How to File Federal Form 1040EZ for Tax Year 2021

Each year, millions of Americans file their tax returns late or make errors that delay their refund by weeks. According to the IRS, paper-filed returns can take eight weeks or longer to process, while electronically filed returns are typically processed in about 21 days. Filing accurately and on time is not just a formality: it protects you from penalties, keeps your finances in order, and ensures you receive any refund you are owed quickly.

Federal Form 1040EZ, once the go-to choice for taxpayers with simple returns, was permanently discontinued after the 2017 tax year. For tax year 2021, all taxpayers must file using Form 1040 or the senior-friendly Form 1040-SR. While this change may initially seem confusing, the new system is streamlined and flexible: the main Form 1040 handles most income and deduction scenarios, and additional schedules are only used when needed. Whether you earn wages, have retirement income, or qualify for tax credits, this single form covers everything.

This guide will walk you through how to file a federal Form 1040EZ for tax year 2021, using clear instructions and practical tips to avoid costly mistakes. We will show you which documents to gather, how to calculate and report your income, when to take the standard deduction, and how to choose the best filing method. Along the way, we will include comparison tables, filing deadlines, and actionable tips so you can confidently file. Don’t let simple math errors, missing signatures, or missed deadlines delay your refund or trigger penalties: follow this guide to file correctly the first time.

What Happened to Form 1040EZ

Before you start to file, it is essential to understand why Form 1040EZ no longer exists and what you should use instead. Federal Form 1040EZ for tax year 2021 was discontinued as part of tax reform efforts that simplified individual income tax return filing. Beginning in tax year 2018, the IRS consolidated Form 1040EZ, Form 1040A, and the original Form 1040 into one streamlined form. This means that every taxpayer, regardless of income level or tax complexity, now uses the same form to prepare their federal return.

Discontinuation of Form 1040EZ

Form 1040EZ was designed for taxpayers with fundamental situations: wages under a specific limit, no dependents, and no adjustments or credits beyond the Earned Income Credit. Its removal created a single universal filing method. This approach eliminates confusion over which form to use and allows all taxpayers to claim tax credits and report other income on the exact schedules.

What Replaced the 1040EZ

The IRS now uses a “building block” approach:

• Base Form 1040: This core form includes lines for income, deductions, and tax credits. Most taxpayers only need this page to complete their return.
  
  
• Same schedules (1, 2, 3): These are added only when you have additional income, other taxes, or extra credits to report.
  
  
• Form 1040-SR for Seniors: This form is for taxpayers 65 and older. It has larger print and a simplified layout, but the instructions are the same.

Who Must File

Filing requirements depend on age, filing status, and income level. If your income tax liability is above a certain threshold, you must file even with no federal withholding.

Comparison 1: 2021 Filing Requirements

These thresholds apply to wages, retirement income, and other income. If you qualify for refundable tax credits or had taxes withheld, you should still file to receive a refund.

Important Updates for the 2021 Tax Year

Before you fill out your return, it is crucial to understand what changed this year. Tax law updates affect credits, standard deduction amounts, and even how you report information to the IRS. Reviewing these changes before you start will save time, prevent filing errors, and help you claim the full amount of credits you are eligible for.

Recovery Rebate Credit

The most significant update for tax year 2021 is the Recovery Rebate Credit. This credit allows you to claim any missing portion of the third stimulus payment you were entitled to receive. If you were supposed to receive $1,400 but only got $1,000, you can claim the remaining $400 directly on your tax return. This is especially important for taxpayers who had income changes during 2021.

Enhanced Child Tax Credit

The Child Tax Credit was temporarily increased for 2021.

• Parents could claim up to $3,600 for each child under age six and $3,000 for children ages 6–17.
  
  
• Advance monthly payments were sent from July through December 2021 and must be reconciled when you report on your return.
  
  
• Many taxpayers became newly eligible because the credit was made fully refundable.

