Form 1040 Tax Year 2016: Complete Filing Checklist
2016 Tax Year Unique Attributes
The 2016 Form 1040 mandates reconciliation of advance premium tax credit payments via Form 8962 and requires reporting of the Affordable Care Act shared responsibility payment on line 61 if coverage was not maintained throughout the tax year. The standard deduction for head of household status is $9,300 for the 2016 tax year.
Personal exemption amount is $4,050 per person, subject to phaseout when AGI exceeds $155,650 for married filing separately, $259,400 for single, $285,350 for head of household, or $311,300 for married filing jointly.
Year-Specific Programs Applicable to 2016 Form 1040
If you or a family member enrolled in health insurance through the Marketplace and received advance payments of the premium tax credit for 2016, you must file Form 1040 and attach Form 8962 to reconcile those payments. You cannot file Form 1040A or 1040EZ if you received advance premium tax credit payments.
If you did not have qualifying health care coverage throughout 2016, you must report a shared responsibility payment on line 61 unless you are eligible for a coverage exemption claimed via Form 8965.
Ten-Step Form 1040 (2016) Filing Checklist
Step 1: Verify Filing Status and Collect W-2 Forms
Select your filing status on line 1: single, married filing jointly, married filing separately, head of household, or qualifying widow(er). Attach all Forms W-2 showing 2016 wages, salaries, and tips. If you were born before January 2, 1952, or were blind, check the corresponding box on line 39a to claim the additional standard deduction.
Step 2: Gather All Income Documents
Collect Forms 1099-INT for interest, 1099-DIV for dividends, 1099-B for broker transactions, 1099-G for unemployment or state tax refunds, 1099-MISC for miscellaneous income, and Schedule K-1 from partnerships or S corporations. If you received Form 1095-A from the Marketplace showing advance tax credit payments, set it aside for Step 9. Do not attach Form 1095-A to your return.
Step 3: Complete Income Lines 7 Through 21
Enter wages from Form W-2 on line 7. Report taxable interest on line 8a, ordinary dividends on line 9a, and qualified dividends on line 9b. If you operated a business, complete Schedule C and enter business income on line 12. Report capital gains or losses on line 13, attaching Schedule D if required.
Enter total Social Security benefits on line 20a. Calculate the taxable portion by adding AGI, tax-exempt interest, and one-half of Social Security benefits. If combined income exceeds $25,000 for single filers or $32,000 for married couples filing jointly, a portion becomes taxable. Enter the taxable amount on line 20b.
Step 4: Calculate Adjusted Gross Income
List the applicable above-the-line deductions on lines 23 through 35, which include educator expenses up to $250, health savings account deductions, the self-employment tax deduction, self-employed health insurance, IRA contributions, student loan interest up to $2,500, and the tuition and fees deduction. Add these deductions and enter the total on line 36. Subtract line 36 from line 22's total income to calculate AGI on line 37.
Step 5: Determine Standard Deduction or Itemize
Enter the standard deduction for your filing status on line 40: $6,300 for single, $12,600 for married filing jointly, $9,300 for head of household, or $6,300 for married filing separately. If age 65 or older or blind, add the additional standard deduction amount.
Alternatively, if itemized deductions exceed the standard deduction, complete Schedule A and enter the total on line 40. Itemized deductions include medical expenses exceeding 10% of AGI (7.5% if born before January 2, 1952), state and local taxes, real estate taxes, mortgage interest, charitable contributions, and certain miscellaneous deductions.
If AGI exceeds $155,650 for married filing separately, $259,400 for single, $285,350 for head of household, or $311,300 for married filing jointly, itemized deductions may be limited.
Step 6: Calculate Personal Exemptions
Multiply $4,050 by the total number of exemptions claimed on line 6d, including yourself, your spouse if filing jointly, and each qualifying dependent. Enter the result on line 42.
If AGI exceeds the threshold for your filing status, use the exemption phaseout worksheet in the Form 1040 instructions to calculate your reduced exemption amount.
Step 7: Complete Tax Calculation
Subtract line 42 from line 41 to obtain taxable income on line 43. If the result is zero or negative, enter zero. Use the 2016 Tax Table to find your tax and enter it on line 44. If you have qualified dividends or capital gains, use the Qualified Dividends and Capital Gain Tax Worksheet.
If subject to alternative minimum tax, complete Form 6251 and enter the amount on line 45. If you must repay excess advance premium tax credit, enter the repayment amount from Form 8962 on line 46. Add lines 44, 45, and 46 to calculate the total tax on line 47.
Step 8: Claim Credits
Enter foreign tax credit on line 48 with Form 1116, child and dependent care credit on line 49 with Form 2441, education credits on line 50 with Form 8863, and retirement savings contributions credit on line 51 with Form 8880. Enter the child tax credit of $1,000 per qualifying child under age 17 on line 52. Attach Schedule 8812 if the credit exceeds your tax liability. Enter residential energy credits on line 53 with Form 5695 and other credits on line 54.
Add lines 48 through 54 and enter total credits on line 55. Subtract line 55 from line 47 to calculate the total tax after credits on line 56.
Step 9: Report Health Coverage and Premium Tax Credit Reconciliation
On line 61, check the full-year coverage box if you, your spouse, are filing jointly, and all dependents have qualifying health insurance for all twelve months of 2016. If not, either complete Form 8965 to claim a coverage exemption or calculate the shared responsibility payment using the Form 8965 worksheet and enter it on line 61.
Suppose you received advance premium tax credit payments shown on Form 1095-A; complete Form 8962 to reconcile those payments with your actual credit based on your final 2016 income. Attach Form 8962 to your return. Excess advance payments were entered on line 46 in Step 7. The additional premium tax credit is entered on line 69.
Step 10: Calculate Refund or Amount Owed and File
Enter federal income tax withheld on line 64 and estimated tax payments on line 65. Enter earned income credit on line 66a, additional child tax credit on line 67, American opportunity credit on line 68, and net premium tax credit on line 69 if applicable. Add lines 64 through 73 to calculate total payments on line 74.
If line 74 exceeds line 56, you have an overpayment on line 75. Request a refund on line 76a or apply it to the 2017 estimated tax on line 77. If line 56 exceeds line 74, you are liable for tax on line 78.
Sign and date the return. If filing jointly, both spouses must sign the return. Include your occupation and daytime phone number. Attach all required schedules: Schedule A if itemizing, Schedule C if self-employed, Schedule D for capital gains, Form 8962 for premium tax credit reconciliation, Form 8965 for coverage exemptions, and supporting forms for credits.
Do not attach Forms 1095-A, 1095-B, or 1095-C. Mail to the IRS address for your state by April 18, 2017, or consider filing Form 4868 for an automatic six-month extension.
Key Form Changes for 2016
Line 61 requires three responses for health care coverage: check the Full-year coverage box, claim exemption with Form 8965, or report shared responsibility payment. This reflects the Affordable Care Act reporting requirement.
Line 46 directs taxpayers who received advance premium tax credit payments to attach Form 8962 and report any repayment amount if reconciliation shows excess payments were made.
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This checklist is for educational purposes only and does not constitute tax or legal advice. Always review official IRS instructions and consult a qualified professional for guidance.
