00:08Today, we're going to talk about the 1040.
00:10The first time I saw a 1040, I thought, why are there so many lines and why is it so
00:16confusing?
00:17And I'm sure I'm not alone in this feeling because a lot of people have this question
00:22about what is a 1040 tax form.
00:24So all of the information that we've discussed in previous episodes, this is the culmination
00:29of all of that information.
00:30And so all of your W-2s that you've received for the year, any 1099s, all of that information
00:35will end up on your form 1040.
00:38It actually has a major impact and could be the difference between you getting a refund
00:42or you owing.
00:43And so you want to make sure that you fill it out right.
00:45To help you better understand a 1040 and how to fill it out correctly, we have our team
00:50of tax experts.
00:51But first, a question from Hannah.
00:53Hi, my name is Hannah.
00:54Hannah.
00:54I went to the IRS website to download the return form and was overwhelmed with all the
00:59information I needed to fill out.
01:01Help.
01:03Hannah, we got you, girl.
01:04So let's dive right in.
01:07What do you have for her?
01:09The 1040 is a form that's required by the U.S. government that will identify all of your
01:14wages that have been earned for the year and help you calculate what your tax liability
01:18is and if you are owed money from the federal government or if you owe money back to the
01:23federal government.
01:25The form 1040 is applicable to all U.S. taxpayers.
01:29Whether or not you will be filling it out yourself is determined whether or not you will
01:33be using a tax preparer.
01:35If you are using a system to help you prepare your taxes, you do still have to fill this out.
01:40It's just housed within the software.
01:43Starting from the top, you will fill out your filing status for the year.
01:47You will then move on to providing your basic information, which will include your full
01:52legal name, your social security number, and your home address.
01:55Then you will identify whether or not you will be taking the standard deduction or if you will
01:59be itemizing those deductions.
02:01You will then also provide information about any dependents that you may have, whether a
02:06qualifying child or a qualifying relative, and provide some basic information.
02:10You will then fill out and capture all of your wages for the year.
02:13This will include any tips that you receive, bonus, grants, commissions, every dollar that
02:18you've received from your employer or employers.
02:21Then there's a myriad of questions that are very specific to your individual tax situation.
02:25So whether or not you have any IRA distributions, any pension distributions, those are very specific
02:31to your particular tax situation.
02:33Once you've captured every dollar, this is referred to as your total income.
02:38Once you have calculated your total income, if there's any adjustments to that total income,
02:42that is then referred to as your AGI, your adjusted gross income.
02:46Once you have identified your adjusted gross income, you will then identify whether or not
02:50you will be applying the standard deduction or if you choose to itemize your deductions.
02:55This then results in what is considered your taxable income for the year and how your tax
03:00liability will be calculated going forward.
03:03So once you have identified your taxable income for the year, you then will move onto the section
03:08labeled credits.
03:09This is where you apply any credits that are applicable to your individual tax situation.
03:13From there, you will then know and be able to calculate whether or not the government owes
03:18you money or you owe the government back.
03:21I'm so impressed by Lauren's explanation of the 1040.
03:25Such a simple and concise way to understand what this tax form is all about.
03:30So, Tanya, do you have anything for Hannah?
03:32Yeah.
03:33I filed my taxes for the first time by myself when I was like 17 years old.
03:38Oh my gosh.
03:39You're so impressive.
03:39Oh my gosh.
03:40I'm not.
03:41I'm not.
03:42Right now, there's tax software, there's websites and so forth that really help kind of hold
03:47your hand through the process.
03:48And that's what I found instrumental and really helpful.
03:51It's like, okay, maybe the question on this form, maybe you don't understand it in this
03:55manner, but the software asks you the question.
03:57We're like, yo, yeah, I want to do that or no, I don't want to do that or yeah, I
04:00did
04:00this or I didn't do this.
04:02But also understand, you know, if you have a more complex situation, maybe it's not for
04:07you to file it yourself.
04:08Mine was very simple.
04:09I didn't have any children.
04:10I like didn't have a home.
04:12I was like, well, I was not homeless.
04:14I lived at home with my parents, but I wasn't claiming a home or anything of that nature.
04:18I hadn't gone to college, so I didn't have interest for my student loan payments or anything
04:22of that nature.
04:23So it was really straightforward and it made sense for me at that time.
04:26But if your taxes aren't straightforward and you're concerned that you're going to mess
04:30something up, that's the reason there are experts there.
04:32So ask questions or reach out to expert.
04:35If you feel like it's a little out of your hands or if you get to a point when using
04:38a
04:38software that you're like, you know what?
04:40I don't trust myself with this.
04:41Let me ask for additional help.
04:42I still can't get over Lauren's explanation about the 1040.
04:47Wow.
04:48Very impressive.
04:49Stay tuned for the next one, all about tax deadlines and extensions.
04:53Make sure to subscribe to the mother of someone who owns thever, which is an interviewer.
04:56Be sure to join us at your house.
04:58So, we'll be back in the next one.
04:59We'll be right back in the next one, all about tax deadlines and extensions.
04:59Bye.
05:00Bye.
05:00Bye.
05:01Bye.
05:01Bye.
05:01Bye.
05:02Bye.
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