Standard Deduction Amounts

The standard deduction increased slightly in 2021, allowing taxpayers to reduce taxable income more effectively.

• Single or Married Filing Separately: $12,550
  
  
• Married Filing Jointly or Qualifying Widow(er): $25,100
  
  
• Head of Household: $18,800
  
  
• Additional Deduction for Age 65+ or Blind: $1,350 per qualifying condition ($1,700 if single or head of household)

These changes affect calculating adjusted gross income, credits, and tax due. Reviewing them before you prepare your return can prevent costly mistakes and ensure you receive your full refund.

Step-by-Step Filing Instructions

Now that you know what form to use and what changed this year, it’s time to complete your return. Follow these steps carefully to avoid errors, reduce delays, and ensure you receive the refund you are owed.

Step 1 – Gather Crucial Financial Documents

Before filling out the form, organize all the documents you need. This will prevent missed income reports or credits.

1. Collect W-2 forms from all employers. 

Each employer must send you a W-2 by January 31, and you should verify that wages and withholding amounts are accurate before you report them on your return.

2. Gather all 1099 forms for other income. 

This includes 1099-INT for interest, 1099-DIV for dividends, 1099-R for retirement distributions, and 1099-G for unemployment compensation to ensure you report all taxable income.

3. Locate Social Security cards for all household members. 

This step helps you report names and Social Security numbers and prevents processing delays caused by mismatched information.

4. Find bank routing and account numbers for direct deposit. 

Direct deposit is the fastest way to receive your refund, with most taxpayers getting their money within 21 days of IRS acceptance.

5. Keep prior years’ tax returns nearby. 

These documents can help you carry forward credits or deductions and confirm details from previously filed returns for accuracy.

6. Include Form 1095-A if you had marketplace health insurance. 

This form is required to accurately calculate and reconcile the Premium Tax Credit on your federal return.

Step 2 – Choose Your Filing Status

Your filing status determines your tax bracket, standard deduction, and eligibility for certain credits.

• Single: Choose this status if you are unmarried and do not qualify for another status.
  
  
• Married Filing Jointly: This is ideal for most married couples because it usually results in the lowest combined tax.
  
  
• Married Filing Separately: This is used when each spouse files individually, sometimes for legal or financial reasons. Be aware that certain credits are limited.
  
  
• Head of Household: This is available if you are unmarried, pay more than half the cost of keeping up a home, and have a qualifying dependent living with you.
  
  
• Qualifying Widow(er): This allows certain surviving spouses to use joint return rates for two years after a spouse’s death.

Step 3 – Complete Personal Information

Lines 1 through 5 require accurate details.

• Enter your full legal name, Social Security number, and your Social Security card.
  
  
• Include your mailing address and ensure it matches USPS standards to avoid return mail issues.
  
  
• Check the box if someone else can claim you as a dependent, affecting your standard deduction.

Step 4 – Report Dependents

This section helps you claim valuable credits such as the Child Tax Credit and Credit for Other Dependents.

• List each dependent’s full name, Social Security number, and relationship to you.
  
  
• Double-check spelling and numbers because errors here commonly cause refund delays.
  
  
• Check the appropriate box if they qualify for the Child Tax Credit or Other Dependent Credit.

Step 5 – Report Income and Other Income

Lines 1 through 8 capture your income sources.

• Wages (Line 1a). 

Add together all W-2 amounts and enter the total on this line to ensure your income is reported accurately.

• Interest and Dividends (Lines 2a, 2b, 3a, 3b). 

Report taxable and tax-exempt amounts from your 1099 forms to reflect your investment income correctly.

• Retirement Distributions (Line 4a). 

Report pensions, annuities, and IRA distributions in full, and list the taxable portion separately on line 4b.

• Social Security Benefits (Line 6a). 

Enter the total benefits received, then calculate the taxable portion if your income exceeds IRS thresholds.

• Other Income. 

Include unemployment compensation, gambling winnings, and any taxable refunds from prior years to ensure nothing is left unreported.

