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Form 1040 Explained: Your Guide to Different Types and Uses

Tax season can be stressful for many people, especially with the various tax forms that you’ll have to remember to file. Form 1040 is the main form that US taxpayers use to report their individual income tax returns with the Internal Revenue Service each year.

Although there’s been some changes made to Form 1040 to make the filing process easier, some still find it complicated. Here’s a guide to Form 1040, how it works, and the different types of 1040s to know about.

What is Form 1040? 

Form 1040 is the IRS form that US taxpayers use to file their annual income tax returns. It has sections requiring taxpayers to report their annual taxable income and deductions to determine whether taxes are owed, or the filer will get a refund. Based on the type of income you report, you may also want to attach extra forms, referred to as schedules.

“In the past, you could choose to file Form 1040A or Form 1040EZ instead of Form 1040 if your taxes were relatively simple. But starting with the 2018 tax year, these forms have been eliminated in favor of a shorter Form 1040,” says Brandon Berquist, tax planning specialist at Personal Capital. “There are fewer boxes to fill in on Form 1040 than there were before because many lines from the old form have been moved onto additional schedules.”

Understanding Form 1040 

The purpose of Form 1040 is to declare annual income tax returns. If you earn income over a certain threshold, you need to report that plus tax deductions and tax credits for that year. You’ll then use this information to calculate your tax liability for the year and find out if you owe any taxes or you’ll receive a refund.

Tax season begins in earnest around mid-February, and you should file Form 1040 with the IRS by the April filing deadline each year, which for 2022 tax returns in April 18, 2023.

If you need more time to file your taxes, you can file for a six-month extension to file your taxes by October 17.

Here’s a closer look at what the Form 1040 does:

  • It confirms your identity. The very top part of Form 1040 requires you to fill out your basic information. This includes your tax filing status, name, address, Social Security number, and dependents. The filing status can be single, married filing jointly, married filing separately, head of household, or qualifying widow(er).
  • It calculates your taxable income. Form 1040 is used to determine your taxable income for the year plus the deductions you’d like to claim. One of the steps is calculating your adjusted gross income (AGI) minus any allowable adjustments. When reporting your AGI, you can reduce how much you owe the IRS with standard deductions or itemized deductions. Subtracting your itemized or standard deductions from your AGI will calculate your taxable income. Itemized deductions include mortgage interest, charitable deductions, state and local taxes, and medical expenses — with certain limitations.
  • It calculates your tax liability. When filing your taxes, you need to report how much income tax you owe the IRS. This is called tax liability. If you have dependents, you can claim tax credits at this point. For example, you may claim a child tax credit or any other qualifying tax credit.
  • It determines whether you’ve paid all or part of your tax bill. Form 1040 also ascertains if you’ve paid all of your income taxes or you still owe some. If you’ve paid more, you’re due for a tax refund. If you’ve paid less, you owe the IRS and need to pay the full balance by the tax filing deadline in order to avoid penalties and interest. If you owe and cannot pay the full balance, it is recommended that you still file form 1040 on time to avoid a failure to file penalty. Any amounts owed after the filing deadline will still incur failure to pay penalties and interest, even if you apply for an installment agreement with the IRS.

If you need to file your individual income tax returns, you can find Form 1040 on the IRS website. The form is typically available as a PDF that you can fill out manually and send by mail or use the IRS’s Free File Fillable Forms. You can also file your returns using tax software, where you only need to provide the required information.

Form 1040 variations

There are various types of Form 1040 that some taxpayers may need to fill out.

Form 1040-NR

If you’re a non-resident alien doing business in the US, you might need to file the IRS Form 1040-NR. Also, if you are a representative of a deceased person, an estate or trust, you need to file this form if they’re required to do so.

Form 1040-ES

This form is for anyone who pays estimated quarterly taxes. The estimated tax applies to any income not subject to withholding, including self-employment income, rents, interest, and dividends. It may also include compensation from unemployment and the taxable part of social security benefits.

Form 1040-V

If you have any balance due on the “amount you owe” line of your Form 1040 or 1040-NR, you might want to fill this form. It’s a statement that accompanies taxpayers’ payments.

Form 1040X

If you made a mistake when filing Form 1040, you can make corrections using Form 1040X. You can also use this form to claim carryback or make changes to the amounts formerly adjusted by the IRS. The typical deadline for Form 1040X is three years from the date you filed Form 1040.

Form 1040-SR

This version of the IRS Form 1040 is exclusively for senior taxpayers (age 65 and older). Form 1040-SR is very similar to the standard Form 1040. The main difference is that it has some sections printed in large fonts. It also has a chart designed to help senior taxpayers calculate their standard deductions.

Frequently asked questions

Is a 1040 the same as a W-2?

“No, 1040 is not the same as a W-2. W-2 is a form provided by the employer to the employee that states the gross wages in a given year and all the tax withheld and deductions,” says Armine Alajian, CPA and founder of the Alajian Group, a company providing accounting services and business management for startups. “Form W-2 information is used to enter into Form 1040 to show the income and income taxes will be calculated based on that income.”

What is the difference between 1099 and 1040? 

The key difference between these forms is that Form 1040 is typically used by taxpayers to file their income tax returns for the year, while 1099 is for anyone who earns income other than salary or wages. There are many categories of 1099 forms. For example, if you worked as an independent contractor, you’ll receive 1099-NEC.

The bottom line

Form 1040 is the standard IRS tax form that taxpayers use to file their annual income tax returns. The form is typically used to determine how much you owe the IRS and whether you’ll receive a tax refund.

It’s crucial to have all your tax documents with you before you start to fill out your Form 1040. This includes W2 that shows your earnings information or any other document based on your income. Even if a tax preparer is filing your taxes, you still need to have all of your earnings information.

by Lydia Kibet.