VIEWS: 127 PAGES: 38 POSTED ON: 11/30/2011
THE 1040-EZ FORM Most people have an accountant do their taxes. But you don’t need an accountant if: You are single. Received a W-2 Form. Received a 1099-INT Form Made less than $1,500 from interest. You can do YOUR own taxes. For free! All you have to do is use Form 1040-EZ. Go to www.irs.gov and you can download it. You want to download the PDF file that has the form AND the instructions. It’s also available at libraries. What is the 1040-EZ form? The 1040 Form is what you use to determine if you owe tax or get a refund. You send the completed 1040 form to the government to tell them how much money they owe you….. OR…. You send the completed 1040 form with the money you owe the government. The 1040 EZ is a really simplified version of the regular 1040 Form. The 1040 Form has been around a LONG time… since 1913. In 1913 Congress ratified the 16th Amendment, which gave Congress the authority to tax EVERYBODY’S income. Here’s what the form looked like in 1913: There is a lot of stuff going on in the 1040-EZ form. Don’t freak out. It’s really easy to complete. Let’s go through it step by step. In our example, we will be David Flores. Stuff we need to know: David is an employee at a music store in Chicago. He just got his W-2 and 1099-INT in the mail. He is single. Watch out ladies! David (You will do this with Mister Crow) First, get your W-2 form: Second, get your 1099-INT form: We are ready to begin filling out the 1040-EZ! Fill out the name and address information: Do you want to donate to a Presidential Election Campaign? Line 1: Enter Box 1 from your W-2. Line 2: Enter Box 1 from your 1099-INT. Line 3: Don’t worry about this line. Line 4: Add up Line 1 and 2. This is your AGI – (Adjusted Gross Income) Line 5: Today, if you were to fill this out you would be a dependent since you are in high school. However, this example uses David Flores. David is not a dependent. We will enter $8,950. Line 5: What is $8,950? Why are we entering this? $8,950 is the “Standard Deduction.” The government is trying to help you out. The Standard Deduction lessens the amount on which you get taxed. For example, if you make $28,950 you will not get taxed on that entire amount. You get to deduct $8,950. $20,000 will be the amount you are taxed on. Line 5: Interestingly, if you make less than $8,950 you don’t have to pay ANY tax. Should you still file a 1040-EZ? Heck yeah! If the government withheld any money from your paycheck they have to give you a refund. But they won’t give you a refund unless you file the 1040-EZ! Line 6: Subtract Line 5 from Line 4. $54,556 - $8,950 = ? This is the amount on which you have to pay taxes. This is your TAXABLE INCOME. Line 7: Enter the amount the government withheld. (Box 2 from your W-2.) 36 Lines 8 and 9: Don’t worry about these lines. Line 10: Enter the amount from Line 7. This is the amount of TAX you have already paid. Line 11: There is a packet that usually comes with the 1040- EZ form. On page 28 you can find a tax table that will lists the TAX you owe for your specific TAXABLE INCOME. It looks like this: Line 11: David’s TAXABLE INCOME is on line 6. What is his TAXABLE INCOME? Line 11: David’s TAXABLE INCOME is on line 6. What is his TAXABLE INCOME? $45,606 Line 11: We now need to find what the tax for $45,606 will be according to that tax table. Keep in mind that David is single. What is the TAX for $45,606? Line 11: Enter this amount on Line 11. Examples: find the tax Taxable income 6,735 5,025 4,259 Line 12: Is Line 10 bigger than Line 11? If Yes, subtract Line 11 from Line 10. In our example Line 10 is bigger. $8435 - $7750 = ? This is your refund! Line 12: If you are getting a refund you can have your money deposited directly to your bank account. You have to enter the routing number and account number. Line 12: If you are getting a refund you can have your money deposited directly to your bank account. You have to enter the routing number and account number. Line 13: Is Line 11 bigger than Line 10? If Yes, subtract Line 10 from Line 11. Uh oh!! This is how much tax you owe! Luckily, David is getting a refund in our example. We leave Line 13 blank. Sign the Form: Sign and date the appropriate parts of the rest of the form. Congrats! You are done! Now, once you get your refund you have make some tough choices: Go on a Road Trip? Invest the money? Take Mister Crow out for dinner for helping you with your taxes? SAVE YOUR TAX RETURN FORM Save to your Drive! Taxes Classwork DavidFlores1040EZ YOUR TURN: Worksheet Use your own Name and Address
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