If you live in the United States and are a taxpayer, you must have heard about the dreaded 1040 form. It becomes a complex process between data and calculations at the slightest oversight. And if you don't fully understand what this form is all about, it seems even more impossible. Thus, to help you make the process easier, we intend to show you everything related to this document in this article.
The 1040 form is a document provided by the Internal Revenue Service (IRS) for all U.S. citizens who must file income tax returns. It is the most necessary form for citizens and the IRS.
Regardless of the attachments added , the form is structured with two pages; 23 lines are established to place all the necessary information.
Generally speaking, within the form, there are different sections to fill in: General data together with the definition of the marital status, income accounting and its deductions, together with the withholdings and credits, and, finally, the calculation corresponding to defining the amount of refund or taxes to be paid.
Although the process of filling it out is fairly complex, its purpose is no more than to record all the income obtained and thus be able to calculate the amount of taxes to be paid to the government or, on the contrary, the amount of money to be refunded by the government to the taxpayer.
Although the best-known form is 1040, due to the number of people applying to it, there are several other types, branching from it, for different people and with different functions. All of them are shown below.
It is nothing more than the original 1040 form, but this time in Spanish, for the Latin American community under common conditions as any other U.S. citizen.
If filling out the 1040 form is a complicated task for an average adult, it is not hard to imagine how difficult it is for a senior citizen. To make it easier for seniors, the 1040-SR form has undergone several changes from the original and contains a larger font size. The idea was to make it more understandable for this population sector.
Form 1040-NR is exclusively for non-resident aliens who are required to pay taxes despite not being resident aliens. It can be filed by non-resident aliens or by a representative in case of death.
The form can only be filed by self-employed or independent workers, including FreeLancers, who obtain monetary remuneration for work through the Internet, or independent contractors. Through this document, they rub their quarterly tax return.
This form is based on the declaration of modifications of any form previously filed in previous years to the current filing.
Electronic payment management has made its place even in tax matters. However, not everyone is so comfortable with the idea. Therefore, this form is intended for those who submit physical payments for outstanding taxes . It serves as proof of payment.
Both forms are no longer used due to the various modifications presented in the most recent forms. However, they are mentioned due to the amount of information on the Internet. Also, although they are no longer used, those who once used them are still valid documents for the IRS.
As stated above, all U.S. income-earning citizens must file the form. However, the question arises, who are U.S. citizens?
Logically, it is not difficult to assume that all U.S.-born or naturalized residents are required to file the form if they meet certain income and criteria.
With foreign nationals, things change a bit. Of course, a foreigner visiting the country has no obligation to pay taxes due to the null income generation. But, with a resident or non-resident foreigners with a taxable income in the country, the conditions are different.
On the one hand, resident aliens, possessing, by logic, a green card and proof of presence, must pay taxes like any other U.S. citizen. With the difference of being able to qualify for certain tax benefits.
On the other hand, non-resident or dual resident aliens who do not have a green card to be considered residents but have an income from a business, trade, or employment, must file their tax returns and forms as if they were resident aliens.
However, although they handle virtually the same tax obligations, they must file a different type of 1040 form. For these cases, the form used is the 1040-NR, already mentioned in the previous section.
On more than one occasion, the 1040 form or one of its various types is required. It may also be necessary to file one or more of the different schedules presented below to complement the information.
It is required that those who have additional income during that declaration either receive rewards, prizes, bets, compensations, etc. In addition , it is also suitable for those who hide versions pending claims.
The main function of this one is to file for any other taxes due, such as IRA or retirement plans, or to request and process a refund of an advance health insurance tax credit.
With Schedule 3, you can claim unclaimed credit on any other forms mentioned above. In addition, it is also functional for those who have another payment, such as an over-withholding of social security tax or an amount for an extension request.