Internal Revenue Service always tries to find the tax season easier for taxpayers in order to make everyone able to file their tax forms with ease and on their own. Keeping this in mind, federal tax form 1040EZ was developed and introduced by IRS department as simplest (easiest) version of federal 1040. There are three basic from to choose while filing your federal tax return; Form 1040, Form 1040A and Form 1040EZ. 1040EZ version is not only the simplest version among the three but also the shortest one which requires lesser information of the tax payer. In this article I have tried to eradicate the confusion over this tax form and explain the Federal 1040EZ and who all qualify to file their returns through this tax form.
After conducting surveys and taking feedback from the tax payers the Internal Revenue Service in the United States has designed the 1040EZ to keep it simplest ever so that individual taxpayer can prepare and file it without any fuss. The complex adjustments and deductions were omitted from this purview of this form for Free Tax Filing service. Involvement in following financial activities would prevent you from using this form:
• In case you meet the following basic requirement you can use form 1040EZ:
• You should not have taxable income in excess of $ 100,000
• You do not plan to claim for any dependents
• Your filing status should only be single or married filing jointly.
• You plan to claim any IRA deductions
• Interest income received by you in a tax year is less than $ 1,500
• Taxpayer and his/her spouse should be under the age of 65 years and not blind.
• You do not plan to claim any deductions or adjustments in your income.
• In case you have to receive or pay Alimony.
• You plan to claim any social security benefits.
• Your earning should only constitute of salaries, wages, tips, taxable scholarships, unemployment compensation or any qualified state program earnings.
• Capital gain transactions in a tax year.
• Apart from the above mentioned criteria a taxpayer should also meet the following conditions in order to use form 1040EZ to his/her advantage:
• You should not have received any advance earned income credit payments.
• Any tips which you have earned must be reported in your Form W-2 by your employer.
• Sole proprietorship business or any home based small business that files a Schedule C.
• You do not wish to claim any additional deductions for real estate taxes, disaster losses or motor vehicle taxes.
• You should not be a debtor in a bankruptcy case.
• You do not owe any wages paid to your household employee.
If you do not qualify under the above criteria it will always be beneficial for you to file either Form 1040 or Form 1040A instead of choosing 1040EZ tax form. Still having any confusion or query then you must visit IRS.GOV