Step-by-Step Guide to Fill Out Your Form 1040

Triston Martin

Jun 05, 2023

The 1040 takes up two pages. Information about yourself is required on the first page. Your full name, current residence, SSN, and filing status are all required information. When filing jointly, include your spouse's name and Social Security number.

Each dependent must have their name, Social Security number, and relationship to the taxpayer entered. If you have qualifying children or other dependents and intend to claim a tax credit for them, you can do so by checking the appropriate box next to their names on this form.

There will also be a box to click to attest that you, your spouse (if filing jointly), and your dependents were covered by either a qualifying health insurance plan or an exemption from coverage for the whole year.

You'll need to sign your name and list your occupation on the final line of the first page. This step is optional and can be done after you finish the rest of the form. A tax preparer or accountant would sign and submit their information if they helped you complete Form 1040.

Instructions For Filing A Personal Tax Return

Tax preparation software will ask you for details that will be used to fill out your Form 1040 once you've filed your taxes. After entering your information into the tax software, Form 1040 (and any attached schedules) should be completed and electronically filed with the IRS. You can save a copy on your computer or print one off for reference.

Form 1040 can be downloaded from the IRS website and filled out manually if desired. Although the form may appear complicated, it serves four main purposes.

1. Asks Who You Are

At the beginning of Form 1040, you will be asked for personal details, including your name, social security number, and the number of people claimed as dependents.

2. Calculates Taxable Income

Then, you'll use Form 1040 to count your year's income and any deductions you're eligible for. The point is to determine how much of your income is subject to income tax. To conduct the maths, you (or your tax preparer/software) must refer to the federal tax brackets.

3. Calculates Your Tax Liability

Towards the bottom of Form 1040, you'll report the income tax you must pay. You can deduct your total tax liability for the year, including any taxes withheld from pay throughout the year and any tax credits you may be entitled to.

4. Finds Out How Much Of Your Tax Bill You've Previously Paid

You can determine whether or not your tax credits and withholding taxes are sufficient by filling out Form 1040. If they don't, you could have to include the shortfall in your Form 1040 payment. You will receive a tax refund if you have overpaid. (There's a designated area on 1040 for you to inform the IRS where to send your refund.)

5. Verify Your Refund Status

Your refund is discussed in detail below. You have overpaid the government and are eligible for a refund if the amount shown on Line 19 (total payments) is larger than the amount shown on Line 16 (total tax). To calculate the amount you overpaid, go to Line 20 and deduct Line 16 from Line 19.

You'll need to provide the account and routing numbers for the checking or savings account into which you'd like your refund deposited. Fill out Form 8888 to choose whether you want a paper cheque or to use your return to buy savings bonds.

6. Find Out What You Owe

If the amount on Line 16 (taxes owed) is more than the amount on Line 19 (taxes paid), you owe the IRS additional money. This is addressed in Part IV of Form 1040. Just the right name for it: "Amount You Owe."

To calculate your tax liability, go to Line 23 and deduct Line 19 from Line 16. Penalties, if any, should be entered on Line 24.

Purpose Of A 1040 Form

Taxpayers use the federal 1040 form to determine how much of their income is subject to taxation. To get your Adjusted Gross Income (AGI), you must first declare your entire income and then deduct any permissible modifications (sometimes called "above-the-line deductions"). Tax credits and deduction thresholds are calculated based on your adjusted gross income.

Your AGI for the 2022 tax year should be reported on line 11 of Form 1040. The standard deduction or your total itemized deductions from Schedule A can further reduce this amount. Some examples of allowable itemized deductions are as follows:

  • Mortgage taxation and local sales and income taxation
  • Donations to Good Causes
  • Healthcare costs

If your total itemized deductions are less than your filing status's standard deduction, you can reduce your taxable income by using the standard deduction instead. Higher child credits and a new other dependant tax credit will replace exemption deductions in 2018.

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