Form 1040 is the primary document for taxpayers in the United States to report yearly income and calculate the tax owed to the IRS. This form requires detailed information about their income sources, including wages, salaries, interest, dividends, and other sources of earnings.
Additionally, it enables individuals to claim various deductions, credits, and adjustments that may reduce their taxable income, allowing for a more accurate determination of the final tax liability or potential refund. Its various sections, known as Schedules, facilitate the reporting of diverse income streams such as full-time employment, self-employment, rental earnings, and more.
1040 vs. 1099 Income Tax Forms
Form 1040 is the primary document that combines data from various forms, including 1099, to determine the total taxable income or the amount the government has to refund.
Meanwhile, Form 1099 separately records different non-employee income types, like interest, dividends, Social Security benefits, and self-employment earnings. Each income type has its 1099 form, providing specific details to recipients and the IRS.
Understanding IRS Form 1040
The 1040 tax form is a document issued by the IRS for reporting various tax information. It includes categorized sections where you input income and deductions, automatically computing the owed tax or expected refund.
While the form is concise, additional schedules might be necessary for specific income, credits, or deductions. Gathering information to fill it out involves acquiring statements of wages from all employers in the prior tax year, often listed on Form W-2, distributed by January’s end.
For Whom: For freelancers, independent contractors, or self-employed individuals, the form accommodates reporting eligible deductions and credits.
Additional Documents: Additional documents might be necessary to attach along with the 1040 form depending on the reported income.
Ensure accuracy in filing Form 1040 by keeping receipts, income statements, and evidence of business expenses.
Other required documents encompass additional wage statements like Form 1099-S, interest or dividend statements from banks and brokerages, evidence supporting claimed tax credits or deductions, a copy of the previous tax return, and bank account details for potential direct deposit of tax refunds.
Form 1040 Deductions
Here are some common deductions that may be claimed on Form 1040:
- Standard Deduction: A fixed amount based on your tax bracket, providing a straightforward deduction from your taxable income.
- Itemized Deductions: Mortgage interest, local and state income or sales taxes, charitable contributions, and medical expenses. This approach might be beneficial if the deductible expenses exceed the standard deduction, potentially reducing taxable income further.
Purpose of Form 1040
The federal form serves the purpose of helping taxpayers calculate their taxable income and the corresponding tax. In this process, determining the Adjusted Gross Income (AGI) is crucial, as many credits and deduction limits depend on it.
Other functions of the form include:
- Tax Liability Calculation – Determines the tax liability owed to the IRS based on the reported income, deductions, and eligible tax credits.
- Deductions and Credits – Itemizes standard deductions or claims deductions, impacting taxable income and influencing the owed tax amount.
- Filing Status Determination – Gathers details regarding the taxpayer’s filing status (e.g., single, married, head of household) and affecting applicable tax rates and deductions.
- Credits and Payments – Enables the claiming of tax credits, reducing the overall tax liability. It also considers pre-paid taxes through withholding or estimated tax payments.
- Comprehensive Financial Overview – Helps in financial planning and budgeting strategies.
- Tax Compliance – Ensures adherence to tax laws, allowing the IRS to assess and collect accurate tax revenue.
- Data Verification – Uses the provided information to verify income accuracy against other documents such as W-2s and 1099s.
- Recordkeeping – Proof of the financial transactions for the tax year, valuable for future reference or potential audits.
Who Needs to File Form 1040?
Filing Form 1040 or its relevant variations may be necessary for:
- U.S. citizens who have received diverse income types, such as self-employment income, unreported tips, earnings from partnerships, S corporations, estates, or trusts, securities-related interest, distributions from a foreign trust, or insurance policy dividends surpassing premiums.
- Those meeting specific criteria, including eligibility for the foreign earned income exclusion, income exclusions in Puerto Rico or American Samoa (as a resident), holding Alternative Minimum Tax (AMT) adjustments on stock, owing excise tax on expatriate corporation stock, owing household employment taxes, or qualifying for the premium tax credit.
There are several primary conditions determining the necessity to file. Firstly, the IRS mandates filing for individuals with certain gross income levels, varying according to the individual’s filing status and age.
The income limits for people under 65 are detailed in the table below, noting that older taxpayers and varying marital statuses can lead to different thresholds.
