The Difference Between 1040 & 1040A Tax Forms
Many people get confused about whether they should use form 1040 or 1040A to file their taxes. Many tax preparers charge more to file a 1040, so even if you do not prepare your own taxes, it is important to know whether you are able to file a 1040A to save yourself a little money. The 1040A is more basic than the 1040, allowing only for the most common sources of income, adjustments, deductions and credits.
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Income
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The form 1040A can report basic income, but anyone who has income from self-employment, farming, rental property, or capital gains or other investment gains must use form 1040.
Adjusted Gross Income
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The 1040A includes some adjustments for gross income, but the 1040 has more options, including the ability to report self-employment taxes and insurance expenses, moving expenses and alimony paid.
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Deductions
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Anyone who chooses to itemize their deductions must use Form 1040. The 1040A only allows you to take the standard deduction.
Taxes
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If you owe self-employment taxes, you must file form 1040. The 1040A does not allow for the calculation and reporting of self-employment taxes.
Tax Credits
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The only tax credit that can't be taken on form 1040A is the Foreign Tax Credit. Form 1040A can be used to calculate the Earned Income Credit and Child Tax Credit the same way it is calculated on form 1040.
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