Tips for Preparing a Form 1040-EZ for the Year 2006
Overview of Form 1040EZ for 2006
Why Use Form 1040-EZ?
Many people qualify to use the 1040-EZ form. It will be easier and less time-consuming for you, and faster for the IRS to process. Form 1040EZ is probably the right tax form for you to fill out if you don't have any kids or dependents, don't own a home or didn't attend school.
Are You Eligible to File the 1040EZ Form?
Here's the details. You can file the 1040EZ, the shortest of all federal tax forms, if you meet these conditions:
- Your total income is under $100,000
- Your interest income is under $1,500
- You have income only from wages, interest, unemployment compensation, and Alaska Permanent Fund dividends
- You and your spouse are under 65 years old
- You do not have any adjustments to income
- You are claiming only the standard deduction
- You may claim the Earned Income Credit
- You are not claiming any other tax credits
Quick Links relating to the 2006 Form 1040EZ
Tips for Filing a Tax Form for the Year 2006
- Request a "wage and income transcript" from the IRS before preparing your tax return. This report shows all the tax documents filed with the IRS, such as W-2 and 1099 forms. You can order this on the IRS Web site on their Get Transcripts page. You can use this report to make sure you have all the information you need to file an accurate tax return.
- If you have a refund, that refund is now expired. Federal tax refunds have a three year statute of limitations. That three-year period begins on the tax filing deadline, and ends three years later. Year 2006 tax returns were due on April 15, 2007, and refunds expired on April 15, 2010.
- Use your current mailing address instead of your address where you lived back in 2006.
- You'll need to mail in your 2006 tax return. Tax returns for older years cannot be electronically filed. Here's a list of the current mailing addresses: Where to File Form 1040-EZ with the IRS.
- Mail your tax return in a single envelope using certified mail with return receipt.
- If you are filing several years at once, mail each year in its own envelope.
- Alternatively, you can hand-deliver your tax return to a local IRS taxpayer assistance center.
- If you have a balance due, the IRS will calculate late penalties and interest and send you a letter letting you know your total balance due.
Need information for a different year?
For Year 2005
For Year 2004
Tips for Preparing a Form 1040EZ for the Year 2006
Print your name, address, and Social Security Number at the top of the form.
- Double check the spelling of your name and your Social Security number (SSN).
- The IRS may take longer to process your tax return if your name or SSN does not match your Social Security records, or if you make a mistake in your address.
Line 1: Wages
- Gather all your W-2 statements from each job you worked during the year.
- Look in Box 1 of the W-2. This is your total wages. Using a calculator, add up the Box 1 amounts from every W-2.
Put the total figure on Line 1.
Line 2: Interest
- Gather all your 1099-INT statements from each bank that reported your interest earnings for the year.
- Using a calculator, add up all the interest amounts from every 1099-INT.
- Put the total figure on Line 2.
Line 3: Unemployment and Alaska Permanent Fund Dividends
- Gather all your 1099-G statements from the state agency that paid you unemployment compensation.
- Put the figure from the 1099-G on Line 3.
- If you received Alaska Permanent Fund dividends, put the figure reported to you by the State of Alaska on Line 3.
- If you have both unemployment and Alaskan dividends, add the two figures together and put the total on Line 3.
Line 4: Adjusted Gross Income
- Using a calculator, add the figures on Lines 1, 2, and 3 of your 1040-EZ.
- Put the total figure on Line 4.
- This figure is your Adjusted Gross Income. AGI is used to figure your Earned Income Credit and your tax.
Line 5: Personal Exemptions & Standard Deduction
- Can your parents, or someone else, claim you as a dependent?
- You are a dependent if a family member pays for more than half your living expenses.
If you're not sure, ask your parents or guardians if they will be claiming you as a dependent on their tax return.
If you are not being claimed as a dependent, do not check the boxes on Line 5.
