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• What is federal tax forms - 1040?
  
  

  The Form 1040, U.S. Individual Income Tax Return, is the starting form for personal (individual) Federal income tax returns filed with the Internal Revenue Service (IRS) in the United States. The first Form 1040 was published for use for the tax years 1913, 1914, and 1915. Beginning with the tax year 1916, Form 1040 was converted to an annual form (i.e., updated each tax year with the new year printed on the form).

  Any full-time resident individual U.S. income taxpayer can use the standard Form 1040 (often referred to as the "long form" to distinguish it from the other 1040 variants). Those with uncomplicated tax situations (for example, no itemized deductions, no capital gain or loss, etc.) may be able to use the simplified Form 1040A (the "short form") or the even simpler Form 1040EZ (the "easy form") instead of Form 1040. Some versions of Form 1040 are colored blue (though not the case when tax return software packages are used).

  Income tax returns for individual calendar year taxpayers are due by April 15 of the next year. Should April 15 fall on a Saturday, Sunday, or holiday, the returns are due on the first succeeding day that is not a Saturday, Sunday, or holiday. If Patriots Day (a state holiday in Massachusetts) falls on the Monday in question, then filers in southern New England and some parts of New York State have until Tuesday to file, since the IRS processing center for these areas is located in Andover, Massachusetts. Generally, income tax returns for fiscal year taxpayers (an individual taxpayer may choose a fiscal year other than the calendar year, though this is uncommon) are due on or before the 15th day of the fourth month following the close of the fiscal year (if the 15th falls on a Saturday, Sunday, or holiday, the return must be filed by the next business day).

  
  
  
• How to choose the tax form that best fits your needs?
  
  

  When you file your 2008 individual tax return, you will use one of three IRS tax forms. Be sure to use the simplest form you can, which will help you avoid costly errors or processing delays so you won’t have to wait to receive your refund. Each of these forms can be filed electronically, which speeds up the processing of your return.

  Use the 1040EZ if:
  • Your taxable income is below $100,000
  • Your filing status is Single or Married Filing Jointly
  • You (and spouse) are under age 65 and not blind
  • You are not claiming any dependents
  • Your interest income is $1,500 or less

  Use the 1040A if:
  • Your taxable income is below $100,000
  • You have capital gain distributions
  • You claim certain tax credits
  • You claim deductions for IRA contributions, student loan interest, educator expenses or higher education tuition and fees

  If you cannot use the 1040EZ or the 1040A, you’ll probably need to file using the 1040. You must use the 1040 if:
  • Your taxable income is $100,000 or more
  • You claim itemized deductions
  • You are reporting self-employment income
  • You are reporting income from sale of property
   
  When preparing your return, be sure to carefully check the instructions for the appropriate form. All IRS forms and instructions can be found on IRS.gov.
  

  
  
  
• Why not E-File your 1040 tax return this year?
  
  

  E-filing online offers several real and practical advantages that help explain its growing popularity:

  1. Lower cost. Tax returns can be prepared with web-based tax software and e-filed for tens of dollars. Many companies offer free use of their tax software and only charge a small fee to e-file a return. Complete e-file packages range from about $10 for short-form (1040A and 1040EZ) services to about $50 for long-form (1040) tax services. Using a paid tax preparer is at least twice as expensive. According to a report by the Brooking Institution, the national average for a paid tax return is about $100.
  2. Easy and convenient. With web-based taxes, there's no software to download or install. Using a secure account, internet pages lead you step-by-step and verify the math. Because the tax software is web-based, a user can access their secure account and work on their tax return wherever and whenever they access the Internet. No more last minute trips to the Post Office--just hit Send. Once completed, the IRS provides an official acknowledgement that the tax return was received. If you owe money, you can authorize an electronic funds withdrawal from your savings or checking account or use a credit card.
  3. File in minutes. About 70 percent of all individual tax returns use "short" tax forms (1040A or 1040EZ). Studies conducted by the IRS suggest that more than ten hours are needed, on average, to prepare a 1040A tax return using paper forms. Meanwhile, several e-file companies report that people using online tax software prepare and file their short-form tax returns in under an hour. One company reports that about 50 percent of their online tax software customers completed tax returns, in one sitting, in under 30 minutes.
  4. Refund in days. With IRS e-file, you can receive your tax refunds in about half the time, compared to paper filers, or even faster by having your tax refund directly deposited into your bank account. With e-file, you can get your refund in nine to 15 days. With paper forms, you can hope to get your refund in three to six weeks.
  5. Greater accuracy, fewer errors. E-File tax software greatly reduces the chance for errors. You're less likely to hear from the IRS down the road because e-filed returns are automatically checked for accuracy--and they've been found to be 99 percent accurate. If errors are detected, you (or your tax preparer) will receive an electronic message indicating the error and you'll be allowed to correct the mistake and resubmit the tax return without penalty. Conversely, the IRS reports up to a 20 percent error rate in paper tax returns. Also, those using paper forms are more likely to receive an IRS penalty or have their payments misapplied.
  6. Socially responsible. By using e-File, you're helping to save resources now and for future generations--less paper, less time, less energy. It's a more efficient, friendly way to prepare and file your tax return.
  7. Peace of mind. After e-filing your tax return, the IRS provides an official acknowledgment of your return--you'll get confirmation within 48 hours that the IRS received it. This is something you don't get with paper-form tax returns. And e-file is secure: The IRS reports that e-file transmissions are absolutely secure, and IRS E-file meets or exceeds all government security standards.

