Home > Articles

The Truth About Paying Fewer Taxes: Filling out the Right Form

1040. It’s the most feared number in America, especially when April 15 is fast approaching. There are, however, three 1040 versions. Picking the appropriate one could save you money.
This chapter is from the book

This chapter is from the book

Form 1040 is the tax document, the one millions of us complete to report our income and figure any associated federal taxes or refunds due.

There are, however, three 1040 versions. Picking the appropriate one could save you money.

Form 1040EZ—Because tax filing is a dreaded task, the allure of an official form labeled EZ is understandable. And for many people, this simplest of the three 1040 versions is the perfect filing answer.

But there are some restrictions. The main one is income, both the amount and type. You must make less than $100,000 to file the EZ. Even if you meet the income limit, if your earnings include interest of $1,500 or more, you cannot use the form. Neither is it available if you’re living off of retirement account distributions.

Other 1040EZ prerequisites include the following:

  • You be a single taxpayer or couple filing jointly.
  • You have no dependents.
  • You are younger than age 65. If you file a joint return, your spouse also must meet the age requirement. Be careful if you or your spouse were born on Jan. 1. In this case, for filing purposes the IRS considers you to have turned 65 the prior year, meaning you can’t file the EZ form.

One thing that catches the eyes of many taxpayers is the 1040EZ’s standard deduction amounts; they’re larger than the amounts shown on the other two 1040s. Don’t let that alone entice you to use the form; in reality, the standard deduction amounts are the same regardless of which 1040 version you use. The form simply combines the standard deduction and exemption amounts.

That’s a nifty shortcut, but this form offers only one additional tax break, the earned income tax credit (EITC) that is designed for lower-income workers.

Form 1040A—Form 1040A is twice as long as 1040EZ, but it offers many more opportunities to save on taxes. It also can be used by taxpayers who file using any of the five filing statuses (single, married filing jointly, married filing separately, head of household, or qualifying widow/widower).

  • Form 1040A is twice as long as 1040EZ, but it offers many more opportunities to save on taxes.

It does, however, have a few limitations. Your income must be less than $100,000. But you are allowed to report more interest and dividend income. When it comes to capital gains, though, only capital gains distributions, not profits or losses from the sale of assets, are allowed on this form.

Older taxpayers will find the 1040A more amenable. Pension and other retirement income can be reported on this form. Even better, the 1040A allows age 65 or older and visually impaired filers to claim a larger standard deduction. Elderly and disabled individuals also can claim a special credit on 1040A.

In addition, 1040A offers four income adjustments, also commonly called above-the-line deductions because they are found on page 1 of the form, just above where you enter your adjusted gross income, or AGI.

The 1040A above-the-line deductions that help reduce your taxable income are educator expenses, traditional IRA contributions, student loan interest, and higher education tuition and fees.

More tax-cutting options are available through seven credits found on Form 1040A. In addition to the EITC found on the EZ and the previously mentioned elderly or disabled credit, Form 1040A allows you to claim the child, additional child, education, dependent care, excess Social Security withholdings, and retirement savings credits.

Form 1040—If you want the most tax-saving chances, use the long Form 1040, the granddaddy of tax forms. It first appeared in 1913 just after ratification of the 16th Amendment, which gave Congress the authority to enact an income tax. Today’s Form 1040 is packed with ways to report, and reduce, more types of income.

Form 1040 can be filed by a taxpayer using any filing status. It’s required if your earnings are larger, you itemize deductions, or you have a variety of investment and other income, such as self-employment earnings, to report.

Form 1040 also is closely associated with another well-known piece of filing paperwork, Schedule A. This is the document used to itemize tax-deductible expenses, such as medical costs; home-related expenses (mortgage interest and property taxes); other taxes (state income or sales taxes); and charitable donations.

Some of these deductions are limited to certain percentages of your adjusted gross income. Your overall itemized deductions also might be reduced if you earn over a certain amount. But if you have enough allowable expenses to exceed the standard deduction amount available for your filing status, you should itemize. And that requires you to file the long Form 1040.

