Federal Income Tax Returns

In casual conversation, the term tax return is used rather loosely for two related, but entirely different topics.  Sometimes the term is used when talking about filling out an income tax form.  The same term is also used when talking about a refund.

Filling out a Tax Return

Anyone trying to figure out if they have to file a tax return has the opportunity to read through two pages of IRS instructions.  Essentially, all of those instructions can be condensed into three high-level rules of thumb for the tax years 2015 and 2016:

  • If the filer's gross income was more than $3,800, and they are not claimed as a dependent on another's tax return, they may have to fill out a return.
  • If the filer is claimed as a dependent on someone else's form, and the filer's unearned income was greater than $950, they might have to file a return.
  • If the filer is claimed as a dependent on someone else's form, and their earned income is $5,650 or more, they might have to file a return.

Gross income is merely the sum of all earned income (such as wages) plus unearned income (interest income).  Pages 8 and 9 of the Form 1040 instructions have a much more detailed approach to figuring this out.  Anyone close to these thresholds needs to look at these instructions to see if they need to file a tax return.

Anyone that is a college student and their employer withheld federal income tax, may have overpaid and may be entitled to a tax refund.  Form 1040 EZ is simple to fill out and worth the effort, especially if there is a chance of receiving money back from the government.

Tax Return Deadline

Typically, the tax filing deadline is April 15th.  But if the 15th falls on a Friday, the deadline will be Monday, April 18th.  If the 15th falls on a Saturday, the deadline will be Tuesday, April 18th.  If the 15th falls on a Sunday, the deadline will be Tuesday, April 17th.

The above rules have been in place since 2005, when Emancipation Day (April 16th) became a public holiday in Washington D.C.

Filing for an Income Tax Extension

All taxpayers are entitled to an automatic six-month extension if they inform the IRS either by phone or by completing a Form 4868 no later than April 15th.  This does not mean everyone can wait until October 15th to pay income taxes they owe the government.  The extension only applies to the filing of the tax return.  The government expects to be paid on time; interest charges will accrue on any taxes due starting on April 15th.

Anyone in the military and on duty outside of the United States, or a civilian that lives outside the United States and their main place of business is outside of the U.S., may qualify for an automatic two-month extension without filing a Form 4868.

Form 1040

The IRS is extremely sensitive to the time it takes to fill out tax forms.  As a matter of fact, the instructions usually contain an estimate of the time necessary to fill out each form.

The rule of thumb for Form 1040 is to keep it simple.  Unless a taxpayer believes they are entitled to numerous tax deductions, they will want to complete the shortest form possible.  The three options include:

Form 1040EZ

The easiest of the three tax returns to complete is the Form 1040EZ.  This is the form most college students or summer help would typically file with the IRS.  It's also the best form for individuals with interest income that is less than $1,500, zero dependents, taxable income less than $100,000, and under the age of 65.

Form 1040A

The Form 1040A is a little more detailed than Form 1040EZ.  Filers are able to claim deductions for student loan interest expense, IRA contributions, and some higher education costs.  It's also possible to claim a tax credit for items such as childcare, earned income, and education.

Form 1040A does not allow taxpayers to itemize deductions and taxable income must be less than $100,000.  It's possible to claim a capital gain distribution, but not a capital gain and loss.  If the forms 1040EZ or 1040A are not suited to an individual's situation, then the tax return should be completed using the Form 1040, also known as the long form.

Tax Refunds

Once a tax return is completed, there is either good news or bad. The bad news is easy to figure out, since it involves writing out a check to the IRS.  The good news is easy to recognize too, because it's a tax refund, which leads to one final tip:

Consider filling out tax forms as early as possible after the first of the year.  Even if this is just an estimate, try to get an idea if money is owed or if there will be a refund.

Anyone that thinks they're getting a refund should fill out their tax return as soon as possible.  This way the tax refund is received sooner.  Anyone that owes additional income taxes may want to wait until they're closer to the April 15th deadline before sending in their return.

In the good old days, the earlier someone filed their return, the faster they would get their refund.  Today's age of electronic tax filing allows individuals to opt for electronic funds transferred directly into a bank account.

Tax Refund Status

The best innovation we've seen from the IRS in recent years is their system that allows anyone to check on the status of their tax refund, which can be determined by visiting Where's My Refund.  The only information needed is a Social Security number, filing status, and the refund dollar amount.


About the Author - Federal Income Tax Returns (Last Reviewed on August 15, 2016)