Tax forms can be tough and trying to figure out what to put where can be aggravating. If you’re unsure about which form to file, you should check this out before continuing. Form 1040EZ is the shortest tax form available to file so let’s start with the basics.
You simply fill in your name, street, city, state and zip. Don’t forget to enter your social security number, - the box for it is off to the far left. If you’re married filing jointly, your spouse will have to fill in her vitals as well. If you’re feeling especially generous, feel free to give $3 to the presidential election campaign. Whether you’re in the mood or not, don’t sweat it, it won’t affect your return.
On line 1, enter your wages, salaries, and tips. You can find this amount in the first box of your W-2, just be sure to attach your W-2 with your return. On line 2, include any taxable interest you may have received last year. This could be from savings accounts, checking accounts and the like. This interest acts like income, so be sure to record it. You don’t want to cheat the government do you?
Line 3 is where folks who have been receiving unemployment pay and (if you’re a resident of Alaska) permanent dividend funds, enter the amount they’ve received. This year the first $2,400 is tax free. If you happen to be in a 28% tax bracket and had to collect at least $2400, the IRS is giving you a tax break of $672. Anything above that sum is taxable, but most would agree, - getting paid after you get laid off is a smooth social service.
Add up all these inflows of cash and line 4 becomes your adjusted gross income or AGI. You’ll notice that line 5 is where someone can claim you. If you’re being supported by mom, dad, or anyone else, now’s the time to fess up. If you’re single and no one is able to take credit for you, enter $9,350. If you’re married (filing with your spouse) enter $18,700. Then subtract line 5 from 4, - if 5 is higher enter zero. If line 4 is more, congratulations, you’ve just figured out your taxable income.
Line 7 is where you enter your federal income tax withholdings, which can be found in box 2 of your W-2. Line 8a is for an earned income credit. Basically, EIC is for those who don’t make much money. In fact you could qualify for an EIC even if you didn’t pay any income tax. To find out if an EIC is right for you, check out page 13 of the 1040EZ instruction booklet.
Add up Lines 7 and 8 (your total payments & credits) and enter that amount into line 9. To figure Line 10 go to pages 30 – 35 of the booklet to see how much you should have paid the IRS, or look at page 19 of the 1040EZ booklet for other options. Simply find your taxable income (from line 6), then scan across the page to determine your total tax.
Simply put, if line 9 is more than line 10, you’ve paid too much and you’re getting a refund. Declare how much by entering it on line 11a. Now, it would be in your best interest to use the direct deposit feature. On Line 10b enter your banks routing number, Line 11c is asking if this is a checking or savings account, and Line 11d wants your actual account number. If Line 10 is larger than Line 9, then you’re singing the tax bill blues and have to pay up. Just enter the amount on line 12 and check page 19 (of the instructions booklet) to find the most efficient way to take care of this bill.
If you want to allow your accountant to rap with the IRS about your return, put their name and phone number in the third party designee box. But before sending it off, remember to sign, date, state your occupation, (slacker is not actually a career), and attach a phone number. If you’re married make sure your spouse does the same. If you used one, the very last section is for your tax preparer. Now all that’s left is to buy a stamp, seal an envelope, and send this bad boy on its way. Now wasn’t that fun?