Let’s start at the basics, the Form 1040
1040: This is the standard income-reporting form applicable to almost everyone at different levels. It also has several add-ons called schedules, which you can include based on applicability. For example, you should complete Schedule 1 if you made student loan payments. Complete Schedule 3 if you want to claim credits for education expenses.
The form includes several sections where taxpayers report their income, deductions, and tax liability. Here's a brief overview of each section:
Income: This section includes lines where you report all types of income, such as wages, salaries, tips, interest, dividends, and capital gains.
Adjustments to Income: Here, you can deduct certain types of expenses, such as contributions to a traditional IRA, student loan interest, or self-employment tax.
Tax and Credits: This section calculates your tax liability based on your income and deductions. You can also claim tax credits, such as the earned income tax credit, child tax credit, or education credits.
Other Taxes: This section includes taxes that are not calculated based on your income, such as self-employment tax, additional taxes on IRAs or other retirement accounts, or household employment taxes.
Payments: Here, you report any payments you've made throughout the year that apply to your tax liability, such as income tax withheld from your paychecks or estimated tax payments.
Refund or Amount Due: The final section calculates your total tax liability for the year, compares it to the total payments you've made, and determines whether you're due a refund or owe additional tax.
It’s often referred to as the long form, because, well it’s quite… long.
Filling up this form will also help you with finding out your actual tax liability—and whether you'll get a refund or end up owing more.
Here’s a glimpse at the form:
Line 24: The total tax due is what you owe in taxes for the year
Line 25d: Income tax withheld is the total amount withheld from your income
Is the number on Line 25d larger than the number on Line 24? If so, that means you withheld too much. Go to:
Line 34: This is your refund
Or is Line 24 larger? If so, you didn't withhold enough. Go to:
Line 37: This is the amount you owe
How do you get the information required for the form?
While a 1040 form is the form that you fill out and send to the IRS when filing your taxes, it is based on forms such as W-2 that your employer will send to you with information on your income and tax rate ( which in turn is based on the W-4 form)
1098-T: This form tells the IRS how much you paid in tuition and fees. Your school completes it and mails it to you or a parent. You need to include it when you file your taxes because it represents educational expenses that may be eligible for tax credits or deductions.
1098-E: There are several specialized forms. Another useful one is the 1098-E. If you paid any interest on student loans last year, you should have received this form from your loan servicer. Include this with your tax filing to deduct interest payments from your taxes.
W-2: If you made $600 or more at work last year, your employer must provide you with a W-2. This form will show if you had any income tax withheld.
International Student Tax Forms
1042-S: This form is like 1040 for international students. Your employer will give you this form to report the income you earned. If your college awarded you certain stipends or travel grants, it would mail you this form. This is so you can report taxable income to your foreign country and is typically not needed for your US returns.
8843: International students with zero U.S. income must complete this form and send it to the IRS to report that they earned no income in the country.
Now that we’ve gone through the mess of going through that, I have some good news,
If you only had a campus job and didn't receive any other sources of income during the tax year, you will likely only need to file a federal tax return using Form 1040-EZ or Form 1040A. These are simpler tax forms that are designed for taxpayers with less complex tax situations.
Form 1040-EZ is the simplest of the three forms and is generally used by taxpayers who have no dependents, only earned income, and don't claim any tax credits or deductions other than the standard deduction. Use Form 1040EZ (Quick & Easy) if: Your taxable income is less than $100,000. You only received a W2. Your filing status is single or married filing jointly.
Form 1040A is slightly more complex but still easier than the standard Form 1040. It allows taxpayers to claim some tax credits and deductions, such as the earned income credit, education credits, and deductions for IRA contributions. Form 1040-A was a simplified version of Form 1040 used for filing individual income tax. Filers using 1040-A were required to have less than $100,000 in taxable income and not have exercised any incentive stock options during the year.
Form 1040NR-EZ is the form for nonresident aliens - basically if you're an international student. In general, international students must file Form 1040NR-EZ or Form 1040NR if they engaged in any trade or business in the U.S. during the tax year and thus they had U.S. source income. Studying, teaching, and doing research are all considered to be activities in which the taxpayer is engaged in a trade or business.
What's the difference between Form 1040NR-EZ or Form 1040NR
Form 1040NR is 5 pages long and can accommodate all types of income and expenses. Form 1040NR-EZ is only 2 pages long and is limited to specific situations. Nonresidents cannot file joint returns and are very limited in claiming dependents. Choose the simplest and shortest form that will accommodate all your income and deductions.
You can use Form 1040NR-EZ instead of Form 1040NR if all of the following statements are true:
You do not claim any dependents.
You cannot be claimed as a dependent on another person's U.S. tax return.
Your only U.S. source income was from wages, salaries, tips, taxable refunds of state and local income taxes, and scholarship or fellowship grants.
Your taxable income is less than $100,000.
The only adjustments to income you can claim are the student loan interest deduction or the exclusion for scholarship and fellowship grants.
You do not claim any tax credits.
If you were married, you do not claim an exemption for your spouse.
The only itemized deduction you can claim is for state and local income taxes.
The only taxes you owe are income tax
If you don't have a professional accountant helping you out with your taxes, using tax software could really help you understand which forms are the most applicable to your situation.
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