The new IRS Form 1040, the one you and most taxpayers use to file your income taxes, has been significantly changed.
Will the New IRS Form 1040 be smaller and shorter?
Yes. It has been condensed (the number of lines decreased from 23 to 79) and it replaces the previous two-page version of the 1040 form, as well as 1040EZ and 1040A, used for simpler financial situations.
In the past, there were several (3) versions of the 1040 form. The standard form 1040 could be used by anybody but was rather complicated. The 1040-A, that was commonly known as the “short form,” and could be used by taxpayers with relatively simple tax situations, such as not itemizing deductions, not owning a business, and having a taxable income under $100,000. And finally, the 1040-EZ was for the simplest tax situations.
Now, the latter two forms will no longer exist, and all Americans will use the same Form 1040 to file their taxes. The topic of “which 1040 do I use?” often confused taxpayers, so now this will not be an issue.
The new IRS Form 1040 is a postcard-size document that contains in the front all of the taxpayer’s identifying information, while the back contains the actual tax calculation. It reflects some of the changes that were made under the Tax Cuts and Jobs Act.
So the answer is yes, it is smaller…, but in addition to the already familiar to you schedules, such as Schedule A (for itemized deductions) and Schedule C (for self-employment income) there are at least six brand-new schedules you or other taxpayers may need to use.
Will the New IRS Form 1040 be easier?
Several items were eliminated for the 2018 tax year, such as:
- The personal exemption
- The alimony deduction
- The deduction for moving expenses
- Miscellaneous deductions, which were formerly deductible if they exceeded 2% of AGI.
But the New IRS Form 1040 is not necessarily “easier“. As it was mentioned above, now you have to take into account 6 Schedules:
- SCHEDULE 1: for taxpayers with additional sources of income (not from a W-2) or adjustments to income, such as IRA contributions, student loan interest, and health savings account contributions.
- SCHEDULE 2: a form for people with some other forms of taxes, such as on a child’s unearned income.
- SCHEDULE 3: for nonrefundable tax credits
- SCHEDULE 4: where taxpayers will add up certain taxes, such as self-employment tax, uncollected Social Security and Medicare taxes, and others.
- SCHEDULE: to add up tax payments, such as estimated tax payments or amounts paid with an extension.
- SCHEDULE: where you can appoint a third-party designee to discuss your tax return with the IRS on your behalf.
The trick here is that while the new IRS form 1040 has gotten smaller, most of what was removed has simply been transferred to the new schedules. It means that the overall paperwork hasn’t become as simple as they want you to believe, and at least for the 2019 tax season you will need a seasoned tax preparer more than ever.
The Treasury Department estimates that 65% of filers will use the new IRS Form 1040 plus one additional schedule.
Will the New IRS Form 1040 Affect You?
If you do your own taxes using tax software or with the help of an experienced tax preparer, not necessarily. You will still have to answer most of the same questions, which the program then places on the appropriate form or schedule. Your challenge will come when you have to compare your tax return to the prior year’s return to ensure there are no mistakes or unconscious omissions.
You also will have to figure out which line number on the new forms correspond with those of the old forms.