  
  
  
• Tips in handling tax form 1040.
  
  

  If you are a citizen earning an annual income, then you are required to submit Tax Form 1040 to the Internal Revenue State and the Department of Revenue of the state to which you permanently reside in. This tax form enables you to report your annual income, interest income, avail of credits and tax deductions, as well as calculate your annual tax returns. It is important that you file your tax returns on time to avoid any problems with the IRS, which can be very difficult to mend once you have delayed or violated their rules. For 1040 form help, here are some tips that may be of use to you: 1. Tax Form 1040 has two sub-sections, 1040-EZ and 1040A, which are shorter and won’t have to take up to much time to submit. You can avail of any of the two forms if you are eligible and have all the requirements needed by the IRS. You can call the IRS customer service if you have any questions or clarifications regarding these two forms.
  2. If you want to get a copy of the tax form 1040 or any of the two sub-forms, you can do so by visiting the official website of the IRS and download a PDF version of the tax forms to your own computer. That way, you will have enough time to read through the 1040 Form help instructions and familiarize yourself with the requirements and procedures when filing for the tax forms.
  3. If this is too much of a hassle for you, you can always call the customer service of the IRS and request them to send a copy of the forms to your email account.

  
  
  
• Top 10 tips to avoid an IRS audit for 1040 form filer.
  
  

  A taxpayer is unlikely to get audited by any one of the below ways alone, but a combination of two or more of below is definitely inviting the IRS to audit you!
  
  1. Unreported income:
  Remember any company whom you work for has to by law provide you with either W-2 or a 1099-Misc or around January 31st. Thus, if you file a return but fail to report this income, remember the W-2 and 1099-Misc is also being simultaneously reported to IRS, and so you're screaming for an IRS audit. This is also true for your bank interest, stock dividends, and capital stock transactions from stock trading activities, these must also be reported as they too are being reported to the IRS.
  
  2. Incomplete or poorly prepared tax returns:
  If you file a tax return with missing or incomplete information along with several mathematical errors, the IRS computer will not be able determine what you've filed, then you are definitely inviting an IRS agent to investigate these omissions and error.
  
  3. Consistently using estimates or round numbers on your deductions:
  If a taxpayer is consistently using round numbers or estimates, it really implies that the taxpayer has been either exaggerating or has poor records to substantiate the deductions. Most CPA's and tax professionals recommend the use of exact numbers
  
  4. Reporting income that appears too low to support taxpayer lifestyle:
  A taxpayer who reports mortgage and property tax expenses on his schedule A but showing income from employment incapable of supporting these deductions, this too will be inviting an IRS audit. A taxpayer who consistently shows very little taxable income, and hence a small tax liability due but has substantial savings and investment income could also trigger an audit.
  
  5. Drastic changes in income:
  Substantial income fluctuations can sometimes indicate that income was underreported somewhere. IRS loves to investigate strange income fluctuations.
  
  6. Taxpayer claiming excessive charitable contributions:
  There are no average percentages in place to determine what is unreasonable, but most National tax publications maintain a safe percentage is 2-5% percentage a year. Most CPA's will now demand a copy of a receipt or canceled check showing proof of charitable deduction before reporting this contribution to charity.
  
  7. Employee Business Expenses:
  Employees that claim high amounts of employee business expenses, especially if these expenses appear to be mostly commuter expenses are most susceptible for audits. For example, claiming travel expenses for daily commuting, parking or train tickets to travel to work in metro cities. As such, these are generally personal expenses if the taxpayer is a W-2 employee.
  
  8. Claiming Auto mileage:
  Taxpayers keep claiming auto mileage without really understanding the law. Taxpayers can claim auto expenses in connection to your job for which the employer does not reimburse them. This is really rare in this day and age when gas prices are very high. Still, it is possible for say an employee to make various trips to client sites for which the employer does not provide reimbursements. However, on the personal tax return the taxpayer generally claims excessive mileage that includes commuting mileage that is mileage from home to work. This is strictly not allowable per IRS tax code.
  
  9. Flagrantly ignoring to file individual tax returns or late returns without proper extensions:
  The IRS has consistently audited individual taxpayers who have flagrantly disregarded the law, and consistently ignored the IRS filing deadlines for filing the individual tax returns. All IRS correspondences must be responded timely as ignoring those leads to more investigations and a potential invitation of an audit. All tax returns must be filed on a timely basis along with timely extensions.
  
  10. Claiming office at home expense:
  This is generally the most common area of deduction that results in triggering IRS audits. The reason is that the office at home expenses are allowable under some very strict rules. The office must be used exclusively and regularly for business purposes. The so called designated area in the house must be generally a room where the family do not entertain, do not use as a play room for the kids and definitely not be used as a bedroom.