Who Must Use This Form?

Form 1040 is the form used for U.S. citizens and permanent resident aliens (including green card holders) to declare their income, report their deductions or credits and compute the amount of any income tax due or any refund due.

What Information Is Required

The amount of information varies from a simple two page form to a document that can exceed 100 pages for some taxpayers. The law requires all income (as defined by the tax law) to be reported, but taxpayers may choose whether or not to report their deductions and credits. 

When is it Due?

The form is generally due by April 15th of the year following a tax year ending on December 31 of the previous year or by the 15th of the fourth month following a fiscal year.  An automatic 4 month extension to file is available by submitting Form 4868 by April 15th, but any tax that may be due must be paid by April 15th in order to avoid penalties for late payment. 

Where Should It Be Filed?

The Form 1040 is filed with the Internal Revenue Service Center office in the District Office for the state of the taxpayer’s residence. Taxpayers who reside and work outside the U.S. for more than a year file their 1040 with the International Division of the IRS in Philadelphia, PA.

How Long Does It Take To Prepare?

The preparation time varies from less than an hour to as much as a month for a complex return, depending on the taxpayer’s financial situation and the taxpayer’s understanding of the process for preparing the Form 1040 and whether the taxpayer is using a reliable computer system to prepare the return. The IRS estimate of the average time required to prepare the Form 1040 (excluding supporting schedules) is about six hours. 

Why Comply ? (Penalties)

Generally, the penalties for not filing an individual income tax return are based on the amount of tax that is due and unpaid. 

If no taxes are due and the taxpayer has no deductions of any kind other than statutory exemptions and deductions (like the standard deduction), there is no penalty for a failure to file. 

The penalty for an underpayment of estimated taxes is generally an interest charge ranging from 6% to 11% of the underpayment, computed on a quarterly basis, depending on the prime rate. 

The penalty for a late filed return with an underpayment of tax is 5% per month, up to 25% of the unpaid tax, plus ½% per month times the amount of tax that is unpaid. 

In addition, if the return is not filed, the statute of limitations does not apply and the taxpayer can be audited at any time.

In some extreme cases, a failure to file can result in criminal penalties. 

Comments:

Non-resident aliens with income from U.S. sources may or may not be required to file a tax return, but will not usually file a Form 1040. A non-resident alien may file a Form 1040NR for their U.S. source income to recover any excess withholding. 

See http://www.irs.gov/formspubs/index.html