Form 1040 (formally, "Individual US Income Tax Returns") is one of three IRS tax forms (see section variants for each description) used for personal federal income tax returns (individuals) which is filed with the Internal Revenue Service (IRS) by residents of the United States for tax purposes.
The income tax return for personal taxpayers is due on the Tax Day, which is usually April 15 next year, except when April 15 falls on a Saturday, Sunday, or official holiday. In such situations, the return is due on the next business day. Automatic renewal until October 15 to file Form 1040 can be obtained by filling out Form 4868.
Form 1040 consists of two full pages (a total of 79 rows) excluding the number of attachments. The first page collects information about the taxpayer (s), dependents, income items, and income adjustments. In particular, the taxpayer determines his filing and personal exclusion status on this page. The second page calculates deductions and allowed credits, taxes to be paid, and implements funds already withheld from wages or estimated payments made against tax liabilities. At the top of the first page is a presidential election campaign fund checkoff, allowing individuals to point out that the federal government gives $ 3 of the taxes it receives to the presidential election campaign fund. The manual for Form 1040 is 104 pages per 2014.
Overall, more than 147 million returns are submitted for Form 1040 and its variants in 2014, 80% of which are filed electronically.
Video Form 1040
Archiving requirements
Who should file?
Form 1040 (or its variant) is the main tax form filed by an individual who is considered a resident of the United States for tax purposes. The main form related to the business proposed is Form 1120, also called US Revenue Income Tax Return.
A person is considered a resident of the United States for the purpose of taxation if he is a US citizen or foreign resident of the United States for tax purposes. A person is a foreigner living in the United States if he passes the Great Existence Test or Green Card Test, although there are also other cases; individuals who have taxable income in the United States but fail the criteria for being foreigners must apply as non-resident aliens for tax purposes. While residents of the United States for tax purposes file Form 1040, 1040A, or 1040EZ, non-resident foreigners must file a Form 1040NR or 1040NR-EZ. There is also a "foreign double status" for foreigners whose status changes throughout the year.
Foreign nationals from the United States for tax purposes generally have to file if their earnings cross the threshold where their taxable income tends to be positive, but there are many other cases that may be legally desirable to ask. For example, even if unnecessary, an individual may apply for a refund to receive a refund of withholding income or to receive a particular credit (eg income tax credit earned).
Archiving Modality
Forms can be submitted either through paper or online.
Paper archiving
Paper filing is a universally accepted method of filing. Form 1040, along with its variants, schedule, and instructions, can be downloaded in PDF form from the Internal Revenue Service website. The final version of the form for the tax year (which in the US equals the calendar year) was released towards the end of January of the following year.
The paper form can be filled and stored electronically using a compatible PDF reader, and then printed. In this way, it's easy to keep an electronic copy of a form that someone filled in even though it is filed with paper. Or, they can be printed and filled with hands. A combination of approaches can also be used, with some content being filled electronically and additional content written by hand. As a general rule, if possible, it makes sense to charge electronically, but in some cases charging by hand may be necessary (for example, if additional annotations records need to be added, or the font used for electronic filling is too large to fit the information in the space provided.
The only part of the form that can not be filled electronically is the signature line.
Paper Form 1040, together with all relevant schedules and additional forms, must be sent in one package by post or courier to the IRS address specified by the U.S. state the taxpayer submits from and whether the payment is closed or not; addresses for the three forms (1040, 1040A, 1040EZ) are identical.
The IRS accepts binding or binding returns together. However, any checks or vouchers of payment, as well as the attached Form 1040-V, shall be not bound or stapled with the remainder of the payment, as payment is processed separately.
Electronic archiving
The IRS allows US citizens to tax destinations for files electronically in three ways:
- Those earning $ 66,000 or less can file electronically using the IRS Free File, a free e-filing tool (there are other provisions required to qualify for free submissions; in particular, some types of income and deductions can not handled with free archiving).
- It is possible to prepare a person's tax refund using a tax-compliance software approved by the IRS and request that the software file return it electronically.
- A person may use a tax professional who has been accepted by the IRS for electronic archiving.
Many taxpayers are being asked to file electronic individual tax returns, and most of the tax file software files are electronic on behalf of the taxpayer. Even unnecessary tax builders, should file Form 8948 if they choose paper filing, explaining why they did not file electronically.
