Quantcast Most Popular Tax Forms Explained by the Income Tax Crew

Most Popular Tax Forms explained in normal english by the Income Tax Crew!


Tax Form NameITC ExplanationDownload PDF (on IRS.gov)

Form 1040



IRS Says: U.S. Individual Income Tax Return

Okay taxpayers - this is the form that everyone needs. Including YOU. self explanatory to the point of inserting all of your personal information: address, filing status, dependents, ALL forms of Income, Expenses, Credits, and any taxes paid throughout the year. #1 Most Used Form - it draws ALL information from other necessary forms and collaborates the data.

Form 1040 (Schedule A)



IRS Says: Itemized Deductions

Friends, you only need this form if you are going to specifically "itemize" your deductions (a.k.a. expenses, gifts, mortgage interest, medical costs, job expenses and other miscellaneous expenses). Otherwise, you will take the standard deduction that is given to you (which varies depending on your "Filing Status") and this form will not be needed.

Form 1040 (Schedule B)



IRS Says: Interest and Ordinary Dividends

This form is used to report a type of Income that earned you more than $1,500. The following types of Income must be reported on this form: Interest Income (Interest on Money in Accounts), Ordinary Dividend Income (Investment Account Payouts), Foreign Income (interest earned on accounts overseas).

Form 1040 (Schedule C)



IRS Says: Profit or Loss from Business (Sole Proprietorship)

If you are a Sole-Proprietor; aka - Entrepreneur, you WILL NEED this form. This form is used to report ALL income, expenses, losses, automobile information and miscellaneous costs associated with your own business.

Form 1040 (Schedule C-EZ)



IRS Says: Net Profit from Business (Sole Proprietorship)

This form should (could) be used if you are running your own business as a sole-proprietor or in a partnership; however, you must meet the specific requirements listed in Part 1 in order to use it. For example, you must have Business Expenses of $5,000 or Less; had only 1 Business.

Form 1040 (Schedule D)



IRS Says: Capital Gains and Losses

This form is used by taxpayers whether you are running a business yourself or simply an employee. You must report all Capital Gains and Losses on this form. Capital gains and losses will come from the Sale, Exchange, or loss from any property that is: used in your trade or business (Assets/Inventory); depreciable or amortizable; oil, gas "property"; Gains or losses on Stock, Securities, etc.

Form 1040 (Schedule EIC)



IRS Says: Earned Income Credit

This is a form which may be used by taxpayers in order to earn a Tax Credit. The Earned Income Tax Credit is given to people who Work and make Low Wages. It reduces the amount of tax money you owe and can alternatively be used to grant you a higher refund if the credit is for more than the amount of tax you owe to the IRS. In order to qualify for the Credit you must meet the following requirements: 1) you must have a valid Social Security Number; 2) You must have earned income from employment or from self-employment; 3) Your filing status cannot be married, filing separately; 4) You must be a U.S. citizen or resident alien for the entire year, or a nonresident alien married to a U.S. citizen or resident alien and filing a joint return; 5) You cannot be a qualifying child of another person. If you do not have a qualifying child, you must: * be age 25 but under 65 at the end of the year, * live in the United States for more than half the year, and * not qualify as a dependent of another person 6) Cannot file Form 2555 or 2555-EZ (related to foreign earn income) 7) You must meet these EITC Income Limits: * Earned Income and adjusted gross income must each be less than: - $43,352 ($48,362 married filing jointly) with three or more qualifying children - $40,363 ($45,373 married filing jointly) with two qualifying children - $35,535 ($40,545 married filing jointly) with one qualifying child - $13,460 ($18,470 married filing jointly) with no qualifying children Tax Year 2010 maximum credit: - $5,666 with three or more qualifying children - $5,036 with two qualifying children - $3,050 with one qualifying child $457 with no qualifying children

Form 1040 (Schedule M)



IRS Says: Making Work Pay Credit

Taxpayers will use this form in order to calculate whether or not they are eligible for the making work pay credit; and how much they will receive. This is a Credit which means that it can reduce your tax liability or increase your Refund accordingly. The maximum amount you can receive is $400 as a Single filer and $800 as a married filer (jointly). There are conditions which disqualify you for the credit as well: 1) the amount you enter on line 5 of this form is $95,000 (or $190,000 if filing jointly); 2) you are a non-resident Alien; 3) you can be claimed as a dependent on another persons tax return.

