If you earn money in the United States, you are usually required to tell the government how much you earned and how much tax you owe. This process is called filing an individual tax return. In the US, the main form used for this purpose is called Form 1040. Almost every working person, whether they are an employee, freelancer, investor, or small business owner, uses this form.
The tax year in the United States runs from January 1 to December 31. After the year ends, people prepare their tax return and submit it to the Internal Revenue Service, commonly known as the IRS. The deadline is generally April 15 of the following year.
To understand US individual tax returns properly, we will start from the very beginning and move step by step until the final refund or payment stage. So here I will explain to you how to file a US individual Tax Return (Form 1040).
What Is Form 1040?
Form 1040 is the main personal income tax return form used in the United States. It collects details about your income, deductions, credits, and taxes paid. At the end of the form, it calculates whether you owe money to the government or whether the government owes you a refund.
There are three main versions of individual returns.
| Form Name | Who Uses It | Purpose |
|---|---|---|
| Form 1040 | Most US residents | Standard individual income tax return |
| Form 1040-SR | People aged 65 or older | Same as 1040 but designed for seniors |
| Form 1040-NR | Non-resident aliens | For individuals who are not US residents but earned US income |
For most people living and working in the US, Form 1040 is the standard return.
Who Needs to File a US Individual Tax Return?
Not everyone must file, but most working individuals do. The requirement depends on your income level, age, and filing status. If your income crosses a certain threshold set by the IRS, you are required to file.
Even if your income is below the limit, some people still file because they want to claim a refund. For example, if tax was already deducted from their salary, filing a return allows them to get that money back.
Self-employed individuals must usually file if their net earnings are at least 400 dollars in a year. This rule surprises many people because the threshold is very low.
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Understanding Filing Status
When filing a US tax return, you must choose a filing status. This affects your tax rate and standard deduction.
| Filing Status | Who Can Use It |
|---|---|
| Single | Unmarried individuals |
| Married Filing Jointly | Married couples filing together |
| Married Filing Separately | Married but filing individually |
| Head of Household | Widow or widower with a dependent child |
| Qualifying Surviving Spouse | Widow or widower with dependent child |
Your filing status plays a big role in how much tax you pay. For example, married couples filing jointly often receive better tax rates compared to filing separately.
What Income Is Reported?
The US tax system requires you to report almost all types of income. This includes salary from a job, freelance income, business profit, rental income, bank interest, stock dividends, and capital gains from selling property or shares.
If you are an employee, your employer gives you a document called Form W-2. It shows how much salary you earned and how much tax has already deducted.
If you are self-employed or a freelancer, you may receive Form 1099 from clients. This form shows how much they paid you during the year.
Even if you do not receive a form, you are still legally required to report your income.
Adjustments and Deductions
After reporting income, the next step is reducing taxable income. The US system allows certain adjustments and deductions.
There are two main ways to reduce taxable income. One is taking the standard deduction. The other is itemizing deductions.
The standard deduction is a fixed amount set by the IRS each year. Most people choose this because it is simple.
Itemized deductions allow you to deduct specific expenses such as mortgage interest, medical expenses above a certain limit, and charitable donations. People usually choose this option only if their total deductions are higher than the standard deduction.
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Tax Credits
After calculating tax on your taxable income, the next stage is tax credits. Tax credits directly reduce the tax amount you owe. This is different from deductions, which only reduce income.
Common tax credits include the Child Tax Credit and the Earned Income Tax Credit. Some credits are refundable, meaning you can receive money back even if you owe no tax.
This is why many low-income families receive tax refunds even if they paid little tax during the year.
How the Final Amount Is Calculated
The calculation process usually works like this.
First, total income is added. Then adjustments and deductions are subtracted to find taxable income. Tax rates are applied to that taxable income. After that, tax credits are subtracted. Finally, the system compares how much tax you already paid through withholding with how much you actually owe.
If you paid more than required, you get a refund. If you paid less, you must pay the remaining amount.
Refund or Payment
If the IRS owes you money, you can receive it through direct deposit into your bank account. This is the fastest method. Paper checks are also possible, but take longer.
If you owe tax, you can pay online, by bank transfer, or by an installment plan if you cannot pay the full amount immediately.
How to File
You can file your US individual tax return in three main ways. You can file electronically using tax software, hire a tax professional, or file a paper return by mail. Most people prefer electronic filing because it is faster and reduces errors. Electronic filing also speeds up refunds.
Important Dates
The US tax year ends on December 31. The normal filing deadline is April 15 of the following year. If you need more time, you can request an extension, which usually gives you until October 15. However, an extension only gives extra time to file, not extra time to pay. If you owe tax, payment is still due in April.
Special Situations
Some individuals have special reporting requirements. US citizens living abroad must still file US tax returns if their income crosses the threshold. Non-residents earning US income use a different form. People with foreign bank accounts may also need to file additional reports.
Each situation depends on personal circumstances.
Final Understanding
A US individual tax return is simply a yearly financial report submitted to the government. It tells the IRS how much you earned, how much tax should be paid, and whether you deserve a refund.
The main form used is Form 1040. You choose your filing status, report all income, subtract deductions, apply credits, and calculate the final result. In the end, you either pay the remaining tax or receive money back.
Once you understand this flow from income to refund, the entire system becomes much easier to understand. It is not as complicated as it first appears. It is simply a structured way of calculating tax fairly based on your income and family situation.
