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When Should You Avoid Using IRS Form 1040A?

Out of the three primary forms for reporting one's taxes that the Internal Revenue Service of the federal government offers, IRS Form 1040A is one of the most used by a huge number of individuals who prefer its simplicity over IRS Form 1040 and its added benefits over those of IRS Form 1040EZ. While it can't handle each and every taxpayer out there, it definitely receives a large bulk of those filing each year due to its mix of pros and cons. It is known as "the short form" because it is only 2 pages in all, but there is a cost to the simplicity that you need to be aware of before you choose to go with this form to file your taxes. The primary advantage of this form is that if you have a fairly uncomplicated set of fiscal circumstances, this form will be very easy to fill out and it still allows you to claim a variety of adjustments to income, as well as a selection of tax credits. So if your income situation is complex, involving investments or an annual income of more than $100,000 then this is absolutely not the form you should use. 

A very important aspect of choosing the right form for your tax needs is making sure that you meet all of the eligibility requirements, but many people do not look beyond this and end up choosing a form that does not benefit them as much as the right form would. The main argument against using IRS Form 1040A is that you will not be able to itemize all of your expenses in order to deduct them from the amount of taxes that you end up owing. Unlike the standard 1040, known as "the long form", taxpayers can not detail out all of the expenses they incur throughout the year and therefore they can expect to get much smaller tax refunds when using the 1040A. This means that you need to be aware of the fact that you could well lose a serious amount of money by taking the easy route. At the same time, if you have an extremely simple tax situation and don't plan to pursue more than the standard deduction and Earned Income Credit, then you should still avoid the 1040A and go, instead, for the 1040EZ which offers a much easier form and a quicker turnaround time for getting your refund, as well. Whichever way you go, be sure to do your homework first.