Form 1040 (2021) Filing Checklist
Purpose
Form 1040 reports your total 2021 income, calculates federal income tax liability, and claims refundable credits. For 2021, the American Rescue Plan Act (ARPA) expanded several tax benefits, including the child tax credit (up to $3,600 per child under age 6 and $3,000 per child ages 6-17) and the Recovery Rebate Credit for the third stimulus payment.
Step-by-Step Filing Instructions
Step 1: Determine Your Filing Status
Select the correct filing status: Single, Married Filing Jointly, Married Filing Separately, Head of Household, or Qualifying Widow(er). If you claim Head of Household, ensure you meet all the requirements, including paying more than half the cost of maintaining a home for a qualifying person. If your qualifying child is not claimed as your dependent due to divorce/separation rules, enter the child’s name in the space below the filing status checkboxes.
Step 2: Provide Personal Information
Enter your name, address, and Social Security Number exactly as shown on your Social Security card. If married filing jointly, include your spouse’s information. Ensure all names and SSNs are accurate to avoid processing delays.
Step 3: Answer the Virtual Currency Question
All taxpayers must answer the question about virtual currency at the top of Form 1040. Check “Yes” if, at any time during 2021, you received, sold, exchanged, or otherwise disposed of any financial interest in a virtual currency. Check “No” if you did not engage in such transactions. This question cannot be left blank.
Step 4: List Your Dependents
Enter information for each dependent, including their name, Social Security Number, relationship to you, and whether they qualify for the Child Tax Credit or Credit for Other Dependents. Ma—Markmn (4) appropriately. Attach Schedule 8812 if claiming child tax credits or credits for other dependents.
Step 5: Report All Income
Report wages from Form W-2 on line 1, taxable interest on line 2b, ordinary and qualified dividends on lines 3a-3b, IRA and pension distributions on lines 4a-5b, Social Security benefits on lines 6a-6b, and capital gains or losses on line 7. Additional income from Schedule 1 goes on line 8. Total all income sources on line 9.
Step 6: Calculate Adjusted Gross Income
Enter adjustments to income from Schedule 1, Part II on line 10. Subtract line 10 from line 9 to determine your AGI on line 11. This figure is important for determining eligibility for various credits and deductions.
Step 7: Claim Your Standard or Itemized Deduction
Enter your standard deduction amount on line 12a based on your filing status: $12,550 for Single or Married Filing Separately, $25,100 for Married Filing Jointly or Qualifying Widow(er), or $18,800 for Head of Household. Check applicable boxes if you are age 65 or older or blind to increase your standard deduction. Alternatively, enter itemized deductions from Schedule A on line 12a if they exceed your standard deduction.
Step 8: Add Charitable Contribution Deduction
If you are taking the standard deduction, you may claim an additional charitable contribution deduction on line 12b for cash donations made in 2021. The limit is $300 for single filers and $600 for married filing jointly. Add lines 12a and 12b, then enter the total on line 12c.
Step 9: Calculate Qualified Business Income Deduction
Suppose you have qualified business income; complete Form 8995 or Form 8995-A to determine your QBI deduction. Enter the result on line 13. Add lines 12c and 13, then enter the total on line 14. Subtract line 14 from line 11 to determine your taxable income on line 15.
Step 10: Compute Tax and Apply Credits
Calculate your tax using the Tax Table or Tax Computation Worksheet and enter it on line 16. Attach Form 8814 or Form 4972 if applicable. Add any additional taxes from Schedule 2 on line 17 to the total tax on line 18. Enter the nonrefundable child tax credit or credit for other dependents from Schedule 8812 on line 19 and other nonrefundable credits from Schedule 3 on line 20. Subtract these credits from line 18 to arrive at line 22.
Step 11: Claim Refundable Credits
Enter Earned Income Credit on line 27a if eligible. Enter the refundable child tax credit and additional child tax credit from Schedule 8812 on line 28. Report American Opportunity Credit from Form 8863 on line 29. Claim the Recovery Rebate Credit for the third Economic Impact Payment on line 30 if you did not receive the full amount in 2021. Enter other refundable credits from Schedule 3 on line 31.
Step 12: Report Tax Payments
Enter federal income tax withheld from Forms W-2 on line 25a, from Forms 1099 on line 25b, and from other forms on line 25c. Add these amounts together on line 25d. Report 2021 estimated tax payments and any amount applied from your 2020 return on line 26. Add lines 25d, 26, and 27 through 32 to determine total payments and refundable credits on line 33.
Step 13: Determine Refund or Amount Owed
If line 33 is greater than line 24, you have an overpayment. Enter the amount on line 34. Choose to have your refund directly deposited by completing lines 35a-35d, or apply all or part of it to your 2022 estimated tax on line 36. If line 24 is greater than line 33, subtract line 33 from line 24 and enter the amount you owe on line 37. Include any estimated tax penalty from line 38 in your payment.
Step 14: Sign and Date Your Return
Both you and your spouse (if filing jointly) must sign and date the return. Enter your occupation and daytime phone number. If someone prepared your return for a fee, they must also sign and provide their information. Unsigned returns are not valid.
Step 15: File Your Return by the Deadline
File Form 1040 by April 18, 2022 (April 19 for Maine and Massachusetts residents due to state holidays). You may request an automatic six-month extension by filing Form 4868 or making an electronic payment by the due date. However, extensions to the filing do not extend the time to pay any tax owed. Interest and penalties may apply to late fees.
Important Reminders
Premium Tax Credit Reconciliation: If you or anyone in your household received advance premium tax credit payments for Marketplace health insurance coverage, you must file Form 8962 with your return to reconcile these payments, even if you are not otherwise required to file.
Schedule 8812 Required for Child Tax Credits: Because of ARPA changes, all taxpayers claiming child tax credits or credits for other dependents must complete and attach Schedule 8812 to their Form 1040. The Child Tax Credit calculation has been moved from the main form instructions to the Schedule 8812 instructions.
Direct Deposit Expanded: For 2021, direct deposit of refunds is now available even if you file your return after November 30, 2022, providing faster access to your refund.
Payment Options: If you owe taxes, pay electronically at IRS.gov/payments for immediate processing. Other options include direct debit during e-filing, check, money order, or same-day wire transfer. Do not send cash through the mail.
Special Considerations
Forgiven PPP Loans: If you received Paycheck Protection Program loan forgiveness, this creates tax-exempt income that does not need to be reported on Form 1040. However, you may need to report certain related information depending on your situation.
Multiple Jobs or Filing Status Changes: If you worked various jobs during 2021 or experienced a change in filing status, carefully review withholding amounts and consider whether adjustments are needed for future years to avoid underpayment penalties.
Identity Protection PIN: All taxpayers who can verify their identity may now opt into the IRS Identity Protection PIN program to help prevent tax-related identity theft. Visit IRS.gov to request your IP PIN.
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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.
