1040a vs 1040 Form

1040a vs 1040 Form: What You Should Know

How Do IRS Forms 1040 and 1040EZ Compare in Detail? In 2014, the IRS amended Form 1040A to remove a variety of qualifying expenditures, reducing the amount of qualifying expenses an individual can deduct on his or her income tax return. The Form 1040EZ, however, has no changes to the items it contains, which will enable users to file an amended return. Here's a breakdown of some differences between the two versions of Form 1040: Form 1040A Taxable Income The Form 1040A is the more detailed but also more time-consuming version of the form. The IRS requires that you use Form 1040A for everything, including medical/dental expenses, student loan interest and taxes paid to a state or local government. Form 1040EZ Expenses The Form 1040EZ does not deduct expenses incurred after your tax year begins, such as state or local income tax, business taxes, home taxes, or mortgage payments if you purchased your home or your main residence after 2015. Those expenses are considered qualified expenses, and they are usually deductible on Schedule A, Itemized Deductions and Exclusion from Income (Form 1040-EZ). Interest The Form 1040EZ includes interest on loans as qualifying interest. If you took out a loan to pay down student loans, Form 1040EZ qualifies. It doesn't cover interest on a credit card where you paid off the original loan. So, if you took out a loan to pay down your student loans, you would have the maximum allowable amount of interest that you can deduct on Form 1040EZ, because the interest wasn't charged to your credit card. The IRS has been trying to crack down on this over the years. Taxes Paid to a State or Local Government You can deduct your property taxes paid to the state or local government as qualified expenditures on Schedule A. This may be the one drawback of using Form 1040EZ vs. Form 1040. Property taxes paid to your local school district or the local government may not have the same exclusions and deductions available on the federal version of the form, so you might be able to deduct that payment, too. Federal and State Income Tax If you are filing a joint return, and you itemize on Schedule A, you can claim deductions and credits related to state and local taxes paid by you and your spouse under the federal standard deduction limits.

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