1. Ch. 9.2 Forms and More Forms: 1040EZ and 1040A Objectives 1.To be able to choose the right form for each situation 2.Be able to fill out a form

2. 1. Which form is the right one? 1040EZ: Must meet all requirements 1.Filing status must be “single” 2.Does not claim any dependents 3.Is under 65 yrs. For entire year and not blind. 4.His taxable income less than $55,000 5.Income includes only wages, salaries, tips 6.No advanced earned-income credit payments 7.Not a non-resident alien at any time during yr. 8. His wages were not over $55,000 if more than one job.

3. 1. Which form is the right one? 1040A: longer and more complex. These people have a more complicated tax situation. These people have many exemptions, dependents, and deductions. The IRS allows you to subtract $2,300 from you gross income for each exemption. An exemption for each family member except your spouse. An exemption must be a dependent.

4. 1. Which form is the right one? Dependent – a dependent cannot file taxes and receive an exemption for themselves Basic Requirements: Be a relative of the filer or a member of the filer’s household Be a citizen of resident of the U.S. Have received more than half of their support from the filer. Have a gross income of less that $2300 – Unless they are under 19 and is a child of the filer – Unless they are under 24 and qualifies as a student.

5. Deductions Every person filing a return may subtract a number called a deduction. Deductions are expenses such as large medical bills, mortgage interest, and charitable gifts. These can be listed or itemized on a form. Standard deduction is just a number that can be subtracted depending on filing status.

6. Ask Yourself! 1.What is the maximum taxable income that a person may have and still be allowed to use Form 1040EZ? 2.What is one basic requirement that a person must meet to be claimed as a dependent? 3.What kinds of income besides salaries must be reported on federal tax forms?

7. Sharpen Your Skills Example1: Larry meets the requirements for using Form 1040EZ. Larry made $5,460 in wages. He also made $200 in interest from his savings account. He was withheld $478.00 of Federal income tax. Fill out a 1040EZ for Larry, how much is his refund check?

8. Sharpen Your Skills Example2: Larry’s parents must file a more complicated Form, 1040A. Mr. and Mrs. Lender are filing jointly and have Larry as a dependent. Their income is Mr. Lender with $17,600 and Mrs. Lender with $31,000. They had interest gained of $300 from a savings account. Their federal income taxes withheld were $5,216.

9. Example: Fill out a 1040EZ for each case and find the amount of the refund check. 1.A single girl who earned $2,400 in wages. She was withheld $225 for federal income tax. She can use an exemption of $2,300 in line 5. 2.A young man who earned $9,020 in wages. The income tax withheld was $1,200. He can use an exemption of $2,300 in line 5. 3.A person who is single who earned $46,000 in wages. The federal income tax withheld was $8,748. He can use an exemption of $2,300 in line 5.

10. Example Sten and Greta Larson who live in Orlando are married and filing jointly. Mr. and Mrs. Larson earned $37,500 and $29,320 respectively. They earned income on interest, $287, and income on dividends, $155. They have two kids. One is age 10, Karl, and the other is 8, Kristina. On their W-2’s the federal income tax withheld was $4,512 for Mr. Larson and $1,504 for Mrs. Larson. Find the amount of their refund check.

11. Example: Fill out a 1040A for each case and find the tax refund amount. 1.Fred and Frawn Turner are filing jointly. Their wages totaled $27,700. They have their daughter as a dependent who’s name is Angela, age 7. The federal income taxes withheld were $1,200. They also earned income on interest in the amount of $350 and dividends of $298.

12. 1040A Examples 1. Flora and Ernest Jones are married and filing jointly. Wages: Flora $19,400 Ernest $21,620 Taxes withheld: Flora $1,500 Ernest $1,836 Dependents: 3 kids Interest earned: $200 Dividends income: $180 2. Janice Parker is single and is head of household. Wages: $38,450 Taxes withheld: $3,800 Dependents: 3 kids Interest income: $40 Dividends income: $300