Who Is Eligible To Use Tax From 1040EZ?

As you prepare to file your 2011 federal tax return, you must first decide which form to use. While every taxpayer may use Form 1040, there are advantages to using Form 1040EZ, also known as “the short form,” if you qualify.

The advantage lies in the ease of filling it out. It doesn't require as much information and can be completed in a shorter amount of time.

Because it's so simple, you may be able to fill it out yourself, saving the cost of a tax preparer. If you pay to have your taxes prepared anyway, it will take less time and should cost less than a regular Form 1040 return.

Generally, you may use the short form if you are single, or married filing jointly; you do not claim any dependents; and you do not claim any adjustments to your income.

While there are benefits to Form 1040EZ, the Internal Revenue Service points out there can be disadvantages too. Some tax benefits can only be accessed by using Form 1040 or Form 1040A, so if you fall in certain categories, it may pay you to go to the extra time and expense of using those forms.

For example, you might be able to claim a bigger refund under the Earned Income Credit (EIC) if you file using Form 1040 or Form 1040A. This tax year, the maximum adjusted gross income you can have and still get the credit has increased.

Form 1040EZ is best used when you have salary from one or more jobs, taxable interest that is less than $1,500, or unemployment compensation. You may also claim the EIC using the short form, but the credit is computed on a separate worksheet.