IRS 1040 U.S. Individual Income Tax Return

Form 1040 Questions and Answers

• Taxpayer Information
  • Filing Status
    • What are the different filing statuses?
    • What tests must you satisfy to be considered married for filing status purposes?
    • Who is treated as unmarried for filing status purposes?
    • Who may file as a head of household?

• Income
  • Wages, Salaries, and Tips
    • What should I do if a Form W-2 is not provided?
    • Where do I report compensation received as an employee and what compensation is included?
    • How do I report tip income?
  • Interest
    • Where is interest income reported?
    • What types of interest income are reported on form 1040?
    • How is interest income from a U.S. Savings Bond reported?
    • When is interest income from a U.S. Savings Bond not taxable?
  • Dividends
    • Where is dividend income reported?
    • What are ordinary dividends?
    • What are qualified dividends?
    • What types of dividends cannot be qualified dividends?
    • When is a dividend declared in 2018 and paid in 2019 taxable?
  • Retirement Distributions
    • Are the distributions from a traditional IRA taxable?
    • What are the general tax consequences associated with IRAs?
    • How are distributions from employer-sponsored retirement plans taxed?
    • What are the general rules that apply to payments from pensions and annuities?
  • Social Security Benefits
    • How is the taxable amount of a lump-sum payment of Social Security benefits figured?
    • What are Social Security benefits, for tax purposes?
    • How is the taxable amount of Social Security benefits generally figured?

• Additional Income-Schedule 1
  • State and Local Tax Refunds
    • How is the taxable amount of a state income tax refund generally figured?
    • How is the taxable amount of a state income tax refund figured if the taxpayer was subject to the itemized deduction limitation?
  • Alimony Received
    • What is an alimony or separate maintenance payment?
    • How does a payee-spouse treat alimony or separate maintenance payments received?
    • When is a payor-spouse required to recapture excess alimony paid?
  • Business Income
    • How is income or loss from a business reported?
    • What expenses can be deducted by a business?
    • What method of accounting is used for a business?
    • What types of dividends cannot be qualified dividends?
    • I own an interest in an activity as a limited partner. Can I ever be treated as materially participating in the activity?
    • What types of activities are considered passive activities?
    • Can losses disallowed as a result of the at-risk rules be deducted in the following year?
    • For what amounts am I considered at risk?
  • Capital Gains
    • Are capital losses deductible?
    • What is a capital asset?
    • What tax rates apply to net capital gains?
    • Is my long-term capital gain from the sale of property and qualified dividend income taxed at 0, 15, or 20 percent?
  • Sale of a Home
    • If I qualify, what is the maximum amount of gain that I may exclude on the sale of a principal residence?
    • What are the ownership and residency requirements to qualify for the exclusion of gain from a sale of a home?
    • Do I currently have to live in the principal residence to qualify for the exclusion of gain from a sale of a home?
    • Do the ownership and use tests for the principal residence exclusion apply to people outside the county?
    • Do the ownership and use tests apply if a home sale is due to health or work-related issues?
    • If I own two homes, which home is considered the principal residence?
  • Sales and Exchanges
    • When is gain determined under the installment method?
    • Can I elect out of the installment method?
    • What types of property qualify for the like-kind exchange treatment?
    • When is gain or loss recognized on a like-kind exchange?
    • What requirement must be met for property to be considered involuntarily converted?
    • Is gain recognized when property is involuntarily converted into property that is not similar or related in service or use to the converted property?
    • What is the effect of an involuntary conversion (i.e., destruction, taking or condemnation) of a residence?
    • What are the below-market loan rules?
    • What types of loans are affected by the below-market loan rules?
  • Other Gains and Losses
    • What other gains and losses are generally reported on Line 14 of Form 1040, Schedule 1?
    • What types of property are subject to these rules for other gains and losses?
    • How are these other gains and losses calculated?
  • Rental Real Estate, Royalties, Income from Passthrough Entities
    • What is the tax treatment of a personal residence rented for 15 days or more during the year?
    • What is the tax treatment of a personal residence rented for less than 15 days during the year?
    • When is a home treated as a personal residence for purposes of the rental income rules?
    • What are royalties?
    • How are royalties reported on my return?
    • How does a partner treat distributions received from a partnership?
    • I am a partner. Can I deduct my share of a partnership loss?
  • Farm Income or Loss
    • What types of farm income are reported on Schedule F of a farmer's return?
    • What types of farm expenses can I deduct on Schedule F of a farmer's return?
  • Unemployment Compensations
    • What payments are treated as unemployment compensation?
    • How should I treat unemployment compensation when I have made prior nondeductible contributions to a government unemployment compensation program?
    • How should I treat unemployment compensation that is repaid?
  • Other Income
    • How is the taxable portion of a distribution from a Coverdell education savings account (ESA) calculated?
    • How is the taxable portion of a distribution from a qualified tuition program (QTP) calculated?
    • How is a court award taxed and reported?
    • How is a canceled debt taxed and reported?
    • How are gambling winnings (or losses) taxed and reported?
    • How is jury duty pay taxed and reported?

