How to Determine Which Federal Income Tax Return Best Suits Your Situation

Tax season can be a confusing and stressful time for a great majority of Americans, so if you are one of the millions who struggle to understand the federal tax system then you should not worry because you are not alone. Fortunately, it really is quite a bit easier to understand the filing process once you have a solid understanding of which forms you need to file. Depending upon your financial situation, you will file your taxes using different forms so it is crucial that you know which forms are most applicable to your particular situation. The key thing to realize when you are choosing which federal income tax return to file is that you always want to choose the simplest form if you want your return to be processed more quickly and, as a result, get your refund back faster, too. For many people, this will mean selecting Form 1040EZ, so titled because it is the easiest return to file. Those taxpayers who have income only from interest (of less than $1,500), unemployment benefits or wages, all of which is less than $100,000 will be able to use this form. As long as you are single or married and filing jointly, both of you should be able to use this form provided both partners are younger than age 65. Other than the Earned Income Tax Credit and the standard deduction, you will not be able to claim tax credits or claim any adjustments to income. Since the 1040EZ is very hassle free, you will want to use this if you possibly can. The 1040A federal income tax return is designed for those who have a more complex situation than those using Form 1040EZ. With this particular return, also called the short form, taxpayers can be of any age and file under any status they need to. Provided that you do not intend to itemize any deductions and you make less than $100,000 per year, you and your spouse will be able to file a 1040A. Income from wages and interest, in addition to Social Security benefits, IRA or pension distributions, and capital gains distributions can all be reported using this form and you can claim a variety of tax credits and adjustments to income, as well. Form 1040, the longer federal income tax return will work for any tax situation, no matter how complex. This is the form you want to choose if you are unsure. You can file at any age, filing status or income level and though it is longer, it allows you to detail any kind of deduction or income you might need to report.