Here she is, the one, the only, the 1040. You've got personal income taxes? You're getting this form. For such an important document, something hundreds of millions of people receive each year, the 1040 is very poorly formatted, confusing to follow, and filled with tiny numbers and abbreviations that lack meaningful context. Fear not, we're here to help make sense of it all.
Top of the Form (base of the trunk, if we still with our metaphor)
Let's take the return step-by-step, starting with demographic info:
Think of the above as the "who are you?" section. Here, the IRS wants to know if you're single or married, if you have kids or other other people in your life you support, how old you are, and where you are. All these things potentially impact your taxes.
And note the 2023 at the top! Changes are made to the 1040 each and every year, both large and small. But the function of the form remains constant. It is always the “trunk” of the tax return.
Middle Bits (of the first page)
This section summarizes the money you made, how it was made, and what personal expenses you might have that reduce how much of that income is ultimately gonna be taxable:
Note on the left how different filing statuses have different standard deductions. This is the IRS's way of accounting for the fact that everyone has personal expenses, without them having to go through millions of shoeboxes of receipts. Example: Your income from W-2s and dividends and stocks gets added up to $100,000, and then $13,850 is subtracted from that amount (if you're single in 2023), which leaves you with $86,150 in taxable income.
Second Page (it's starting to get branchy up here)
Think of this page of the tax return as a long-winded way of saying how much you owe (or will get back from) the IRS:
General questions the IRS is thinking about here are: “Do you have kids, or pay for college, or do other things we should keep in mind when calculating how much you owe in taxes?” And, importantly, this is also where they're asking, “Have you already paid us anything this year?”
This is also where you can see that there's not only income tax (line 16) but self-employment tax (line 21) as well. It's easy to forget when you're busy freelancing throughout the year, but no one is taking withholdings out of our freelance income, meaning we're responsible for footing the bill for income taxes and self-employment taxes, either when we file, or throughout the year by way of quarterly estimated payments.
All the Branches (all those "schedules" and other forms that come after the 1040)
Some tax returns total dozens of pages, what with all the related forms and schedules, but we're sparing you those bloody details, mainly because every single bit of information on a tax return, no matter how dense or minute, eventually flows back to the 1040 tree trunk.
The quick thing to understand is that what all those schedules and worksheets and attached statements are doing is showing how you got the numbers that appear on the 1040 (things like the math behind a tax credit or the expenses you're taking for your freelance business).