Form 1040-EZ vs 1040A vs Form 1040

The Form 1040EZ no longer exists for use by taxpayers, but previous EZ filers may still qualify for a “simple return.”

The IRS and Treasury Department attempted to simplify the basic Form 1040 document from a few pages to a “building blocks” system; the Form 1040 is now a single primary page with six new schedules to be completed and attached to your Form 1040 as needed. With the new system in place, the shorter Forms 1040EZ and 1040A became unnecessary, but the same type of filers may still qualify to file “simple returns.”

What is a 1040-EZ?

When it comes to taxes, most people want to keep it as simple as possible. The 1040-EZ form is the easiest of the three tax return forms (1040, 1040A, 1040-EZ) is a simple 2-page form that you can fill out. However, keep in mind you will not be able to itemize deductions and must meet various criteria such as having taxable income under $100,000 and both you and your spouse (if you file jointly) are under 65 on January 1st for that tax year. To make it even easier for you, we’ve listed the necessary information to help you through the tax filing process.

You can fill out a form 1040-EZ if you meet ALL of the following requirements:

  • Your taxable income is LESS THAN $100,000
  • You don’t claim any dependents
  • You don’t itemize deductions
  • You are filing as a single person, or married and are filing jointly.
  • Your taxable interest if $1,500 or less
  • You (and your spouse, if you’re married) were under 65 years old on January 1st of the year you’re filing for.
  • You don’t claim any credits other than the Earned Income Credit

You can take the standard deduction, but you cannot itemize them or claim adjustments to income (e.g., contributions to an IRA). You also can’t file a 1040-EZ if you have any income from self-employment, alimony, dividends, or capital gains!

What is a 1040A?

As your life becomes more complex (e.g., the addition of kids) so does your tax situation. However the form 1040A is a gradual step-up (in terms of complications) from the 1040EZ, and a step below the traditional 1040.

With the 1040A you can file as head of household, which is not available in the 1040-EZ. You can also claim dependents and take tax credits for retirement savings, earned income, and child care along with a few other items. Here are some requirements to file for the 1040A:

  • Your taxable income is less than $100,000
  • You plan on taking standard deductions
  • Your income comes from a salary, tips, fellowship grants, interest, taxable scholarships, standard dividends, capital gain distributions, annuities, pensions, IRAs, social security, and or unemployment compensation
  • The only adjustment to your income comes from student loan interest deduction, IRA deductions, the educator expenses deduction, and tuition and fees deduction.

What is Traditional 1040?

If your taxable income exceeds $100,000/year and you plan to deduct certain items from your Adjusted Gross Income (AGI) then you’ll want to file for a traditional 1040.

This form is the more complicated of the three but this also means it’s more customizable and good for those with a more complex income stream.

You can file for 1040 if you meet the following requirements:

  • Your taxable income is more than $100,000
  • You itemize deductions
  • You owe taxes for the use of a household employee
  • You receive income from the sale of property
  • You receive income from sources that include but are not limited to self-employment, dividends, partnerships, and or if you’re a beneficiary of an estate or trust.

Summary of 1040-EZ vs. 1040 vs. 1040A

The IRS requires individuals to fill out the form 1040 if their taxable income exceeds $100,000, and they want to itemize deductions. This form has the advantage of customization but is more complicated. The 1040-EZ is the shortest tax return form and is good for those whose tax situation is simpler. As your finances become more complicated (multiple sources of income, larger overall income, etc.) you will likely switch to the form 1040. However, if are eligible for a 1040A it might be worth considering, especially if you’re young since the process is not as complicated as the traditional 1040.

If you’re looking to speak with a tax expert or certified public accountant in the El Paso region, consider reaching out to us at Marcus, Fairall, Bristol + Co., PLLC!

Our firm specializes in the following financial services:

Marcus, Fairall, Bristol + Co., PLLC
230 Thunderbird Dr Ste G, El Paso, TX 79912
Phone: (915) 775-1040