If you are being claimed as a dependent, check the box on Line 5 for yourself and/or your spouse. Use the worksheet on the back of Form 1040-EZ to figure the amount to enter on Line 5.
If you are single (unmarried), put the figure $8,200 on Line 5.
If you are married and filing a joint return with your spouse, put the figure $16,400 on Line 5.
Together, this figure represents the amount of income which is tax-free.
If you earn less than $8,200 (Single) or $16,400 (Married), your income is completely tax-free. You should still file a tax return, because you probably will have a refund from any tax that was withheld on your paycheck. You may also qualify for the Earned Income Credit.
Line 6: Taxable Income
- Using a calculator, enter the figure from Line 4 (your Adjusted Gross Income), and then subtract the figure from Line 5.
- Put the result on Line 6. This is your taxable income.
- This figure will be used to calculate your tax.
Line 7: Federal Income Tax Withheld
- Go back to your W-2 statements. Look at Box 2. This is the amount of income tax that was withheld from your paychecks and sent to the IRS on your behalf.
- Using a calculator, add up the Box 2 amounts from every W-2.
- Put the total figure on Line 7.
Line 8a: Earned Income Credit
You are eligible to claim the Earned Income Credit if you meet the following criteria:
- Your Adjusted Gross Income on Line 4 is less than $12,120 (for Single people) or less than $14,120 (for Married people).
- You and your spouse cannot be claimed as a dependent by someone else.
- You and your spouse are between the ages of 25 and 64.
How to calculate the Earned Income Credit:
- Use the worksheet in the Instructions for Form 1040-EZ, pages 13 through 16, to calculate your Earned Income Credit.
- Use your "earned income" figure from the worksheet on page 14 to look up your tax credit amount on the EIC table on page 17.
- Or, if you want, the IRS to calculate your Earned Income Credit for you, enter the word "EIC" on Line 8a.
Put the EIC figure on Line 8a.
Line 8b: Nontaxable Combat Pay Election
- If you received combat pay, your non-taxable combat pay is shown on your W-2, Box 12, code Q. There will be a dollar amount next to the "Q."
- You can choose to include your combat pay for Earned Income Credit purposes, or you may choose to leave it out.
Calculate your EIC credit amount both ways. First calculate the credit using only your "earned income" from the worksheet, and then calculate it again using your "earned income" plus your combat pay. Take whichever credit amount is higher.
If you decide to include your combat pay, enter the amount coded as "Q" on your W-2 on Line 8b. If you are not including your combat for EIC, leave Line 8b blank.
Line 9: Credit for Federal Telephone Excise Tax Paid
You can claim a standard refund of the telephone excise tax. You can also claim a refund of your actual telephone taxes. The standard amounts are:
- $30 if your filing status is single and you did not check any boxes on line 5.
- $30 if your filing status is married filing jointly and you checked only one box on line 5.
- $60 if your filing status is married filing jointly and you did not check any boxes on line 5.
The standard amounts include both the tax paid and interest owed on that tax.
Line 10: Total Payments
- Add the figures from Lines 7, 8a, and 9. Put the total figure on Line 10.
- This represents the total amount of money paid-in towards your income tax.
Line 11: Tax
- Look at the figure on Line 6. This is your taxable income.
- Use this figure to look up the amount of tax using the tax tables in the instruction booklet, beginning on page 24.
Put the tax figure on Line 11.
Lines 12a or 13: Refund or Amount Due
- Using a calculator, enter the figure on Line 10 (your total payments), and subtract the figure on Line 11 (your tax).
- Look at the result.
If the number is positive, you have a refund. Enter this figure on Line 12a.
If the number is negative, you owe additional tax. Enter this figure on Line 13.
Lines 12b, 12c, and 12d: Direct Deposit
- Direct deposit is not available for late-filed tax returns. Also, refunds from the year 2006 have expired.
- If you have a refund, the IRS will mail you a letter stating that your refund has expired. They will not add any late penalties if you have a refund. Late penalties are added only if you have a balance due.