IRS tax forms: Explained in detail

Forms for tax-exempt organizations and taxpayers are used by the US Internal Revenue Service (IRS) to record financial information, including income, taxes owed to the federal government, and other information mandated by the Internal Revenue Code (IRC). There are more than 800 different schedules and forms. In the United States, state and municipal governments receive other tax types. Read more about IRS tax forms by visiting our website and if you have any questions related to this topic, connect with us.

As the forms were launched, the IRS assigned them sequential numbers.

Single forms

1040

The only form utilized for personal (individual) federal income tax returns submitted to the IRS as of the 2018 tax year is Form 1040, U.S. Individual Income Tax Return. In previous years, such returns were filed using one of three forms: 1040 (the “Long Form”), 1040A (the “Short Form”), or 1040EZ (see below for details of each). For the tax years 1913, 1914, and 1915, the first version of Form 1040 was released. Form 1040 was changed to an annual form for 1916, meaning it was updated annually with the new tax year put on it. In the beginning, all families received tax booklets from the IRS, which included Form 1040, instructions, and the most typical attachments. The IRS mailed fewer packets as the use of other distribution methods (CPA/Attorneys, online forms) grew. This practice was abandoned in 2009.

Individual calendar year taxpayers must file their income tax returns by April 15 of the following year, unless April 15 occurs on a Saturday, Sunday, or a legal holiday. Returns are due the next business day in certain cases. Filing Form 4868 will automatically extend the deadline for filing Form 1040 to October 15.

Form 1040 consists of two condensed pages, excluding attachments. Before the 2018 tax year, it was two whole pages (not including attachments), however the IRS drastically reduced both pages when the Tax Cuts and Jobs Act of 2017 was passed. The signature line and information about the taxpayer and any dependents are gathered on the current first page. In addition to providing information on income items and changes to income, the current second page also computes the tax owed based on the income amount, allows deductions and credits, and applies money that has already been withheld from wages or projected payments made to the tax debt. Before 2018, the first page contained information on income items and changes to income. On both pre- and post-2018 versions of Form 1040, the presidential election campaign fund checkoff is located near the top of the first page and allows taxpayers to specify that the federal government donate $3 of their taxes to the presidential election campaign fund.

Abbreviations

Other “Short Forms” were employed for brief periods of time over the years. An IBM card, for instance, was used in the 1960s to write a few lines that were copied onto another card. A computer or “unit record” machine could read the holes on the other card, which had the identical appearance. A signature was always welcome, just like on the other forms. Following the 2017 tax year, the two most current short forms, 1040A and 1040EZ, were no longer in use.

The US individual income tax return, Form 1040A (“short form”), was a condensed version of Form 1040. Form 1040A was initially one page long before being enlarged to two pages in the 1982 version, and its use was restricted to taxpayers with taxable income under $100,000 who chose to take the standard deduction rather than itemizing deductions.

Introduced in 1982, the most basic six-section Federal income tax return was Form 1040EZ (“easy form”), Income Tax Return for Single and Joint Filers With No Dependents. It was only available to taxpayers who had no dependents, used the standard deduction rather than itemizing deductions, and had taxable incomes under $100,000 (as of the 2016 tax year).

Reporting under fiduciary duty

Section 1223(b) of the Pension Protection Act of 2006 states that a nonprofit organization’s tax-exempt status will be withdrawn as of the third return or notice’s due date if it fails to file annual returns or notifications for three years in a row. If an organization can provide justification for the years of noncompliance, its tax-exempt status may be restored.

990

The Form 990 is sometimes the sole source of financial data about a nonprofit organization that is made available to the public. Governmental groups also utilize it to stop them from misusing their tax-exempt status. The IRS introduced a new Form 990 in June 2007 that necessitates substantial disclosures about boards of directors and corporate governance. All nonprofit filers must make these additional disclosures for the 2009 tax year; organizations with more than $1 million in revenue or $2.5 million in assets must make more extensive reporting. Additionally, certain nonprofits—like hospitals and other health care organizations—are subject to extra stringent reporting obligations (Schedule H). Form 990 can be submitted online through an Authorized IRS e-file Provider or by mail to the IRS.

Nonprofit boards are encouraged to implement a range of governance practices rules, but they are not required to do so under the Form 990 disclosures. These recommendations go beyond the standards set forth by Sarbanes-Oxley for nonprofit organizations to implement document preservation and whistleblower programs. With relation to executive salaries in particular, the IRS has stated that it will utilize Form 990 as an enforcement tool. For instance, section 4958 of the Internal Revenue Code and Treasury Regulation section 53.4958-6 provide safe harbor from excessive compensation requirements to charitable organizations that implement particular executive compensation policies.