Tax Tip: Using the Right Forms
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Ryan McVay/Photodisc(NEW YORK) -- There are literally hundreds of IRS tax forms. Fortunately, there are only a dozen or so that apply to most people. When it comes to choosing which 1040 to use, Mary Beth Franklin from Kiplinger's Personal Finance says “pick the simplest tax form for you.”
“If you simply have wage income W-2, you can go with the 1040EZ,” Franklin said. Be aware, however, that the form won't allow you to take anything but the standard deduction, which might be the wrong move, according to accountant Janice Hayman.
“A lot of people file the short form mistakenly when they truly do have enough to use the long form and itemize their deductions," Hayman said. "What is commonly overlooked are the state and local income taxes that are right there on their W-2 form. They are part of the itemized deductions.”
You have to use the full form -- a 1040 -- if you want to itemize your deductions, make more than $100,000, or have self-employment income.
Copyright 2011 ABC News Radio
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