• Nontaxable Items
  • Items Not Generally Reported on a Form
    • Can I exclude payments from my employer for dependent care assistance?
    • Can I exclude amounts related to accident and health insurance plans?
    • Can I exclude amounts paid by my employer for my education?
    • Can I exclude amounts paid by an employer for adoptions?
    • What employee fringe benefits can be excluded from income?
    • Is an employer-provided cell phone taxable to me?
    • Can I exclude payments from my employer for transportation to work?
    • Is a forgiven mortgage taxable to me?

• Adjustments to Income-Schedule 1
  • Educator Expenses
    • May I claim the deduction for educator expenses?
    • What expenses qualify for the deduction for educator expenses?
  • Certain Business Expenses of Reservists, Performing Artists, and Fee-Basis Government Officials
    • What expenses may a qualified performing artist deduct?
    • What expense may a reservist deduct?
    • What expenses may a fee-based government employee deduct?
  • Health Savings Accounts (HSAs)
    • Can I deduct contributions to a health savings account (HSA)?
    • Is there any limitations on the amount of the health savings account (HSA) deduction?
  • Moving Expenses
    • When can moving expenses be deducted?
  • Self-Employment Tax Deduction
    • Where do I figure the self-employment tax deduction?
  • Self-Employment Retirement Plans
    • Which self-employed persons are eligible for the deduction for self-employed SEP, SIMPLE, and qualified plans?
    • What contributions can a self-employed taxpayer deduct?
  • Self-Employed Health Insurance Deduction
    • Can I take the self-employed health insurance deduction?
    • What types of insurance are eligible for the self-employed health insurance deduction?
  • Penalty on Early Withdrawal of Savings
    • What amounts qualify for the deduction of the penalty for the early withdrawal of savings?
    • How do I determine the amount of my penalties on the early withdrawal of savings?
  • Alimony Paid
    • Who qualifies to take the deduction for alimony paid?
    • What payments are eligible for the deduction for alimony paid?
  • Individual Retirement Account Contributions
    • Are there limitations on deducting contributions to a traditional IRA?
    • Who is covered by an employer retirement plan?
    • How do the rules for Roth IRAs differ from the rules for traditional IRAs?
  • Student Loan Interest Deduction
    • What interest qualifies for the student loan interest deductions?
    • What are qualified education loans?
  • Tuition and Fees Deduction
    • Can I take the tuition and fees deduction?
  • Other Adjustments to Income
    • Can I take a deduction for an Archer MSA?
    • Can I take a deduction for jury duty pay?
    • Can supplemental unemployment benefits be deducted?
    • Can I deduct attorney fees?

• Deductions
  • Standard Deductions and Itemized Deductions
    • What are the basic standard deduction amounts for 2018?
    • When should I claim itemized deductions instead of the standard deduction?
    • What is the qualified business income deduction?

• Itemized Deductions-Schedule A
  • Medical and Dental Expenses
    • What are the general rules for deducting medical expenses?
    • What expenses are generally deductible as medical expenses?
  • Deductible Taxes
    • What state and local income taxes are deductible?
    • What real estate taxes are deductible?
    • Are prepaid 2018 property taxes paid in 2017 deductible in 2018?
  • Deductible Interest
    • What are the general rules in deducting interest?
    • What are the general rules on deducting home mortgage interest?
    • Are there limits on the home mortgage interest deduction?
  • Charitable Contributions
    • What are the general rules on deducting charitable contributions?
    • What are the limitations on deducting charitable contributions?
  • Casualty and Theft Losses
    • Can I deduct a casualty loss?
    • What limitations apply to the deduction of a casualty or theft loss?
    • How is the amount of a casualty or theft loss figured?
  • Other Itemized Deductions
    • What are some other itemized deductions?
    • How are the gambling losses of recreational gamblers treated for tax purposes?

• Tax
  • Regular Tax
    • Who must use the Foreign Earned Income Tax Worksheet to calculate regular tax?
    • Who should use the Qualified Dividends and Capital Gain Tax Worksheet to calculate regular tax?
    • Who is a child for purposes of the kiddie tax?
    • Who does the kiddie tax apply to?

• Tax-Schedule 2
  • Alternative Minimum Tax
    • Why is there an alternative minimum tax (AMT)?
    • What are the 2018 AMT exemption amounts?
    • What is the 2018 AMT tax rate?

• Tax Credits
  • Child Tax Credit
    • What is the maximum amount of the child tax credit that may generally be claimed and who may claim it?
    • For purposes of the child tax credit, who is a qualifying child?
    • For purposes of the $500 family credit, who is a qualifying relative?
    • Can I claim the child tax credit if I do not owe taxes?

• Nonrefundable Tax Credits-Schedule 3
  • Foreign Tax Credit
    • What foreign taxes qualify for the foreign tax credit?
    • Can I take a foreign tax credit for taxes for which a refund is available?
    • Can a cash method taxpayer take a foreign tax credit in the year the taxes accrue?
  • Business Tax Credits
    • How much is the credit for small employer pension plan startup costs?
    • What is the disabled tax credit and how much is it?

• Other Taxes-Schedule 4
  • Self-Employment Tax
    • Who is subject to self-employment (SE) tax?
    • Which taxpayers must always use the Long Schedule SE (Section B)?
  • Tax Payments
    • Who is required to file Form 1040, Schedule H, for household employees?

• Filing and Paying-Form 1040
  • Filing
    • When is Form 1040 due?
    • When is a decedent's tax return due?
  • Estimated Tax Penalty
    • How can I avoid the underpayment of estimated tax penalty?