Filing income taxes is an annual ritual for most Americans. If you met the minimum income requirements, you would file Form 1040, Form 1040A or Form 1040EZ. This ritual is changing, though. The Tax Cuts and Jobs Act, passed in December 2017, introduced changes to tax law. One of those changes is to tax forms. In 2018, the Form 1040A and Form 1040EZ are being replaced by a revised Form 1040. If you need to file taxes from 2017 or before, though, you may be able to use Form 1040A.
Understanding 1040 vs. 1040A
Until the 2018 tax year, you could choose from three tax forms: the 1040EZ, the 1040A and 1040. The 1040EZ was the simplest form, and 1040 was the most complex. The Form 1040A was a middle ground between the 1040EZ and 1040. The main difference between the 1040 and 1040A is the ability to itemize deductions. With 1040, you can claim all available deductions and credits. Any taxpayer could use 1040, but only certain taxpayers could use the 1040A.
For example, you could only use the 1040A if your taxable income was below $100,000. That income had to come from specific sources, including wages, salaries, tips, pensions, annuities, individual retirement accounts and unemployment compensation. You could not itemize deductions, and the only adjustments you could make to income were educator expenses, IRA deductions and student loan interest deductions. You could only claim a limited number of tax credits on the 1040A, including the credit for child and dependent care expenses, education credits, the child tax credit and earned income credit.
Exceptions to 1040 or 1040A
Beginning with the 2018 tax year, any individual who files taxes will need to use Form 1040. Some individuals are not required to file income taxes, though. In general, you don’t need to file income taxes if your income is less than the standard deduction for your filing status. For example, you may not have needed to file taxes for 2017 if you were a single filer making less than $6,350 for the tax year because that’s the amount of the standard deduction for those filing as single.
Using 1040 for 2018 Taxes
Starting with the 2018 tax year, you no longer need to choose between 1040 vs. the 1040A. Everyone will use the revised 1040 form. If you’ve used the Form 1040A in the past, the 2018 Form 1040 will seem familiar. The lines for personal exemptions are gone because personal exemptions have been eliminated for the tax years 2018- through-2025.
Since the new 1040 form is shorter than the previous 1040 form, it is being supplemented by several schedules, which you use to supplement or add information to 1040. For example, if you’re taking tax credits other than the child tax credit, you will need to complete and attach Schedule 3 to your Form 1040.
1040 or 1040A 2017 Taxes
If you’re filing taxes for the 2017 tax year, you can file using a Form 1040A if you meet the income requirement of $100,000 or less in taxable income. You also can’t claim an alternative minimum tax adjustment using a 1040A. If you’re planning to itemize rather than take the standard deduction, you will also need to file using the full 1040.
There are some situations where you must use Form 1040 instead of Form 1040A, even if you meet the income requirements and you’re taking the standard deduction. For example, you must use 1040 if you have income from self-employment or a business partnership, if you’re excluding foreign earned income, if you received a distribution from a foreign trust or if you owe household employment taxes.
- Nerdwallet: IRS Form 1040, 1040A or 1040EZ: Which Tax Form to Use in 2018
- IRS: 1040A Instructions 2017
- Forbes: Here's How The New Postcard-Sized 1040 Differs From Your Current Tax Return
- IRS: IRS Working on a New Form 1040 for 2019 Tax Season
- Forbes: IRS Announces 2017 Tax Rates, Standard Deductions, Exemption Amounts And More
Melinda Hill Sineriz is a freelance writer with over a decade of experience. Her work has appeared on Pocket Sense and Sapling. She specializes in business, personal finance, and career writing. She has worked in insurance sales and financial planning, helping families to manage their money and prepare for the future. Learn more about her and her work at thatmelinda.com.