7.4 Forms 1040EZ and 1040A

1. Form 1040EZ- A short form that taxpayers can use to report their earnings and pay their taxes. This form has CERTAIN requirements. 2. Form 1040A- A SHORT form that taxpayers can use to report their earnings and pay their taxes. 3. Form 1040- A tax form used by people that have other types of INCOME such as royalties, alimony, or prizes; also called the long form. VOCABULARY

4. Dependent- A person reported on a taxpayer's income tax form that a taxpayer SUPPORTS financially. 5. Exemption- Information included on tax forms that LOWERS taxes; exemptions include dependents as well as the taxpayer. 6. ITEMIZE- When deductions are listed on a tax form. 7. Standard Deduction- An allowable reduction on income tax forms that is based on the FILING status; these amounts are set by the government and may change from year to year. VOCABULARY

Elizabeth Allison is a food editor for a magazine Elizabeth Allison is a food editor for a magazine. She has received a W-2 form from her employer and a 1099 form from her savings bank. What is Elizabeth’s taxable income for the year if she files as a single taxpayer? EXAMPLE 1

What is Elizabeth’s tax? EXAMPLE 2

Does Elizabeth get a refund or owe the government money Does Elizabeth get a refund or owe the government money? In either case, determine that amount. EXAMPLE 3

CHECK YOUR UNDERSTANDING 1 Leo is filling out his 1040EZ form. His employer withheld $12,907 in federal taxes. He has calculated that he owes $13,952. Does he get a refund or owe money? In either case, what is the amount? CHECK YOUR UNDERSTANDING 1

How many exemptions can Mr. and Mrs. Omar claim? EXAMPLE 4

Determine the Omars’ adjusted gross income Determine the Omars’ adjusted gross income. They received $987 interest on bank deposits and $1,200 in stock dividends. EXAMPLE 5

Determine the Omars tax for the year. EXAMPLE 6

Do the Omars get a refund or owe the government money Do the Omars get a refund or owe the government money? In either case, determine that amount. EXAMPLE 7

CHECK YOUR UNDERSTANDING 2 Lisa and Bob Zee have a combined income from salaries of $87,980. They received 1099 forms for $1,100 in interest from their bank and $1,300 in stock dividends. They have a total of $4,000 in adjustments to their gross income. Determine their adjusted gross income. CHECK YOUR UNDERSTANDING 2