Those taxpayers seeking a fast, efficient method of filing for their taxes are going to want to choose the least comprehensive form, the 1040EZ tax return. The fact is, when you want to be done with filing quicker, this is your most suitable option provided you meet its guidelines. Check the requirements carefully to ensure that this form suits your circumstances, and if it does then you want to be aware that you are limited to only one tax credit. The single tax credit you are allowed to claim is the Earned Income Credit or EIC.
Since this is the only credit you are allowed, be particularly sure you handle it correctly so that you can maximize the amount you get back on your refund. On Line 4 of your 1040EZ tax return you will have entered your AGI or Adjusted Gross Income. If the amount on this line is under $12,880 for a single person or $15,880 for both people who are married, then you are eligible provided both of you are between 25 and 64 years of age. On the official website of the IRS there is a EIC Assistant feature that can help you verify your eligibility for the credit. If you prefer to perform this by hand, you may use the instructions for Form 1040EZ found on pages 12, 13 and 14. The EIC tables featured on page 16 help you find the amount of tax credit that fits your situation. Alternately, on line 8a you can write in “EIC” and the IRS will calculate the amount for you.
Make sure that you are not claimed as a dependent on anyone else’s tax return and this goes for both spouses if you are filing jointly as a married couple. As long as you follow these instructions you should find that your EIC gives you an increase on your tax refund and this is valuable since there are very few ways to raise your refund when using the 1040EZ tax return to file.
Since the system first came out years ago, more and more people have begun to rely on electronic means to file their taxes with the IRS. It is certainly much easier to use an efile tax return, but if you are sitting on the fence regarding whether you are ready to switch over to the electronic system, you should know the benefits to efiling are quite strong. Not only do you avoid having to hand write the information on your forms, you can also save on the hassle of having to get to the post office. In fact, you aren’t even going to need to walk to your own mailbox because all you need to do when you file online is hit the Send button.
The ease of use this system offers tax payers is definitely a strong advantage but it’s not the only advantage. For those wondering how reliable it is, consider the fact that in 2006 the IRS processed 73 million tax returns over the internet, but by 2008 that number leapt to 90 million efile tax returns sent through online means. Citizens are discovering that this method gives them not only greater freedom and flexibility about scheduling when they want their taxes done, but additional bonus that they can use the IRS Electronic Funds Transfer method to deposit their refund check directly into their bank account. The refund will generally clear within 7 to 10 days which is much quicker than waiting for it to be deposited after using the paper forms or even filing online and waiting for the check to be mailed to you.
Since the computerized tax system automatically corrects math mistakes and reminds you if you omit any information in the form then you know you are bound to make far fewer errors and as a result, need to rely on IRS assistance far less than in the past.
Every year at tax time you have to choose which form you are going to use to file. This depends upon your financial situation because each of the primary forms used suit different circumstances. The most common of these forms are variations of the 1040 tax return (also referred to as the ‘long form’) such as 1040EZ, 1040A and so forth. While it is not, by far, the easiest of the forms, it is the most comprehensive and by using it you will be able to itemize more deductions than with the other forms. This is certainly the most appropriate for more complex tax needs.
When you are dealing with more advanced income situations that are more than simply wages or interest earned on savings accounts, you will want to use this solution because it allows you to report a much wider array of income streams than the other forms. Income from a business, trust, S-corporation, rentals or farm profits can all be reported via your 1040 tax return in addition to stocks, bonds, property and your mutual funds. If you have dealings outside the United States then you will have to use this route as it allows you to claim benefits from tax treaties and to report your wages earned in a foreign country plus the taxes you paid that government.
Not only will you be able to claim adjustments to your income such as moving costs or your health savings account, you can also claim expenses related to obtaining higher education such as tuition and other fees associated with schooling. The real strength of the 1040 tax return is the ability to itemize your deductions in much greater detail to ensure that you pay the least in taxes. Health care costs for medical treatments, prescription drugs and even dental work can be included. Money you have given to charities and nonprofit organizations can also be itemized using a Schedule A form.
After the frenzy to get our taxes filed by the time they’re due in April, many people switch from stressed about getting their taxes done to stressed about the status of their federal tax return. This is natural since most of us want some form of confirmation that we’ve done everything correctly and will not be facing an audit. We might also love to check our tax return status and find out that a nice big refund check is headed our way.
With the advent of websites it’s quite easy to make sure that you know where you stand with the IRS. If you have filed your taxes electronically then you will need to wait a full 7 days before the IRS can let you know your tax return status. This is much faster than the 4 to 6 week processing period they estimate for returns that were mailed to their offices. If you choose to file via digital means then you can go online to the official IRS website and use their service called “Where’s My Refund?” in order to find out what your status is. You can actually use this service if you mailed your forms in, too, but you will need to know your filing status, Social Security number and the exact amount that you expect back from your refund in order for this service to provide you with any information.
If you prefer to check on the status of your refund over the phone, you can find the correct toll free phone number to check that right on the website for the IRS, as well. Of course, if you have utilized the services of a business or individual to prepare your taxes for you, it may be wise to get in touch with them first and see if they are willing to help you.