Form 1040 (Schedule SE)



IRS Says: Self-Employment Tax

This form is necessary for all of those tax payers who are self-employed or entrepreneurs. Use this form to estimate or figure the tax that will be due based on your net earnings throughout the year. It is typically good to file this form even if you have a loss or a small amount of income; traditionally though, you are required to file it if you make more than $400.

Form 1040-ES



IRS Says: Estimated Tax for Individuals

This form is used by all taxpayers required to make estimated tax payments. If you are not required to do so then you may discard this form. However, if you are, and you fall within the following rules, then you must use this form to calculate and make your payment. Rules: 1) You expect to owe at least $1,000 in taxes after subtracting any withholding amounts and refundable tax credits; 2) You expect your withholding and refundable credits to be less than the smaller of: a) 90% of the tax to be shown on your 2011 tax return; OR b) 100% of the tax owed shown on your 2010 tax return (your 2010 return must cover ALL 12 months of the year).

Form 1040-ES (NR)



IRS Says: U.S. Estimated Tax for Nonresident Alien Individuals

This form is identical to 1040 ES with one exception, it only applies to Non-Resident Alien Individuals. But the purpose is still the same: to project your estimated tax and pay it.

Form 1040-EZ



IRS Says: Income Tax Return for Single and Joint Filers With No Dependents

This form should be used if you meet ALL of the requirements listed below: 1) Your filing status is single or married filing jointly 2) You do not claim any dependents 3) You do not claim any adjustments to income 4) You claim only the Earned Income Credit 5) You (and your spouse if filing a joint return) were under the age of 65 and not blind by the end of 2011 6) Your taxable income is less than 100,000 dollars 7) You had ONLY wages, salaries, tips, taxable scholarship or fellowship grants, unemployment compensation, or Alaska Permanent Fund dividends, and your taxable interest was not over 1,500 dollars 8) If you made tips, they are included on box 5 and 7 on your W2 9) You do not owe any household employment taxes on wages you paid to a household employee. 10) you are not a Debtor in a Chapter 11 bankruptcy case which was filed after Oct. 16, 2005.

Form 1040-SS



IRS Says: U.S. Self-Employment Tax Return (Including the Additional Child Tax Credit for Bona Fide Residents of Puerto Rico)

If you meet all 3 requirements listed below than you MUST file form 1040-SS. 1) You or your spouse, if filing a joint return, had net earnings from self-employment (other than Church employee income) of $400 or more (or you had Church employment income of $108.28 or more) 2) You are not required to file form 1040 within the United States 3) You are a resident of: a. Guam b. American Samoa, c. The USVI d. The CNMI, or e. Puerto Rico

Form 1040-V



IRS Says: Payment Voucher

This form can be used by ALL taxpayers. It is simply a payment voucher that will be sent along with your Check or Money Order for payment on any tax owed. It lists the "Amount you Owe" in a box in the top right corner; it also provides space for you to put in all of your personal information as it relates to your Taxpayer identity.

Form 1040-X



IRS Says: Amended U.S. Individual Income Tax Return

This form is pretty self explanatory people. You will want to file this form if you think that you either made a mistake on your original return; OR, you forgot to claim some sort of Credit or Deduction on your Original Return; you can also use it to change your filing status. For example, from Single to Married or married filing jointly.

Form 1041



IRS Says: U.S. Income Tax Return for Estates and Trusts

This form is used when a domestic citizen dies. The Fiduciary, or person responsible for the estate, trust or bankruptcy estate, must use this form to file a tax return on behalf of the decedents estate.

Form 1099-DIV



IRS Says: Dividends and Distributions (Info Copy Only)

This form is typically set to investors on behalf of investment fund companies. It is used to report the following as they were paid out: ordinary dividends, total capital gains, qualified dividends, non-taxable distributions; This form is also used to report: federal income tax withheld, foreign tax paid and foreign source income from each investment account held by a fund company.



All Tax Forms