Should i use 1040ez




















The EZ is the shortest and simplest form, Form A is a bit more complex and the long Form is the most detailed and potentially difficult. But even if your tax life is simple and straightforward, it might be worthwhile to investigate the other two forms.

Generally, the longer the form, the more opportunities for tax breaks. If you previously filed Form EZ, but bought health insurance through an Affordable Care Act state or federal exchange, known as the marketplace, you can no longer file this simplest form.

When individuals purchase a policy through an exchange, they have an option to receive advance payment of the premium tax credit. This tax credit helps cover some of the insurance costs. The advance credit amount, however, must be accounted for when the policy recipient files his or her tax return. If the advance premium amount was too small, the taxpayer will get the extra.

However, if too large of an advance premium credit was paid, the taxpayer must make up the difference, either by paying any tax due or by having the amount taken from an expected refund. Such calculations are made on Form , which only can be filed with Form A or If you received advance payments of the premium tax credit, you must file one of these longer forms instead of the EZ. Even if you did not get the premium credit in advance but got health care through an exchange and want to claim it when you file, you must complete A or Take the case of tax filer Joe P.

A perfect EZ filer, right? Joe has a student loan. Joe also would get the chance to reduce his actual bill if he files the longer A.

The better tax news for Joe is that a credit allows you a dollar-for-dollar reduction of what you owe the IRS. But the only tax credit shown on the EZ is the earned income tax credit, available only to low-income taxpayers. And there are even more tax-saving opportunities found on the long Form They might not apply to Joe, but they could cut your tax bill — if you take the time to look over each of the forms.

Here are the basic guidelines for the three individual tax returns. And ever since the IRS doubled the earning limit on filers who use it, the EZ has been available to even more taxpayers. All of the forms use the same tables to calculate your income tax liability.

Certain items on a return trigger the need to use Forms A or tax tables , rather than Form EZ. Having kids you want to claim as dependent immediately bumps you to at least a Form A.

For example, you can have capital gain distributions usually from a mutual fund or distributions from an IRA and still use Form A. You can claim certain tax credits using Form A, including the credit for child and dependent care expenses, credit for the elderly or the disabled, education credits, retirement savings contribution credit, child tax credit, earned income credit, and additional child tax credit. When you use TaxAct to prepare your return, TaxAct will guide you through simple interview questions about your tax situation and recommend which form to file with.

In addition, we can help you choose prior to preparing your return. Take Control of Your Finances Sign up to get the latest tax tips, information on personal finance and other key resources sent straight to your email.

How do you know which form you should use? Sprintax can help you prepare your nonresident alien tax return easily and stress-free! Not only this, but we are the only tax preparation software for nonresident aliens in the US and the nonresident tax partner of Turbotax! We are currently the only nonresident tax prep solution offering e-filing services.

File Your NR online with Sprintax. Form NR-EZ is used if your only income from US sources is salaries, tips, wages, refunds of state and local income taxes, or fellowship grants and scholarship. You should file NR-EZ instead of Form NR only if you are filing for years prior to and then if any of the below sounds like you:. Below you can see the NR-EZ form, with instructions outlining what you will need in order to complete the document. Prior to , this form was typically used for reporting income such as self-employment compensation, investments, as well as the types of income.

It is typically for nonresidents who earned investment income , sold or bought a house, or had self-employment income, or other income. It can also be used by nonresidents who qualify for a tax treaty and wish to claim a tax refund for employment taxes that were withheld before the tax treaty was granted. Filing the wrong form can lead to complications when applying for a future US visa or for a Green Card.

If you file the wrong form, you should amend your tax return so it does not lead to problems with the IRS later in the year. If you did not receive any US sourced income during your stay in the States, you should file a Form This only applies to you if your are:.

Form is not an income tax return. You claim credits only for child and dependent care expenses, the earned income credit, the credit for the elderly or the disabled, education credits, the child tax credit, the additional child tax credit and the retirement savings contribution credit.

Your only adjustments to income are the IRA deduction, the student loan interest deduction, the educator expenses deduction, and the tuition and fees deduction. Your income comes entirely from: wages, salaries, tips, taxable scholarships and fellowship grants, interest, ordinary dividends, capital gain distributions, pensions, annuities, IRAs, unemployment compensation, taxable Social Security or railroad retirement benefits, Alaska Permanent Fund dividends.

Your taxes are only from the Tax Table, the alternative minimum tax, recapture of an education credit, Form or the Qualified Dividends and Capital Gain Tax Worksheet. You did not have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option. You owe household employment taxes. You have certain types of income, such as unreported tips; certain nontaxable distributions; self-employment earnings; or income received as a partner, a shareholder in an S corporation, or are a beneficiary of an estate or trust.

Keep Reading. Drew Housman Contributor.



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