1040a adjusted gross income

1040a adjusted gross income

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I'm preparing to file my taxes for the first item and I'm trying to determine if I should file a 1040EZ or a 1040A. The instructions I see say file a 1040EZ if you have "no adjustments", but they don't clarify what exactly that is.

Would an adjustment be anything that changes my adjusted gross income? IE last year I contributed to my IRA, which lowers my AGI. So would that disqualify me from a 1040EZ?

"Adjustments to income" are the changes you make to your "total income" to get your "adjusted gross income". These are things that come between the "total income" line and the "adjusted gross income" line on form 1040 (i.e., lines 23 through 36 on the 2014 form). These are sometimes called "above-the-line deductions"; they are deductions that you can use even if you don't itemize deductions. You can see an IRS page about them here.

An IRA contribution is indeed an adjustment to income. On this IRS page explaining which form to use, you can see that it says you can use 1040EZ if "you do not claim any adjustments to income", but you can use 1040A if "your only adjustments to income are the IRA deduction, the student loan interest deduction, the educator expenses deduction, the tuition and fees deduction". That makes it clear that you can't use 1040EZ if you want to claim a deduction for IRA contribution.


How to Calculate Taxable Income From Adjustable Gross Income

Your taxable income is derived after your adjustable gross income.

If you itemize your taxes, and thus use a Form 1040, the deductions come after your adjustable gross income (AGI) is determined. Even if you don't itemize, and use a 1040A, you can take standard deductions for yourself and potentially others in your household. Once these are figured in, you are left with your taxable income. That's the figure to check against the tax tables to find what you will pay.

Get your AGI from the appropriate line on your tax form. On the 1040, it's line 37; on the 1040A, it's line 21. On the 1040EZ, AGI can be found on line 4.

Figure out your post-adjustable gross income deductions. For the 1040, use the total deductions from Schedule A if you itemize. For the 1040A and 1040EZ, and if you choose not to itemize for the 1040, take the standard deduction for yourself -- and spouse, if applicable. The standard deduction is listed in the form instructions for each year.

Deduct the figure in Step 2 from your AGI. For example, if your AGI is $56,000, and you have a standard deduction of $9,350, the result is $46,650. This is your taxable income on the 1040EZ.

Deduct your exemptions if you file a 1040 or 1040EZ. Multiply the number of exemptions from the "Exemptions" area of the front of the form by the figure listed on the form. For example, with two exemptions times $3,650, the total is $7,300.

Subtract the result in Step 4 from the amount in Step 3 to find your taxable income. In this example, $46,650 minus $7,300 leaves $39,350 in taxable income.

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