Form 1040 (2023) Filing Checklist
Overview
The 2023 Form 1040 is used to report total income, compute taxable income through standard or itemized deductions, apply nonrefundable and refundable credits, and reconcile withholdings and estimated payments. Key updates for 2023 include a mandatory digital asset disclosure question and increased standard deduction amounts: $13,850 for single filers, $27,700 for married filing jointly, and $20,800 for head of household. The age and blindness threshold applies to individuals born before January 2, 1959.
Step-by-Step Filing Checklist
Step 1: Personal Information and Filing Status
Enter your legal name, Social Security Number, and current address on the form. Select your filing status: Single, Married Filing Jointly, Married Filing Separately, Head of Household, or Qualifying Surviving Spouse. Your filing status must reflect your situation as of December 31, 2023. If filing as Married Filing Separately, print your spouse’s name in the designated space. If filing as Head of Household or Qualifying Surviving Spouse, include the qualifying person’s name if required.
Step 2: Digital Asset Disclosure Question
Answer the digital asset question at the top of Form 1040. Check “Yes” if, during 2023, you received digital assets as a reward, award, or payment for property or services, or if you sold, exchanged, or otherwise disposed of any digital asset. Check “No” if you only purchased digital assets with U.S. dollars, held them without transactions, or transferred them between your own wallets or accounts. All filers must answer this question regardless of transaction amounts.
Step 3: Standard Deduction or Itemized Deduction
Determine whether to claim the standard deduction or itemize. The 2023 standard deduction amounts are $13,850 for single or married filing separately, $27,700 for married filing jointly, and $20,800 for head of household. If you are age 65 or older (born before January 2, 1959) or blind, add $1,850 if single or head of household, or $1,500 for other filing statuses, for each applicable condition. If someone can claim you as a dependent, your standard deduction is limited to the greater of $1,250 or your earned income plus $400, not exceeding the regular standard deduction for your filing status. If filing Married Filing Separately and your spouse itemizes, you must also itemize and cannot claim the standard deduction.
Step 4: Dependents and Qualifying Individuals
List all dependents you are claiming, including their names, Social Security Numbers, relationships to you, and whether they qualify for the Child Tax Credit or Credit for Other Dependents. Ensure each dependent meets the IRS definition of a qualifying child or qualifying relative. Verify that no one else can claim these individuals as dependents on their return.
Step 5: Income Reporting
Report all income on the appropriate lines. Enter wages from Form W-2 Box 1 on Line 1a, including household employee wages, tips, Medicaid waiver payments, taxable dependent care benefits from Form 2441 Line 26, employer adoption benefits from Form 8839 Line 29, and wages from Form 8919. Report taxable interest on Line 2b, ordinary dividends on Line 3b, and include distributions from IRAs, pensions, annuities, and Social Security benefits on their respective lines. If you have nontaxable combat pay, report it separately on Line 1i.
Step 6: Schedule B Requirements
Attach Schedule B if your taxable interest or ordinary dividends exceed $1,500. Schedule B is also required if you received interest from a seller-financed mortgage where the buyer used the property as a personal residence, if you have accrued interest from a bond, if you received nominee dividends belonging to someone else, or if you had a foreign account or received distributions from a foreign trust. Complete Part III of Schedule B if foreign account or foreign trust requirements apply.
Step 7: Additional Income and Adjustments
Complete Schedule 1 Part I if you have additional income such as business income, farm income, unemployment compensation, prizes, awards, or other income not reported on Form 1040 Lines 1 through 7. Complete Schedule 1 Part II if you have adjustments to income, such as educator expenses, student loan interest deduction, self-employment tax deduction, or IRA deductions. Enter the totals on the appropriate lines of Form 1040.
Step 8: Adjusted Gross Income
Calculate your adjusted gross income on Line 11 by subtracting Line 10 (adjustments to income from Schedule 1) from Line 9 (total revenue). Your AGI determines eligibility for many tax credits and deductions, and serves as the basis for calculating your taxable income.
Step 9: Qualified Business Income Deduction
If you have qualified business income from a pass-through entity such as a sole proprietorship, partnership, S corporation, or certain trusts and estates, calculate your QBI deduction using Form 8995 or Form 8995-A. Use Form 8995 if your taxable income before the QBI deduction is $182,100 or less for single filers or $364,200 or less for married filing jointly. Otherwise, use Form 8995-A. The QBI deduction allows eligible taxpayers to deduct up to 20 percent of their qualified business income, subject to income limitations and wage and property basis restrictions as outlined in IRC Section 199A. Enter the QBI deduction on Line 13.
