Choosing the right IRS form to file: the EZ one could cost you

Most American taxpayers found their 1983 income tax forms in the mail a week or two ago. By now, some people have already misplaced those forms. That may not be so bad.

Not every taxpayer gets the standard 1040 form. The Internal Revenue Service prefers to process simpler forms when it can, so it sends either the 1040A or the highly simplified 1040EZ to people who used these forms last year. These forms also go to people who the IRS thinks can get by with the shorter forms.

But experts say that using these forms to reduce your effort could increase the taxes you pay.

''A lot of people will file the wrong form and pay too much tax,'' says Thomas Bloch, president for tax operations at H & R Block, the tax preparation firm.

A lot of people filed all kinds of tax forms last year. The IRS says it received jut under 96 million forms in 1983. Of these, 21.1 million were the 1040A, 14.9 million were the 1040EZ forms, and 59.5 million, the 1040 long forms. Of those who filed the long form, 33.8 million taxpayers itemized deductions.

Among the 14.9 million who filed the 1040EZ, Mr. Bloch guesses, many should have filed a longer form. For one thing, there are limits on who can use the EZ at all. You have to be single, have an income of $50,000 or less, and have no dependents, and you cannot claim exemptions for being 65 or over, or blind. Also , the income can only consist of wages, salaries, tips, and interest income, as long as it was less than $400.

This means you cannot make any provision for an individual retirement account , any business expenses that were not reimbursed by your employer, job-seeking expenses, medical expenses, or such credits as energy-saving improvements to your home.

If there is any group that the EZ may fit, then, it would be students with only summer or part-time job income to report and no investments. But even they might find some job-related expenses (having uniforms cleaned, for instance) that they could claim on the 1040.

The somewhat longer 1040A has been changed to a four-page form with an attached Schedule 1 to list interest and dividend income, the marital deduction, and the credit for child and dependent care expenses. There is also room to claim the IRA deduction. Beyond that, however, you cannot do much more with the 1040A than you can with the EZ. You can't itemize deductions like medical expenses or interest payments, nor can you claim business expenses, or tax credits.

Perhaps one way to find out which tax form is for you is to start with the 1040 long form and see how many of the lines apply to you. You may find yourself filling in enough of them to stop at that form. If not, you can move down to the 1040A or the 1040EZ. This process will take more time, but it could keep you from overtaxing yourself.

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