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What You Need To Know About Tax Return Forms

As a person with income, you are required by the law to file your tax returns for the year. When it is time to do so, you will have to pick from three forms. These forms are 1040, 1040A, or 1040EZ. Anyone can fill out the Form 1040; the other two have some other specific requirements.


Here is a quick breakdown of the forms and when to use them:

– Form 1040A

You can use this form when you do not want to itemize your deductions, for example for mortgage interest. However, it will be tough for you to claim deductions, but tax credits for expenses such as education can be claimed.
– Form 1040EZ

You will not be able to claim any deductions or credits on this form except for the earned income tax credit. This form is a brief version of form 1040. The best thing about the 1040EZ is that you can easily file your returns with many online tax preparation services free of charge.
– Form 1040

This form allows you to claim all the credits and deductions possible. Also, anyone can use form 1040, regardless of filing status. The only downside about it is that it is much longer than the other two.
Now that we have broken down all the forms, it is time to talk about when to use each one of them.

When to use Form 1040:

1. When your taxable income was $100,000 or more.

2. When you claim certain tax credits, itemize deductions, or are a trust or estate beneficiary.

3. When you have certain types of income such as self-employment earnings, certain nontaxable distributions, unreported tips, or income received as a shareholder or partner in a corporation.
When to use Form 1040A:

1. When your taxable income is less than $100,000.

2. When the only adjustments to your income are the educator expenses deduction, the IRA deduction, or the student loan interest deduction.

3. When you do not itemize deductions.

4. When your income comes entirely from interests, taxable scholarships/grants, wages, IRAs, etc.

5. When you have stock acquired from the exercise of an incentive stock option and you have an alternative minimum tax adjustment.

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State Law Vs. Federal Law

Legal issues are difficult for the average person to understand. There is procedural, penal, case, state and federal law, all of which must be understood if you are to come up with a potent legal argument. That is why hiring a competent lawyer is always recommended. While there are many legal issues that are governed by federal law, it is the state that formulates the framework for implementation of those laws. When it comes to bankruptcy, for instance, the federal government provides the legal framework for resolution of debt while the state comes up with the debt limits and exemptions among other things. When it comes to criminal cases, some cases must be taken before a federal judge while others can be handled within the state.

When looking for a lawyer to hire, it is important for consumers to confirm that the attorney is licensed by the local bar association to handle cases in the state. This is an important requirement because a lawyer who is not licensed in a given state cannot appear before its courts. Consumers should also do some research on the reputation of a lawyer before hiring them. This is because the reputation of the lawyer can have a big impact on the outcome of the case. If you hire a lawyer who is known to be disrespectful and cunning, your case may be hurt by their reputation. You want a decent and respectable lawyer to represent you.

There are many legal fields that a lawyer can specialize in as they begin their practice. Depending on the type of legal problem you are facing, whether family-related or a criminal case, you should hire a lawyer who has focused in that legal field. For instance, if you are facing financial problems and want to seek debt resolution through bankruptcy, you should hire a lawyer who has focused on bankruptcy and other financial issues.

The amount of experience a lawyer has in a given legal field matters a lot as it can have an impact on the success of your case. The ideal lawyer must have been handling similar cases for many years with a high success rate. Therefore, you should do your research to learn about the amount of experience a lawyer has in the field of interest.

The rates charged by an attorney is a key factor to consider. After all, you do not have unlimited resources to commit to the case. Ideally, you should identify three or four lawyers that meet all your requirements and ask them to give you their hourly rate. By comparing the rates charged by different lawyers, you can identify the most affordable one. This will go a long way in helping you to make a well-informed decision.