Tax Refunds & Advice

If you are not eligible to use Form 1040A, or the short form, you will need to use Form 1040, also known as the long form. Many tax filers are not sure of which form to use. If this sounds like you, and you do not want to hire a professional, you need to make sure that you are using the right form. For many, this starts with knowing when to use Form 1040 as opposed to the short form.

You must file form Form 1040 if you meet one or many of the following requirements:

1. Have an income that exceeds $100,000.

2. Claiming income from a business, rental, partnership, farm, S-Corp, or trust.

3. You are itemizing your deductions.

4. If you are claiming foreign income, or paid any sort of foreign tax.

5. You sold property, bonds, or stocks.

6. You are taking advantage of adjustments for tuition, moving expenses, or a health savings account.

Are you still unsure of whether to use Form 1040 or the short form? If so, it would be in your best interest to simply use the long form. It can handle the most complex situations, and will help to keep you in good standing with the IRS. Simply put, it is better to use the long form, or Form 1040, if you are unsure of what you are doing.

Form 1040EZ may be calling your name when it comes time to file your final return. That being said, this is not the best form for every tax filer. You need to make sure that Form 1040EZ, which is commonly known as the short form, is best for your situation.

Why do the majority of people want to use this form? Simply put, it is the easiest to figure out and takes the shortest amount of time to complete. And for most taxpayers, easy and time saving is something that they are quite interested in.

You can comfortable use Form 1040EZ if you meet all of the qualifications below:

1. Your income for the past year was $100,000 or less

2. You earned less than $1,500 in earned income

3. Both you and your spouse are under the age of 65

4. Your income is derived from nothing more than interest, wages, and/or unemployment compensation

5. Your filing status must be married filing jointly or single

6. You are comfortable using the standard deduction as opposed to itemizing

7. You don’t have any adjustments to make to your income

Do you qualify to file Form 1040EZ next year? If so, you will probably want to take advantage. The bottom line is that this form is easy to file and will not take up a lot of your time. Although you may be used to hiring a tax professional, if you can get away with filing Form 1040EZ you may be able to complete the process on your own next year.

Even tax professionals make mistakes. When dealing with so many forms and numbers, it is no surprise that thousands of people make mistakes on their income tax return year in and year out. The question is: what can you do about this after the fact? In other words, is there any way that you can fix your mistakes? The short answer is yes. You can file an amended return using form 1040X. This makes it easy to show changes between your original return and the one that is correct.

Before we go any further, you should be aware that you have three years from the original deadline to file form 1040X. For instance, if you made a mistake on your 2006 return, you have until April of 2010 to make the change.

Why would you need to file an amendment?

1. If you missed a credit or deduction.

2. Need to report additional income that you initially forgot.

3. Need to claim additional dependants.

4. Additional withholding from a 1099 or W2.

5. Any deductions that you may have forgotten such as charitable contributions, etc.

If you are unsure of how to file an amendment, make sure that you take your time. After all, you do not want to make a mistake on the form that is meant to correct mistakes! For those who are having a very difficult time understanding how to fill out and file form 1040X, take the time to speak with a tax professional. Since they have experience with this form, they should be able to walk you through the process.

All in all, you should not be afraid to file an amendment. Many people think that the IRS looks down on this, but nothing could be further from the truth. Remember, they want your return to be 100 percent accurate; even if it takes you a couple of tries.