How to File Federal Form 1040EZ for Tax Year 2020 Guide

Each year, the IRS reports that more than 20 percent of paper tax returns contain errors that delay refunds by weeks. For most taxpayers, those delays can mean waiting two months or more to receive money you may need for bills or savings. Filing your federal tax return accurately and on time is the first step toward avoiding late-payment penalties and unnecessary stress.

Form 1040EZ was once the most straightforward way for individuals with basic income to file, but it was discontinued after the tax year 2018. For the 2020 tax year, all taxpayers—including those who would have used 1040EZ—must file using the redesigned Form 1040 or Form 1040-SR. The good news: this updated form keeps filing straightforward for those with simple situations. You can still report wages, claim the standard deduction, and file without additional schedules if your return is uncomplicated. This guide walks you through the transition, showing how to correctly file the federal Form 1040EZ for tax year 2020 using its replacement.

Acting early and filing electronically is the best way to protect your refund. E-filed returns are processed in about 21 days compared to eight or more weeks for paper forms. Filing electronically also helps prevent math errors and reduces the risk of a rejected return. Whether you are filing as a single worker, a married couple, or a first-time filer, this guide will help you understand what information is needed, how to claim all eligible credits, and how to avoid easily preventable mistakes that cost money. The goal is simple: provide clear instructions to file quickly, accurately, and confidently.

Why Form 1040EZ Was Discontinued

Form 1040EZ was designed for taxpayers with the simplest tax situations: single or joint filers with basic wages, little to no interest, and no dependents. Beginning with tax year 2018, the IRS discontinued Form 1040EZ and Form 1040A to simplify the federal tax system. Instead of deciding between multiple tax forms, all individuals now use Form 1040, which works for every filing status.

This change allows most taxpayers to complete only the sections that apply to them. The IRS calls this the "building block approach." You start with a two-page core form, and if you need to report extra income, claim additional credits, or pay special taxes, you attach the appropriate schedules. This update has made filing more consistent and easier for individuals and tax software systems to understand.

Your Options for 2020

You have two primary options for the 2020 tax year: Form 1040 and Form 1040-SR. Both are valid for complex and straightforward returns alike. The only difference is that Form 1040-SR is designed specifically for seniors, with larger fonts and a more concise layout. Tax calculations are identical between the two forms, so you can choose whichever is more comfortable to use.

Comparison 1: Form 1040 vs. Form 1040-SR

Now that you know which form to use, it is essential to understand what changed for the 2020 tax year before you start filling out your return.

Key Changes for Tax Year 2020

Before filling out your federal tax return, it is essential to understand the updates that apply to the 2020 tax year. Several changes affect how you calculate income, deductions, and credits. Knowing these updates in advance will help you claim every dollar you are eligible for and avoid errors that could delay your refund.

Recovery Rebate Credit

One of the most important additions for 2020 is the Recovery Rebate Credit, found on Line 30 of Form 1040. This credit allows you to claim any Economic Impact Payments (stimulus payments) you did not receive or received in the wrong amount. For most taxpayers, this means up to $1,200 for individuals ($2,400 for joint filers) plus $500 for each qualifying child. If you have already received the full amount, you do not need to take any action; if not, claiming this credit can significantly increase your refund.

Unemployment Compensation Exclusion

Another significant change is excluding up to $10,200 unemployment compensation per person if your adjusted gross income was under $150,000. This exclusion applies to all filing statuses and can lower your taxable income, reducing your tax due. If you use tax software, the calculation is automatic; if you are filing on paper, carefully follow the IRS instructions to avoid overreporting income.

Charitable Deduction for Non-Itemizers

For 2020 only, you may deduct up to $300 in cash contributions to qualified charities even if you take the standard deduction. This deduction is available to all taxpayers and is claimed on Line 10b of Form 1040.

Updated Standard Deduction Amounts

The IRS increased the standard deduction amounts for 2020.

Comparison 2: 2019 vs. 2020 Standard Deduction Amounts

With these changes in mind, you are ready to follow a step-by-step process to complete your return accurately and avoid missing any valuable credits.

Step-by-Step Filing Instructions

Following these steps will help ensure your federal Form 1040EZ for tax year 2020 replacement (Form 1040) is accurate, accepted, and processed quickly. Each step is written for individuals and joint filers with simple returns, but you can adapt if your situation is more complex.

