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Federal Tax Form 1040 A

Federal Tax Form 1040 A

The Federal Tax Form 1040 A is one of three forms you can use to file your federal income tax return. Federal Tax Form 1040 A is a shorter version of the more detailed Federal Tax Form 1040 A, but is more complex than the simple 1040EZ form. All taxpayers can use Form 1040; however, to use Federal Tax Federal Tax Form 1040 A you must satisfy a number of requirements, such as having taxable income of $100,000 or less and claiming the standard deduction rather than itemizing.

Filing status and exemptions

When preparing Federal Tax Form 1040 A, you must list your exemptions and choose your filing status and exemptions before you begin to report any income. Each filing status, such as “single” or “married filing jointly,” uses different tax brackets for calculating your income tax.

However, your filing status doesn’t affect the exemption amount you claim for yourself and each of your dependents. Each exemption works just like a deduction; the amount reduces your taxable income, so the more exemptions you have, the lower your tax liability will be. The top portion of the form includes a section where you must list the name and Social Security number of each dependent and provide their relationship to you.

Types of income allowed on the Federal Tax Form 1040 A

The income section of the Federal Tax Form 1040 A only allows you to report limited types of income. Specific items include wages, salaries and tips, interest and dividend income, capital gains, IRA, pension and annuity distributions, unemployment compensation, Alaska permanent fund dividends and Social Security benefits. If you have other types of income, such as from a business you operate as a sole proprietorship, you still must report the income since it is taxable, but you must file the full-length Federal Tax Form 1040 A.

After reporting your income, the 1040A form allows you to claim certain adjustments to arrive at your adjusted gross income. These include deductions for educator expenses, IRA contributions, student loan interest and tuition payments.

Reporting tax, credits and payments on Federal Tax Form 1040 A

The second page of Federal Tax Form 1040 A allows you to subtract a standard deduction and your exemption allowances from your adjusted gross income to arrive at your taxable income. You then need to determine the amount of tax you owe by finding the appropriate range for your taxable income and filing status in the tax tables in the instructions.

Once you calculate your tax, Federal Tax Form 1040 A allows you to claim a limited number of tax credits such as for child and dependent care expenses, the credit for the elderly or disabled and education tax credits. Your total credits reduce your tax bill on a dollar-for-dollar basis. After reducing your tax by the credits, you reduce it again by the amount of your tax payments and withholding.

Differences between Federal Tax Form 1040 A and Form 1040

The filing status and exemptions section of Federal Tax Form 1040 Ais similar to the corresponding section on Form 1040. Due to the limited types of income you can receive and the limited adjustments to income you can make on Form 1040A, the income and adjusted gross income sections of Federal Tax Form 1040 Aare much shorter. One of the most significant differences between the two forms is that you can itemize deductions on Form 1040 but not on Form 1040A.

About 

Gustavo A Viera is the managing partner of Gustavo A Viera, PA. His experience spans more than 25 years. He started his career in public accounting at PriceWaterHouseCoopers where reached the level senior audit manager. His Fortune 500 experience includes positions as CFO – Latin America Region for both Hewlett Packard and Telefonica of Spain. Gustavo also writes a blog twice a week that addresses trending accounting and tax issues. He is an SBA Advisor and teaches workshops for aspiring entrepreneurs. His office is located at One Alhambra Plaza Floor PH Coral Gables FL 33134, and is admitted to practice in the State of Florida as a licensed Certified Public Accountant. Gus welcomes questions and he can be reached at 786-250-4450.

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