Comparison
If someone is not eligible for IRS Free Files, it may cost hundreds of dollars to file electronically, while the filing paper has no cost other than printing and shipping. Additionally, the currently available electronic filing options may not offer sufficient flexibility with regard to a person's tax refund arrangement, adding an attachment, or placing a written record of explanations that may help precede IRS questions. In addition, electronic archiving makes a person's tax refund more likely to be audited because it is in an IRS-accessible format, whereas return of paper, only 40% is transcribed, so the rest is not even in the process of being audited.. For this reason, the legal resources of NOLO as well as Forbes argue that the more complicated tax returns, the better it is to file it on paper. Archiving electronically also exposes taxpayer data to the risk of accidental loss or identity theft.
Signature requirements
Form 1040 must be signed and dated to be considered valid. If filed together with spouse, both must sign and date. If returns are submitted electronically, an individual must use a PIN Choose Your Own or a Practitioner PIN.
Return replacement
If a person decides not to file a refund, the IRS may (after sending a few reminders) file a replacement refund.
Maps Form 1040
Variant
To apply for a regular tax refund, other than the standard 1040 Form, there are also four variants: 1040A, 1040EZ, 1040NR, and 1040X.
Forms 1040 and 1040A use the same rows that number up to and include line 9. Form 1040EZ uses completely different line numbers. Line numbering is important to remember because many of the state tax refund reference line numbers are in 1040. Form 1040A and EZ can only be used if the filer wants to take only standard deductions: if a filer wants to specify a snippet then 1040A should be used.
The Form 1040NR is used by taxpayers who are deemed "non-foreign residents" for tax purposes. Form 1040X is used to convert one of 1040 series shapes.
1040A
The 1040A (dubbed "short form") is a shorter version of the standard Forms 1040. This is limited to taxpayers with under taxes of under $ 100,000 who take standard deductions instead of scrapings. 1040 can always be used instead of 1040A, but 1040A can only be used when restrictions apply.
1040EZ
The 1040EZ (formally called "Income Tax Returns for Single and Together Filers with No Dependent", but dubbed "easy form") is a simplified version, six parts of 1040. Its use is limited to unattended taxpayers claims, with a taxable income of under $ 100,000 that takes a standard deduction and not a sort piece. 1040 or 1040A can always be used instead of 1040EZ, but not vice versa.
1040X
1040X (formally, "U.S. Individual Tax Refund") is used to make corrections on Form 1040, Form 1040A, and the previously proposed 1040EZ tax return form.
Complete payment
Form 1040-V
The 1040-V (official, "Voucher Payment for Form 1040") is used as an optional payment voucher to be sent along with a payment for each balance due on the "Amount You owe" line of 1040.
The form is completely optional. IRS will receive payment without 1040V form. But including 1040-V allows the IRS to process payments more efficiently.
The Form 1040-V and any accompanying payments should be included in the same package as the tax returns, but must be not stapled or stapled together with tax returns, as they are processed separately.
Additional schedule and form
Form 1040 has 14 attachments, called "schedules", which may need to be addressed depending on the taxpayer. For 2009 and 2010 there are additional forms, Schedule M , due to the "Pay Employment" provisions of the 2009 Recovery and Reinvestment Act ("stimulus").
In addition to the listed schedule, there are dozens of other forms that may be required when applying for a personal income tax refund. Usually this will provide additional details for the deductions taken or earned income listed either on form 1040 or the next schedule.
In 2014 there are two additions to Form 1040 due to the implementation of the Affordable Care Act - premium tax credits and individual mandates.
In most situations, the form of Internal Revenue Service or other Social Security Administration such as Form W-2 must be attached to Form 1040, in addition to the Schedule 1040 schedule. There are more than 100 other special forms that may be supplemented with Schedule and Form 1040. However , Form 1099 does not need to be attached if no tax is withheld. In general, forms submitted by employers are used to prove a suspension claim, so only forms involving withholding need to be attached.
Estimated payments and withholding
For most people, holding is the main way through which taxes are paid. However, non-deductible earnings should be estimated using Form 1040-ES. (It is possible to avoid filing a Form 1040-ES by increasing a person's deductions and instead submitting Form W-4.)
Estimated payments may be made using the Federal Federal Tax Payer System.
Payments, refunds and penalties
There is a limit of three years when an individual can claim a tax return. However, due payments must be paid immediately.
In addition it is possible to apply a person's refund for taxes next year and also to change someone's mind later.
There is a penalty for not filing a tax return on April 15th depending on whether the person gets an extension of the archive and the amount of unpaid taxes. However, because the maximum penalty is 25% of unpaid taxes, if someone has paid all their taxes, there is no penalty for not filing it.
