When it comes time to file your federal income tax return, you'll likely use IRS Form 1040 – or one of its few variations – for your U.S. individual income tax return. This important tax form has changed over the last few years, and this tax year you will complete a streamlined new Form 1040 to report information about yourself, your income and adjustments through deductions and credits.
There are also several additional forms you may need to work with depending on your tax situation. Some taxpayers end up not needing to file a return at all.
Use this guide to learn all about Form 1040 so you can feel better prepared for tax season.
1040 Tax Form Introduction
Whether you're an employee, you work as a sole proprietor or you receive retirement income, Form 1040 serves as the primary income tax form that most taxpayers use for federal income tax filing, as long as you're a U.S. permanent resident or citizen. Nonresidents usually use a special version called Form 1040-NR.
On the other hand, U.S. citizens and permanent residents aged 65 and older can choose to file Form 1040-SR instead of the regular Form 1040. If you need to amend a tax return to make corrections, then you'd use the version called Form 1040-X.
Although these forms have different names, the contents of the main forms for original income tax filing have the same purpose: They allow you to report all your income, gains and losses from the year and then claim relevant deductions and credits that fit your situation. After you complete Form 1040, you find out whether you owe money to the IRS or the IRS owes you a refund. In some cases, you can pay tax penalties if you didn't have enough taxes withheld and sent to the IRS during the year.
You can obtain the various 1040 forms and their detailed instructions from the IRS website, or you can use tax-filing software or a provider to make your work easier and automate some of the process. For the 2020 tax return you file in 2021, you must submit your Form 1040 and any other attached forms and documents to the IRS by April 15, although you can request a six-month extension if you need it.
Although these forms have different names, the contents of the main forms for original income tax filing have the same purpose: They allow you to report all your income, gains and losses from the year and then claim relevant deductions and credits that fit your situation.
Who Must File Form 1040?
Before diving deeper into Form 1040's contents, it helps to know whether you need to file a return this year, and this means checking your gross income for the year and comparing it to the filing thresholds the IRS has set for the year in line with the standard deduction. The standard deduction is a set amount you can deduct from your taxable income if you decide not to deal with itemized deductions. On the other hand, gross income refers to the total amount of certain earnings such as wages, interest income, capital gains and self-employment net income. Some items, such as Social Security benefits, can be excluded from this figure.
Depending on your age and filing status, you might need to file if you earn as little as $5, which is the case for people married and filing separately. A single taxpayer under 65 would file with a $12,400 gross income ($14,050 if 65 or older), while a head of household under 65 would file once they earn $18,650 ($20,300 if older). Married couples filing jointly would file with $24,800 if they're under 65, $26,100 if one of them is over 65 or $27,500 if both are 65. A qualifying widow or widower would file with $24,800 in gross income if they're under 65 or $26,100 if they're at least 65.
Be aware that there are many exceptions to these filing guidelines based on gross income, age and filing status. For example, Social Security income counts sometimes, and some taxpayers need to file anyway depending on certain advanced tax credits they've received. Nonresident aliens also need to file in many more situations. The good news is that the IRS has a questionnaire you can fill out online to get a clear answer on whether you need to file in your situation.
Understanding Form 1040 Contents
The regular Form 1040 has a few pages with boxes where you fill in various numbers and questions you answer that help determine your tax liability and eligibility for credits and deductions.
Here are some of the types of information you can expect to provide:
- Basic personal information: The new Form 1040 starts out asking for your filing status for the year and then proceeds to request the names, Social Security numbers and addresses of all parties filing the return. There's also a quick question asking if you have completed transactions with virtual currencies and if you want some money to go toward the presidential election campaign.
- Standard deduction eligibility: To determine if you qualify for the standard deduction, Form 1040 asks questions about your dependency status and age and checks if you're blind. Later on the form, you tell the IRS if you want to take the standard deduction or itemize, and the IRS has a worksheet that can help you make that decision.
- Dependents: Since the IRS offers credits for qualified dependents that you support, Form 1040 asks you to list their names, relationship, Social Security number and the type of credit – such as the child tax credit – for which they help you qualify.
- Income: Lines 1 through 9 on Form 1040 all deal with tallying up your income, so there are boxes to enter income from your W-2 and 1099 forms. It asks about wages and tips, interest and dividend income, pensions, retirement account distributions, capital gains, Social Security benefits, business income and additional income you might get from real estate sales, gambling or unemployment payments.
- Deductions: There are lines for various deductions on Form 1040, and you might complete additional documents that make adjustments to your income for things like business expenses, retirement plan deductions, college tuition and student loan interest. There are instructions and worksheets for the various deductions in the guide the IRS provides. Deductions directly reduce the income amount that the IRS uses to calculate taxes. During the process, you end up with your adjusted gross income (AGI) on line 11 and your final taxable income on line 15 of Form 1040.
- Tax credits: The second page of Form 1040 addresses various tax credits that directly reduce the taxes owed. Some of these include the child tax credit, earned income credit, recovery rebate credit and American opportunity credit. Determining the credit amount and eligibility often requires completing some supplemental forms and carrying the amount back over to Form 1040.
- Tax liability or refund: You report all the taxes you paid individually or had withheld from various types of earnings on the second page of Form 1040 as well. The form uses this information along with your total tax due to determine whether you get a tax refund or you need to make a payment plus any tax penalty due. You can input bank account information to receive a direct deposit for your refund, if desired, and you can make tax payments online or by mail.
