Episode 5 - 1040s and Filing - YouTube

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Today we're going to talk about the 1040.

The first time I saw a 1040,

I thought, why are there so many lines

and why is it so confusing?

And I'm sure I'm not alone in this feeling

because a lot of people have this question

about what is a 1040 tax form?

So all of the information that we've discussed

in previous episodes, this is the culmination

of all of that information.

And so all of your W-2s that you've received

for the year, or any 1099s,

all of that information will end up on your form 1040.

It actually has a major impact and could be the difference

between you getting a refund or you owing,

and so you want to make sure that you fill it out right.

To help you better understand a 1040

and how to fill it out correctly,

we have our team of tax experts.

But first, a question from Hannah.

Hi, my name is Hannah.

I went to the IRS website

to download the return form

and was overwhelmed with all the information

I needed to fill out. Help.

Hannah, we got you, girl.

So let's dive right in. What do you have for her?

The 1040 is a form that's required by the US government

that will identify all of your wages

that have been earned for the year

and help you calculate what your tax liability is

and if you are owed money from the federal government

or if you owe money back to the federal government.

The form 1040 is applicable to all US taxpayers.

Whether or not you will be filling it out yourself

is determined whether or not you will be using a tax preparer.

If you are using a system to help you prepare your taxes,

you do still have to fill this out.

It's just housed within the software.

Starting from the top, you will fill out

your filing status for the year.

You will then move on to providing your basic information

which will include your full legal name,

your Social Security Number, and your home address.

Then you will identify whether or not

you will be taking the standard deduction

or if you'll be itemizing those deductions.

You will then also provide information

about any dependents that you may have,

whether a qualifying child or a qualifying relative,

and provide some basic information.

You will then fill out and capture

all of your wages for the year.

This will include any tips that you received,

bonus, grants, commissions,

every dollar that you've received

from your employer or employers.

Then there's a myriad of questions

that are very specific to your individual tax situation.

So whether or not you have any IRA distributions,

any pension distributions,

those are very specific to your particular tax situation.

Once you've captured every dollar,

this is referred to as your total income.

Once you have calculated your total income,

if there's any adjustments to that total income,

that is then referred to as your AGI,

your Adjusted Gross Income.

Once you have identified your Adjusted Gross Income,

you will then identify whether or not

you will be applying the standard deduction

or if you choose to itemize your deductions.

This then results in what is considered

your taxable income for the year

and how your tax liability

will be calculated going forward.

So once you have identified

your taxable income for the year,

you then will move on to the section labeled credits.

This is where you will apply any credits

that are applicable to your individual tax situation.

From there you will then know and be able to calculate

whether or not the government owes you money

or you owe the government back.

I'm so impressed by Lauren's explanation of the 1040.

Such a simple and concise way

to understand what this tax form is all about.

Tonya, do you have anything for Hannah?

Yeah, I filed my taxes for the first time by myself

when I was, like, 17 years old.

Oh, my gosh, you're so impressive.

Oh, my gosh. I'm not. I'm not.

Right now there's tax software, there's websites and so forth

that really help kind of hold your hand through the process.

And that's what I found instrumental and really helpful.

It's like, okay, maybe the question on this form,

maybe you don't understand it in this manner.

But the software asks you the question,

we're like, &quot;Yo, yeah, I want to do that.&quot;

Or, &quot;No, I don't want to do that.&quot;

Or, &quot;Yeah, I did this. I didn't do this.&quot;

- Mm-hmm. - But also understand,

you know, if you have a more complex situation,

maybe it's not for you to file it yourself.

Mine was very simple. I didn't have any children.

I didn't have a home.

Like-- well, I was not homeless.

I lived at home with my parents.

But I wasn't claiming a home or anything of that nature.

I hadn't gone to college, so I didn't have interest

from my student loan payments or anything of that nature.

So it was really straightforward

and it made sense for me at that time.

But if your taxes aren't straightforward

and you're concerned that you're going to mess something up,

that's the reason there are experts there.

So ask questions or reach out to an expert

if you feel like it's a little out of your hands

or if you get to a point when using a software

that you're like, &quot;You know what?

I don't trust myself with this.&quot;

Let me ask for additional help.

I still can't get over

Lauren's explanation about the 1040.

Wow. Very impressive.

Stay tuned for the next one

all about tax deadlines and extensions.