In addition to ensuring that a person pays a person's tax for the year through the Tax Day, it is also important to ensure that a person has paid a portion of taxes throughout the tax year in the form of tax payments that an employer tax deduction is estimated. If someone has not done so, then tax penalties can be assessed. The minimum amount of taxes to be paid to avoid punishment depends on a variety of factors, including one's income in the taxable year in question and a person's income in the previous year (in general, if a person pays 90% of the current tax liability or 100% of the tax liability for the year earlier during the tax year, a person is not subject to an estimated tax penalty even if this year's tax is higher, but there are some objections to the regulation). The termination of employer is also treated differently from the estimated tax payment, in that case for the latter, the time of year when the payment is made important, while for the first, what matters is how much has been withheld at the end of the year (though there are other restrictions on how one can adjust the pattern of cutting a person who needs to be enforced by the employer).
When filing Form 1040, the penalty for failing to pay the tax is estimated to be included on the form (on line 79) and is included in the total at line 78 (if net payment is due). Taxpayers are not required to calculate interest and other penalties (such as penalties for late submission or late payment of taxes). If the taxpayer chooses to calculate this, the computed penalty may be listed on the lower margin of page 2 of the form, but may not be included on the limit amount (line 78).
Relationship with country tax refund
Each state has a separate tax code in addition to federal taxes. Form 1040 is only used for federal taxes, and state taxes must be filed separately on the basis of individual country forms. Some states have no income tax. Although state taxes are filed separately, many state tax returns will refer items from Form 1040. For example, 540 California Resident Tax Form makes reference to Form 1040 line 37 in line 13.
Certain tax filing software, such as TurboTax, will simultaneously file a state tax refund using information filled in form 1040.
The Federal Government allows individuals to withhold state income taxes or state sales taxes from their federal taxes through Schedule A of 1040, but not both. In addition to reducing income tax or sales tax, a person may deduct state tax or personal property tax.
Controversy OMB control number
One argument used by tax shakers against the legitimacy of Form 1040 is the OMB Control Number or the Document Reduction argument argument. Tax shooters argue that Form 1040 does not contain the "OMB Control Number" issued by the Office of Management and the US Budget under the Document Reduction Act.
The relevant clause of the Document Reduction Act states that:
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- Ã,§ 1320.6 Public protection.
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- (a) Apart from other legal provisions, no person shall be liable for failure to comply with the collection of information subject to the terms of this section if:
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- (1) The collection of information is not shown, in accordance with Ã, § 1320.3 (f) and Ã, §1320.5 (b) (1), the current OMB control number assigned by the Director in accordance with Act...
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- (e) The protection provided by paragraph (a) of this section does not preclude the imposition of a penalty on a person for failing to comply with the collection of information imposed on a person with statute - eg 26 USC Ã,§6011 ( a) (legal requirements for people to file tax returns)...
The court has responded to the OMB Control Number argument with the following argument. 1) Form 1040, US Individual Income Tax Returns have contained OMB Control number since 1981. 2) As regulated in a number of cases, the absence of OMB Control number does not eliminate the legal obligation to apply for or pay taxes.
Cases involving the OMB Control Number Argument include:
- United States v. Wunder
The United States Court of Appeals for the Sixth Circuit argues that the provisions of the Document Reduction Act are irrelevant as they apply only to requests for information made after December 31, 1981 and tax returns beginning in 1981 containing the OMB Control Number.
- United States v. Patridge
The US Court of Appeals for the Seventh Circuit dismisses the OMB control taxpayer's OMB controlled argument by stating "Finally, we have no doubt that the IRS has complied with the Document Reduction Act Form 1040 contains the control number of OMB, as do other forms which are usually channeled the IRS to taxpayers that this amount is constant since 1981 does not mean that OMB has neglected its duty. "
- United States v. Lawrence
In this case, IRS agents who have calculated Lawrence's tax liability have made a mistake and it is known that Mr. Lawrence owes taxes lower than originally set. Lawrence asked the court to order the government to reimburse the legal fees, which the court decided against it. He appealed to the US Court of Appeals for the Seventh Circuit, arguing that the government's actions against him had been "annoying, reckless, or in bad faith." and also increases the OMB Control Number Argument.
