Information Needed to Prepare and File Form 1040

Form 1040, the U.S. Individual Income Tax Return, is the standard document for citizens and residents to file annual federal income taxes. The form allows individuals to report all sources of income, claim eligible deductions and credits, and calculate their total tax liability. This calculation determines if the tax paid through employer withholding or estimated payments was sufficient. The final result shows whether the filer owes additional tax or is due a refund for overpayment.

Determining Your Filing Requirements

Before preparing a return, you must determine if you are legally required to file. The Internal Revenue Service (IRS) sets annual gross income thresholds that trigger this requirement. These thresholds are based on your filing status, age, and whether you can be claimed as a dependent.

If your gross income is above the standard deduction for your filing status, you must file a return. Gross income includes all income received that is not tax-exempt. For the 2024 tax year, the filing threshold for a single individual under age 65 is $14,600. This increases to $16,550 for those age 65 or older.

For those Married Filing Jointly, the 2024 threshold is $29,200 if both spouses are under 65, rising to $30,750 if one is 65 or older, and $32,300 if both are. The Head of Household threshold is $21,900, or $23,850 for those 65 or older. Qualifying Surviving Spouses use the same thresholds as married couples, while a $5 threshold applies to the Married Filing Separately status.

Other situations can also require you to file a return, even if your gross income is below the standard thresholds. You must file if you had net earnings from self-employment of at least $400. Other triggers include owing special taxes, like the alternative minimum tax, or receiving advance payments of the premium tax credit for health coverage.

Filing Status

Your filing status defines your tax obligations and is based on your marital and family situation on the last day of the year. The five filing statuses are:

• Single: For individuals who are unmarried, divorced, or legally separated.
• Married Filing Jointly: For married couples who combine their incomes and deductions on one return.
• Married Filing Separately: For married couples who file separate returns.
• Head of Household: For unmarried individuals who paid more than half the cost of keeping up a home for a qualifying person.
• Qualifying Surviving Spouse: Available for two years after a spouse’s death if the survivor has a dependent child and meets other criteria.

Information and Documents Needed to Prepare Form 1040

Gathering the correct documents before preparing your tax return ensures accuracy and helps you claim all entitled deductions and credits. Organizing these items streamlines the process. The required documents fall into categories covering personal details, income, and tax reductions.

Personal Information

You will need the full names, dates of birth, and Social Security numbers (SSNs) or Individual Taxpayer Identification Numbers (ITINs) for yourself, your spouse, and any dependents. Ensure names and SSNs match Social Security Administration records to avoid delays. For direct deposit refunds or electronic payments, you need your bank account and routing numbers. A copy of your previous year’s tax return is also useful, as the prior-year adjusted gross income (AGI) is often used for identity verification when e-filing.

Income Documents

Most of your documents will be forms reporting income. Employers send Form W-2, detailing wages and taxes withheld. Independent contractors receive Form 1099-NEC. Other common forms include Form 1099-MISC for miscellaneous income, Form 1099-INT for interest, and Form 1099-DIV for dividends. Investors also use Form 1099-B for broker transactions. Retirement income is reported on Form 1099-R, Social Security benefits on Form SSA-1099, and unemployment compensation on Form 1099-G. Wait to file until you have received all income statements.

Records for Adjustments to Income

Adjustments, or “above-the-line” deductions, reduce your gross income to find your AGI. To claim these, you need specific records. This includes year-end statements for traditional IRA contributions and Form 1098-E for student loan interest paid. You will also need records for Health Savings Account (HSA) contributions, educator expenses, self-employed health insurance premiums, or alimony paid.

Records for Deductions and Credits

To claim itemized deductions or tax credits, you need detailed records. For deductions, this includes Form 1098 for mortgage interest, receipts for property taxes, and acknowledgements for charitable contributions. You also need a summary of medical expenses. For credits, you need records like the care provider’s information for the Child and Dependent Care Credit. For education credits, you will need Form 1098-T from the educational institution.

