Form 1040-A: Simplified U.S. Individual Tax Return Explained

Julia Kagan is a seasoned financial and consumer journalist, formerly a senior editor specializing in personal finance at Investopedia.

What Was Form 1040-A: U.S. Individual Tax Return?

The IRS's Form 1040-A served as a more straightforward alternative to the traditional Form 1040, allowing eligible U.S. taxpayers to file their yearly income tax returns with less hassle. To qualify for Form 1040-A, taxpayers had to meet specific criteria, including not itemizing deductions, not owning a business, and having taxable income below $100,000. Often referred to as the "short form," Form 1040-A was discontinued starting with the 2018 tax year when the IRS introduced a redesigned Form 1040.

Key Highlights

• Form 1040-A offered a simplified filing process compared to the standard Form 1040 for individual income taxes.
• Eligible filers had to have taxable income under $100,000 and must not have exercised incentive stock options during the year.
• The IRS phased out Form 1040-A in 2018, replacing it with a revamped Form 1040.
• Form 1040-EZ, an even simpler variant, was also eliminated alongside Form 1040-A starting in 2018.

Who Was Required to Use Form 1040-A?

Most U.S. taxpayers traditionally used Form 1040 for filing income taxes, especially those with complex financial situations involving investments, itemized deductions, multiple credits, or incomes exceeding $100,000. For taxpayers with simpler tax profiles, Form 1040-A provided an easier alternative.

This two-page form allowed individuals to report ordinary income, certain deductions, and tax credits. Taxpayers of any age could file under one of five statuses: single, head of household, married filing separately, married filing jointly, or widowed. However, not all taxpayers qualified to file with 1040-A.

To use Form 1040-A, filers needed to have taxable income below $100,000 and must not have exercised any incentive stock options during the tax year. Acceptable income types included wages, salaries, tips, capital gains, dividends, interest, unemployment compensation, pensions, annuities, taxable Social Security and railroad retirement benefits, taxable scholarships or grants, and Alaska Permanent Fund dividends. Income from businesses or other sources required the more detailed Form 1040.

How Did Form 1040-A Function?

Form 1040-A allowed taxpayers to claim specific deductions to reduce taxable income, including student loan interest, qualified post-secondary tuition and fees, classroom expenses, and IRA contributions. However, it did not permit itemized deductions. Therefore, taxpayers with deductible expenses like charitable contributions or mortgage interest that exceeded the standard deduction would benefit more from filing the full Form 1040.

Additionally, Form 1040-A enabled claimants to apply for various tax credits that directly lower tax liability. These credits included the American Opportunity Tax Credit (AOTC), Earned Income Credit (EIC), child tax and additional child tax credits, child and dependent care credit, credits for the elderly or disabled, and retirement savings contribution credit.

Comparing Form 1040-A and Form 1040-EZ

Form 1040-EZ was an even more simplified version of Form 1040-A, intended for taxpayers with very straightforward tax situations. It was limited to single filers or married couples filing jointly, did not allow deductions, and only permitted claiming the Earned Income Credit (EIC). Like Form 1040-A, Form 1040-EZ was discontinued beginning with the 2018 tax year.

While Form 1040-A was more detailed than 1040-EZ, it remained simpler than the comprehensive Form 1040. Taxpayers with dependents, special deductions, or education-related credits often transitioned from 1040-EZ to 1040-A to better accommodate their tax needs.

The IRS’s redesigned Form 1040, launched in 2018, streamlined the filing process significantly, leading to the elimination of both Form 1040-A and Form 1040-EZ to simplify tax return submissions for all taxpayers.

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