1040A Step by Step Guide
Form 1040A has been eliminated as part of the Tax Cuts and Jobs Act (TCJA) which was passed at the end of 2017 . Everyone will now need to file the new Form 1040 which acts more as a summary form with six supporting schedules.
The guide below is only relevant for those who are filing late taxes for previous years.
Form 1040A is a bit more complicated than Form 1040EZ (see our guide on Form 1040EZ) and here we will get into every detail. We’ll provide all of the necessary information for you to quickly and easily complete this form. Let’s begin!
This is where you and Uncle Sam make your official introductions. Fill in your personal data (name and address, including the state and the zip code, as well as your social security number). If you file jointly with your spouse, include his or her data in this section too. Things are still going smoothly with this form, so why not think about being generous? If you want to donate $3 to the presidential election campaign, you can do it here, by ticking the appropriate boxes (one for you and one for your spouse).
This part (which is not in Form 1040EZ), is where you tell the government how you are going to file. You can do it as single person, married (filing separately or jointly), head of household, or widower with dependent(s). If you’re not sure what your status is, check the 1040A Instructions 2018 Booklet (pages 7-9).
“Exemptions” is another section that you can find in the 1040A, but not in Form 1040EZ. First two boxes are reserved for you and your spouse, while 6c is for your dependents. You should write their names, relationship to you, and their social security numbers. Check page 16 to see if any of your children qualifies for a child tax credit. Then, add all family members and enter the total amount in box 6d.
Here comes the income declaration section, which is just like on the 1040EZ. Here you declare the amount of money you made from salaries, wages and tips (on Line 7), interest (bank accounts, for example, on 8a), dividends (regular or qualified, meaning you’ll be taxed at either the normal rate or a reduced rate, go in Line 9 a and b).
The following lines are for your capital gains distributions, IRA distributions, pensions and annuities, unemployment compensations (and Alaska permanent fund dividends, for residents of Alaska), and social security benefits (Lines 11 and 12). Lines 11a and b are for the taxable amount. Everything set? Now add up Lines 7 through 14b, and you’ll calculate your total income, which goes on Line 15. Hooray!
Adjusted Gross Income (AGI)
Now it’s time for adding some adjustments into the equation. Line 16 is dedicated to educator expenses, Line 17 to IRA deductions (see page 26 of the 2018 Form 1040A Instructions for details). Your student loan interest can be deducted by filling in the appropriate amount on Line 18, as well as tuition and fees on Line 19. Your total adjustments go on Line 20, after adding up Lines 16 through 19. Next, subtract Line 20 from Line 15 and determine your adjusted gross income (AGI), which goes on Line 21.
Taxes, Credits and Payments
To begin with, copy your AGI into Line 22.
The next line (23a) is for people who are blind and/or born before 1953. If you are married, file separately, and your spouse itemizes deductions, see page 35 of the 2018 Form 1040A Instructions for details before checking the box on Line 23b.
Line 24 is for your standard deductions. If you are not exempt (see 2018 Form 1040A Instructions on the same page 34 to determine that) and you are single or married but filing separately, enter $6,350 on Line 24. If you are married and file together with your spouse or you are a qualifying widow(er), enter $12,700. If you are a head of household, enter $9,350 in Line 24.
Next, subtract Line 24 from Line 22 and enter the result on Line 25. If the amount on Line 24 is greater than the amount on Line 22, enter zero.
To determine the amount of your exemptions, on Line 26, multiply $4,050 by the number of your family members (the value from Line 6d). Next, on Line 27, you’ll determine your taxable income. To do that, subtract Line 26 from Line 25. If the amount on Line 26 is higher, enter zero.
Now, go to page 30 of the 2018 Form 1040A Instructions to find the amount of your tax and enter it on Line 28 (this value has to include, if applicable, alternative minimum tax). From Line 29 to Line 35, check to see if you can claim any tax credits. For child and dependent care expenses (Line 31), elderly or disabled (Line 32 – attach also Schedule R), education (Line 33, attach Form 8863, Line 23), retirement savings (Line 34 – attach Form 8880), child tax credit (on Line 35; see the 2018 Form 1040A Instructions, page 16 and 33). Now, add everything from Line 31 to 35 and determine your total credits and enter the total on Line 36.
You’re on your way to calculating your total tax. Subtract Line 36 from Line 30 and enter the result on Line 37 (put zero if the amount on Line 36 is higher). Include the advance earned income credit payments from Form W-2, box 9 on Line 36. Add up Lines 35 and 36 and you’ll have your total tax. Write it down on Line 40.
Now, enter your federal income tax withheld from Forms W-2 and/or 1099. When you’re ready, add up Lines 40, 41, 42a, 43, 44 and 45 and you’ll get your total payments that should go on Line 46.
The moment of truth is here. Do you have to pay some more to the government, or you should you decorate your bank account for a nice refund? It’s easy to find out. If the amount on Line 46 is greater than the total tax on Line 39, you paid too much and will get some money back. Hooray! Just enter the amount on Line 48a along with your bank account details. Uncle Sam is just trying to be funny on Line 49, where it asks if you really want your whole refund or just part of it. It’s true, if you are a very wise person, you might want to use the option on Line 48a – keeping a part of the refund to pay for next year’s taxes.
Third Party Designee and the Final Steps
This part is where you allow somebody else (an accountant, for example) to discuss your return with the government. You have to fill in their name, phone number, and personal identification number.
You’re not finished yet! Don’t forget to sign the document, date it, and include your occupation and phone number. If you filed jointly with your spouse, then he or she has to include the same information. If you worked on this with a tax preparer, the last field is the place where you say who that person is.
To Sum Up
What should you remember about Form 1040A? It is a slightly more complex version of Form 1040EZ, but is has its use: it lets you increase refunds by itemizing deductions and checking exemptions. It’s true, it’s a little more time consuming but in the end Form 1040A might just leave you with a few dollars more to spend.