Differences in 1040A & 1040 EZ

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Individual taxpayers have several forms from which to choose to file federal income taxes. The Internal Revenue Service (IRS) provides Forms 1040EZ, 1040A and 1040 for taxpayers. Each form has different criteria for taxpayers with different income circumstances. The differences in Forms 1040A and 1040EZ will help you determine which form you need to use.

Physical Restrictions and Dependents

Taxpayers can file Form 1040EZ if they are under age 65. Taxpayers age 65 and older must file Form 1040A or Form 1040. Legally blind taxpayers may not file Form 1040EZ. Taxpayers who can file the 1040EZ income tax return may not claim any dependents, and those who claim dependents must file either Form 1040A or Form 1040.

Qualifying Income

One difference between the 1040EZ and the 1040A lies in the qualifying income earned by taxpayers. To file the 1040EZ, taxpayers must earn income from only salary, wages, tips, unemployment compensation, taxable scholarships, fellowship grants, the Alaska Permanent Fund dividends and taxable interest income of $1,500 or less. To file the 1040A, taxpayers can earn income from the same sources for the 1040EZ as well as capital gain distributions, pensions, annuities, IRA distributions, taxable Social Security benefits and railroad retirement benefits.

Income Adjustments

Disallowed income adjustments for the 1040EZ include IRA contributions and student loan interest. Taxpayers can claim IRA deductions, student loan interest, educator expenses and tuition and fees on Form 1040A.

Tax Credits

Taxpayers can file either Form 1040EZ or 1040A if they claim the earned income credit. Taxpayers with additional tax credits such as child and dependent care credit, child tax credit, additional child tax credit, elderly or disabled credit, education credits and retirement savings contribution credit must file form 1040A.

IRS Recommendations

The IRS recommends that taxpayers use the simplest tax form that meets individual circumstances to avoid costly errors. Taxpayers who file income tax returns electronically have the advantage of the IRS system automatically detecting the appropriate form for filing based on information entered into the system by the taxpayer.