What Is IRS Form 1040A? History, Eligibility, and Replacement
Introduction
For a long time, people with simple personal finances could use several different IRS tax forms. There was Form 1040A, which was slightly more advanced than the very basic 1040EZ. Form 1040A, however, was still a bit more basic than the full length Form 1040.
As a part of modernization, the IRS completely got rid of 1040A after the 2017 tax year. Nowadays, all tax payers are able to use a single, redesigned Form 1040.
In this article, we will dive into what Form 104A was, who was able to use Form 104A with ease, the reasons as to why Form 104A was removed, and the ways tax payers can manage current and past IRS returns.
What Was Form 1040A?
Form 1040A is a more basic version of the tax return individual income that was made for people who do not have a complicated filing situation.
Form 1040A was the tax form one used that was in the middle:
Much less restrictive than the 1040EZ, which did not allow taxpayers to have a dependent or some form of credit.
Not as detailed as the Form 1040 where the person submits deductions and all forms of income.
For decades, it was a very simple filing alternative that did not have dozens of lines and schedules for millions of American citizens.
Purpose and Role in the U.S. Tax System
The IRS’s goal in creating 1040A was to make taxpayer burden more manageable without sacrificing income information accuracy. They helped taxpayers:
Filing becomes streamlined with wage and retirement income.
Access to some credits, like the Child Tax and Education Credits, available on the 1040EZ.
Retired individuals and families who did not want the full complexity of Form 1040.
It became a “middle ground” form that was widely used for the simplistic and the complex tax situations.
Who Was Eligible to File 1040A
Not everyone could opt for 1040A. The form came with specific limitations:
Income cap: Taxable income had to be less than $100,000.
Countable income: Wages, interest, dividends, unemployment benefits, taxable social security, and retirement distributions.
Adjustments: A few specific deductions like IRA contributions and a student loan interest deduction.
Deductions: Only the standard deduction could be claimed. Itemized deductions were off the table.
Credits: Taxpayers had the privilege of claiming the earned income credit, the child tax credit, and the education credits, however not all the 1040 credits were available.
If you had business income, had capital gains, earned self-employment income, and wanted to itemize your deductions, you had to use a long Form 1040.
Differences Between 1040, 1040A, and 1040EZ
Sample for comparison of the forms obsolete before 2018:
| Feature | 1040EZ | 1040A | 1040 |
|---|---|---|---|
| Income Limit | Under $100,000 | Under $100,000 | No limit |
| Dependents | Not allowed | Allowed | Allowed |
| Adjustments | None | Limited | Full range |
| Deductions | Standard only | Standard only | Standard or itemized |
| Credits | Limited | Several allowed | Full range |
| Complexity | Easiest | Moderate | Most complex |
Why Form 1040A Was Discontinued
Beginning in the 2018 tax year, the IRS stopped issuing 1040A forms due to a reorganization in concern with the Tax Cuts and Jobs Act (TCJA).
In place of having three separate 1040 forms, the IRS consolidated everything to one redesigned Form 1040, which is a lot shorter than the original 1040. Any extra complex information is supplemented through schedules (Schedules 1, 2, and 3 as examples).
Confusion over which form a taxpayer should use is reduced, and the IRS is able to modernize paper and electronic filings.
What To Use Instead
Currently, each individual filer uses Form 1040, irrespective of the filer's income and the filing's difficulty. The distinction is whether additional schedules must be attached.
Simple returns: Many taxpayers with only W-2 income and a standard deduction usually only complete the basic form and do not add any additional schedules.
Complex returns: Taxpayers with any business investment income, small business income, and taxpayers who do itemized deductions will usually have schedules to add.
Currently, Form 1040 has roughly combined the 1040A and 1040EZ forms, therefore becoming the only form a taxpayer has to file.
Accessing Old 1040A Returns
Although Form 104A is now considered to be obsolete, there are instances when you need the past returns such as when you need to apply for a mortgage, financial aid, or need to complete some immigration papers. What are your choices?
IRS Transcripts: You can order free tax transcripts through the IRS Get Transcript service
Exact Copies: You need to fill out Form 4506 and send it to the IRS if you want certified copies of old 1040A returns, as there is a processing fee.
Tax Software or Preparers: Your software provider or your tax preparer may have archived copies if you filed your return electronically.
Conclusion
Form 1040A was handy for those who wished to claim some allowable credits with an income of less than $100,000 without having to file itemized deductions. However, the IRS system simplification efforts led to discontinuing 1040A and replacing it with the new universal Form 1040, which came into use in 2018.
Replacing the 1040A Form for you means using Form 1040 and, in the majority of situations, the ease of use is the same. The clearer the changes are to IRS guidelines, the less issues taxpayers will face while filing.
Need help with your Form 1040A? Reach out to Dimov Partners today!
FAQs
What is a 1040A tax form?
Who could file a 1040A?
Is Form 1040A still valid?
What replaced 1040A and 1040EZ?
Can I still get copies of my old 1040A returns?