If you are an independent service provider and want to file income tax returns in the U.S., you should get updated with form 1040. You need to know who should file it and how to file? You need to know everything about form 1040. The taxpayer can file a federal income tax return with the IRS 1040 form. It contains your gross salary for the financial year and the detail of the taxable amount after tax deductions. 1040 form will help you to know the taxable amount and the refund amount you receive. 1040 form is capable to handle the various sources of income and complexities you may face.
Who needs to file a 1040 Form?
Independent service providers, freelancers, an employee, and investors of the U.S. need to file 1040 Form. If you earn $400 or more from freelance, you need to file an income tax return.
Form 1040EZ and 1040A
Form 1040EZ and 1040A are the shorter version of 1040 forms that offer simple returns for taxpayers. These forms do no longer exist now. Now most taxpayers need to use a new 1040 form. The taxpayers who are above 65 years able to file the income tax return using a new 1040-SR form.
How you get 1040 Form
The IRS provides a 1040 form in PDF version. You can download the form from the internet and fill that form manually. But the best idea is to use the popular tax software programs to file a tax return. The form contains divided sections where you need to fill the details of your salary and deductions to calculate the taxable amount and the refund value you will receive.
How to fill the 1040 Form
You require all the important documents related to tax returns such as W2 form, 1099, and other IRS printable tax forms for 2020 that records your salary and deductions. After getting all these documents ready, you have some options for filling 1040 form and filing tax return:
- Fill yourself by using IRS Free File
- Fill yourself by using tax software
- Hire a paid tax preparer to file return
If you want to file a tax return by yourself, you must need to consider:
- Personal details and income report
You need to provide your name and your spouse name (if you are married) home address, dependent’s information, and unique social security number on the first page of 1040 form.
After providing personal information you need to report all the income sources whether it may be salary, interest, capital gain, income from investments. You need to complete the schedule 1 to report for any type of extra income source. These may include:
- Amount received as alimony
- Income from sale of business property
- Income received as rent from real estate property
- Amount received as unemployment compensation
- Claim all deductions
Claim your deductions that are made from your total income to reduce the amount of tax. There are two categories of deductions in 1040 Form:
- Above the line deductions- these deductions are also known as adjustments to income that appears above the line as the name indicates. These deductions result in a reduction of adjusted gross income so you don’t need to itemize for refund. These deductions include:
- Educational expenses
- Health saving contributions
- Amount paid as alimony
- Interest on student loan
- Amount contributed to IRA
You need to complete schedule 1 if you qualify for these deductions.
- Standard or itemized deductions- some deductions need itemization or standard deduction for a claim. Standard or itemization deductions include:
- Medical expenses
- Interest of home mortgage
- Charitable expenses
- Property tax
- Calculate tax liability
The second page of the 1040 Form allows you to calculate your tax liability. You must follow instructions for IRS 1040 to calculate tax with the help of tax tables. Some tax credit like Earned Income Credit, Additional Child Tax Credit, etc. on 1040 Form. Complete schedule 3 tax credits. After filling the form, you may file the tax return with 1040 form online through email, electronically or manually.
Where you should mail 1040 Form
Email is the easiest way to file an IRS 1040 form. IRS recommends filing tax returns online because it is more effective and secure than manual work. This will also help to get a refund sooner. You can mail the form 1040 to the official website of the IRS.
Filing deadline for 1040 Form
You must submit the 1040 Form to IRS by 15 April 2020 that is extended to 15 July 2020. You can request for extension in some special conditions.