What Was Form 1040EZ? A concise explainer for students and retail traders
Definition and purpose
Form 1040EZ was the shortest, simplest individual income tax return that the U.S. Internal Revenue Service (IRS) offered prior to 2018. It was designed for taxpayers with very basic tax situations—no dependents, relatively low interest income, and straightforward wages or unemployment income—so they could file quickly without additional schedules or complex calculations.
Quick facts
– Target filers: single or married filing jointly with no dependents.
– Income limits (historical): taxable income below $100,000 and taxable interest under $1,500.
– Allowed income types: wages, salaries, tips, taxable scholarships/fellowship grants, Alaska Permanent Fund dividends, and unemployment compensation.
– Limited credits/deductions: allowed earned income credit (when applicable) and election to include nontaxable combat pay; no itemized deductions, no student loan interest deduction, no IRA deduction, etc.
– Discontinued: eliminated for tax year 2018 and replaced by the redesigned Form 1040.
Why it existed
1040EZ existed to simplify filing for taxpayers whose returns could be completed without additional worksheets, schedules, or forms. It reduced lines and options to the essentials—income, tax, credits available to basic filers, and refund/payment information.
Eligibility checklist (short)
Use this checklist to see whether a filer would historically have qualified for Form 1040EZ:
– Filing status: Single or Married Filing Jointly only.
– Dependents: You claim none.
– Age: Under 65 (and not blind).
– Taxable income: Less than $100,000.
– Taxable interest: Less than $1,500.
– Income sources: Only wages/salaries/tips, taxable scholarships/fellowships, Alaska Permanent Fund dividends, and unemployment compensation. No self‑employment, rental, dividend, retirement distributions, Social Security, or foreign income.
– Deductions/credits: You will not itemize deductions and do not need deductions such as student loan interest or IRA contributions (except the earned income credit where eligible).
Key limitations and why it was phased out
Form 1040EZ’s simplicity was also its drawback. It omitted many common income categories and tax breaks, so filers with modest complexity could not use it. The IRS moved to a single redesigned Form 1040 (with modular schedules) beginning with the 2018 tax year to allow a “building block” approach—taxpayers use the main 1040 and attach small schedules as needed. That change removed the need for multiple short forms (1040A and 1040EZ) while making it easier to add specific credits and adjustments.
How Form 1040EZ differed from other 1040 versions
– Form 1040 (standard): Covered many income types (dividends, retirement distributions, rental income, Social Security, alimony, etc.) and many deductions and credits. It had many more lines and schedules.
– Form 1040A (historical intermediate): Allowed more credits and certain additional income types than 1040EZ, but fewer than full 1040.
– Form 1040EZ (historical simplest): Minimal income types and credits; no dependents; no itemized deductions.
Worked numeric example (eligibility and basic filing)
Scenario: Alex is single, age 30, earned $28,000 in wages (W-2), received $200 in taxable interest, and $0 in other income. Alex has no dependents and is not claiming deductions beyond the standard deduction.
Step 1 — Check eligibility:
– Filing status: single → OK.
– Dependents: none → OK.
– Taxable income: $28,000 < $100,000 → OK.
– Taxable interest: $200 < $1,500 → OK.
– Income types: wages and taxable interest only → OK.
Step 2 — Compute taxable income (simplified, 2017 rules for illustration):
– Gross income = $28,000 + $200 = $28,200.
– Standard deduction (single, 2017 example) ≈ $6,350.
– Taxable income ≈ $28,200 − $6,350 = $21,850.
Step 3 — Compute tax and credits:
– Use the tax tables for the year to find tax on $21,850 (example only).
– If Alex is eligible, could claim the Earned Income Credit (EIC) depending on filing situation and exact income—this was one allowable credit on 1040EZ.
Because Alex meets the checklist, Alex could have used Form 1040EZ in years when it was available. Note: exact deduction amounts and tax rates change each year; this is an illustrative calculation only.
Transition and current status
Form 1040EZ is obsolete. Starting with tax year 2018, the IRS consolidated Forms 1040, 1040A, and 1040EZ into a redesigned Form 1040 plus supplemental schedules. There is no 1040EZ for 2024 or 2025. The modern Form 1040 accommodates simple returns directly and allows attaching schedules for additional items.
The bottom line
1040EZ was a no‑frills, short tax return for straightforward filers with no dependents and limited income types. It was eliminated to give taxpayers a single, flexible Form 1040 plus small schedules that make adding specific income types, adjustments, credits, and deductions easier while preserving simplicity for those with basic returns.
Further reading (official/reputable sources)
– Internal Revenue Service — “All Taxpayers Will File Using 2018 Form 1040; Forms 1040-A and 1040-EZ No Longer Available.” https://www.irs.gov/newsroom/all-taxpayers-will-file-using-2018-form-1040-forms-1040-a-and-1040-ez-no-longer-available
– Internal Revenue Service — “2017 Instructions for Form 1040EZ.” https://www.irs.gov/instructions/i1040ez
– Internal Revenue Service — “Here Are Five Facts About the New Form 1040.” https://www.irs.gov/newsroom/here-are-five-facts-about-the-new-form-1040
– Investopedia — Summary of Form 1040EZ history and rules. https://www.investopedia.com/terms/1/1040ez.asp
Educational disclaimer
This article is for general informational and educational purposes only. It does not provide personalized tax advice. For specific questions about your tax situation or current tax rules, consult the IRS guidance or a qualified tax professional.