IRS Form 1040 101: The Whats & Hows
Does the thought of sorting out your 1040 income tax form (and, God forbid, failing at doing it) make your skin crawl? No worries, you are not alone. Because this document is one of the most common in the United States tax system (the mother of all tax forms, for sure), you’re going to finally have to get to grips with it. In this post, we’ll cover the basics of the topic.
What is the purpose of this doc? Who is supposed to file it? How to fill out IRS 1040 schedule C online? Now that we’re in 2021 has the form truly become easier to deal with after being changed in 2018? Find the answers to these and some other questions related to form 1040 below. Once you read our instruction overview and learn more about this document, it may seem less scary and confusing.
Form 1040: the Basics
A quick definition: form 1040 is one of the official docs U.S. taxpayers utilize for reporting their tax info to the IRS. The form reports your gross income (the one you received throughout the last 12 months), calculating how much tax you owe or your tax refund. The doc used to come in several variations, but now that it has been revamped, there’s just form 1040 and 1040-SR.
Based on the type of income you report, additional docs (also referred to as schedules) may need to be attached to form 1040. For example, if you’re an owner of a sole proprietorship, you’re going to need to fill out 1040 schedule C online and attach it to form 1040. If you’re having trouble sorting the whole thing out, ask your bookkeeper to help you find a free schedule C fillable form and complete it for you.
All that said, here are the main functions for Form 1040:
- gathering all the basic data about you;
- determining your annual taxable income, along with all the deductions;
- assessing your tax accountability;
- pinpointing whether you’ve paid all of your tax bills or not and i.e. whether you qualify for a refund or not.
1040 Blank Schedule C: Where to Find It?
Wondering where you can find the 2021 form 1040 or its schedules? Make the most of the multiple document automation software platforms out there. If you choose hiring a tax preparer, they’ll have all the necessary papers (in either digital or paper form). Also, you’re free to get your form 1040 on the IRS official website. Can’t find a reliable schedule C PDF source, let alone fill it out? Ask for professional help without hesitation. Don’t forget that tax season officially begins in February. The deadline to fill your tax forms is the usual April 15, 2021.
Step-by-Step Guide on Preparing Your Form 1040
- Focus on gathering your tax information, along with such vital tax docs as W-2s, 1099s, etc.
- Calculate your business income and gross profit.
- Attach your business expenses.
- Don’t forget about your net income calculation.
- Attach schedule C to your form 1040.
Wondering where to submit your form 1040? That depends on how you’re going to complete and file it. For example, if you’re planning to submit a paper version of the form, the exact address is determined by the state in which you live (see the IRS instructions for more details). While if you intend to e-file the form, you can make the most of a reliable tax prep software platform and/or ask a tax pro to have the whole thing sorted out for you. At the end of the day, form 1040 is definitely something that deserves your undivided attention.