Instructions for Form 1040

These instructions apply to the tax year 2004 only.

What's New for 2004

• You can deduct your contributions to a Health Savings Account.
• You can deduct up to $4,000 of college tuition and fees.
• You can deduct the higher of your state income tax or local sales taxes that you paid.
• Fishermen can now average their income over a three-year period, just like farmers already can.
• If you were awarded a legal settlement for unlawful discrimination, you can now deduct legal fees without having to itemize your deductions.
• You can contribute to a tax-deductible traditional IRA and a 401(k) plan if your adjusted gross income is less than $55,000 (or $75,000 married filing jointly).

What's New for 2005

• You will be able to contribute up to $4,000 to an IRA, and up to $14,000 to a 401(k) plan.
• A new, uniform definition of a child will take effect.

You May Qualify to Use the Form 1040A or 1040EZ

• If you make less than $100,000, you may be eligible to use Form 1040EZ or 1040A instead of the long 1040 form.

Use Form 1040EZ if:

• Your total income is under $100,000
• Your interest income is under $1,500
• You have income only from wages, interest, unemployment compensation, and Alaska Permanent Fund dividends
• You and your spouse are under 65 years old
• You do not have any adjustments to income
• You may claim the Earned Income Credit
• You are not claiming any other tax credits

Use Form 1040A if:

• You have income only from wages, interest, dividends, capital gains, retirement distributions, unemployment compensation, and Social Security benefits.
• Your adjustments to income include only Educator expenses, Traditional IRA, Student loan interest, and Tuition and fees deduction.
• You are claiming only the standard deduction.
• You may claim tax credits such as the Earned Income Credit, Child tax credit, Credit for child care expenses, Credit for the elderly or disabled, Hope or Lifetime Learning credits, Retirement savings credit, and Adoption credit.

Getting Ready

• Gather all your income statements, and summary of expenses for any deductions.
• Get two copies of Form 1040 (PDF format)—I suggest two copies so that one can be your "draft" and one your "final" copy, just in case you make mistakes or need to re-write something.
• Get a copy of the Instructions for Form 1040 (you can download the instructions in the "PDF" format).
• You can find links to other 2004 tax forms.
• You can find links to 2004 tax software reviews.

Tips for Filing a Late Tax Return

Be aware that you must file your tax return on paper. You can no longer e-file 2004 tax returns.

Be aware that you must file your 2004 tax return by April 15, 2008, in order to receive a tax refund for the year 2004.

There will be no late filing penalties if you have a refund.

If you have a balance due, there will be IRS penalties and interest.

I provide additional tips for filing back taxes.