Even though it happens on the same month every year, the majority of us probably aren’t a hundred percent ready for this tax season.
However, we hope this article will bring you more confidence and help better prepare you for this upcoming tax season.
Let’s go!
Choose one of the 1040 forms to file your tax returns
Individual taxpayers always file their tax returns using some kind of version of Form 1040.
As usual, Form 1040 is filed by U.S. residents and citizens with recorded incomes during the filing year or by those who are eligible for a certain credit. Form 1040 is the most complex of all the individual tax filing documents to complete. This document gives taxpayers the ability to submit information on complex investments, itemized deductions, and various tax credits.
The IRS Form 1040-A is a simplified version of the Form 1040.
You should fill out this form if:
- You have dependents and your income is below $100,000;
- You have a regular income, such as wages, salaries, or tips;
- You plan to claim only a few deductions such as classroom expenses, student loan interest taxes, or tuition/fees;
- You don’t plan on itemizing any deductions.
The simplest version is Form 1040EZ. However, it’s usage is limited.
You are eligible to use this form only if you meet the following requirements:
- If you are a single taxpayer or if you file your return jointly with your spouse;
- If your annual taxable income doesn’t exceed $100,000;
- If the sources of your income are only salaries, wages, grants, tips, scholarships or unemployment compensations;
- If you earn no more than $1,500 of interest income;
- If you don’t plan on claiming an IRA deduction or student-loan interest (or any other adjustments);
- If you claim only earned income credit (no other credits may be included in IRS Form 1040EZ);
- If you don’t owe any wages or taxes from household employment to your employees.
Other forms you might be required to file
Form 1040-ES is used to estimate your annual tax and pay it quarterly, or every 3-months. Be aware that the nearest quarterly estimated due date is January 15, 2019.
Note: You don’t have to make the payment due on January 15, 2019, if you file your 2018 tax return by January 31, 2019, and pay the entire balance due with your return.
Form 1040V, or the Payment Voucher, serves as a tool for including a check or money order for any remaining tax that is owed. You’ll calculate this amount on whichever Form 1040 you used (the full 1040, 1040a or 1040EZ).
Form 1040X is an amended tax return with corrections made to previously submitted 1040 Forms. It looks very similar to the regular Form 1040, with additional sections to explain any corrections that were made. In most cases, a Form 1040X can be submitted up to 3 years after you filed the original (and incorrect) Form 1040.
Form 1040SS is also known as the U.S. Self-Employment Tax Return. It’s designed specifically for residents of the U.S. Virgin Islands, Guam, American Samoa, the Northern Mariana Islands, and Puerto Rico who are not required to file a U.S. income tax return because they are self-employed.
Form 709 is used to calculate any taxes related to gifts (since some gifts, donations, or transfers are subject to taxes). The form is also used to calculate taxes on generation skipping transfers, or GSTs. The taxpayer that gave the gift is the on required to pay the tax on it. Only in special cases will the receiver of a gift be required to pay this tax.
P.S. Learn about the deadlines and documents for your business HERE.
Give your nerves a break and save your time by filling out your necessary tax forms electronically. That way, your forms will be received by the IRS immediately – which will provide you with more time to spend on requesting a refund.
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