The IRS released an official draft of the new 1040 and the additional 6 new schedules that will be used in place of the old form last Friday. The new 1040 is postcard sized as promised but will require extra pages to complete for most taxpayers. This condensed version of the standard 1040 will replace the Form 1040, Form 1040A, and the Form 1040EZ. Basically, you will start with the 1040EZ and add schedules as needed.
So how did they fit all 79 lines on 1 postcard? Many sections of the Form 1040 have been condensed and moved to the 6 additional schedules, which cover things such as Additions to Income, Other Taxes, and Nonrefundable Credits. The first page of the form holds personal information. This is where taxpayers will report filing status and dependents, and where the signatures of both taxpayer and preparer will go. The second page of the form is where all tax information will be reported. That makes for a total of 23 lines.
Here are the key changes made to the Form 1040:
Personal exemptions have been eliminated for the tax years 2018-2025.
All Income from Schedules C, D, E, and F are to be reported on Schedule 1.
Most adjustments to Income will be reported on Schedule 1.
To calculate the tax, you will need to attach Schedule 2.
Tax Credits, other than the Child Tax Credit or other credits related to Dependents, will be reported on Schedule 3.
To calculate additional tax, such as Medicare or Social Security, you will need to attach Schedule 4.
Payments made to the tax bill, including Refundable Credits and Withholdings, will be reported on Schedule 5.
There have been mixed reviews about this form since it leaked last week to the news outlets. Some tax preparers are frustrated by the additional schedules, others while others prefer the simplicity of the new form. Whichever side of the argument you’re on, TaxSlayer is here to back you up. We are working diligently to incorporate these changes into our upcoming 2018 programs, so this transition will be as flawless as possible for you.