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Income tax form 1040a is one of the standard income reporting forms required by the Internal Revenue Service (IRS), which asks questions about the income you received and the expenses you incurred each year in order to determine how much tax you owe the federal government.
The IRS recommends you use form 1040a if you meet the following 4 conditions:
- Your taxable income is below $100,000
- You have capital gain distributions
- You claim certain tax credits
- You claim deductions for IRA contributions, student loan interest, educator expenses or higher education tuition and fees
The form asks questions like:
- What were your wages, salary, and tips earned?
- Did you receive interest from any savings, checking, or investment accounts?
- Did you receive any business income or income from passive investments like stocks or real estate?
- Did you spend money on education or tuition?
- Did your business incur a loss?
- Did you have any deductible business expenses?
IRS form 1040a is arranged so that you can enter your income, expense and deduction information in neat, easy to read columns. The income information is entered first, then the expense information is deducted from it and resolved to show adjusted gross income, or AGI. This is the amount of money you earned that will be taxable.
The IRS determines the amount of tax you pay by matching your AGI with your tax classification, depending on whether you are single, married, married but filing separately, or the head of household. You can match your classification with your AGI amount on the tax table to determine the amount of tax you owe for that year.
The amount of tax you owe is one of the final boxes on the IRS form 1040a. The form is then signed and mailed to the IRS each year before April 15.