Common Form 1040 Supplements
When working through Form 1040, you may come across many tax schedules and supplemental forms you have to fill out. While there are many others that you can find on the IRS website, here are some of the most common ones:
- Schedule 1: You use this to report additional income sources like business, unemployment and alimony income plus account for certain expenses, penalties and deductions.
- Schedule 2: This addresses additional taxes owed, such as self-employment tax, household employment taxes, alternative minimum tax and excess credit you received for your health insurance premiums through the exchange.
- Schedule 3: You fill this out to report nonrefundable and refundable tax credits.
- Schedule B: If you received taxable dividends or interest over $1,500, or they fall under some certain IRS criteria, you report the information on this form.
- Schedule C: Sole proprietors use this form to input their income and expenses and determine their business's net profit.
- Schedule D: If you've incurred any capital losses or gains, the information will go here.
- Schedule E: This form handles supplemental income like rental, trust, royalty and partnership income.
- Schedule SE: You determine your self-employment tax amount using this form.
- Schedule 8812: This handles the additional child tax credit if you're eligible.
- Form 2441: You use this to report child and dependent care expenses and account for taxable benefits, too.
- Form 8962: If you bought health insurance coverage through this exchange, then you use this form to reconcile the credit you're owed with the advanced credit you received so that you either get a refund or pay back what you owe.
- Schedule EIC: This form requests information about qualifying children for which you're receiving the earned income credit.
What You Need for Form 1040
Now that you know what Form 1040 involves, you can prepare by gathering important information and documents for when you're ready to complete and file your return. You need the same items whether you do your own taxes or have someone else do the work.
While you need some basic personal information for yourself and any dependents, a lot of the information you need comes from various forms that you receive in the mail early in the year. For example, you should receive Form W-2 from any employer for whom you worked during the year. For other income sources, you often get 1099 forms, such as 1099-NEC for independent contract work, 1099-INT for interest income and 1099-MISC for rental income.
You also need documentation handy for any deductions and credits you might claim. For example, you should receive forms related to retirement accounts, student loans and tuition paid and have receipts for things like medical bills, child care costs, charity donations, business expenses and other potential deductions and credits. If you made estimated payments to the IRS, you should have the dates and amounts so you can account for this.
Completing Your 1040 Tax Return
Whether you have a professional tax preparer handle your taxes or you take the do-it-yourself approach, consider looking through the 1040 instructions first to better understand how your wages are taxed, which deductions and credits exist, which filing status you should use, what determines whether you need to file a tax return and how to use the various supplemental forms. You can also consult Publication 501 for more filing information. Doing this extra work will also help you better understand the questions your tax preparer, tax filing software or tax forms ask you.
As you're working on your tax return, note that each supplemental form has instructions included from the IRS and possibly some worksheets to make calculations easier. The IRS offers line-by-line help for various forms if you're doing them by hand using the Free File Fillable Forms. Using tax software can make the process much easier if you're doing it yourself since the program usually has an explanation with each question and offers ways to get support if you feel stuck.
Read More: Filing an Extension for Taxes
Filing and Tracking Your Return
When you have your tax return prepared with software, you can easily use the e-file method to transmit the return and all its attached documents electronically. E-filing helps you get a tax refund faster. The IRS started accepting tax returns through e-file on Feb. 12, 2021. If you e-file, the IRS notes that using this method usually gets you a refund within 21 days unless your return has an issue that slows the process down.
Alternatively, you can send in a paper copy of Form 1040 and supplemental documents by mail. You can check the Form 1040 instructions to see a chart that shows regions and mailing addresses, and the addresses can vary based on whether you're sending a money order or check for taxes owed. Keep in mind you might need to wait six weeks for a tax refund with this option.
Regardless of how you filed, you can use the "Where My Refund?" tool to track your return status. The IRS says you should be able to start tracking a refund for an e-filed return within 24 hours, but this can take around one month for mailed-in returns.
- IRS: Schedules for Form 1040 and Form 1040-SR
- IRS: About Form 1040-SR, U.S. Tax Return for Seniors
- IRS: About Form 1040, U.S. Individual Income Tax Return
- IRS: About Form 1040-NR, U.S. Nonresident Alien Income Tax Return
- IRS: 1040 and 1040-S Instructions
- IRS: About Form 1040-X, Amended U.S. Individual Income Tax Return
- IRS: 2021 Tax Filing Season Begins Feb. 12; IRS Outlines Steps To Speed Refunds During Pandemic
- IRS: Do I Need to File a Tax Return?
- IRS: Publication 501 (2020), Dependents, Standard Deduction, and Filing Information
- IRS: Forms and Publications (PDF)
- NerdWallet: Tax Prep Checklist: What to Gather Before Filing
- IRS: Line-by-Line Help Free File Fillable Forms
- IRS: Tax Season Refund Frequently Asked Questions
- IRS: Where's My Refund?
- IRS: Forms, Instructions & Publications
Ashley Donohoe has written about business and technology topics since 2010. Having a Master of Business Administration degree, bookkeeping certification and experience running a small business and doing tax returns, she is knowledgeable about the tax issues individuals and businesses face. Other places featuring her business writing include Zacks, JobHero, LoveToKnow, Bizfluent, Chron and Study.com.