Even though the Internal Revenue Service (IRS) might seem to be stern and unforgiving, the truth of the matter is that they put in measures to ease tax time. This can be attributed to the fact that they have offered a number of personal tax returns aimed at streamlining the filing process. Among the most notable type of personal tax return is the renowned Form 1040A. The idea behind tax form 1040A is that you are not going to make many mistakes with the filing process as long as you qualify to file a simpler return.
However, changes have already been made to how we file our 1040 tax forms considering it is now a Schedule A. This new schedule A is attached to the newly designed 1040 tax form. What is even more fascinating is the fact that it is a shorter version of the original one. However, you might fail to notice the difference especially when your tax situation is very simple. Despite this, those with more complex tax situations must attach a number of schedules to the new Form 1040.
Quite a number of people are still in limbo regarding whether they qualify to file form 1040A. To clear any doubts that you might have in mind, those with taxable incomes that does not exceed $100,000 can file Form 1040A. However, this only applies when they do not want to claim an Alternative Minimum Tax (AMT) on the stocks they gain after exercising and incentive stock option. In addition, they ought to claim the standard deduction and forego itemizing.
So, why should you file form 1040A? Well, the main reason why you should consider using Form 1040A is that it happens to be faster and easier to prepare when compared to the longer 1040. Better, it still covers more tax credits and deductions unlike the 1040EZ, another simplified return option. If you are thinking about preparing your tax return by hand, the Form 1040A is worth starting with. Luckily, you do not have to worry about the tax to use when relying on tax software.