Gross Income Thresholds
| Filing Status | 2023 Gross Income Thresholds (Filed in 2024) | 2024 Gross Income Thresholds (Filed in 2025) |
|---|---|---|
| Single | $13,850 | $14,600 |
| Married Filing Jointly or Qualifying Widow(er) | $27,700 | $29,200 |
| Head of Household | $20,800 | $21,900 |
Those aged 65 or older or blind may claim an additional deduction. These figures, including the standard and other deductions, are adjusted annually for inflation. For instance, for the aged or blind, the deduction increases from $1,500 in 2023 to $1,850 if the individual is unmarried and not a surviving spouse. Similarly, in 2024, these amounts rise to $1,550 and $1,950, respectively.
Dependents, including children, may be exempt from tax filing obligations if claimed as dependents. However, in 2023, certain conditions require dependent filing. They must file their form if:
- The unearned income exceeds $1,250 ($1,300 in 2024) but stays below $12,500 ($13,000 in 2024).
- The earned income exceeds $13,850 ($14,600 in 2024) or if their gross income meets specific thresholds. These regulations vary slightly for single dependents as opposed to married dependents.
Moreover, specific situations mandate the submission of the form regardless of income or dependency status. These circumstances include but are not restricted to:
- Owing additional special taxes such as the alternative minimum tax.
- Receiving distributions from HSA or other health accounts.
- Having net earnings from self-employment totaling at least $400.
- Meeting income threshold limits for wages earned from a church.
Even if not required to file, it is recommended to do so to request a refund of any federal income tax withheld. Filing is also advised for individuals eligible for specific credits, such as the Earned Income Credit, Additional Child Tax Credit, American Opportunity Credit, Premium Tax Credit, Credits for Sick and Family Leave, or Credit for Federal Tax on Fuels.
Types of Form 1040
IRS Form 1040 serves as the primary document for fulfilling income tax obligations for U.S. residents, which includes citizens, residents, and specific non-residents meeting particular criteria. While more straightforward variations like 1040A or 1040EZ were available previously, they were consolidated into the revised version starting from the 2018 tax year. Below are the current options:
Form 1040-SR
Form 1040-SR, crafted explicitly for individuals 65 and older, replicates the standard version with modifications tailored to enhance readability and navigation for senior taxpayers.
It is mandatory for seniors starting with the 2019 tax year and offers a tailored option for older taxpayers. However, seniors still have the flexibility to use the standard version.
Form 1040-NR
Form 1040-NR is designed for “non-resident aliens” for tax purposes and stands out for its notably greater length than other versions. It applies to:
- Individuals involved in U.S. trade or business.
- Representatives of deceased individuals who would have been required to file this form.
- Representatives of estates or trusts that need a 1040-NR filing.
Form 1040-ES
Form 1040-ES is crucial for freelancers, gig workers, or business owners who foresee owing taxes to the IRS. It requires submitting estimated quarterly tax payments based on anticipated tax liabilities. The failure to comply with these payments may lead to underpayment penalties.
Its primary function is determining and facilitating the payment of estimated quarterly taxes, focusing on income sources not subject to regular withholding. Such income includes earnings from:
- Self-employment
- Interests
- Dividends
- Rents
- Unemployment compensation
- Pension income
- The taxable portion of Social Security benefits
Form 1040-V
Form 1040-V, also recognized as the “Payment Voucher for Form 1040,” is a supplementary document for taxpayers settling balances indicated on the “Amount you owe” line of the 1040 or 1040-NR. Although not mandatory, utilizing this voucher in connection with the payment can streamline the IRS payment processing.
While the IRS accepts payments without Form 1040-V, including the voucher ensures more efficient payment processing. Form 1040-V and the associated payment should be submitted in the same packet as the tax return. However, it’s advisable to refrain from stapling or paper-clipping it with the tax return, as this form undergoes a separate processing procedure by the IRS.
Form 1040-SS
The IRS also provides Form 1040-SS, tailored for residents of American Samoa, CNMI, Guam, Puerto Rico, or the U.S. Virgin Islands, specifically those with net self-employment income exempt from filing Form 1040.
This filing allows them to claim specific credits, fulfill Social Security and Medicare tax obligations, and potentially qualify for benefits under these programs by reporting their income to the U.S. Government.
Form 1040-X
Form 1040-X, officially referred to as the “Amended U.S. Individual Tax Return,” can correct errors or omissions that may have occurred on previously submitted tax returns, specifically on Form 1040, Form 1040A, and Form 1040EZ. Despite the discontinuation of these latter two versions, individuals still have the option to use Form 1040-X to amend tax returns filed with these now obsolete forms from earlier years.
