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Difference Between 1040 and 1040A Tax Forms

1040 vs 1040A Tax Forms

Every year you need to fill-up a tax form for the IRS to indicate how much tax deduction you can claim. For this purpose, you can use the 1040 and 1040A tax forms. The difference between the 1040 and the 1040a is that the 1040 form is longer than the 1040A form. So basically, the 1040 form would be a bit more difficult to tackle than the 1040A since you need to fill-up more information than if you just used the 1040A

The reason why the 1040 is longer than the 1040A is that it is a general form. You can specify pretty much any deduction you can declare on that form; it also lets you itemize each deduction so that you can maximize it. On the other hand, the 1040A is a more specialized form that caters to those who have limited income sources, like those who only depend on their wages, unemployment compensation, or pensions. Those who have earnings via self-employment or are beneficiaries of an estate or trust, you must use the form 1040.

Anyone can use the form 1040 because it is the general form, but certain parameters need to be met in order to use the form 1040A. The primary one is how much your income is. If you have less than $100,000 annual income, then you can use the 1040A. If it’s over $100,000 then you must use the form 1040. Your income sources should also be limited to the following sources: wages, salaries, tips, taxable scholarships and fellowship grants, interest, or ordinary dividends, capital gain distributions, pensions, annuities, IRAs, unemployment compensation, taxable social security or railroad retirement benefits, and Alaska Permanent Fund dividends.

Even if you qualify for the 1040A, there is still some good reason to use the 1040A instead. First off, you will eventually grow your finances and will probably need to move to the 1040. So learning to use the 1040 earlier is more prudent. You should also look at the amount of deductions you can avail of. The 1040A form only allows for a maximum deduction of $6500. If you have a lot of medical bills, property taxes, mortgage interests, and the like that may push your deductions above $6500, then you should go for the form 1040.

Summary:

  1. The 1040 is the long form than the 1040A is the short form
  2. The 1040 is the general form while the 1040A is a more specialized form
  3. Everyone can use the 1040 but not everyone can use the 1040A
  4. The 1040 lets you claim more deductions than the 1040A

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1 Comment

  1. Hi Ben, great article.
    Just a couple of picky thoughts. I wish there was a way to write the authors privately .
    a) I would say ” fill out” instead of fill-up.”
    b) “Even if you qualify for the 1040A, there is still some good reason to use the 1040A instead.” I believe the second “1040A” should be “1040.”
    Thanks

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