IRS Debuts Postcard-sized 1040 for 2018
16486
post-template-default,single,single-post,postid-16486,single-format-standard,bridge-core-3.1.8,qode-page-transition-enabled,ajax_fade,page_not_loaded,,qode-theme-ver-30.5,qode-theme-bridge,disabled_footer_bottom,qode_header_in_grid,wpb-js-composer js-comp-ver-7.6,vc_responsive,elementor-default,elementor-kit-17134
 

IRS Debuts Postcard-sized 1040 for 2018

14 Jul IRS Debuts Postcard-sized 1040 for 2018

Posted at 10:08h in What's New by

At the end of June, the IRS unveiled a new draft version of the 2018 Form 1040. This newly proposed postcard-sized 1040 form replaces the old 2017 1040, as well as forms 1040EZ and 1040A. While some in Washington are celebrating the design as a simpler way to file, a closer look may tell a different story.

What is changing?

  • Fewer lines. The new form has only 23 lines – 50 lines less than the 2017 1040. Some of the lines saved come from the elimination of exemptions, but most come from combining many old lines into a single line.
  • Six new schedules. The complete 2018 1040 tax form is now seven tax forms. The 50+ lines removed from the old 1040 now exist on one of six new schedules. These schedules (referred to as Schedule 1, Schedule 2, etc.) use many of the same line numbers and descriptions as the old 1040, which will help for year-over-year comparability.
  • Many new lines. Lines are added to accommodate new tax legislation, like the “Qualified business income deduction” for the new 20-percent pass through deduction for business owners.

What you need to know

  • Virtually everyone now files multiple forms. This new 1040 system is anything but simple. Now the majority of taxpayers will need to complete at least one of the new schedules to file with their 1040. Even taxpayers previously using the simple 1040EZ might be required to file an additional schedule or two. The IRS website states that only “taxpayers with straightforward tax situations” will be able to skip the new schedules.
  • The postcard goal is met. While the newly proposed form 1040 is postcard-sized, the type is now smaller and filing the 1040 form now requires a lot of retraining and reprogramming. Tax software companies will be scrambling to reprogram their software, and the IRS is telling congress it will need millions of dollars to implement the changes.
  • It is still in draft form. Be aware that this version of the 1040 is in draft form and revisions are expected before it is considered final. A copy of the proposed 2018 1040 form can be viewed on the IRS website.

Unfortunately, the new 1040 form appears to be more a product of political desire rather than a strategic redesign. This added confusion is one more reason taxpayers will need help navigating this new tax landscape.