What’s behind that 1040? Check out TPC’s interactive tax forms(Read article summary)
Figuring out exactly how to answer a question on an IRS tax form can be tricky. But the Brookings Institution's Tax Policy Center has developed an interactive guide that offers up an explanation of each question.
Federal income taxes are complicated. That’s why roughly 90 percent of us either hire someone to prepare our tax returns or use computer software to do the job on our own. Only a tenth of us actually sit down and fill out the forms by hand. But it’s still important to understand what goes onto the various forms, in part so you know why you owe the taxes you pay and in part so you understand all of the tax and social policies that come through the tax code.
To help, the Tax Policy Center has created an interactive tool that explains a little about what is behind the tax forms. What does each line mean? How many people make an entry? How does it affect revenues and the distribution of tax burdens across income categories?
The inaugural version includes form 1040—the most commonly used return—along with Schedule A for itemized deductions. Over time, we will add more information and include more forms.
The interactive forms are easy to use. Just go to datatools.taxpolicycenter.org/1040 and click on a link to bring up the first or second page of the 1040 tax return or Schedule A. Hover your cursor over a line to bring up a box that tells what goes on that line and usually a fact about it. Click on the line to open a window that provides links to additional information.
For example, clicking on line 8b of the 1040 reveals that “Nearly 6 million taxpayers reported $73 billion dollars of tax-exempt interest in 2011” and linked distribution tables show that most of them have income over $100,000.
Take the interactive forms for a test drive and let us know what you think. It just might make doing your taxing a little less intimidating—or at least provide you with some fun facts to use next time you play Tax Trivia.