Personal Information

• For the personal information sections of Form 1040, you'll need the names, Social Security numbers and birthdates for each member of your household that you will claim on your tax return. This section of the form will also require your filing status, home address, phone number and bank account information, if you want to receive your tax refund by direct deposit.
  
  

Income

• "Income" includes all sources of revenue to the household. If you are a paid employee, your employer will provide you with a Form W-2 with your salary and tax withholding information that you'll need to prepare your return. Other common forms of income include interest on bank accounts, alimony, retirement benefits and dividends. Income from other sources such as self-employment, rental real estate and capital gains are also listed on the Form 1040. However, those items usually require additional forms to support the amount listed.
  
  

Expenses

• Some commonly allowed expense deductions on Form 1040 are moving expenses, one-half of any self-employment taxes paid, IRA deductions, tuition deductions and student loan interest. Income less expenses equals your adjusted gross income.
  
  

Deductions

• If you have enough expenses such as mortgage interest and real estate taxes that you paid out during the tax year, you can itemize your deductions on Schedule A and transfer that amount to Form 1040. If you do not have enough expenses to itemize, you should take the standard deduction instead, which is based on your filing status and the deduction amount in effect for that tax year. Deductions are subtracted from your adjusted gross income to figure your taxable income. Tax tables list the amount of tax you owe based on your taxable income and filing status.
  
  

Tax Credits

• Tax credits are not the same as tax deductions. Tax credits directly reduce the amount of tax you owe, while deductions reduce the amount of income taxed. Some common tax credits are child and dependent care expenses, education credits, child tax credit and retirement savings credit.
  
  

Tax Refund or Balance Due

• Your tax refund or balance due is calculated by taking the total tax due less any tax credits and all tax amounts you paid in during the year. The amount of tax paid in is the amount withheld from your payroll checks as reflected on your W-2.