Important Reasons to Avoid IRS Form 1040ez

For the convenience of taxpayers, the Internal Revenue Service offers several different tax forms one can use to file their taxes each year. Of these, one of the most commonly used is IRS Form 1040ez because it is far quicker to fill out, and less complex than IRS Form 1040 or IRS Form 1040A. This makes it a very popular choice for students and younger people just entering the work force, but there are definite disadvantages that you need to be aware of if you are planning to utilize this form when you file your taxes this year. The fact is, 1040ez is not always the best form to use for all situations, even if you as a taxpayer technically fit the eligibility requirements for its use. The disadvantages are surprising and they can certainly outweigh the benefits of convenience and a speedy tax refund. By keeping yourself aware of the down side of this tax form, you make a more educated decision when it comes to choosing the form that is going to best suit your needs when you are ready to file. Simplicity is not always the best answer, especially when it ends up costing you money to have that level of ease.

The most crucial aspect to understand about this particular tax return form is that you may lose the amount of money you get on your refund if you choose to use it. The primary limitations of IRS Form 1040 EZ is that you are greatly restricted in the amount of deductions you can claim and the amount of tax credits you can try for. The Earned Income Credit is a good choice for many people, but if you have dependent children or other people in your household whom you care for then you will not be able to get other tax credits while using this form. The reduction in the amount of deductions you can claim also means that expenditures such as work related costs you incur and medical expenses are not going to be eligible for you to itemize and this drastically reduces the amount of potential savings you could have on your taxes. In essence, you are almost guaranteed to get a smaller refund if you choose this route simply because the form is designed for those who are willing to forego cost saving in an effort to obtain a higher level of convenience. If you are not concerned with the size of your refund then you may want to check out 1040 EZ, but you definitely do want to be aware of the savings you miss out on by doing so.