The US Court of Appeals for the Seventh Circuit rejected the OMB argument that stated it
According to Lawrence, the Paperwork Reduction Act of 1995 (PRA) requires the Internal Revenue Service to display valid Office and Budget (OMB) numbers on Form 1040.... Lawrence believes that PRA with its provisions prohibits the government from imposing criminal penalties on citizens because of the failure to complete the form in which the request for the information in question is incompatible with the PRA... But Lawrence acknowledges on the oral argument that no case of this series establishes such a proposition, and in fact Lawrence quotes no caselaw of any applicable jurisdiction. Instead, the government refers to many cases that support its position that PRA does not present a defense against criminal activity for failing to file income tax. "
History
Original shape structure and tax rate
The first 1040 form was issued for use for the fiscal years 1913, 1914, and 1915. For 1913, taxes were applied only from 1 March to 31 December. The original 1040 form, available on the IRS website as well as elsewhere, is three pages and 31 long lines, with the first page focused on calculating one's income tax, the second page focusing on more detailed documentation about one's earnings and a third page explaining cuts and including the signature area. There is an additional instruction page. The main rules are:
- Taxable income is calculated from gross revenue, minus business-related expenses to earn a net profit, and then subtract special exclusions (typically $ 3,000 or $ 4,000). In other words, people with net income under $ 3,000 do not have to pay taxes at all. The inflation calculator used by the Bureau of Labor Statistics estimates the corresponding amount in the 2015 dollar as $ 71,920.
- The basic income tax rate on the taxable income is 1%.
- High-income people must pay additional taxes. The first high-income tax bracket, $ 20,000- $ 50,000, has an additional tax of 1% on a share of net income above $ 20,000. So a person with a taxable income of $ 50,000 (more than a million dollars in 2015 dollars according to BLS) will pay a total of $ 800 (1% of $ 50,000 1% of $ (50,000 - 20,000)) in federal income tax. At that time (when the United States as a whole was much poorer) this higher tax was applied to less than 0.5% of the population of the United States.
More than 350,000 forms were filed in 1914 and all were audited.
Next changes
For the year 1916, Form 1040 is converted to an annual form (ie, renewed annually with new tax year printed on the form). Initially, the tax books that the IRS sent (Form 1040, instructions, and most common attachments) to all households. As alternative delivery methods (CPA/Attorneys, Internet forms) are increasing in popularity, the IRS sends fewer packets by mail. In 2009 this practice was discontinued.
Under the Current Tax Payments Act of 1943, income tax deductions were introduced. The Individual Income Tax Act of 1944 created a standard deduction in 1040.
In 1954, the tax refund deadline was changed to April 15.
Form 1040A was introduced in 1941 to simplify the archiving process.
The Form 1040EZ was introduced by the Internal Revenue Service for fiscal year 1982. The title of the 1982 form is "Return of Income Tax for Single unattributed reporter."
Electronic archiving was introduced in limited form in 1986, with the issuance of the 1986 Tax Reform Act, and beginning in 1992, the taxpayers owed money were allowed to file electronically. The Federal Electronic Tax Payment System, co-managed by the IRS and Financial Management Services, began in 1996 and allows people to make estimated payments.
Changes in complexity and tax rates
The complexity and burden of compliance of related forms and instructions have increased considerably since 1913. The National Taxpayer Union has documented a steady increase in the complexity of the 34-line form in 1935 to a 79-line form in 2014, while Quartz creates an animated GIF that shows gradual changes to the structure and complexity of the form. NTU table below:
The number of pages in the federal tax law grew from 400 in 1913 to over 72,000 in 2011. The increase in complexity can be attributed to an increase in the number and range of taxable activities, increased number of exceptions, credits, and available deductions, rules governing taxation and edge cases explicitly spelled out by historical experience, and an increasing taxpayer base that makes it necessary to offer longer and more explicit instruction for less sophisticated taxpayers. For example, while the initial version of Form 1040 only comes with the tariff schedule included in the tax form itself, the IRS now publishes a complete tax table for taxable income of up to $ 100,000 so that people can immediately seek their tax liability from their taxable Income without having to do elaborate arithmetic calculations based on tariff schedules. The IRS still publishes its tariff schedule so that people can quickly calculate their estimated tax liabilities, and allow people with incomes over $ 100,000 to calculate their taxes directly using the Tax Computing Worksheet.
In addition to the increasing complexity of the form, the tax rate also increases, although an unstable tax rate increase (with large increases and decreases) contrasts with a steady increase in tax complexity.
Archiving costs
For the preparation of tax returns, Americans spend about 20% of the amount collected in taxes (estimating compliance costs and efficiency costs are difficult because both the government and taxpayers maintain a regular account of these costs). In 2013, there are more tax builders in the US (1.2 million) than law enforcement officers (765 thousand) and firefighters (310,400) combined.
In 2008, 57.8% of the tax returns were filed with the help of the compilers of paid taxes, compared to about 20% of taxpayers who hired a payment expert in the 1950s.
See also
- List of countries by tax rate
References
Source of the article : Wikipedia
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