Your Form 1040, section by section

Who you are and your filing status

Your name, address, Social Security number and anyone you claim as a dependent. The most important box here is your filing status: single, married filing jointly, married filing separately, head of household or qualifying surviving spouse. Your status decides your standard deduction, your tax brackets and which credits you can get.

Everything you earned

Wages from your W-2, interest, dividends, retirement distributions, Social Security, and capital gains from selling investments. Income from a side business, rental, unemployment or gig work is figured on other schedules (mainly Schedule 1 and Schedule C) and carried over here. Everything adds up to your total income.

Adjustments and your AGI

Certain payments come off your income before anything else, such as deductible IRA contributions, HSA contributions, student loan interest, educator expenses and half of self-employment tax. These come from Schedule 1. What's left is your adjusted gross income (AGI), one of the most important numbers on the return, because many credits and deductions shrink or disappear as AGI goes up.

Standard or itemized, plus the new deductions

Next you subtract either the standard deduction, a flat amount based on your filing status, or your itemized deductions from Schedule A (things like mortgage interest, state and local taxes, charitable gifts and large medical bills), whichever is bigger. Some business owners also get the qualified business income deduction here.

New for 2025: a new form, Schedule 1-A, holds four temporary deductions for tax years 2025 through 2028: qualified tips, qualified overtime pay, interest on certain car loans and an extra deduction for seniors. You can take these whether you itemize or not, but each has eligibility rules and income limits.

See Does this count? for what is and isn't deductible now.

The number your tax is figured on

AGI minus your deductions equals taxable income. This is the amount that runs through the tax brackets. Brackets are marginal: each slice of income is taxed at its own rate, so moving into a higher bracket only raises the tax on the dollars inside that bracket, not on everything you earned.

Your tax, then credits off the top

The form figures your tax on taxable income, then subtracts credits. A deduction lowers the income you're taxed on; a credit lowers the tax itself, dollar for dollar, which usually makes credits more valuable. Common ones include the child tax credit, education credits and the credit for child and dependent care.

Taxes beyond income tax

Some taxes are added on from Schedule 2. The most common is self-employment tax, the Social Security and Medicare tax people with side or business income pay on their own, since no employer withholds it. Early retirement withdrawals can also add a penalty here. The result is your total tax.

What you already paid

This section totals everything you've already paid toward your tax: federal income tax withheld from your paychecks (on your W-2 and 1099s), any estimated tax payments you sent in, and refundable credits like the earned income credit, which can pay you even if you owe no tax.

Refund or amount owed

If your payments are more than your total tax, you get a refund of the difference. If they're less, you owe. A big refund isn't free money: it's your own money you overpaid during the year. A big balance due can mean too little was withheld, and owing too much can sometimes bring an underpayment penalty.