Question

Isabelle, a single, retired taxpayer with income from interest, a pension, and social security, and using the standard deduction, was required to file 1040A last year. If nothing has changed for Isabelle, for 2018 she will file:

Answer 1

Isabella being retired with income from interest, pension and social security and using standard deduction was required to file 1040A last year. So if nothing has changed for her in 2018 , then she will file 1040 FORM

Prior to 2018, 1040 forms included ( FORM 1040, FORM 1040EZ and FORM 1040A). In order to promote simplicity of filing , IRS decided to reduce the number of forms so that all the taxpayers need to choose only one form i.e. FORM 1040. The IRS released the very first draft of FORM 1040 in June 2018. It uses a building block approach so that a taxpayer can file his Federal Tax return only through one simple form. This new FORM 1040 was introduced keeping in mind that most of taxpayer use E-Filing process and will be able to take advantage of it as because the tax return software will do all the work for taxpayer by using their input data to fill FORM 1040 and any numbered schedules, if needed.
After 2018. taxpayer needs to file his Federal Tax return using only FORM 1040 . The only exception to this is when Taxpayer needs to file a tax return for a year prior to 2018. In that case he is required to use and file the FORM 1040, FORM 1040A or FORM 1040EZ
The Form is divided into sections where a taxpayer can input his income and deductions to determine his tax liability for his annual income tax return or refund which he can expect to receive. In FORM 1040. firstly a person has to calculate his AGI or Adjusted Gross Income by entering his sources of income such as salary, interest, pension, dividend , business income, capital gain, social security benefits etc. In other words, to arrive at Total Income, all sources of income must be mentioned unless and until they are exempt. From Total income various deductions are allowed such as IRA contributions, student loan payment, one half of self employment tax payments etc in order to arrive at AGI. Then AGI needs to be further reduced by standard deduction or total of itemized deductions which includes sales tax, local tax, medical expenses, charitable contributions etc.
After all deductions and exemptions are deducted from Total income then you finally arrive at your taxable income on which Income tax is payable.