Step 1: Gather Your Documents

Before you begin, collect all required paperwork. Missing documents lead to inaccurate reporting and IRS notices.

• You should gather W-2 forms from each employer before you begin filing. These forms show your total wages and the amount of federal tax withheld during the year. Collect a W-2 from every employer to avoid underreporting your income if you worked multiple jobs.
• You will also need 1099 forms for interest, dividends, or unemployment compensation. Each 1099 form reports a specific type of income that must be accurately included in your return to prevent IRS mismatches.
• Having your prior-year return on hand is also helpful. It allows you to carry forward information such as overpayments or estimated tax payments, ensuring your current return is complete and accurate.
• Finally, ensure you have the Social Security numbers for yourself, your spouse, and any dependents you plan to claim. Incorrect or missing Social Security numbers can lead to processing delays, rejections, or lost eligibility for credits like the Child Tax Credit.

Step 2: Complete Personal Information

Fill in your legal name, current address, and Social Security number exactly as they appear on your Social Security card. If filing jointly, include your spouse's information. Answer the virtual currency question honestly: answer "Yes" if you sold, exchanged, or received virtual currency in 2020; answer "No" if you only held it. Errors here can cause rejected returns or additional IRS questions.

Step 3: Choose Your Filing Status

Determine which filing status applies to you:

• Single: This filing status is for taxpayers who are unmarried and do not have any qualifying dependents.

• Married Filing Jointly: This status is often the most beneficial for married couples because it allows them to claim the highest standard deduction and combine their income on one return.

• Head of Household: This status is available if you are unmarried and provide more than half the support for a qualifying person, such as a child or dependent relative.

• Married Filing Separately: This option should only be used if it results in a lower tax bill or if you are legally required to file separately.

Choosing the wrong status can raise your tax bill unnecessarily. You should use the IRS Interactive Tax Assistant to confirm that you have selected the correct filing status.

Step 4: Report Income

Enter your income on the appropriate lines:

• Line 1: Enter the total wages, salaries, and tips from all of your W-2 forms. For example, if one W-2 shows $35,000 and another shows $15,000, you would enter $50,000 as your total wages.

• Line 2a/2b: Report taxable and tax-exempt interest exactly as shown on your 1099-INT forms. Even small amounts must be included to avoid mismatches with IRS records.

• Line 3a/3b: Report the ordinary and qualified dividends listed on your 1099-DIV. Qualified dividends receive special tax treatment, but you must still report the full amount.

If you have other income types such as unemployment, business income, or capital gains, attach Schedule 1. This ensures accurate reporting and prevents IRS mismatch notices.

Step 5: Calculate Adjusted Gross Income (AGI)

Add up all income lines to determine your total income. If eligible, subtract adjustments such as student loan interest (Schedule 1) or unemployment exclusion. Enter the result on Line 11 as your AGI. This number determines eligibility for credits and deductions, so double-check your math or rely on tax software.

Step 6: Take the Standard Deduction

Most taxpayers who previously used 1040EZ will claim the standard deduction.

• Single or Married Filing Separately: $12,400
  
  
• Married Filing Jointly: $24,800
  
  
• Head of Household: $18,650

Add $1,650 if you are 65 or older or blind ($1,300 if married). Subtract this from your AGI to get taxable income.

Step 7: Calculate Tax

Use the IRS tax tables or software to find the tax owed on your taxable income. For example, if you are single with $45,000 taxable income, the table will show $5,144. Enter this on Line 16. Using software reduces the risk of math errors that delay refunds.

Step 8: Apply Credits

Reduce your tax by claiming all eligible credits:

• Child Tax Credit: You may claim up to $2,000 for each qualifying child under age 17, provided they meet the IRS requirements. This credit can significantly reduce your tax bill, and up to $1,400 per child may be refundable.

• Recovery Rebate Credit: This credit allows you to claim any missing or partial Economic Impact Payments (stimulus payments) from 2020. Completing this section accurately ensures you receive the full amount you are entitled to.

• Earned Income Credit: This credit is available to low- and moderate-income workers and can increase your refund, especially if you have qualifying children.

Follow the IRS instructions carefully for each credit. Errors can delay processing and may cause your return to be flagged for review.

