What is the 1040EZ? The 1040EZ form (aka the EZ form) is the simplest and shortest form you can use to file your federal income taxes.
Each year over 20 million people file this form, around 1 in every 6.5 federal tax returns filed.
This article explains who can use it, the information required to fill it out, and options for filing it with the IRS.
Who Can Use the 1040EZ?
If you make less than $100K per year, don’t have any dependents, and don’t have a mortgage, then you’re probably eligible to file the 1040EZ. It covers salary and wages from your job (W-2), interest from your bank account (1099-INT), and unemployment income (1099-G). If you’re an independent contractor (1099-MISC), have dividend income (1099-DIV), or investment income (1099-B), then you’re not eligible to file a 1040EZ. Read more about 1040EZ eligibility requirements.
What Information is Required?
There are four main sections of the form. Personal information, income you made, taxes you already paid, and your tax refund or balance due.
Just the facts, ma’am. Name, address, date of birth and social security number. Easy breezy. If you’re married, you enter the same information for your spouse. Since you can’t claim dependents with the 1040EZ, there is no place to record their information. If you’re over age 65, you can’t file the EZ form unfortunately.
Income You Made
As noted earlier, the 1040EZ covers the most common types of income – wages, salaries, and tips from your employer (reported on Form W-2), interest income from banks and other financial institutions (reported on Form 1099-INT), and unemployment income (reported on Form 1099-G). If you received any of these types of income, these forms will be sent to you by the end of January. For more information about the timing of Tax Year 2014 (filed in 2015), read this article.
Taxes You Paid
Each of the forms you receive will report the taxes you’ve already paid, or had withheld. Typically taxes are withheld from each paycheck you receive, so your W-2 will list the total amount of tax you’ve already paid via your job in box 2. It is unusual to have taxes withheld from bank interest or unemployment income, but if they were they will be reported on the 1099-INT or 1099-G you receive.
Refund or Balance Due
This is the best part! Most people get a refund, and this is especially true for 1040EZ filers. Your refund or balance due is the calculated by comparing the amount of tax you’ve already paid vs. what you actually owe. If you’re eligible for the earned income credit, it will increase your refund.
You have 3 options for filing your taxes.
Pencil and paper
The old school way to do your taxes is with pencil and paper. It takes a while and a little math, but you can’t beat the price (it’s free). Download the form from the IRS, grab a calculator, and read the 42 pages of instructions… Wait, never mind. Research shows it takes over 3 and half hours on average to do it by hand.
Pay someone else to do it for you
You can hire a CPA or go to a tax store and pay someone to do it for you. It’s certainly less effort on your part, but you have to pay for it. Around $100, if not more.
Do It Yourself With Your Phone or Computer
There are lots of mobile, online, and software options, many of them quite good. We believe Common Form is the best option for 1040EZ filers and hope you’ll give us the chance to earn your business.
As I mentioned earlier, you probably won’t get your paperwork until the end of January and IRS e-file doesn’t open until then either. If you want us to inform you when the IRS is ready for business, click here to get a reminder email or follow us on Facebook.
This article originally appeared on the Common Form blog as What is the 1040EZ – 1040EZ Form Explained.
Bill Hendricks is the CEO and co-founder of Common Form, which helps people with simple finances file taxes in 5 minutes from their phone or computer.
Lynnette Khalfani-Cox, The Money Coach®, is a personal finance expert, speaker, and author of 15 money-management books, including the New York Times bestseller Zero Debt: The Ultimate Guide to Financial Freedom.
Lynnette has been seen on more than 1,000 TV segments nationwide, including television appearances on Oprah, Dr. Phil, The Dr. Oz Show, The Steve Harvey Show, Good Morning America, The TODAY Show and many more.
All information on this blog is for educational purposes only. Lynnette Khalfani-Cox, The Money Coach, is not a certified financial planner, registered investment adviser, or attorney. If you need specialty financial, investment or legal advice, please consult the appropriate professional. Advertising Disclosure: This site may accept advertising, affiliate payments or other forms of compensation from companies mentioned in articles. This compensation may impact how and where products and companies appear on this site. AskTheMoneyCoach™ and Lynnette Khalfani-Cox, The Money Coach® are trademarks of TheMoneyCoach.net, LLC.