Which Tax Form Should You File?

Most people do not know it, but there are several versions of the 1040 form.

Why are people unaware of these versions? Are they top secret?

No. The answer is that the majority of taxpayers use a paid preparer or tax software to prepare and file their income tax return. The decision to choose a version is left to the preparer or the software.

If you still prepare your return yourself using paper and pen, however, follow these guidelines to choose the best form for your situation.

The simplest to file is the 1040EZ. You can generally use the 1040EZ if:

  • Your taxable income is below $100,000;
  • Your filing status is single or married filing jointly;
  • You are not claiming any dependents; and
  • Your interest income is $1,500 or less.

The 1040A may be best for you if:

  • Your taxable income is below $100,000;
  • You have capital gain distributions;
  • You claim certain tax credits; and
  • You claim adjustments to income for IRA contributions and student loan interest.

The granddaddy of forms is the 1040. This is the most complex version, with an almost limitless number of schedules and related forms. Reasons you must use the 1040 include:

  • Your taxable income is $100,000 or more;
  • You claim itemized deductions;
  • You are reporting self-employment income; or
  • You are reporting income from sale of a property.