IRS Form 1040 is the income tax return used by individuals, married couples (filing jointly or separately) and heads of households. The form first calculates the taxpayer’s income. Then it deducts “above the line” deductions such as business expenses, to calculate the taxpayer’s “adjusted gross income.” “Below the line” deductions, such as charitable giving and mortgage interest, are then taken to determine the net income. After the tax on the net income is calculated, tax credits are applied to reduce the tax due. The form must be filed electronically or by mail with the IRS.
Schedules to Form 1040 include Schedule A for a list of itemized deductions, Schedule B to list interest and dividend income, Schedule C for business activities, schedule D for capital gains or losses, Schedule E for supplemental income or losses from things like royalties and real estate holdings and various other schedules for less common circumstances.