Understanding the Structure of Form 1040

Form 1040 is organized across two main pages. It guides you from your gross income to your final tax liability and refund or payment due. The form systematically accounts for your financial data for the tax year.

Page 1

The first page of Form 1040 begins with your personal information, including your name, Social Security number, address, and filing status. This is also where you list any dependents you are claiming. Following this, the form moves to the income section. Here, you report various types of income from your source documents to calculate your total income.

The final part of page one is the Adjustments to Income section. Claiming these deductions reduces your total income to yield your Adjusted Gross Income (AGI). AGI is used to determine eligibility for many deductions and credits.

Page 2

Page two is where your tax liability is calculated. It begins with subtracting either the standard deduction or your itemized deductions from your AGI to determine your taxable income. This is the amount of income subject to tax.

Next, you calculate your initial tax based on your taxable income. You then apply any nonrefundable credits, which can reduce your tax to zero, and refundable credits, which can result in a refund even if you owe no tax.

The final section totals your payments, including federal tax withheld and any estimated tax payments made. Comparing your total payments to your total tax determines whether you have overpaid and are due a refund, or if you have an amount due.

Common Schedules Attached to Form 1040

Many taxpayers must attach additional forms, known as schedules, to report income, deductions, and taxes not listed on the main form. These schedules provide detailed calculations, with the final results transferring to Form 1040. Understanding the most common schedules helps you identify which ones you need.

Numbered Schedules (1, 2, and 3)

The IRS moved many items to three numbered schedules to simplify Form 1040. Schedule 1, “Additional Income and Adjustments to Income,” is used to report various income sources and claim adjustments to income. The totals from other schedules, like C and D, are often reported here first.

Schedule 2, “Additional Taxes,” is where you report other taxes beyond the regular income tax, such as the alternative minimum tax (AMT) or self-employment tax.

Schedule 3, “Additional Credits and Payments,” is for claiming various tax credits and reporting other payments. This includes nonrefundable credits like the foreign tax credit and education credits, and payments made with a filing extension.

Lettered Schedules

Lettered schedules are frequently used for specific financial situations. Schedule A, “Itemized Deductions,” is for taxpayers who itemize rather than take the standard deduction. You use it to deduct expenses like state and local taxes up to $10,000, home mortgage interest, charitable contributions, and medical expenses that exceed 7.5% of your AGI.

Schedule B, “Interest and Ordinary Dividends,” is required if your interest or dividend income is more than $1,500. It is also used to answer questions about foreign financial accounts.

Schedule C, “Profit or Loss from Business,” is for sole proprietors and freelancers to report business income and expenses. The net profit or loss is then reported on Schedule 1.

Schedule D, “Capital Gains and Losses,” is used to report the sale of assets like stocks and real estate. The net gain or loss from this schedule is transferred to Form 1040.

How to File Your Completed Form 1040

After completing Form 1040 and all necessary schedules, the final step is to file your return with the IRS. You have two primary methods for submission: electronic filing (e-filing) or traditional paper mailing.

E-Filing

E-filing is commonly done through commercial tax preparation software, which guides you through the process and files the return directly. Another option is IRS Free File, a partnership between the IRS and software companies. For the 2024 tax year, taxpayers with an AGI of $84,000 or less can use guided tax software from these companies at no cost.

Those with a higher AGI can use Free File Fillable Forms, which are electronic versions of paper forms with basic calculations but limited guidance. E-filing provides confirmation that the IRS has received your return.

Filing by Mail

If you file a paper return by mail, you must print, sign, and date it; joint returns require both spouses’ signatures. The correct mailing address depends on your state and whether you are enclosing a payment. The IRS provides addresses in the Form 1040 instructions and on its website. Processing for paper returns takes significantly longer than for e-filed returns.

After You File

After submitting your return, you can track its status using the “Where’s My Refund?” tool on the IRS website or the IRS2Go app. For e-filed returns, you can check the status of your refund within 24 hours; for mailed returns, wait at least four weeks. Most refunds for e-filers are issued in less than 21 days.