Need help understanding the 1040 as we enter the homestretch of this year’s tax filing season? The Tax Policy Center has created a new interactive tool to walk you through key parts of the federal income tax, ranging from the mundane to the arcane.
In bite-sized pieces, Who’s Afraid of the Form 1040? discusses the main tax form, explaining the different filing statuses, who counts as a dependent, and what income is taxed (and what income isn’t). How do deductions and credits cut your tax bill and how does the AMT boost it? And how does the income tax help you pay for college, health care, and retirement?
With tax trivia (we used to file our returns on the Ides of March) and facts (just 2.9 percent of taxpayers will owe AMT for 2014 but they’ll pay an average of $6,500), the new feature explains many aspects of the income tax. It won’t make it easier to file your taxes but it might make the process a bit more interesting.
We have also updated our Interactive 1040. Inaugurated last year, this web tool allows users to examine each individual line of the 1040 and Schedule A (itemized deductions). Pop-up boxes contain brief explanations and links to distributional tables and other TPC resources on each topic.
For example, clicking on line 13 reveals that “Over 20 million taxpayers reported net capital gains of $621 billion in 2012” and a linked distribution table shows that taxpayers with adjusted gross income over $10 million realized over 40 percent of capital gains in 2012.
Take a break from the tedious paperwork and explore our new web tools. Maybe you’ll find that income taxes aren’t so scary after all.
The post Who’s Afraid of Income Taxes? New Interactive TPC Tools To Help You Understand the 1040 appeared first on TaxVox.