What form?

One of the first things people ask me when they come through the door is “How Much” – before answering that question, I would need to dive into a series of questions to find out which forms I would be likely to use when doing your taxes.  Of course, when I attempt to do that with a potential client they generally respond with “my taxes are easy” – and in about 1 out of 10 times I am told that, they are correct – the other 9, well, ‘easy’ is a rather subjective word.  With that in mind, I took the liberty of getting the following guidelines from the IRS website (www.irs.gov) as to who can file what type of return.  Generally speaking, the higher you go in the tax form hierarchy, the more complex the return and thus the greater cost.

First on the scale is the 1040 EZ – please do not confuse this with the ‘easy 1040’ as one is a form, the other is an opinion – and generally an opinion of someone getting their taxes done and not someone actually preparing the taxes.

You can use Form 1040EZ if all the items in the following check-list apply.
1.  Your filing status is single or married filing jointly.
2. You do not claim any dependents.
3.  You do not claim any adjustments to income.
4.  If you claim a tax credit, you claim only the earned income credit.
5.  You (and your spouse if filing a joint return) were under age 65 and not blind at the end of 2014. If you were born on January 1, 1951, you are considered to be age 65 at the end of 2015 and cannot use Form 1040EZ.
6.  Your taxable income is less than $100,000.
7.  You had only wages, salaries, tips, taxable scholarship or fellowship grants, unemployment compensation, or Alaska Permanent Fund dividends, and your taxable interest was not over $1,500.
8.  If you earned tips, they are included in boxes 5 and 7 of your Form W-2.
9.  You do not owe any household employment taxes on wages you paid to a household employee.
10. You are not a debtor in a chapter 11 bankruptcy case filed after October 16, 2005.
11. Advance payments of the premium tax credit were not made for you, your spouse, or any individual you enrolled in coverage for whom no one else is claiming the personal exemption.
 Pretty straight forward, right?  Like the name implies: EZ.  Now on to #2
 You can use Form 1040A if all six of the following apply.
1. You only had income from the following sources:
a. Wages, salaries, tips.
b. Interest and ordinary dividends.
c. Capital gain distributions.
d. Taxable scholarship and fellowship grants.
e. Pensions, annuities, and IRAs.
f. Unemployment compensation.
g. Alaska Permanent Fund dividends.
h. Taxable social security and railroad retirement benefits.
2. The only adjustments to income you can claim are:
a. Educator expenses.
b. IRA deduction.
c. Student loan interest deduction.
d. Tuition and fees deduction.
3. You do not itemize deductions.
4. Your taxable income (line 27) is less than $100,000.
5. The only tax credits you can claim are:
a. Credit for child and dependent care expenses.
b. Credit for the elderly or the disabled.
c. Education credits.
d. Retirement savings contributions credit.
e. Child tax credit.
f. Earned income credit.
g. Additional child tax credit.
h. Premium tax credit.
6. You did not have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option (see Pub. 525).
You can also use Form 1040A if you received dependent care benefits or if you owe tax from the recapture of an education credit or the alternative minimum tax.
Ok, not quite as restrictive as #1 – there is some room for basic ‘complexity’ here.  Now for form that is for those folks who have just a shade more ‘stuff’ than the above two categories can handle.
FORM 1040

Who must use form 1040
Check Where To Report Certain Items From 2014 Forms W-2, 1097, 1098, and 1099 to see if you must use Form 1040.
You must also use Form 1040 if any of the following apply.
1. You received any of the following types of income:
a. Income from self-employment (business or farm income).
b. Certain tips you did not report to your employer. See the instructions for Form 1040A, line 7.
c. Income received as a partner in a partnership, shareholder in an S corporation, or a beneficiary of an estate or trust.
d. Dividends on insurance policies if they exceed the total of all net premiums you paid for the contract.
2. You can exclude any of the following types of income:
a. Foreign earned income you received as a U.S. citizen or resident alien.
b. Certain income received from sources in Puerto Rico if you were a bona fide resident of Puerto Rico.
c. Certain income received from sources in American Samoa if you were a bona fide resident of American Samoa for all of 2014.
3. You have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option (see Pub. 525).
4. You received a distribution from a foreign trust.
5. You owe the excise tax on insider stock compensation from an expatriated corporation.
6. You owe household employment taxes. See Schedule H (Form 1040) and its instructions to find out if you owe these taxes.
7. You are claiming the adoption credit or received employer-provided adoption benefits. See Form 8839 for details.
8. You are an employee and your employer did not withhold social security and Medicare tax. See Form 8919 for details.
9. You had a qualified health savings account funding distribution from your IRA.
10. You are a debtor in a bankruptcy case filed after October 16, 2005.
11. You must repay the first-time homebuyer credit. See Form 5405 for details.
12. You had foreign financial assets in 2014, and you must file Form 8938. See Form 8938 and its instructions.
13. You owe Additional Medicare Tax or had Additional Medicare Tax withheld and must file Form 8959. See Form 8959 and its instructions.
14. You owe Net Investment Income Tax and must file Form 8960. See Form 8960 and its instructions.
15. You have adjusted gross income of more than $152,525 and must reduce the dollar amount of your exemptions. See the instructions for Form 1040.
16. You received a Form W-2 that incorrectly includes in box 1 amounts that are payments under a Medicaid waiver program, and you cannot get a corrected W-2, or you received a Form 1099-MISC that incorrectly reported these payments to the IRS

So, when I am asked ‘how much’ – I generally respond with “it depends on the complexity, so I won’t know until I’m done.  If, when I’m done, and we go over each form I used to complete your taxes, and give you my price, you aren’t happy, I will give you back your originals and you don’t owe me anything.”  I call that my “you’ll be happy with my service guarantee” – it is just another way I give more value than the next guy.