completely different than the tax deductions. The tax deductions lower the taxable income.
- Indicate your payment or refund amount. After you have summed up all the numbers, you should know if you owe or overpay anything. If your total payment plus any tax credit is more than the total tax amount, then you will get a refund. You must pay the IRS if it is the other way around.
- Review, sign and submit your form to the IRS. Double check all the information you put on the form are correct with no missing information. Once it is confirmed to be error free, you may sign the form. Mail the form to the appropriate processing center promptly.
You just finished filling out the 1040 Income Tax Form by going through these simple instructions! See how easy it is for you to save this money without any help? Where is the hassle? Now you can sit back and relax knowing your taxes have been filed.