This longest form also offers more than a dozen above-the-line deductions. As with the 1040A, these tax breaks, officially called “adjustments to income,” allow you to subtract certain amounts from your gross income. And although most people file Form 1040 because they itemize, you can claim above-the-line deductions regardless of whether you also file Schedule A.

In addition to the educator expenses, IRA contributions, student loan interest, and tuition and fees deductions found on the 1040A, the bottom of Form 1040’s first page offers deductions for alimony payments, moving expenses, a portion of self-employment taxes, and contributions to certain self-employment retirement and various health savings accounts. Several specialized deductions also are found only on Form 1040. Details on each of the above-the-line deductions are found in the form’s instruction book.

When you flip over the Form 1040, you’ll find the tax-saving opportunities afforded by various credits. In addition to those found on the other two returns, Form 1040 offers the foreign tax credit and half a dozen specialty credits, such as breaks for electric and other alternative-fuel vehicles, prior-year minimum tax paid, and several business credits.

Of course, the additional tax-saving possibilities of the longer Form 1040A and Form 1040 require more time and extra schedules. But that price usually is more than offset by a reduction in your tax bill.

InformIT Promotional Mailings & Special Offers

I would like to receive exclusive offers and hear about products from InformIT and its family of brands. I can unsubscribe at any time.


Pearson Education, Inc., 221 River Street, Hoboken, New Jersey 07030, (Pearson) presents this site to provide information about products and services that can be purchased through this site.

This privacy notice provides an overview of our commitment to privacy and describes how we collect, protect, use and share personal information collected through this site. Please note that other Pearson websites and online products and services have their own separate privacy policies.

Collection and Use of Information

To conduct business and deliver products and services, Pearson collects and uses personal information in several ways in connection with this site, including:

Questions and Inquiries

For inquiries and questions, we collect the inquiry or question, together with name, contact details (email address, phone number and mailing address) and any other additional information voluntarily submitted to us through a Contact Us form or an email. We use this information to address the inquiry and respond to the question.

Online Store

For orders and purchases placed through our online store on this site, we collect order details, name, institution name and address (if applicable), email address, phone number, shipping and billing addresses, credit/debit card information, shipping options and any instructions. We use this information to complete transactions, fulfill orders, communicate with individuals placing orders or visiting the online store, and for related purposes.


Pearson may offer opportunities to provide feedback or participate in surveys, including surveys evaluating Pearson products, services or sites. Participation is voluntary. Pearson collects information requested in the survey questions and uses the information to evaluate, support, maintain and improve products, services or sites, develop new products and services, conduct educational research and for other purposes specified in the survey.

Contests and Drawings

Occasionally, we may sponsor a contest or drawing. Participation is optional. Pearson collects name, contact information and other information specified on the entry form for the contest or drawing to conduct the contest or drawing. Pearson may collect additional personal information from the winners of a contest or drawing in order to award the prize and for tax reporting purposes, as required by law.


If you have elected to receive email newsletters or promotional mailings and special offers but want to unsubscribe, simply email information@informit.com.

Service Announcements

On rare occasions it is necessary to send out a strictly service related announcement. For instance, if our service is temporarily suspended for maintenance we might send users an email. Generally, users may not opt-out of these communications, though they can deactivate their account information. However, these communications are not promotional in nature.

Customer Service

We communicate with users on a regular basis to provide requested services and in regard to issues relating to their account we reply via email or phone in accordance with the users' wishes when a user submits their information through our Contact Us form.

Other Collection and Use of Information

Application and System Logs

Pearson automatically collects log data to help ensure the delivery, availability and security of this site. Log data may include technical information about how a user or visitor connected to this site, such as browser type, type of computer/device, operating system, internet service provider and IP address. We use this information for support purposes and to monitor the health of the site, identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents and appropriately scale computing resources.

Web Analytics

Pearson may use third party web trend analytical services, including Google Analytics, to collect visitor information, such as IP addresses, browser types, referring pages, pages visited and time spent on a particular site. While these analytical services collect and report information on an anonymous basis, they may use cookies to gather web trend information. The information gathered may enable Pearson (but not the third party web trend services) to link information with application and system log data. Pearson uses this information for system administration and to identify problems, improve service, detect unauthorized access and fraudulent activity, prevent and respond to security incidents, appropriately scale computing resources and otherwise support and deliver this site and its services.