Step 9: Enter Payments and Withholding

Add up all federal tax withheld from your W-2s (Line 25a) and any estimated tax payments made during the year (Line 26). If you overpaid, this amount increases your refund.

Step 10: Determine Refund or Amount Owed

• If You Are Due a Refund: Choose direct deposit to receive your refund as quickly as possible, usually within 21 days. Double-check that your routing and account numbers are accurate to prevent delays or rejected deposits.

• If You Owe Tax: Pay by the filing deadline to avoid penalties and interest. The IRS offers several payment options, including Direct Pay from your bank account, debit or credit card payments, and monthly installment agreements if you cannot pay in full.

Step 11: Sign, Date, and File

Sign and date your return. If filing jointly, both spouses must sign. Unsigned returns are considered invalid and will be rejected. Keep a copy for your records before mailing or submitting electronically.

Once you have completed your return, the next step is deciding how to file it. Your filing method can determine how fast you receive your refund and how accurate your return is.

Filing Methods and Deadlines

Choosing the correct filing method is an essential part of the process because it affects how quickly you receive your refund, how accurate your return will be, and how easily you can track it after submission.

E-File (Recommended)

The IRS recommends e-filing because it is faster, safer, and reduces errors. E-filed returns are processed in about 21 days, compared to eight or more weeks for paper returns. Using tax software or IRS Free File ensures calculations are correct, forms are correctly attached, and your return is less likely to be rejected. Most taxpayers with an adjusted gross income of $72,000 or less in 2020 can use IRS Free File at no cost.

IRS Free File and Software Options

• Free File Software: This option is designed for taxpayers with simple returns and offers guided interviews, automatic calculations, and error checking.

• Free File Fillable Forms: This option is available for all taxpayers regardless of income. It provides electronic versions of paper forms. It is best suited for those who are comfortable completing forms manually.

• Commercial Software: Paid software such as TurboTax, H&R Block, and TaxAct provides step-by-step guidance and customer support, often including state tax filing.

Using software can help you follow the latest IRS publications, attach all required schedules, and submit a complete and accurate return.

Paper Filing

If you prefer mailing your return, follow these best practices to prevent delays. Print clearly using black ink or type your responses, attach Copy B of all W-2s and any 1099-R forms with withholding, and use your state's correct IRS mailing address. Include proper postage and consider certified mail for proof of delivery. Because paper filing is slower, send your return early to allow for longer processing times.

Deadlines

The filing deadline for 2020 was extended to May 17, 2021, but future deadlines generally fall on April 15. Missing the deadline can lead to a 5 percent failure-to-file penalty per month and interest on unpaid tax. Filing on time, even without full payment, helps minimize penalties.

Common Mistakes and How to Avoid Them

Even small mistakes on your federal tax return can delay your refund, lead to IRS letters, or result in penalties. Reviewing your return before filing is one of the easiest ways to avoid unnecessary problems. Here are the most common errors and how to prevent them.

Math and Data Entry Errors

• Incorrect Calculations: Adding or subtracting incorrectly is one of the most frequent filing mistakes. To reduce risk, use IRS tax tables carefully or rely on software that performs automatic calculations.

• Transposed Numbers: Writing 1,542 as 1,452 or misplacing a decimal point can cause the IRS to adjust your return. Double-check each line item before submission.

Filing Status and Dependent Mistakes

• Wrong Filing Status: Choosing “Single” when you qualify for “Head of Household” can cost you a higher standard deduction and lower tax bill. Confirm your status with the IRS Interactive Tax Assistant before filing.
  
  
• Dependent Errors: Claiming someone who does not meet the age, residency, or support tests can delay your refund. Make sure Social Security numbers for all dependents are correct and boxes for credits like the Child Tax Credit are properly checked.

Income Reporting Issues

• Missing W-2s or 1099s: Forgetting to include income from a part-time job, bank interest, or unemployment benefits can trigger an IRS notice. Match every form you received to a line on your return.

• Incorrect Payer Information: Entering the wrong employer identification number (EIN) or rounding incorrectly can create mismatches with IRS records.

Signature and Banking Errors

• Unsigned Returns: The IRS considers an unsigned return invalid and will reject it. Make sure you and your spouse (if filing jointly) both sign.

