Tax Season 2021 is around the corner, it will start very soon, on this Friday, February 12. As we all know, everyone will need to fill out the form 1040 when you do your federal income taxes. So, here we compile some information and instructions that you will definitely find helpful, so that you can handle taxes effortlessly and get your tax returns early.
The main content of this article is as follows:
How to Fill Out Form 1040
The 2020 IRS Form 1040 is a relatively simple two-page form. No matter how you file your taxes, it’s essential to understand exactly what you’re doing when you file. Or you can watch a video about it.
Enter Personal Information
The first section of the form is for your personal information. This includes your filing status, name, address, and Social Security number (SSN). There’s also room for your spouse’s information, if you’re filing a joint return. Aliens can enter an Individual Taxpayer Identification Number (ITIN) on the SSN line.
Next there is a section about your standard deduction. The amount of your standard deduction varies based on your filing status, age, and whether or not you’re blind. Check the ones that apply to you. Joint filers should check the boxes if they apply to either spouse.
The section on your dependents has room for each of their SSNs, their relationship to you, and then a box you can check if the dependent qualifies you for the child tax credit or credit for other dependents.
Enter Your Income
Lines 1 through 9 help you calculate your total income for the year. Each line asks you to enter the amount you made from a different type of income. If a line doesn't apply to you, either leave it blank or write in a zero. You can also round all values to the nearest dollar (whether up or down) before writing them on a line.
Calculate Your AGI
Once you’ve written down all of your income, it’s time to make any necessary adjustments to that income in Lines 10 and 11. Income adjustments include certain expenses you incurred that are eligible to exclude from your income. And then you will get your AGI which is the income figure that the federal government actually uses to determine how much you owe in income tax.
Claim Deductions and Credits
Once you’ve made necessary adjustments and found your AGI, there are some other deductions and credits to consider. Line 12 asks you to write in either the amount of the standard deduction or your itemized deductions. Line 13 is for anyone using the qualified business income deduction. Now calculate your taxable income, which is your adjusted income minus the deductions.
Lines 16 through 24 consider any tax credits you should receive because you cared for dependents. Lines 25-33 consider how much tax you already paid and other tax credits you may qualify for. The two main results of this section are the amount you already pay in tax and the amount of tax you owe after accounting for tax credits.
Check on Your Refund or Bill
The next five lines are where you write in the total amount of your refund or tax bill. If the number on Line 33 is greater than the number on Line 24 then you have overpaid the government and are due a refund. Subtract Line 24 from Line 33 to get the amount by which you overpaid and enter it on Line 34.
Line 35 is for direct deposit of your refund. You will write in your bank account number, the bank routing number, and what kind of account it is. You can divide the refund among multiple accounts or opt for a paper check with Form 8888. Line 36 is for people who want to apply some or all of their refund to their 2021 estimated taxes.
Anyone who owes money will fill out line 37 by subtracting line 33 from 24. Any penalty you owe on that bill goes on line 38. You will owe a penalty if your tax bill is $1,000 or more. You could also owe a penalty if the tax you paid during the year was less than 90% of the total you owed.
Get Ready to File
The final part of the 1040 form is for signatures. You will sign, date, and then write your occupation. Any tax preparer you worked with will also sign. If you want to allow anyone to talk with the IRS about the return on your behalf, you can add their name in the “Third Party Designee” section. The designee can include a friend or family member who the IRS is authorized to contact if they have questions about your return or missing forms.
How to File Form 1040
Due to IRS staffing issues, processing paper tax returns could take several weeks longer. So you are encouraged to file electronically. And here are two easy ways to prepare and file your federal income tax online for free:
1. Traditional IRS Free File provides free online tax preparation and filing options on IRS partner sites.
* Please note, only taxpayers whose adjusted gross income (or AGI) is $72,000 or less qualify for any IRS Free File partner offers.
* Please note, it is the only IRS Free File option available for taxpayers whose income (AGI) is greater than $72,000.
A Tool to Help Tax Filing
Whether you need to seek professional help or decide to handle taxes all by yourself, PDF Reader Pro can be a helpful tool to improve your tax filing process. With its robust and plentiful features, you are able to scan physical forms, documents, and images into PDFs on iOS/Android, or merge multiple PDF documents into one organized PDF for better file management. Plus, PDF Reader Pro solves the problem of PDF security and allows you to set passwords and permissions to protect your sensitive data when sharing with your accountant.
Also, for the upcoming tax season 2021, PDF Reader Pro has prepared a series of commonly used tax forms with a detailed description for everyone to view and download. More importantly, PDF Reader Pro lets you fill out tax forms effortlessly. As the tax season 2021 approaches, try PDF Reader Pro for a better filling & filing experience. And download is free.