Step 10: Taxable Income Calculation
Add your standard or itemized deduction from Line 12 and your QBI deduction from Line 13, entering the sum on Line 14. Subtract Line 14 from Line 11 to determine your taxable income on Line 15. If the result is zero or negative, enter zero. Your taxable income determines which tax table or tax computation method applies.
Step 11: Tax, Credits, and Additional Taxes
Calculate your tax using the 2023 Tax Tables, Tax Computation Worksheet, Qualified Dividends and Capital Gain Tax Worksheet, or other applicable forms. Enter the amount on Line 16. Add any additional taxes from Schedule 2 Line 17, such as self-employment tax, additional tax on IRAs or retirement plans, household employment taxes, or alternative minimum tax. Subtract nonrefundable credits from Schedule 3 and the Child Tax Credit and Credit for Other Dependents from Schedule 8812. The result is your total tax liability.
Step 12: Payments and Refundable Credits
Report all payments and withholdings on Lines 25 through 32. Include federal income tax withheld from Forms W-2, 1099, and other information returns. Add estimated tax payments made during 2023, any overpayment from your 2022 return applied to 2023, and refundable credits such as the Earned Income Credit, Additional Child Tax Credit, American Opportunity Credit refundable portion, and other refundable credits from Schedule 3. Total all payments and credits on Line 33.
Step 13: Refund or Amount Owed
Compare your total payments and credits on Line 33 with your total tax on Line 24. If Line 33 is larger, you have a refund. Enter the amount on Line 34 and indicate whether you want it directly deposited, applied to next year’s estimated tax, or used to purchase U.S. Savings Bonds. If Line 24 is larger, you owe additional tax. Enter the amount owed on Line 37 and make payment arrangements through IRS Direct Pay, the Electronic Federal Tax Payment System, or by check or money order with Form 1040-V.
Step 14: Sign and Date Your Return
Sign and date your return under penalties of perjury. If filing jointly, both spouses must sign the return. If filing electronically, follow the procedures for using an electronic signature. If someone prepared your return for compensation, they must also sign and provide their Preparer Tax Identification Number. Keep a copy of your complete return and all supporting documentation for at least three years.
Step 15: Assemble and File
Attach all required schedules and forms in sequence: Schedules 1, 2, and 3, followed by other numbered schedules and supporting forms. File your return by April 15, 2024, or by April 17, 2024, if you live in Maine or Massachusetts due to state holidays. You can request an automatic six-month extension using Form 4868, but this extension only delays the filing deadline, not the payment deadline. Interest and penalties apply to unpaid taxes after the original due date.
Important Reminders
The digital asset question must be answered by everyone filing Form 1040 or 1040-SR, regardless of whether you had any digital asset transactions. Failure to answer this question may result in processing delays.
If you are claimed as a dependent on someone else’s return, you must check the box indicating “Someone can claim you as a dependent” even if that person chooses not to claim you. This affects your standard deduction amount.
Keep all Forms W-2, 1099, and supporting documentation with your tax records. Do not attach these forms to your paper return unless backup withholding is indicated, but have them available if the IRS requests them.
Special Considerations
If your spouse died in 2023 and you did not remarry before the end of the year, you can file a joint return. Enter “Filing as surviving spouse” in the signature area. If you have a qualifying child, you may be eligible to file as a Qualifying Surviving Spouse for the two years following your spouse’s death, which provides a higher standard deduction and more favorable tax rates.
Taxpayers age 65 or older may use Form 1040-SR instead of Form 1040. Form 1040-SR has larger print and includes a standard deduction chart, making it easier for seniors to complete. Both forms are functionally equivalent.
If advance payments of the Premium Tax Credit were made for health insurance coverage purchased through the Health Insurance Marketplace in 2023, you must complete Form 8962 and attach it to your return to reconcile the advance payments with your actual Premium Tax Credit.
Estimated tax payments may be required for 2024 if you expect to owe $1,000 or more in tax after subtracting withholding and credits. Use Form 1040-ES to calculate and make quarterly estimated tax payments to avoid underpayment penalties.
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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.
