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2009 Income Tax: Which Form To Use?

Updated on October 28, 2009

Do I really have to file?

The first question everyone has to ask is “Do I have to file a tax return?” Just because you’ve earned income during year and paid taxes on it, doesn’t mean that you have to file a return. There are a number of cases where you can let it pass, though there may be some great reasons to file anyway. So the official rules go like this:

If you file
And at the end of 2009, you were...
Then you have to file if your gross income is greater than
Under 65
65 or older
Married, filing jointly
Both under 65
One spouse under 65
Both over 65
Married, filing seperately
Any age
Head of Household
Under 65
65 or older
Qualifying widow(er) with a dependent child
Under 65
65 or older

Let’s clarify a couple things on this one. First, for filing purposes if you were born on January 1, 1965, you are considered to be 65 at the end of 2009. Second, gross income includes all income you received in the form of money, goods, property, and services that is not exempt from tax, including any income from sources outside the United States or from the sale of your main home. So the concert tickets you won from the radio station, the car you won in the raffle at a dealership, and the gold coins you found in the woods are all included as income. You wouldn’t include any social security benefits unless you meet specific requirements.

Even if your income is under the limits, there may still be advantages to filing. For instance there are a number of credits, like the Making work pay and Earned income credits, that you can take advantage of. Yes, you may still be eligible for a tax refund, even if you didn’t pay taxes. Nice, eh?

There are also situations where you must file, regardless of how much income you made. You have to file a return if any of the four conditions below apply for 2009.

1. You owe any special taxes, including the alternative minimum tax, anyadditional tax on a qualified plans, including an individual retirement arrangement (IRA), or other tax-favored account (though if you are only filing a return for this tax, you can file a Form 5329by itself), any household employment taxes (though again, if you are filing a return only for this, you can file Schedule H by itself) andSocial security and Medicare tax on tips you did not report to your employer. Also, if you have any other uncollected taxes or recapture taxes you’ll need to file.

2. You received any advance earned income credit (EIC) payments from your employer. These payments are shown in Form W-2, box 9.

3. You had net earnings from self-employment of at least $400.

4. You had wages of $108.28 or more from a church or qualified church-controlled organization that is exempt from employer social security and Medicare taxes.

What Tax Form Do I File?

The next thing we have to figure out each year is which tax return form we need to file. How important is this? First there’s the simplicity factor. If you know ahead of time, through good tax planning, that you won’t be itemizing your deductions or you haven’t sold any stock during the year, why would you want to waste your time working through the 1040 when the 1040EZ is quicker and easier?

Form 1040EZ

The simplest and fastest form to use, you must meet all ten of the following criteria:

  1. Your filing status is single or married filing jointly. If you were a nonresident alien at any time in 2008, your filing status must be married filing jointly.
  2. You, and your spouse if married filing a joint return, were under age 65 and not blind at the end of 2008
  3. You do not claim any dependents.
  4. Your taxable income is less than $100,000.
  5. Your income is only from wages, salaries, tips, unemployment compensation, Alaska Permanent Fund dividends, taxable scholarship and fellowship grants, and taxable interest of $1,500 or less.
  6. You did not receive any advance earned income credit (EIC) payments.
  7. You do not claim any adjustments to income, such as a deduction for IRA contributions or student loan interest.
  8. You do not claim any credits other than the earned income credit or the recovery rebate credit.
  9. You do not owe any household employment taxes on wages you paid to a household employee.
  10. You are not claiming the additional standard deduction for real estate taxes or disaster losses.

So for those who have a nice, simple job, no kids, aren’t paying on student loans (or don’t, for some strange reason want to take the deduction for their student loan interest) and aren’t taking any education credits, this is a good way to go. Once you add any of those things into the mix though, you need to upgrade to a 1040 or 1040A.

Form 1040A

Now if you didn’t qualify for the 1040EZ, you can still pass on the full 1040.

You can use Form 1040A if all of the following apply.

1. Your income is only from wages, salaries, tips, IRA distributions, pensions and annuities, taxable social security and railroad retirement benefits, taxable scholarship and fellowship grants, interest, ordinary dividends (including Alaska Permanent Fund dividends), capital gain distributions, and unemployment compensation.

2. Your taxable income is less than $100,000.

3. Your adjustments to income are for only the following items:
      a. Educator expenses.
      b. IRA deduction.
      c. Student loan interest deduction.
      d. Tuition and fees deduction.

4. You do not itemize your deductions.

5. Your taxes are from only the following items.
     a. Tax Table.
     b. Alternative minimum tax.
     c. Advance earned income credit (EIC) payments, if you received any.
     d. Recapture of an education credit.
     e. Form 8615, Tax for Certain Children Who Have Investment Income of More Than $1,800.
     f. Qualified Dividends and Capital Gain Tax Worksheet.

6. You claim only the following tax credits.
     a. The credit for child and dependent care expenses.
     b. The credit for the elderly or the disabled.
     c. The child tax credit.
     d. The additional child tax credit.
     e. The education credits.
     f. The retirement savings contributions credit.
     g. The earned income credit.
     h. The recovery rebate credit.

7. You did not have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option. (See Publication 525, Taxable and Nontaxable Income.)

You must meet all of the above requirements to use Form 1040A. Otherwise, you must use Form 1040. If you meet the above requirements, you can use Form 1040A even if you received employer-provided dependent care benefits or claim the additional standard deduction for real estate taxes paid. If you receive a capital gain distribution that includes unrecaptured section 1250 gain, section 1202 gain, or collectibles (28%) gain, you must use Form 1040.

A better option
A better option

Form 1040

And so, by process of elimination, if you don’t meet the standards for the 1040EZ or the 1040A, then you’re pretty much stuck with the 1040. Of course there is a way to make the decision much easier: don’t file a paper return!

No, I’m not suggesting you don’t file, but consider E-filing. The IRS allows many taxpayers to E-file for free through their site ( software packages and online site will walk you through each step of the process, having you enter in the information from your w-2 and 1099’s, then complies it all for you. Some, like H&R Block’s TaxCut, will even error check it, to catch any obvious problems, and then guarantee the accuracy of your return. Other sites allow you to file basic returns for free. Typically they are income restricted, and may limit what schedules are available, but for basic returns, they are a great option.

Hope this helps.

Taxes are dreaded every year by millions of Americans, and I hope that the information I provide helps you wade through the morass of rules and regulations. Remember, I am not a tax professional yet, just an interested student, and the information I provide is for personal knowledge only. Specific issues should always be addressed to a tax professional.

Do you have any stories or ideas you'd care to share? Any thing that you think I should have included, or left out? Please let me know, I certainly enjoy the feedback. Thank you all for stopping by.


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