Additional Schedules Used With Form 1040
When filling out the form, it may be required to attach supplementary forms, commonly known as “schedules,” to claim certain deductions or handle additional tax obligations:
| Type | Description | Lines where the schedule is referenced or needed in Form 1040 (2023) |
|---|---|---|
|
Schedule A |
Calculates itemized deductions, including medical expenses, mortgage interest, taxes, donations, and theft losses. | 12 |
| Schedule B | Details interest and dividend incomes and is required if these exceed $1,500 from all sources or if the filer has foreign accounts. Includes interest from seller-financed mortgages, accrued bond interest, nominee-held interest or dividends, and more. | 2a and 3a |
| Schedule C | Designed for sole proprietors, records income and expenses related to self-employment, assisting in the calculation of taxable income by detailing business profit and loss. Form 8829 must be attached to it when reporting expenses for the business use of your home. | Schedule 1, Line 3 |
| Schedule D | Used for calculating capital gains and losses. Reports taxable income from the sale or exchange of capital assets, including gains from exchanges or involuntary conversions, capital gain distributions not reported on Form 1040, and nonbusiness bad debts. | 7 |
| Schedule E | Reports capital gains and losses from rental real estate, royalties, or pass-through entities (trusts, estates, partnerships, or S corporations). | Schedule 1, Line 5 |
How to Fill Out Form 1040
Form 1040 consists of two pages that require completion. Tax filers must provide information such as filing status, personal details (including name, address, and Social Security number), and the number of dependents. The form also prompts taxpayers to indicate if they wish to contribute $3 to presidential campaign funds. Below are the step-by-step instructions to complete the form:
Step 1 – Collect All Your Tax Documents
Before completing the form for your income tax return, it’s essential to gather all the necessary tax documents, such as W-2s, 1099s, and records detailing your income and deductions. Once you have these, you can proceed systematically. While there’s a wealth of information required for your taxes, here are some fundamental items most individuals need to assemble to begin:
- Social Security numbers for yourself, your spouse, and any dependents.
- Earnings statements.
- Interest statements or 1099-DIV forms indicating dividends from banks or brokerages.
- Documentation supporting any tax credits or deductions.
- A copy of your previous tax return.
- Bank account number and routing number (for potential direct deposit of any refund).
Step 2 – Enter Your Personal Details
The initial section requires you to answer fundamental questions regarding your filing status, identification, contact details, and dependents. You can include your Individual Taxpayer Identification Number (ITIN) on the Social Security Number (SSN) line if applicable. For joint returns, provide your spouse’s information as well.
Ensure entering names (yours, your spouse’s, and dependents’) match precisely as they appear on their Social Security cards. Using nicknames or a married name not officially updated with the Social Security Administration may lead to electronic filing rejection or processing delays for paper returns.
Step 3 – Specify Applicable Standard Deductions
In this step, outline the standard deductions that can be subtracted from your annual income.
This section features seven boxes designed to assist in calculating the appropriate amount for your standard deduction. Mark the boxes that are relevant to your situation.
Step 4 – Complete the “Dependents” Segment
In this step, include information about your dependents.
Provide their SSNs, specify their relationship to you, and mark the box if the dependent qualifies you for the child tax credit.
Step 5 – Establish Your Overall Income
Lines 1 through 9 are dedicated to determining your total taxable income. In this section, you are required to input the amounts from each income source line by line. Those that do not apply to your situation should be left blank.
Line 10 refers to adjustments to income from Schedule 1. If you possess other forms of taxable income (from a business, rental property, farm, or unemployment compensation), you must attach Schedule 1 to report those earnings. Refer to the IRS Form 1040 Instructions for a better understanding of the income types and adjustments listed on Schedule 1.
You determine your adjusted gross income (AGI), recorded on line 11, by deducting the adjustments from your total income.
Step 6 – Claim Your Deductions
On line 12, you can choose between itemizing your deductions or claiming the standard deduction. While most filers opt for the standard deduction, if your total itemized deductions surpass the standard deduction applicable to your filing status, you can itemize by completing Schedule A and submitting it.
If you own a pass-through business, claiming the qualified business income deduction may be advantageous, as noted in line 13.
Your taxable income results from your Adjusted Gross Income (AGI) minus all eligible deductions, which should be recorded on line 15.
