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How to understand Form 1040

by TurboTax Updated 1 week ago

Form 1040 is the US individual tax form you’ll use to report info from last year for: 

  • Income, deductions, and credits
  • Calculating your tax liability, if any
  • Calculating your refund, if any

For more detailed info on Form 1040, we’ve broken down the sections to explain what info you’ll need to provide.  

Note: When you complete your tax return in TurboTax, you won’t need to fill out the physical Form 1040. TurboTax will take you through the same questions and complete all of the calculations for you.

This section asks for your personal info, including:

  • Your name (and spouse’s name, if applicable)
  • Your Social Security number (and spouse’s Social Security number, if applicable)
  • Your current mailing address

This section is all about dependents. 

If someone else can claim you as a dependent, such as a parent, fiance, or other relative, you’ll note that here. To be claimed as dependent, the person claiming you must meet several requirements, including income limitations. 

If you’re claiming any dependents on your tax return, you may be eligible to claim child-related credits. To claim credits, you need to report the dependents in this section. 

This is where you’ll report different types of income and deductions. You’ll use Lines 1-8 to report items such as:

  • Wages from your job reported on Form W-2
  • Interest income (Tax-exempt and taxable)
  • Dividend income
  • IRA distributions
  • Pension and/or annuity distributions
  • Social Security benefits
  • Capital gains or losses
  • Other income as reported on Schedule 1, including:
    • Self-employment income
    • Taxable refunds
    • Alimony
    • Rental income
    • Pass-through income reported on K-1 forms
    • Unemployment compensation
    • Farm income
    • Any other income not reported elsewhere

Schedule 1 is a separate form you’ll get with your return if you have any additional income to report. You’ll also use it to report adjustments to income, such as:

  • Educator expense
  • Student loan interest deduction
  • IRA deduction
  • Various other expenses related to self-employed retirement and health insurance

Next, you’ll subtract line 10 from line 9 to figure your Adjusted Gross Income (AGI). 

To get your taxable income, subtract any deductions from your AGI. These deductions can include itemized or standard deductions or the qualified business income deduction (QBID). This will give you your taxable income. 

The amount of your tax liability is calculated using the Taxable Income on line 15 of Form 1040. You can see the tax amount on line 16 of Form 1040.

If you're entitled to any tax credits or if you have any additional taxes for self-employment, you'll find them in the following section. You'll also be able to see any withholdings made on your wages or earnings in this section. These amounts are all added together and subtotaled as your total payments on your tax return.

The total payments are used to offset the tax due on your return.  

If you had more payments than the amount of your tax due, you'll have an overpayment. This overpayment can either be refunded to you or applied to your taxes for next year.

If you have less payments than the amount of your tax due, you'll have a balance due for the amount of taxes you still owe. This payment will need to be made by the tax filing due date.

The final section of Form 1040 is where you sign your tax return, provide your phone number and email, or give a tax preparer authorization to discuss your tax return with the taxing authorities.  

If you were provided with an Identity Protection PIN, that info would also be entered in this section of the form.

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