Tax Preparation Tips: Getting To Know the Tax Forms to Use

Paying your taxes in time is one of your responsibilities as a good citizen. Only when taxes are paid in time and as required, a government can flourish and use the funds to fuel many important projects that are important for any developing nation.  However when ti comes to the perspective of the citizen, paying taxes doesn't seem that sugary-sweet!  The though of having to fill out those forms, and do all those calculations can be a real pain.  However if you get to know the types of forms need to use, this will make the tax preparation process so much more pleasant than if you were to do it blindly.

When filing tax returns you are required to use specific tax forms for different kinds of returns you are submitting. You must use one of the 1040 forms. Therefore you must know exactly which forms to use in order to make a correct submission. In order to use specific forms, you must satisfy certain criteria as laid out by the IRS.

Ask the Experts

To be on the safe side, it is advisable that you consult the IRS regarding definitive answers before filing the forms when making your tax preparation. The 1040EZ, 1040A, 1040 and the different schedules are quite tricky especially if you are not familiar with them and have never tried to fill them before. For example, as for form 1040EZ alone, you may only be eligible to file using the 1040EZ if your taxable income is less than $50,000 for the tax year and you do not earn more than $400 in earned interest. A number of limitations apply and to get definitive answers, you may only receive after consulting IRS regulations.

What is Form 1040?

Form 1040 is the least restrictive tax form as far as who may use it. One of the most outstanding distinctions with the 1040 form is that it is the only form with which you may itemize deductions. Different schedules are provided for itemizing deductions. Earned interest or dividends, profit and loss from business, capital gains and losses from investments, income and loss from rental properties, partnerships, royalties, residual interests, eligibility for earned income tax credit and also income from farming are reported in these different schedules.

Many schedules also exist for less common situations and the specifics of when to use these forms requires training from the IRS.