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All About IRS Form 1040A


Update for the Current Tax Laws: President Trump signed a new tax plan into law in December 2017. The new law consolidated forms 1040, 1040A and 1040EZ into one redesigned Form 1040 that all filers can use. For your 2019 taxes, which you file in early 2020, you will use this new 1040. That means you can no longer use the 1040A unless you are filing a return for the tax year 2017 or earlier. If you have any tax questions you may want to refer them to your financial advisor.

Form 1040A Eligibility Requirements

Whether or not you could use the 1040A used to depend on how much income you had and the sources of your income. More specifically, you needed to meet the following requirements:

  • Your taxable income was less than $100,000
  • Your income came only from wages, interest and dividends, capital gains distributions, taxable scholarships and grants, unemployment benefits, Alaska Permanent Fund dividends, pensions, annuities and IRAs. If you had other sources of income, such as self-employment income, did not qualify for Form 1040A.

Limitations of Form 1040A

All About IRS Form 1040A

Filers who used Form 1040A could take certain above-the-line deductions such as those for contributing to an IRA, for out-of-pocket educator expenses, student loan interest and tuition payments. These would all reduce your taxable income. What you couldn’t do on Form 1040A, though, is itemize your deductions. You could only take those above-the-line deductions and the standard deduction. So if your intention was to itemize instead of taking the standard deduction you would need to use the regular Form 1040.

Form 1040A let you take more tax credits than 1040EZ, but not as many as Form 1040. On 1040A you could claim (if you were eligible) credits for child and dependent care expenses, for the elderly or disabled, for retirement savings (the Saver’s Credit) and for education expenses. You could also claim the Earned Income Tax Credit (EITC). Also available to folks who use the 1040A were the Additional Child Tax Credit, the American Opportunity Credit and the Net Premium Tax Credit.

Remember that a tax deduction reduces your tax bill indirectly by shrinking your taxable income. A tax credit reduces your tax bill directly by giving you a dollar-for-dollar reduction of your taxes owed. Tax credits come in the refundable and non-refundable forms. Say you’re eligible for a credit that exceeds the amount of tax you owe. If it’s a refundable credit, you’ll get the difference between the credit and your taxes owed refunded to you. If the credit is not refundable, your taxes owed will shrink to zero but you won’t get the difference refunded.

Using Form 1040A

All About IRS Form 1040A

The IRS website provides filers with detailed, step-by-step instructions on how to fill out Form 1040A. This includes directions for tax years 2015, 2016 and 2017.

As with all the 1040 Forms, you start with your personal information, then move on to your income, deductions and credits. If you don’t know how to fill out Form 1040A the IRS instructions are your best friend. If you’re using tax software or a tax accountant, you probably don’t need to read the instructions word for word. Your filing software should do the heavy lifting for you.

The Bottom Line

As with any tax form, the twin goals with 1040A were to provide accurate, complete information and to get the most out of what that form could do for you. If you under-claim credits and deductions you’ll owe more to the IRS – or get a smaller refund – than you really should.

Over the course of your tax-paying life, you might have started off using Form 1040EZ when you were just starting out in your career. Then, you might have graduated to 1040A once you’re eligible for more deductions and credits. Finally, if your finances became particularly complicated and/or your net worth grows you may move on to the long-form 1040. Again, this is different starting with the 2018 tax year, because there is now just one 1040 for every filer.

Tips for Navigating Tax Season More Effectively

  • Have more financial questions? You might wish to work with a professional financial advisor. finding a financial advisor doesn’t have to be hard. SmartAsset’s free tool matches you with up to three vetted financial advisors who serve your area, and you can interview your advisor matches at no cost to decide which one is right for you. If you’re ready to find an advisor who can help you achieve your financial goals, get started now.
  • Filing taxes no longer has to be a pain thanks to a variety of easy-to-use and affordable tax filing services. Here’s a breakdown of the two most popular services, H&R Block and TurboTax.

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