A Quick Walkthrough Of Tax Return Forms

The three types of federal tax return forms in the USA, from shortest to longest, are:

1040EZ, the “easy” version

1040a, the “short form”

1040, the “long form”

Form 1040EZ, while the shortest and simplest, can only be used under certain very specific conditions. To use this form, you must satisfy the following criteria

A total annual income of under $100,000, and an interest income under $1500

Your filing status must be either single or married filing jointly

If married and filing jointly, both you and your spouse should be less than 65 years in age

Sources of income limited to wages, unemployment benefits, interest and dividends from Alaska Permanent Fund.

You do not have or claim adjustments to income

Not having any deductions other than the standard deduction

Claiming Earned Income Credit

Claiming no other tax credit

Clearly, this list puts most people out of contention for the Form 1040EZ. If you are among this number, consider yourself lucky.

The tax return form that is next in ease of use to 1040EZ is the form 1040A. The 1040A allows taxpayers of greater variety in age, filing status and income adjustments to file a tax return. People who can use the form 1040A must fulfill the following criteria

Total annual income must be less than $100,000

Filing status or age


Heads of income




IRA or pension

Unemployment benefits

Capital gain distributions

Social Security benefits

Adjustments to income must fall within the following list

Penalty incurred due to premature withdrawal from savings

Interest on student loan

Contributions to IRA

Jury Duty pay

Tax credits that can be claimed within form 1040A must be for:

Child and dependent care


Being elderly and disabled

Child tax


Contribution toward retirement savings

Standard deduction only

If you find that even form 1040A is inadequate for you, or if you are not sure, use the form 1040. The long form becomes mandatory if:

Your income exceeds $100,000

You choose itemized deductions

Your income is from business, agriculture, rentals, partnership, S-corporation, trust etc

You claim tax treaty benefits

You have a foreign income or have paid foreign taxes

You claim income adjustments for education, moving or health investments.

Other than these forms that specify the format for your tax return, you may also need

1. Form 709. This is used to file Gift Tax returns, which are necessary if you give any individual $12000 or more in the financial year

2. TD F 90-22.1, Report of Foreign Bank and Financial Accounts. This report is required to document any reserves great than $10,000 that you may have in foreign financial institutions. This report should be filed by June 30, and is submitted to the US Treasury Department.

The golden rule while choosing tax forms is if you are not sure if a certain detail is eligible under your form, go with form 1040. It may look tough, but it is the safest option.

Four Ways The U.s. Economy Is Setting Trends For IRS Deductions

The economic status of the United States is constantly changing. If the economic conditions are great then you will see more requests for tax cuts or credits. If the economy is in very bad shape then sometimes taxes are raised to meet the budget costs that are estimated for the new year. In either case you should try and spot the trends to take advantage of deductions you can use on your tax returns. Here are four ways that the economy sets trends for deductions.

Car industry

Since the car industry is not doing well, the federal government has come up with incentives to get you the consumer to purchase a car. If you buy a new car then you’ll get a tax break. They have recently tried the cash for clunkers program with much success. It has done so well that your federal representatives are asking for an extension to the program.

Real Estate Industry

The banking industry tanked and interest rates shot through the roof. No one was buying houses. People couldn’t afford the high interest rates on their homes so many were foreclosued upon. There was a glut on the housing market. To spur sales tax credits were created to first time home buyers. This did help to reduce the amount of available houses on the market, but they weren’t selling fast enough. So another credit was created. This time for those that wanted to purchase a second home.

Job Creation

To improve the economy in bad times people need jobs. If there is no income coming in then the taxes collected are not sufficient to pay for all the funded government programs. Therefore, package deals and incentives are provided to companies and businesses that create jobs. You are constantly bombarded via all the media outlets about the ways top officials are bringing jobs to their region. Noone wants to have the highest unemployment rate. The offers get better and better as the unemployment rate increases.

Green Energy

The price of oil has gone up. It is constantly in a state of flux. Never again will we see gas prices under $1.00 per gallon under the current crude oil system. As people pay more for gas they have less to spend for other items. If no money is flowing to other industries the economy gets stagnant. There have been many tax credits that have arisen from green energy from tax credits for more fuel efficient cars, to solar heating for your home. There are new companies that are being created everyday to make our lives better for less money that will also be good for our environment.

When people think of trends they generally think about fashion, or business. However, even the IRS cannot escape the economic trends and how they affect the way taxes are created or eliminated. The housing sector, real estate industry, and unemployment rate will always be key factors to set trends. The economic situation whether good or bad will always determine what types of IRS deductions we have.