In anything in life, there’s a good way of doing things, and then when you learn a little more, you find there’s a better way of doing things. The same principle applies to doing your taxes. Skip or overlook certain credits or deductions, and you don’t receive them.
The IRS is a complex entity, but the 1040EZ form is designed to be simple enough to complete without professional help. If you are doing your Form 1040EZ by yourself, keep these tips in mind for receiving the maximum benefit from this years’ taxes.
Understanding the 1040EZ Form
- Choosing whether to provide $3 to the Presidential Election Campaign Fund. Unfortunately, you don’t receive a tax credit for contributing to this found. Any dollars you contribute come directly out of your pocket.
- Wages, salaries, and tips. This section is the whole reason you are filling out this form instead of the other ones. Make sure you have all of your W-2’s handy, and be sure you also have record of any other income you have earned. Whether or not you received a W-2 for the income does not matter – it all must be reported in this section. Be sure to round off any amounts with cents to whole dollars. If the amount is of cents is 49 or less, you can round down – at least providing a little savings.
- Taxable interest. If you received less than $1500 in taxable interest, then you will have to enter that number in this section. You should have received an IRS form 1099-INT from all institutions which have paid you interest during the past tax year. If you made more than $1500 in taxable interest, then stop filling out 1040EZ now – you are ineligible.
- Additional Income. You do have to pay federal tax on any unemployment benefits you received in the past year. If you collected these benefits, then you should have received a Form 1099-G indicating the amounts paid to you. One exceptional rule for Alaskan residents is this is the area where you will also have to report any payment you have received from the state as your part of oil sales.
- Adjusted gross income. This line is the total of all of the previous three sections.
- Taxable income. On this line, you will find out how much of your money will actually be subject to taxation.
- Earned income credit. If you had meager earnings in the past year, the earned income credit may provide you with a refund even if you don’t owe the federal government any taxes. Figuring your credit, however, can be difficult. If you’d like, you can simply print “EIC” in this section and let the IRS do the figuring for you.
Now You Know What to Expect When Completing Your 1040EZ!
If you didn’t already have a clear idea of what to expect from this form, now you do. And, now you know what to look for when attempting to receive the maximum credits and deductions.
If you are concerned about any past tax returns you did not file, contact Jeff Fouts to have a professional tax attorney review your case and get you the help you need.