Step 6 – Calculate Deductions

You must decide whether to take the standard deduction or itemize.

• Standard Deduction: Most taxpayers benefit from the standard deduction amounts listed earlier. This is the simplest option.
  
  
• Itemized Deductions: If mortgage interest, charitable donations, or medical expenses exceed the standard deduction, consider Schedule A. Use caution: itemizing requires receipts and records.

Step 7 – Calculate Tax, Credits, and Payments

Once you have your adjusted gross income, you can calculate the tax you owe and subtract any credits and payments.

• Use the IRS tax tables to calculate your tax: Look up your taxable income in the IRS tables and find the correct tax amount to enter on your return.
  
  
• Apply tax credits: Credits such as the Child Tax Credit, Earned Income Credit, and education credits can reduce your overall tax liability and may even increase your refund.
  
  
• Subtract payments made: Include federal income tax withheld from your W-2s, estimated tax payments you made during the year, and any amount paid with an extension to calculate your remaining balance or refund.

After completing these steps, review your return carefully. Confirm Social Security numbers, math, and bank details before you sign and submit. Errors in these areas are among the top reasons tax refunds are delayed.

Payment, Refunds, and Extensions

After completing your form, the final step is to handle any payments you owe or to track your refund. Taking action quickly is crucial because missing payment deadlines can result in interest charges and failure-to-pay penalties.

If You Owe Taxes

Paying on time helps you avoid unnecessary costs.

• Use IRS Direct Pay: This free online tool allows you to transfer money directly from your checking or savings account and provides immediate confirmation once the payment is submitted.
  
  
• Try the Electronic Federal Tax Payment System (EFTPS): This secure government system lets you schedule payments in advance, which is helpful if you owe a large balance or want to plan your cash flow.
  
  
• Pay by credit or debit card: You can pay through one of the IRS-approved processors, although you will be charged a small convenience fee.
  
  
• Use your bank’s bill-pay service: Many banks allow you to pay the IRS directly through online banking, which helps you stay current and maintain accurate payment records.

Refund Options

Receiving your refund quickly depends on the method you choose.

• Choose direct deposit for the fastest refund: When filing electronically with direct deposit, most taxpayers receive their refund within 21 days.
  
  
• Split your refund if needed: You may use Form 8888 to send your refund to multiple bank accounts or to purchase U.S. savings bonds.
  
  
• Track your refund status daily: The IRS “Where’s My Refund?” tool provides updates once per day and requires your Social Security number, filing status, and exact refund amount.

Filing an Extension

Requesting extra time to file can prevent late-filing penalties.

• Submit Form 4868 by the original due date. You can file electronically or by mail to receive an automatic six-month extension.
  
  
• Please pay as much as possible by April 18. Even if you cannot pay in full, sending a partial payment will reduce future interest and penalties.
  
  
• Keep proof of submission for your records. Save the confirmation number for electronic filing or the certified mail receipt if you submit on paper.

Common Mistakes to Avoid

Even small mistakes can delay your refund or trigger IRS notices. Reviewing your federal return before you file is one of the most critical steps.

• Double-check your math and calculations. 

Simple arithmetic errors are one of the most common reasons tax returns are flagged for manual review, which can delay your refund for weeks.

• Verify all Social Security numbers carefully. 

An incorrect digit can cause the IRS to reject your return and require a correction before processing.

• Choose the correct filing status. 

Filing as head of household when you do not qualify or selecting the wrong marital status can result in the wrong standard deduction and a notice from the IRS.

• Sign and date your return before submission. 

The IRS treats an unsigned return as invalid, which means it will be sent back to you and will not count as filed on time.

• Check your bank information for direct deposit. 

Routing or account number errors can lead to rejected deposits or even several-month delays while the funds are returned to the IRS.

• Attach all required schedules and forms. 

Make sure copies of W-2s, 1099s, and any schedules are included, especially if you are mailing a paper return.

