From William Perez,
Your Guide to Tax Planning: U.S..
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Jan 30 2008

Many individuals qualify to use Form 1040A to report their income and to calculate their federal taxes. Also called the "short form," the 1040A is a two-page tax form designed to cover the most common types of income, deductions, and tax credits. Chances are, you'll be able to use this simplified tax form to file your taxes.

Quick Links for 1040A Resources

Here's links to the forms, instructions, and other resources on the IRS Web site. All these links point to PDF files, which require the Adobe Acrobat Reader to view, save, and print.

• Form 1040A [PDF]
• Instructions for Form 1040A [PDF]
• Schedule 1 [PDF] for reporting interest and dividends
• Schedule 2 [PDF] for reporting child and dependent care expenses
• Instructions for Schedule 2 [PDF]
• Schedule 3 [PDF] for reporting the tax credit for the elderly and the disabled
• Instructions for Schedule 3 [PDF]

Why File Form 1040A?

Form 1040A is shorter and easier to fill out than the longer and more complex Form 1040. Form 1040A also covers more deductions and tax credits compared to the 1040EZ. For example, you can deduct IRA contributions and student loan interest on the 1040A short form, but cannot take the same deductions on the 1040EZ form. So I usually recommend that people start with the 1040A form if your finances are straightforward.

The benefits of using Form 1040A are that the form is faster to prepare than the longer 1040, and faster also for the IRS to process. That means less tax preparation headaches for you.

Are You Eligible to File the 1040A Form?

Here's the details. You can file the short form 1040A if you meet the following six conditions:

1. Your income is from:

• Wages,
• Interest and dividends,
• Capital gain distributions,
• Taxable grants and scholarships,
• Pensions, annuities, and IRA distributions,
• Unemployment compensation,
• Social Security and railroad retirement benefits, and
• Alaska Permanent Fund dividends.

2. You are claiming the following adjustments to income:

• Classroom expenses
• Deduction for IRA contributions
• Student loan interest
• College tuition and fees

3. You are claiming only the standard deduction.

4. Your taxable income is $100,000 or less. (Taxable income is calculated by subtracting your adjustments and standard deduction from your total income.)

5. You are claiming only the following tax credits:

• Child tax credit
• Additional child tax credit
• Hope and Lifetime Learning education credits
• Earned income credit
• Child and dependent care expenses
• Credit for the elderly and disabled
• Credit for retirement savings contributions

6. You did not exercise any incentive stock options.