James Bronzz

There are three types of 1040 forms: 1040, 1040A and 1040EZ. If mortgage interest is your only deduction, the right version of IRS form 1040 to use largely depends on how much interest you have to deduct. If it’s more than the standard deduction for your filing status, or you make over $100,000 per year, you will need to use form 1040. The standard deduction for 2018 is $12,000 for individuals, $18,000 for taxpayers filing as the head of a household, and $24,000 for married couples filing jointly.

If your deductible mortgage interest is less than your standard deduction, the decision between forms 1040EZ and 1040A comes down to whether you want to claim any credits for retirement savings, education, or child and dependent care. If you do, 1040A is the way to go. If not, you can opt for the simplicity of 1040EZ.

Here’s when each 1040 form is typically filed:

• Form 1040EZ is the easiest to fill out, as you can imagine. But you can’t use it if you make more than $100,000 per year, claim dependents or itemize deductions.
• Form 1040A is a bit more involved but also more flexible. It too applies to people who make $100,000 or less per year and don’t plan to itemize deductions for charitable donations or mortgage interest. Unlike 1040EZ, form 1040A allows you to claim credits for children, other dependents, education expenses and retirement-fund contributions.
• Form 1040 is the form you use if you don’t qualify for 1040EZ or 1040A. It’s the only one of the three that allows you to fully itemize deductions, including the deduction for mortgage interest.

So to recap, the standard 1040 form is typically filed when a taxpayer only has a mortgage interest deduction that’s greater than the standard deduction. Form 1040A is used when the standard deduction exceeds your deductible mortgage interest but you want to claim dependents or certain other credits. And form 1040 EZ is used to take only the standard deduction.

Just bear in mind that the mortgage interest deduction rules have changed. You can now only deduct interest on up to $750,000 in mortgage debt, instead of $1 million as in the past. That shouldn’t affect most people, though.