Tax 2005 Forms

Tax time is here again. There are 3 kinds of Federal Tax forms: 1040EZ, 1040A, 1040. Which one should you use?

If you can not decide you can always use the most general purpose one: 1040. On the other hand, you must use it if you (i) claim numerous tax credits, (ii) own rental property, (iii) Are self-employed (iv) have sold a stock or bond in the past year.

If your case is not so general, you may as well use one of the other two kinds depending on the following:

Conditions for both 1040EZ and 19040A: (i) Your adjusted gross income is less than $50,000 (ii) You are not itemizing your deductions.

You must choose, 1040A, if: You have income only from wages, salaries, tips, taxable scholarships or fellowship grants, pensions or annuities, taxable Social Security benefits, withdrawals from your IRA, unemployment compensations, interest and dividends.

Or, select the easiest one, 1040EZ: If (i) You are single or married (filing jointly); No dependents. (ii) You have income only from wages, salaries, tips, taxable scholarships or fellowship grants, unemployment compensation, dividends from the Alaska Permanent Fund and qualified state tuition program earnings. (iii) Your income does not include more than $1,500 of taxable interest income from investments and other financial accounts. (iv) You are not receiving any advance earned income credit. (find if you have any at Box 9 on your W-2 form) (v) You are not claiming any adjustments to income of tax credits. Such adjustments to income would include deducting student loan interest, IRA contributions or childcare expenses.