1040A Line by Line Guide
Last time, we broke down the 1040EZ from start to finish. This time we're going to run (not walk) through the slightly more complicated 1040A. You should expect to see the same great play by play as well as a bunch of differences. Pumped? Let's get to it.
Label
You simply fill in your name, street, city, state and zip. Don't forget to enter your social security number - the box for it is off to the far right. If you're married filing jointly your spouse will have to fill in their vitals as well. If you're feeling especially generous feel free to give $3 to the presidential election campaign.
Filing Status
You'll notice that the first difference between Form 1040A and Form 1040EZ is that Form 1040A has a filing status box. This is where you will be very clear about how you're going to file. Know that you can still file single or married, just like in the EZ version. But now you have the option to file as married, head of household (if you live with a qualifying person) or qualifying widow(er). Just check pages 18 and 19 of the 1040A booklet for guidance.
Exemptions
Unlike the EZ, the 1040A breaks down exemptions. Boxes 6a and 6b will look familiar, but box 6c asks about dependants. Do you have 5 mouths to feed? Go ahead and claim them, just make sure your five mouths have names, are actually related to you, and have social security numbers. Also be sure to check pg 20 to see if one or all your kids qualify for a child tax credit. When you're done, add up those little bundles of joy and enter the total number in box 6d.
Income
Lines 7 and 8 are just like the EZ, simply enter your wages, salary, tips and the rest. If you've received dividends, you'll have to figure out if they are qualified (taxed at a reduced tax rate), or ordinary (taxed at your regular tax rate). When you're set, enter the totals in line 9a and/or 9b. Line 10 is looking for a capital gains distribution, check pg 25 of the booklet for details. Lines 11 and 12 are for you to record any IRA, pension, or annuity income, with the taxable amount going in boxes 11b and 12b. This year, the first $2,400 of unemployment compensation is tax free, just enter anything over that on line 13. If you collected social security benefits add that to 14a and the taxable amount of said benefits to 14b. When done, add up lines 7 through 14b and your taxable income will be revealed, enter it on line 15 with a smile.
Adjusted Gross Income
Now it's time to hook up with some adjustments. Line 16 is for educator expenses and line 17 is for IRA deductions, see pg 30 for a rundown of both. Enter your student loan interest on line 18 and if you have a tuition and fee's deduction to make be sure to include form 8917 and enter the deduction on line 19. Add these up (lines 16-19) and enter the total on line 20 for your total adjustments. Finally, subtract line 20 from 15, and enter your adjusted gross income (AGI) on line 21.
Tax, Credits and Payments
First things first, carry forward your AGI to Line 22 and if you or your spouse were born before 1945 and/or are blind, check the appropriate boxes. Just write how many boxes were checked on line 23a. If your married filing separately and your spouse itemizes deductions, read through page 34 of the booklet before checking box 23b. While you're there checking page 34 see if your standard deduction includes real estate taxes, if so check box 23c. Then look at the far left margin, those who've checked boxes in this section (23a, 23b, or 23c) or can be claimed as a dependent, need to refer back to page 34 of the sacred booklet for further instruction.
If none of the above apply and you're single (or married filing separately) put $5,700 into line 24. If you're married filing jointly or a qualifying widow(er) put $11,400 into the box. And if you're filing as a head of household record $8,350 as your deduction. Subtract line 24a from line 22 and enter the difference on line 25. If line 22 is over $125,100 or you were nice enough to provide housing to a displaced Midwestern individual, check page 34 of the booklet for guidance. If not, multiply $3,500 by all the exemptions you claimed back on line 6d and enter it on line 26. Subtract line 26 from line 25, to reveal your taxable income and enter it on Line 27.
Now, check page 35 to figure your tax and enter it on line 28, just be aware this number should include any applicable alternative minimum tax. From lines 29 - 33 you're checking to see if you're eligible for a few good ol' tax credits. These include; child and elderly care credit, credits for the elderly or disabled, education credits, retirement savings contributions, and a child tax credit. Once accounted for, enter said precious tax credits (don't forget about attaching the necessary schedules and forms), on line 34. Subtract line 34 from line 28 and enter the difference on line 35.
Line 36 is where you put the federal withholdings from your W-2 and/or 1099. Lines 37 through 40 are mostly about credits (everything from an education credit to an earned income credit to an earned income credit). When you're ready add up lines 37 through 40 to get your total payments and enter it on line 41.
Refund
If line 41 is more than your total tax on line 35, you've overpaid and are due a refund, just enter it on line 42. Line 43a is the funniest line on the 1040A as its asking you if you want your entire refund. You can also write the amount of your refund that you'd like to be applied to 2012's estimated tax on line 44. Like the EZ, if you want your refund directly deposited, just enter the routing and account numbers of your favorite bank account. If you owe money, enter the amount of the liability on line 45. If you have an estimated tax penalty, see page 66 of the booklet, and account for it on line 46.
Third party designee on down
If you want someone to chat up your return with the IRS, check the yes box and enter their name, phone, and personal id number. All that's left is to sign, date and enter your phone number. Don't forget to state what you do for a living in the sign here section. If you're married (filing jointly), don't let your spouse off the hook until they do the same.
Fin
No doubt about it, the 1040A is a more complicated version of the 1040EZ, but it remains useful because it allows you to maximize your refund by itemizing deductions and logging exemptions. So instead of sweating the length, revel in the fact that the 1040A will probably end up giving you more bucks for your bang. That alone should be worth the extra few minutes that it takes to knock out this bad boy.