Cookies and Related Technologies

This site uses cookies and similar technologies to personalize content, measure traffic patterns, control security, track use and access of information on this site, and provide interest-based messages and advertising. Users can manage and block the use of cookies through their browser. Disabling or blocking certain cookies may limit the functionality of this site.

Do Not Track

This site currently does not respond to Do Not Track signals.


Pearson uses appropriate physical, administrative and technical security measures to protect personal information from unauthorized access, use and disclosure.


This site is not directed to children under the age of 13.


Pearson may send or direct marketing communications to users, provided that

  • Pearson will not use personal information collected or processed as a K-12 school service provider for the purpose of directed or targeted advertising.
  • Such marketing is consistent with applicable law and Pearson's legal obligations.
  • Pearson will not knowingly direct or send marketing communications to an individual who has expressed a preference not to receive marketing.
  • Where required by applicable law, express or implied consent to marketing exists and has not been withdrawn.

Pearson may provide personal information to a third party service provider on a restricted basis to provide marketing solely on behalf of Pearson or an affiliate or customer for whom Pearson is a service provider. Marketing preferences may be changed at any time.

Correcting/Updating Personal Information

If a user's personally identifiable information changes (such as your postal address or email address), we provide a way to correct or update that user's personal data provided to us. This can be done on the Account page. If a user no longer desires our service and desires to delete his or her account, please contact us at customer-service@informit.com and we will process the deletion of a user's account.


Users can always make an informed choice as to whether they should proceed with certain services offered by InformIT. If you choose to remove yourself from our mailing list(s) simply visit the following page and uncheck any communication you no longer want to receive: www.informit.com/u.aspx.

Sale of Personal Information

Pearson does not rent or sell personal information in exchange for any payment of money.

While Pearson does not sell personal information, as defined in Nevada law, Nevada residents may email a request for no sale of their personal information to NevadaDesignatedRequest@pearson.com.

Supplemental Privacy Statement for California Residents

California residents should read our Supplemental privacy statement for California residents in conjunction with this Privacy Notice. The Supplemental privacy statement for California residents explains Pearson's commitment to comply with California law and applies to personal information of California residents collected in connection with this site and the Services.

Sharing and Disclosure

Pearson may disclose personal information, as follows:

  • As required by law.
  • With the consent of the individual (or their parent, if the individual is a minor)
  • In response to a subpoena, court order or legal process, to the extent permitted or required by law
  • To protect the security and safety of individuals, data, assets and systems, consistent with applicable law
  • In connection the sale, joint venture or other transfer of some or all of its company or assets, subject to the provisions of this Privacy Notice
  • To investigate or address actual or suspected fraud or other illegal activities
  • To exercise its legal rights, including enforcement of the Terms of Use for this site or another contract
  • To affiliated Pearson companies and other companies and organizations who perform work for Pearson and are obligated to protect the privacy of personal information consistent with this Privacy Notice
  • To a school, organization, company or government agency, where Pearson collects or processes the personal information in a school setting or on behalf of such organization, company or government agency.


This web site contains links to other sites. Please be aware that we are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of each and every web site that collects Personal Information. This privacy statement applies solely to information collected by this web site.

Requests and Contact

Please contact us about this Privacy Notice or if you have any requests or questions relating to the privacy of your personal information.

Changes to this Privacy Notice

We may revise this Privacy Notice through an updated posting. We will identify the effective date of the revision in the posting. Often, updates are made to provide greater clarity or to comply with changes in regulatory requirements. If the updates involve material changes to the collection, protection, use or disclosure of Personal Information, Pearson will provide notice of the change through a conspicuous notice on this site or other appropriate way. Continued use of the site after the effective date of a posted revision evidences acceptance. Please contact us if you have questions or concerns about the Privacy Notice or any objection to any revisions.

Last Update: November 17, 2020