• Wrong Bank Information: Mistakes in routing or account numbers can result in a rejected deposit or a mailed paper check that takes weeks longer.

Final Review Checklist

Before you file, review your return line by line, verify Social Security numbers, confirm your filing status, check math, and ensure all attachments are included. Taking a few extra minutes now can save weeks of processing delays later.

Exceptional Cases for Low or No-Income Filers 

Some taxpayers assume that they do not need to file a federal tax return if they earned little or no income. While that is sometimes true, filing may still be required — and in many cases, it can put money back in your pocket through refunds and credits.

When You Must File

Even if your income was low, you are required to file if:

• You must file a return if your gross income was higher than the IRS filing threshold for your filing status and age.

• You must also file if you had $400 or more in net earnings from self-employment, even if your total income was otherwise low.

• Filing is required if you owe special taxes, such as the alternative minimum or the additional tax on early retirement plan withdrawals.

• You must file if you received advance payments of the Premium Tax Credit so that the IRS can reconcile the amounts.

2020 Filing Thresholds

If one spouse is 65 or older, the threshold is $26,100; if both are 65 or older, the threshold is $27,400.

Why You Should File Anyway

Filing can allow you to claim valuable credits and refunds even if you are below these thresholds. You may qualify for the Recovery Rebate Credit, Earned Income Credit, or a refund of federal tax that was withheld from a paycheck earlier in the year. Filing also keeps your records current with the IRS, which may make future tax years easier.

First-Time Filer Tips 

Filing your first federal tax return can feel intimidating, but the process is often more straightforward than most people expect. With some preparation and organization, you can complete your return accurately and avoid common pitfalls that delay refunds.

Get Organized Early

Gather all of your tax documents before you begin. This includes W-2s from employers, 1099s for interest or other income, and your Social Security card to ensure that names and numbers match exactly. Everything in one place saves time and helps you avoid missing income that could trigger IRS notices.

Choose the Right Filing Method

Electronic filing is the best option for most first-time filers because it provides built-in error checking and faster refunds. IRS Free File is available for taxpayers with an adjusted gross income of $72,000 or less, and many commercial software programs include step-by-step guidance for beginners.

Use the Standard Deduction

Most first-time filers have a simple tax situation and will benefit from taking the standard deduction. This means you do not have to keep receipts or itemize expenses; the deduction amount is automatically calculated for you.

Double-Check Before Submitting

Before you submit your return, review every entry carefully. Ensure your Social Security number is correct, your income totals match your forms, and your bank information is accurate for direct deposit. Minor errors can cause significant delays.

Keep a Copy for Your Records

After filing, save a copy of your return and confirmation of submission. This will make next year's filing easier and will be helpful if the IRS asks for information later.

FAQs

What is a tax return, and why is it important?

A tax return is the form you submit to the IRS each year to report your income, deductions, and credits. Filing a return ensures you pay the right amount of income tax and allows you to claim refunds if too much was withheld. Many community programs offer free help preparing your return, and the IRS regularly releases updated resources to guide you through the process.

Which tax forms replaced Form 1040EZ?

The IRS discontinued Form 1040EZ and replaced it with the redesigned Form 1040 and Form 1040-SR. These tax forms allow all taxpayers to report their income using the same format while adding schedules only when necessary. You can read the official IRS instructions online, which are updated annually when new forms are released, to ensure you are using the correct version for your filing year.

How does federal tax filing work now?

Federal tax filing now uses a single Form 1040 that works for all types of taxpayers. You start with the main two-page form and attach schedules only if needed. This system makes it easier for the IRS and the taxpaying community to stay consistent. Each year, updated forms and instructions are released to reflect changes in tax law, so always read the latest version before filing.

Do I still need to file a tax return if I earned very little?

Yes, filing is still beneficial in many cases, even if your income is below the threshold. Filing allows you to claim refundable credits or get back money that was withheld from your pay. Community organizations often help individuals file for free, and the IRS has released tools that make it simple to determine whether you should file. You should read those resources before deciding not to file.

Where can I find official information about tax forms and deadlines?

You can find official information about tax forms, deadlines, and instructions at IRS.gov. The IRS provides a full library of publications that can be read online or downloaded for free. Updates are released each year to reflect changes in tax law, ensuring that taxpayers have access to current and accurate information when preparing their income tax returns.