Which income tax form do i use

Tax returns allow taxpayers to calculate their tax liability, schedule tax payments, or request refunds for the overpayment of taxes. In most countries, tax returns must be filed annually for an individual or business with reportable income, including wages, interest, dividends , capital gains , or other profits. In the United States, tax returns are filed with the Internal Revenue Service IRS or with the state or local tax collection agency Massachusetts Department of Revenue, for example containing information used to calculate taxes.

Tax returns are generally prepared using forms prescribed by the IRS or other relevant authority. In the U. Corporations will use Form and partnerships will use Form to file their annual returns.

A variety of forms are used to report income from non-employment-related sources. Application for automatic extension of time to file U. Typically, a tax return begins with the taxpayer providing personal information, which includes their filing status, and dependent information. In general, tax returns have three major sections where you can report your income, and determine deductions and tax credits for which you are eligible:.

The income section of a tax return lists all sources of income. The most common method of reporting is a W-2 form. Wages, dividends, self-employment income, royalties and, in many countries, capital gains must also be reported. Deductions decrease tax liability. Tax deductions vary considerably among jurisdictions, but typical examples include contributions to retirement savings plans, alimony paid, and interest deductions on some loans.

For businesses, most expenses directly related to business operations are deductible. Taxpayers may itemize deductions or use the standard deduction for their filing status.

Once the subtraction of all deductions is complete, the taxpayer can determine their tax rate on their adjusted gross income AGI. Tax credits are amounts that offset tax liabilities or the taxes owed. Like deductions, these vary widely among jurisdictions. However, there are often credits attributed to the care of dependent children and seniors, pensions, education, and many more. The following infographic will help you find out which type of income tax return is applicable to you for FY as well as previous year FY Still, you have any doubts about ITR-1 in your mind?.

Read our comprehensive guide on ITR-1 to get answers to all your questions. This Return Form should not be used by an individual whose total income for the AY includes Income from Business or Profession. The Current ITR3 Form is to be used by an individual or a Hindu Undivided Family who have income from proprietary business or are carrying on profession.

The persons having income from the following sources are eligible to file ITR 3 :. Click here to read our comprehensive guide to the ITR Please note that any individual earning income from the above-mentioned sources as a freelancer can also opt for a presumptive scheme if their gross receipts are not more than Rs. Presumptive income scheme under sections 44AD, 44AE and 44ADA is when an individual or an entity opts to derive its income on a presumptive basis, i.

Income tax is a direct tax that is imposed on income derived from Business, Employment, Rent, Dividends, Interests, Pensions among others. Withholding Tax. Installment Tax. Turnover Tax. Capital Gains Tax. Individual Income Tax is charged for each year of income on all the income of a person, whether resident or non-resident, which accrued in or was derived from Kenya.

Personal Relief of Kshs. Any amount paid to Non-Resident individuals in respect of any employment with or services rendered to an employer who is resident in Kenya or to a permanent establishment in Kenya is subject to income tax charged at the prevailing individual income tax rates.

An individual income tax return is a declaration of income earned by an individual within a particular year. But choose carefully. There are three personal income tax forms — , A and EZ — with each designed to get the appropriate amount of your money to the IRS.

The EZ is the shortest and simplest form, Form A is a bit more complex and the long Form is the most detailed and potentially difficult. But even if your tax life is simple and straightforward, it might be worthwhile to investigate the other two forms. Generally, the longer the form, the more opportunities for tax breaks.

If you previously filed Form EZ, but bought health insurance through an Affordable Care Act state or federal exchange, known as the marketplace, you can no longer file this simplest form.

When individuals purchase a policy through an exchange, they have an option to receive advance payment of the premium tax credit. This tax credit helps cover some of the insurance costs. The advance credit amount, however, must be accounted for when the policy recipient files his or her tax return. If the advance premium amount was too small, the taxpayer will get the extra. However, if too large of an advance premium credit was paid, the taxpayer must make up the difference, either by paying any tax due or by having the amount taken from an expected refund.

Such calculations are made on Form , which only can be filed with Form A or If you received advance payments of the premium tax credit, you must file one of these longer forms instead of the EZ. Even if you did not get the premium credit in advance but got health care through an exchange and want to claim it when you file, you must complete A or Take the case of tax filer Joe P.

A perfect EZ filer, right? Joe has a student loan. Joe also would get the chance to reduce his actual bill if he files the longer A. The better tax news for Joe is that a credit allows you a dollar-for-dollar reduction of what you owe the IRS. But the only tax credit shown on the EZ is the earned income tax credit, available only to low-income taxpayers.

And there are even more tax-saving opportunities found on the long Form They might not apply to Joe, but they could cut your tax bill — if you take the time to look over each of the forms.