How to Know Which One Is Better: 1040EZ or 1040A

Dec 19, 2023 By Susan Kelly

Understanding the different kinds of taxes and when you have to pay the tax can be a stressful procedure. There are so many different kinds of things and processes that need to be tackled when it comes to tax time. The first thing that everyone needs to know is the different types of income tax files.

One of the most common Internal Revenue Service Tax Forms is the 1040. However, this form is very extensive, and there are a lot of different things that need to be done and filled out. This is why there are shorter versions of these forms, such as Form 1040EZ and Form 1040A. If you're wondering which one is better, 1040EZ or 1040A, then this article is a must-read for you.

What is 1040EZ?

1040EZ is the IRS form that is basically a shortened version of the 1040 IRS form. This is a simple version for the taxpayers that they can use to find an easy and simple way through which they can pay their taxes. It is essential that you know only people who are below the age of 65 can use this form, and other individuals cannot.

However, the sad part is that this form was discontinued in the 2018 tax year because the redesigned Form 1040 was launched. But the good thing about this form was that it was only one-fifth long as compared to the 1040 form.

Eligibility of 1040EZ:

They are now coming to the eligibility of the form 1040EZ. If someone wants to apply for this form, then they need to have a taxable income of less than 100000. Other than this, they also need to have less than $1500 of their interest income. There should also be no dependents when taxpayers are filing for the tax.

  • Furthermore, the following are some of the other requirements that need to be fulfilled when it comes to this form.
  • If a married couple is filling for the rax jointly, then it is essential that they be under the age of 65 to be eligible to apply for this.
  • The filer is not allowed to take deductions for different loans such as student interest loans, tuition fees, and other such things.
  • The filer should not be under any kind of bankruptcy case.

Many other different kinds of rules and regulations need to be met in order to ensure that you are eligible for this form.

What is the 1040A Form?

Another type of Individual Tax Return form that you can find is the 1040A form. This is also a simplified and shorter version of 1040 that is used by taxpayers so that they can easily file their annual tax income return. This form is just a two-page form that covers a lot of different things, such as the report of ordinary income, education, and credits.

As far as who can file this form, it is people who are earning less than $100000in taxable income. However, this form has also been eliminated by the IRS in 2018 because of the 1040 form.

Eligibility of 1040A:

Now, coming to the eligibility or who was able to apply for this form. Then, people who have a taxable income of less than $100000 can apply for this form. Other than this, the individuals who are applying for the form need to meet some requirements. Individuals should not be itemizing deductions; they should not own a business, and a few other things; if you meet all these criteria, then you can surely apply for this form.

What's the Difference between 1040EZ and 1040A?

Now that you know what 1040EZ is and what 1040A is, you need to understand the significant differences between them. The main things that are present in these forms are relatively similar, such as reporting your income, tax exemptions, additional tax information, and other things. However, there are some differences between them.

The 1040A is slightly bigger than the 1040EZ form, and the main difference is that you can claim certain adjustments that are not available in 1040EZ. It can be used to file as head of the household. Other than this, you can also use these to claim the dependents for the tax credits of a child, retirement savings, earned income, education taxes, premium tax, and so many other things.

The income requirements for the 1040EZ and 1040A are also different. In 1040A, you can include a broader category of salary such as your salary, tips, pensions, IRAs, capital gains distributions, and other kinds of wages. There is also another difference, such as the 1040EZ can only be applied when the person has the $1500 limit on the interest income, and this does not apply to the 1040A.

Another limiting factor that you can see with the 1040A is that you cannot itemize the deductions. This means you need to take the standard deductions and also can't write off the mortgage interest, the medical expenses, or even the business expenses.

Also, there are a lot of different conditions that you need to meet when it comes to the 1040EZ, and sometimes, it can be challenging for people to meet all these requirements. This is why, for them, it becomes much easier to just apply for the 1040A as the requirements are simple and easy, and it does the same work.

Final Words:

The TX system is very complicated. There are a lot of different things that you need to understand before applying for a tax return. There are also many different kinds of forms that you should learn about so that you can pick the right one for yourself. The two forms that got a lot of hype previously and were used by a lot of people were the 1040EZ and 1040A. These two are the more straightforward and shorter versions of the 1040 forms; however, both of them are discounted now because the 1040 form is the complete form that comprises both of them.

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