Taking a few minutes to review your completed return before you submit it can save you from avoidable delays, penalties, or amended returns later.

Special Situations

Many taxpayers assume they do not need to file a federal return if their income is below the filing threshold. While you may not be required to file, submitting a return can still provide significant financial benefits.

• Claim the refundable credits you are eligible for. 

Even if you had no tax liability, you may still qualify for credits like the Earned Income Credit or Additional Child Tax Credit, which can generate a refund larger than the taxes you paid.

• Reconcile advance payments from 2021. 

If you received advance Child Tax Credit payments or Premium Tax Credit subsidies, filing a return ensures that the amounts match your eligibility.

• Request a refund of taxes withheld. 

If your employer withheld federal income tax from your wages, the only way to receive that money back is by filing a return.

• Start your filing history. 

Filing a return, even with zero tax due, helps establish a consistent tax record, which can be helpful for loans, mortgages, and specific government programs.

• Protect against identity theft. 

Filing proactively can help secure your tax record and prevent someone else from submitting a fraudulent return using your Social Security number.

Filing voluntarily, even in a low-income year, is a smart move to put money back in your pocket and protect your financial future.

Tips for First-Time Filers

Filing your first federal return can feel overwhelming, but good preparation will make the process smoother and faster. Use these tips to stay organized and reduce errors.

• Keep all tax documents in one place throughout the year. Store W-2s, 1099s, and deductible expense receipts in a dedicated folder or digital file to be ready when tax season arrives.
  
  
• File early to avoid last-minute stress. Submitting your return in January or February gives you time to correct any errors before the April deadline and receive your refund sooner.
  
  
• Choose direct deposit for faster refunds. This method shortens processing time and reduces the risk of lost or delayed checks in the mail.
  
  
• Use reputable tax software or IRS Free File. Guided software helps you prepare a complete return, check for credits you might qualify for, and avoid math errors.
  
  
• Review your return before submitting. Take a few extra minutes to verify names, Social Security numbers, and calculations to prevent delays or notices from the IRS.
  
  
• Save copies of your filed return and supporting documents. Keep them for at least three years in case the IRS requests information or you need to refer to amounts from prior years.

These habits will help you remain organized, confident, and ready for future tax years.

FAQs

Do I need to file an individual income tax return if I had little or no income?

You may still want to file an individual income tax return even with minimal income. Filing allows you to claim refundable credits, receive a refund of taxes withheld, and create a record with the IRS. This is essential information for employees and nonresident taxpayers who may need proof of filing for future immigration, financial aid, or loan applications.

How do I calculate my adjusted gross income (AGI)?

Your adjusted gross income is calculated by taking your total income and subtracting specific adjustments such as IRA contributions, student loan interest, or educator expenses. The AGI is a key figure because it affects eligibility for credits and deductions. Most tax software and e-file providers calculate AGI automatically, but you can also access IRS resources and worksheets to confirm the amount manually before submitting your return.

What state tax forms do I need to file along with my federal return?

The forms you need depend on where you live and work. Many states require you to file a state return if you meet income thresholds, and some have separate filing requirements for part-year residents or nonresident taxpayers. Visit your state’s department of revenue website to find the correct state tax forms, due dates, and payment options. Keep a note to file both state and federal returns together when possible.

Can I claim the foreign tax credit on Form 1040?

Yes, you can claim the foreign tax credit if you paid taxes to a foreign country on income that is also subject to U.S. tax. This credit helps prevent double taxation. To claim it, complete Form 1116 and attach it to your return. If you have self-employment tax obligations, account for them separately. IRS resources can help you access the correct forms and instructions.

What if I cannot file by the due date?

You can request an automatic six-month extension by submitting Form 4868 before the original deadline. Remember that an extension gives you more time to file, but not more time to pay any balance due. Pay as much as possible to avoid interest and penalties by April 18. E-file options make submitting your extension request fast and secure, and IRS resources confirm receipt.