The 1040-EZ FormThe 1040-EZ Form

Most people have an accountant do Most people have an accountant do their taxes.their taxes.

But you don’t need an accountant if:But you don’t need an accountant if: You are single.You are single. Received a W-2 Form.Received a W-2 Form. Received a 1099-INT FormReceived a 1099-INT Form Made less than $1,500 from interest.Made less than $1,500 from interest.

You can do YOUR own taxes. For free!You can do YOUR own taxes. For free! All you have to do is use Form 1040-EZ.All you have to do is use Form 1040-EZ.

Go to Go to www.irs.govwww.irs.gov and you can download and you can download it. You want to download the PDF file that it. You want to download the PDF file that has the form AND the instructions. has the form AND the instructions.

It’s also available at libraries. It’s also available at libraries.

What is the 1040-EZ form?What is the 1040-EZ form?

The 1040 Form is what you use to determine if The 1040 Form is what you use to determine if you owe tax or get a refund.you owe tax or get a refund. You send the completed 1040 form to the government You send the completed 1040 form to the government

to tell them how much money they owe you….. to tell them how much money they owe you….. OR….OR…. You send the completed 1040 form with the money you You send the completed 1040 form with the money you

owe the government. owe the government. The 1040 EZ is a really simplified version of the The 1040 EZ is a really simplified version of the

regular 1040 Form. regular 1040 Form.

The 1040 Form has been around a The 1040 Form has been around a LONG time… since 1913.LONG time… since 1913.

In 1913 Congress ratified the 16In 1913 Congress ratified the 16thth Amendment, which gave Congress Amendment, which gave Congress the authority to tax EVERYBODY’S the authority to tax EVERYBODY’S income.income.

Here’s what the form looked like in Here’s what the form looked like in 1913:1913:

There is a saying that there are two There is a saying that there are two things for certain in life:things for certain in life:

DeathDeath

andand

TaxesTaxes

Nothing changes. The 1040 Form is Nothing changes. The 1040 Form is still around today. Here is what it still around today. Here is what it looks like: looks like:

There is a lot of stuff going on in the There is a lot of stuff going on in the 1040-EZ form.1040-EZ form.

Don’t freak out.Don’t freak out.

It’s really easy to complete. Let’s go It’s really easy to complete. Let’s go through it step by step.through it step by step.

In our example, we will be David In our example, we will be David Flores. Flores.

Stuff we need to know:Stuff we need to know: David is an employee at a music store in David is an employee at a music store in

Chicago. Chicago. He just got his W-2 and 1099-INT in the He just got his W-2 and 1099-INT in the

mail.mail. He is single. Watch out ladies! He is single. Watch out ladies!

David

(You will do this with Mister Crow)(You will do this with Mister Crow) First, get your W-2 form: First, get your W-2 form:

Second, get your 1099-INT form: Second, get your 1099-INT form:

We are ready to begin filling out the We are ready to begin filling out the 1040-EZ!1040-EZ!

Fill out the name and address Fill out the name and address information:information:

Do you want to donate toa Presidential Election Campaign?

Line 1: Enter Box 1 from your W-2.Line 1: Enter Box 1 from your W-2.

Line 2: Enter Box 1 from your 1099-INT.Line 2: Enter Box 1 from your 1099-INT.

Line 3: Don’t worry about this line.Line 3: Don’t worry about this line.

Line 4: Add up Line 1 and 2.Line 4: Add up Line 1 and 2. This is your AGI – (Adjusted Gross Income)This is your AGI – (Adjusted Gross Income)

Line 5:Line 5: Today, if you were to fill this out you would be a dependent since you are in high school.Today, if you were to fill this out you would be a dependent since you are in high school. However, this example uses David Flores. David is not a dependent. We will enter $8,950.However, this example uses David Flores. David is not a dependent. We will enter $8,950.

Line 5:Line 5: What is $8,950? Why are we entering this?What is $8,950? Why are we entering this?

$8,950 is the “Standard Deduction.” The government is trying to help you out. $8,950 is the “Standard Deduction.” The government is trying to help you out.

The Standard Deduction lessens the amount on which you get taxed.The Standard Deduction lessens the amount on which you get taxed.

