How to Read Tax Returns

How to Read Tax Returns
Make sure you review your tax returns before filing.

Step 1

Look at the first, second and third sections of your federal tax return. These sections have your personal information, filing status and any qualifying exemptions you have. Make sure that this information is correct and all Social Security numbers are correct.

Step 2

Browse the next section, which is the income. Add your W-2 forms forms together and make sure that this total is correct on line 7. Do not include the 1099-INT (interest payments) or 1099-G (government payments such as unemployment or a state refund) on this line. Form 1099-MISC information usually goes on Schedule C and Form 1040 line 12. If you had an unemployment 1099-G, this goes on line 19 of Form 1040. The 1099-G for a state refund goes on line 10 and Social Security benefits is entered on line 20a. If you had any income not listed on a W-2 or 1099 form, this amount goes on line 21 with the type of income it was. This section is totaled on line 22.

Step 3

Move to the next section, which is the adjusted gross income. In this section, your adjustments to your income are entered if you had any. This may include half of your self-employment tax (Schedule SE), qualifying moving expenses, educator expenses, alimony payments or health savings accounts. Look at each line and make sure it is filled in or not depending on what expenses or adjustments you have. The total for this section is on line 36 and your total adjusted gross income is enter on line 37 after subtracting your adjustments from you income on line 22.

Step 4

Look over the next section, which is tax and credits. This is where your itemized deductions and exemptions are calculated. If you did not have to itemize deductions, you should have an entry on the standard deduction line. If you itemized deductions, look at the Schedule A to make sure all these entries are correct and entered correctly on line 40. Look at line 43, for your taxable income. Then look in the instruction booklet at the tax table and make sure your tax liability is correct. Look at the rest of the entries if any and make sure they are correct. If you have other forms to go with the entries, make sure any other forms that are needed are correct. Add these lines together and make sure the total on line 54 is correct. Then subtract this line from line 46 for your total.

Step 5

Calculate any self-employment tax or other taxes in the next section and total on line 61 including line 56.

Step 6

Total your federal income tax withheld from your W-2 forms and 1099 forms if any. If you qualified for the EIC, you will have an entry on line 64a and should have a Schedule EIC. Enter any other payments and check the total on line 71.

Step 7

Refund or amount owed to the IRS is in the next two sections. After subtracting line 72 from 61, you will know if you have a refund coming or if you owe money to the government. If you have a refund coming and chose direct deposit, make sure this information is correct.