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Simplified individual income tax form.

Simplified Individual Income Tax Form

About 3,000 Texas taxpayers will be given an opportunity to file their 1991 return using the IRS's new Form 1040EZ-1. The form consists of four questions: 1) whether the taxpayer wants $1 to go the Presidential Election Campaign Fund; 2) whether the taxpayer can be claimed as a dependent on another's tax return; 3) what the taxpayer's interest income is; and 4) the number of W-2s the taxpayer is attaching. After filling out the form, the taxpayer need only sign the return, attach the W-2s and mail the form to the Service. No calculations are needed. After receiving the form, the IRS computes the tax and sends a refund or bill for any tax due.

To be eligible to use the new form, the taxpayer must be single with no dependents, have less than $50,000 in total income, have no more than $400 in taxable income and have no tax-exempt interest. In addition, the taxpayer may not be claiming any itemized deductions, adjustments or tax credits, may not have income subject to backup withholding and must have all wages, salaries, etc., included in Box 10 of the W-2 and all interest reported on Form 1099-INT.

The Texas test participants were selected randomly from those taxpayers whose 1989 1040-EZs showed addresses with Texas ZIP codes. These taxpayers will receive a letter giving them instructions on how to use the form and those that choose not to participate in the test may file the regular Form 1040EZ from the tax package already mailed to them.

In Information Release 91-11, the IRS states that Form 1040EZ-1 is part of its ongoing effort to find "new ways to reduce taxpayers' filing burden." It also added that other upcoming improvements will include changes to Form 1040A for the 1991 filing season allowing elderly taxpayers reporting retirement income to avoid filing the more complicated long Form 1040.
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Copyright 1991 Gale, Cengage Learning. All rights reserved.

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Publication:The National Public Accountant
Date:Mar 1, 1991
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