Most people will agree that filing your annual income tax return is anything but simple. The United States tax law is very complex depending on transactions and the type of income you earned.
As a US taxpayer, you are required to file an annual US Individual Income Tax return to comply and report your earnings and tax liability with the Internal Revenue Service (IRS). Most taxpayers find tax forms confusing and frustrating but the IRS has a “simplified” version of the tax return which can be filed if you meet certain criteria.
The Form 1040EZ is available for certain taxpayers but even if you qualify for the “easy” Form 1040EZ, it may still be more beneficial to file a Form 1040 to claim certain credits or deductions.
The 1040EZ is much shorter to fill out and can be e-filed or a printable version can be prepared and mailed to the IRS. The IRS website and other popular software allow for the Form 1040EZ to be e-filed for free.
What is the IRS 1040EZ Tax Form
The IRS offers three different forms to file your Individual Income Tax Return. The Form 1040, Form 1040A and Form 1040EZ are generally the forms US taxpayers use to file their income tax return.
The Form A is a hybrid of the Form 1040 and Form 1040EZ. The Form 1040EZ is a very simplified version of the tax return and the Form 1040A allows for additional adjustments to income and credits available.
The Form 1040-EZ, Income Tax Return is for Single and Joint Filers with no dependents. It’s a one-page form with a few sections. The regular Form 1040 is two-pages and but can get much longer and more complicated depending on the transactions you had during the tax year. The Form 1040 usually has additional schedules and forms.
Who Can File a 1040EZ
A taxpayer must meet all of the following in order to qualify to file the Form 1040EZ:
- The taxpayers filing status must be single or married filing jointly.
- The taxpayer cannot claim any dependents.
- The taxpayer cannot claim any adjustments to income (see IRS.gov/taxtopics)
- The taxpayer can only claim the earned income tax credit (EIC). No other credits can be claimed with the Form 1040EZ.
- The taxpayer must be under age 65 and not blind at the end of the tax year.
- The taxpayer’s taxable income (line 6 of Form 1040EZ) must be less than $100,000.
- The taxpayer’s income consisted of only wages, salaries, tips, taxable scholarship or fellowship grants, unemployment compensation, or Alaska Permanent Fund dividends.
The taxpayer’s taxable interest must not be over $1,500.
To claim a “single” status on the Tax Form 1040EZ, the taxpayer must be:
- Not married.
- Legally separated, according to state law, under a decree of divorce or separate maintenance.
- Widowed before the first day of the tax year and not married during the tax year.
To claim a “married filing jointly” status on Tax Form 1040EZ, the taxpayers:
- Must be considered legally married as of the last day of the applicable tax year
- or be considered legally married as of the last day of the tax year and the taxpayer’s spouse died before the return was filed.
Note, if you qualify for the Form 1040EZ, it may still be more beneficial to file the Form 1040 to make income adjustments or credits that you may be eligible for.
How to Get a 1040EZ Form Online
The Form 1040EZ can be prepared and filed using a few different methods:
You can also use the printable version of the Form 1040EZ. You will fill out the tax return and mail to the IRS. This method isn’t really preferred and can delay the refund process.
TurboTax Federal Free:
If you qualify to file form 1040EZ, you can also use the TurboTax Federal Free software to prepare and file your return. TurboTax is a software by Intuit which is one of the leaders in tax software. The free TurboTax software is really simple to use and available to any who qualifies to file a Form 1040EZ.
H&R Block Free Online Tax Filing:
H&R Block offers a free online software to assist in preparing and e-filing your Form 1040EZ. For Form 1040EZ tax returns, H&R Block provides a great service with free features such as W-2 photo capture, and free guidance during the preparation process. This can speed the process of preparing and filing your return. The H&R Block free filing software can be found here.
If your adjusted gross income is $64,000 or less, you can use the IRS Free File tool to file your return. This is a very quick and easy method to use if you qualify but you will need to calculate the taxes yourself. You will also need to create an account to use the tool and e-file your return. The tool can be found here.
How to Fill Out a 1040EZ
Filling out the Form 1040EZ is simplified because being eligible for this tax form means you are low risk for the IRS. The 1040EZ is broken down into a few different sections:
The first section includes general identity information such as your name, address, social security number. Here you can also provide the name and social security number of your spouse if you are filing married filing joint status.
On Line 1 you provide the amount of wages, salaries and tips you earned per your W-2. You will also complete this section with any taxable interest (up to $1,500) and unemployment compensations. Adding these will get you to your adjusted gross income (AGI).
Payments, Credits and Tax
The information for this section usually comes from your W-2. This section is the amount of tax you have already paid to the IRS via withholding tax payments.
Since the Form 1040EZ doesn’t allow for credits, the only credit that you are able to claim is the Earned Income Credit (EIC)
If your tax withholding and EIC during the year are larger than the tax liability on the form, you will receive a refund. Complete this section with your routing number and account number of your savings or checking account. By using a direct deposit instead of paper check refund, you can usually speed up the refund process by a few weeks.
Note: The EIC is a refundable credit which means that if your tax liability is at $0, any additional EIC you can use will result in a refund. See the EIC table here.
If You Owe Tax
If you owe any tax after filling out your return, you will need to complete the amount in Box 14 and pay the amount due – IRS Direct Pay, Pay by Card, Electronic Fund Withdrawal, Online Payment Agreement and IRS2GO which is an app available for Android and iPhone smartphones. If you use one of the free Form 1040EZ services mentioned, you will have the ability to electronically pay your tax liability.
Finally, you (and your spouse if filing joint) will need to sign, date and file the tax return. If you are e-filing you will sign using an e-signature.
1040EZ Tax Table
The IRS instructions for the Form 1040EZ includes a tax table which can be used to calculate your tax liability for the year. If filing the 1040EZ, after you calculate your taxable income, you can use the tax table found at the end of the Form 1040EZ instructions to calculated how much tax you owe. The instructions for the 2017 Form 1040EZ can be found here.
The tax table breaks down the tax due by taxable income and filing status. Simply, find the amount of your taxable income in the table and match it to your filing status to see how much tax you owe.
For taxpayers with simple tax calculations, a lot of time can be saved by filing the 1040EZ. The IRS also provides a Form 1040A which is a hybrid between the Form 1040EZ and Form 1040. Luckily, there are a few different ways to fill out and file your Individual Income Tax Return. It’s important to remember that you may still need to file state and local income taxes in addition to the federal return. Read your state and local individual income tax laws to be sure you are in compliance.
As complex as the US tax law can be, the Form 1040EZ is one method of simplifying tax returns for middle to low class individuals. Many taxpayers do not have multiple sources of income or deductions to claim to this form gives them a great relief in time and money. If you qualify to file the Form 1040EZ, you should research to make sure you do not miss out on any deductions or credits that you would be eligible for by filing a Form 1040. The 2017 tax returns are April 17 so be sure to gather all the information you may need to file a complete and accurate return.