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The 1040EZ: box-by-box

Now that you've gathered up all of your materials: your W-2's, 1099's, a pencil and a calculator, it's time to get down and dirty, and complete your federal income tax return.

Your task is relatively easy if you're using Form 1040EZ -- it's the simplest of the three forms used for tax returns.

How do you know if you can use Form 1040EZ?

Read the following eight statements, and respond "True" or "False" to each.

  1. Your filing status is single or married filing jointly.
  2. You do not claim any dependents.
  3. You do not claim a student loan interest deduction or an education credit.
  4. You (and your spouse if married filing a joint return) were under age 65 on Jan. 1, and not blind.
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  6. Your taxable income (line 6 of Form 1040EZ) is less than $50,000.
  7. You had only wages, salaries, tips, taxable scholarship or fellowship grants, unemployment compensation, qualified state tuition program earnings, or Alaska Permanent Fund dividends, and your taxable interest was not more than $400.
  8. You did not receive any advance earned income credit payments.
  9. You did not owe any household employment taxes.

If any of the statements are false, you're going to have to use either Form 1040A or Form 1040. If all eight statements above are true, then get ready to fill out Form 1040EZ, Income Tax Return for Single and Joint Filers With No Dependents.

1040EZ label

If you received a tax package from the IRS with a peel-off label including your name and address, just stick it on here. If any of the information is incorrect, you can make the correction directly on the label. Make sure any changes that you write in are easy to read. If you didn't receive a tax package, fill in the information requested, including your first name, middle initial and last name. If you're filing a joint return, include your spouse's first name, middle initial and last name. Then fill in your home address, including your ZIP code.

You must enter your Social Security number in the boxes provided in the upper right hand corner of the form. If you're married, whether you're filing jointly or separately, you must enter your spouse's Social Security number underneath yours. Be sure that any Social Security numbers on your return are identical to the Social Security numbers on the corresponding Social Security cards. The IRS will not process a return if it's missing a Social Security number, and you may end up paying a penalty.

Next comes a question about giving $3 to the Presidential Election Campaign Fund. You must check off either "Yes" or "No," and if you're married filing jointly, your spouse must do the same. No matter what the decision is, the amount of tax that you owe or the refund you receive will not be affected.

Line 1. Total wages, salaries and tips.
For most people, this number comes from Form W-2, Wage and Tax Statement, which should be sent to you from all employers in 1999. If you (and your spouse) worked one job, write the number from box 1 on Form W-2 onto line 1 of Form 1040EZ. If you (and your spouse) worked more than one job, add up the numbers from box 1 on all of your W-2's, and put the total on line 1 of Form 1040EZ.

You must also include any wages you received as a household employee -- even if you didn't get a W-2 -- in the total on line 1 of Form 1040EZ.

  • For all monetary entries on your return, the IRS allows you to round off cents to whole dollars. To round off, drop amounts under 50 cents, and increase amounts from .51 to .99 to the next dollar. If you're rounding off one entry, you must round off all entries.

And don't forget to attach copy B of all your W-2 forms in the space indicated on the 1040EZ.

Line 2. Taxable interest
This includes interest that you receive from bank accounts and certain dividends. This number generally comes from box 1 on Form 1099-INT, Interest Income, sent by banks, savings and loans, and other payers of interest. Report the total amount of interest income that is shown on any Form 1099-INT that you received for 1999 on line 2 of Form 1040EZ. Reminder: your total taxable interest must be $400 or less. If the total comes to more than $400, you can't use Form 1040EZ.

Line 3. Unemployment compensation
Unemployment compensation is subject to tax. If you received any unemployment compensation in 1999, you should have received a Form 1099-G showing the amount paid to you for the year. This number is included as part of the total entered on line 3.

Qualified state tuition program earnings
Qualified tuition programs are established by a state and the earnings are free from tax within the program. When withdrawals are made, the earnings get included in taxable income. If this pertains to you, you should have received a Form 1099-G showing the earnings part of any distribution from the program. Include this number as part of the total entered on line 3.

Alaska Permanent Fund dividends
This dividends program began in 1982 for Alaska residents. The money comes from the sale of oil pumped out of the ground in Alaska. Include any dividends you received in 1999 in the total of line 3.

Line 4. Adjusted gross income
Add together the amounts on lines 1, 2 and 3. Enter the total on line 4. This is your adjusted gross income.

Worksheet

Line 5. Can your parents (or someone else) claim you on their return?
Either check off the box on the left marked "Yes" or the box on the right marked "No."

If someone can claim you as a dependent, even if that person chooses not to, use the worksheet on page two of Form 1040EZ to determine the amount to enter on line 5.

If no one can claim you as a dependent, enter the appropriate amount on line 5:

  1. Single, enter $7,050 or
  2. Married, enter $12,700

Line 6. Taxable income
Subtract line 5 from line 4; enter this amount on line 6. If line 5 is larger than line 4, enter 0 on line 6. The amount entered on line 6 is your taxable income.

1040EZ lines 7 to 10

Line 7. Federal income tax withheld
Going back to your Form W-2, enter the amount from box 2 onto line 7 of Form 1040EZ. If you received a Form 1099-INT, 1099-G or 1099-OID showing that federal income tax was withheld (this should be in box 4 of all three forms), include this amount in the total on line 7 of the Form 1040EZ.

Line 8. Earned income credit
This is a tax benefit for people who work, but don't earn high incomes. Those who qualify could pay less federal tax, or even get a tax refund. To see if you qualify for this credit, refer to page 15 of the 1040EZ instruction booklet.

Line 9. Total payments
Add the amounts on lines 7 and 8a. These are your total payments.

Line 10. Tax
Use the amount entered on line 6 to determine your tax. You'll need to use the tax table, which begins on page 24 of the1040EZ instruction booklet.

1040EZ lines 11 and 12

Line 11a. Refund
If line 9 is larger than line 10, hooray, you're going to get money back from Uncle Sam. Subtract line 10 from line 9. The amount you calculate is your refund.

Line 11b. Routing number
If you want to have your refund directly deposited to one of your bank accounts, fill in the routing number. The routing number must be nine digits. If you have any question about what your routing number is, contact your financial institution.

Line 11c. Type of account
Check the appropriate box: checking or savings.

Line 11d. Account number
Your account number can be up to 17 characters, consisting of both letters and numbers. Be sure not to include the check number.

Line 12. Amount you owe
If line 10 is larger than line 9, then you'll have to dish out some money to the government. Subtract line 9 from line 10. The number you calculate is the amount you owe. If you pay by check or money order, make it out to the "United States Treasury." Enclose your payment with your return, but don't attach it to the form.

1040EZ sign the return

Finally, you've reached the end. Sign your name, and write in the date and your occupation. If you're filing a joint return, be sure that your spouse signs the bottom of the form as well. Form 1040EZ is considered incomplete if you don't sign it.

If everything is complete, pop the form into the mail. Mission complete!

 

-- Posted Feb. 16, 2000

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