Step 7 – Determine Your Annual Tax
On the second page of the form, lines 16 through 24 guide you in calculating your total tax, representing the amount owed in taxes before factoring in specific tax credits.
Additional information is requested on lines 25 to 33 to establish your total payments. If you have dependents, you can claim either the child tax credit or the credit for other dependents. Include Form 2441 or Schedule 8812 (if you claim the additional child tax credit).
Various other credits are documented on Schedule 3, which include:
- Foreign tax credit
- Credit for child and dependent care expenses
- Education credits
You are subtracting these credits and any taxes paid during the year from your calculated tax results in a refund or the amount you owe for the year.
Step 8 – Calculate Your Tax Refund or the Amount You Owe
The following five lines (34-38) guide you in determining your tax refund or bill’s overall amount. A refund is generated if line 33 (total payments) exceeds line 24 (total tax).
On line 35, enter the details for the direct deposit of your refund, including:
- Bank account number
- Bank routing number
- Account type (checking or savings)
Step 9 – Sign and Submit the Form
Complete the occupation field for the Primary Taxpayer (and Spouse if filing jointly). While not everyone has a six-digit Identity Protection PIN, if you have received one from the IRS by mail, enter it as instructed (Please note that this is not the signature PIN used for signing the return). Additionally, input the Spouse Identity Protection PIN if your spouse has one.
Upon finishing your tax return, signing it before filing is crucial.
How to File Form 1040
The IRS highly recommends utilizing the Free File method to submit federal tax forms online, ensuring a swift and efficient process.
However, if you choose to mail your forms, it’s crucial to be aware of the multiple addresses designated by the IRS for printed tax forms, each varying based on your state and the inclusion of payment. Detailed information on where to mail your forms can be found on the IRS website under the “Where to File” section.
Additionally, remember that mailing addresses differ per document, so accuracy is critical. To ensure a secure and traceable delivery, it is advisable to use certified mail with a return receipt request. Accepted delivery services include FedEx, UPS, DHL Express, and USPS.
If you opt for traditional mail, anticipate a paper return processing time of up to six months, while e-filing typically results in a faster turnaround of approximately three weeks.
Form 1040 Sample
You can download Form 1040 below in PDF or Word format.
Frequently Asked Questions
When are taxes due for 2023?
The deadline for most individual income tax returns for the 2023 tax year is April 15, 2024, requiring taxpayers to submit their forms and settle any owed taxes by this date.
If this date coincides with a Saturday, Sunday, or holiday, the deadline shifts to the next weekday. In 2024, Tax Day falls on April 15, a Monday for most, except residents of Maine and Massachusetts, who have until April 17 due to Patriots’ Day on April 15 and Emancipation Day on April 16. The IRS may also provide extensions for individuals affected by national disasters or emergencies.
What happens if you miss the tax deadline?
While the tax season typically ends on April 15, taxpayers can request an extension from the IRS, granting them until October 15 to file their taxes (though payment is still due by the original deadline). Failure to meet the tax deadline may result in penalties and interest.
You can apply for an installment agreement with the IRS if you require additional time to settle your taxes. The most convenient application method is through the IRS Online Payment Agreement tool. Following the online process, you will receive a notification confirming your installment agreement is approved.
On the other hand, if the IRS owes you a refund and you miss the deadline, there is no penalty. Nonetheless, filing your 2023 taxes by April 2027 is crucial, as the IRS generally provides taxpayers with a three-year window to claim their refunds.
When are quarterly taxes due?
Individuals who are self-employed, independent contractors, or members of a business partnership usually make quarterly estimated tax payments.
This obligation arises when they anticipate owing more than $1,000 upon filing their federal return or if their withholding and tax credits are projected to be less than 90% of their estimated tax liability for the current tax year (or 100% of the previous year’s liability).
Is IRS Form 1040 the same as a W-2?
Form 1040 and W-2 serve different roles in the tax filing process. While a W-2 is a statement from an employer summarizing annual wages and taxes withheld, the 1040 is the primary document for filing taxes with the IRS.
For instance, if you’re a full-time employee, your employer provides a W-2 Form detailing the tax amounts withheld from your paychecks throughout the year. This data from the W-2 form is used to complete the 1040 form when filing your annual tax return by April. The two forms are not interchangeable, but the W-2 provides essential information to complete the 1040 accurately.