For example, if you make $28,950 you will not get taxed on that entire amount. You get to deduct $8,950. $20,000 will be the amount you are taxed on. For example, if you make $28,950 you will not get taxed on that entire amount. You get to deduct $8,950. $20,000 will be the amount you are taxed on.

Line 5:Line 5: Interestingly, if you make less than $8,950 you don’t have to pay ANY tax.Interestingly, if you make less than $8,950 you don’t have to pay ANY tax.

Should you still file a 1040-EZ?Should you still file a 1040-EZ?

Heck yeah! If the government withheld any money from your paycheck they have to give you a refund.Heck yeah! If the government withheld any money from your paycheck they have to give you a refund.

But they won’t give you a refund unless you file the 1040-EZ!But they won’t give you a refund unless you file the 1040-EZ!

Line 6: Subtract Line 5 from Line 4.Line 6: Subtract Line 5 from Line 4. $54,556 - $8,950 = ?$54,556 - $8,950 = ? This is the amount on which you have to pay taxes.This is the amount on which you have to pay taxes. This is your TAXABLE INCOME.This is your TAXABLE INCOME.

Line 7: Enter the amount the government Line 7: Enter the amount the government withheld. (Box 2 from your W-2.)withheld. (Box 2 from your W-2.)

Lines 8 and 9: Don’t worry about these lines.Lines 8 and 9: Don’t worry about these lines.

Line 10: Enter the amount from Line 7.Line 10: Enter the amount from Line 7. This is the amount of TAX you have already paid.This is the amount of TAX you have already paid.

Line 11: Line 11: There is a packet that usually comes with the 1040-EZ form. There is a packet that usually comes with the 1040-EZ form. On page 28 you can find a tax table that will lists the TAX you owe for your specific TAXABLE INCOME. On page 28 you can find a tax table that will lists the TAX you owe for your specific TAXABLE INCOME. It looks like this:It looks like this:

Line 11: Line 11:

David’s TAXABLE INCOME is on line 6.David’s TAXABLE INCOME is on line 6.

What is his TAXABLE INCOME?What is his TAXABLE INCOME?

Line 11: Line 11:

David’s TAXABLE INCOME is on line 6.David’s TAXABLE INCOME is on line 6.

What is his TAXABLE INCOME?What is his TAXABLE INCOME?

$45,606

Line 11: Line 11:

We now need to find what the tax for $45,606 will be according to that tax table.We now need to find what the tax for $45,606 will be according to that tax table.

Keep in mind that David is single. Keep in mind that David is single.

What is the TAX for $45,606?What is the TAX for $45,606?

Line 11: Line 11:

Enter this Enter this amount on Line amount on Line 11.11.

Line 12:Line 12: Is Line 10 bigger than Line 11?Is Line 10 bigger than Line 11? If Yes, subtract Line 11 from Line 10.If Yes, subtract Line 11 from Line 10. In our example Line 10 is bigger.In our example Line 10 is bigger.

$8435 - $7750 = ?$8435 - $7750 = ?

This is your refund!This is your refund!

Line 12:Line 12: If you are getting a refund you can have your money deposited directly to your bank account.If you are getting a refund you can have your money deposited directly to your bank account. You have to enter the routing number and account number.You have to enter the routing number and account number.

Line 12:Line 12: If you are getting a refund you can have your money deposited directly to your bank account.If you are getting a refund you can have your money deposited directly to your bank account. You have to enter the routing number and account number.You have to enter the routing number and account number.

Line 13:Line 13: Is Line 11 bigger than Line 10?Is Line 11 bigger than Line 10? If Yes, subtract Line 10 from Line 11.If Yes, subtract Line 10 from Line 11.

Uh oh!! This is how much tax you owe!Uh oh!! This is how much tax you owe! Luckily, David is getting a refund in our example. We leave Line 13 blank.Luckily, David is getting a refund in our example. We leave Line 13 blank.

Sign the Form:Sign the Form: Sign and date the appropriate parts of the rest of the form.Sign and date the appropriate parts of the rest of the form. Congrats! You are done!Congrats! You are done!

Now, once you get your refund you Now, once you get your refund you have make some tough choices:have make some tough choices:

Go on a Road Trip?Go on a Road Trip?

Invest the money?Invest the money?

Take Mister Crow out for dinner for Take Mister Crow out for dinner for helping you with your taxes?helping you with your taxes?