The Internal Revenue Service has released the redesigned Form 1040, along with six related tax schedules, for next tax season after changes under the Tax Cuts and Jobs Act promised to simplify the tax preparation process.
While the new form is not quite postcard size, as originally promised by the Republicans in Congress who pushed through the new tax law at the end of 2017, it is considerably shorter than last year’s Form 1040. However, the size is deceiving because there are six related schedules that may or may not need to be filed along with the Form 1040, depending on the taxpayer’s circumstances. A draft version of the Form 1040 and the six schedules was posted in late June (see IRS and Treasury preview postcard-size Form 1040). After soliciting comments on the new forms and schedules, the final versions were posted this month on IRS.gov.
Schedule 1, Additional Income and Adjustments to Income, is for taxpayers who have to report additional income, such as capital gains, unemployment compensation, prize or award money, or gambling winnings, or who have any deductions to claim, such as student loan interest deduction, educator expenses or self-employment taxes.
Representative Kevin Brady, a Republican from Texas and chairman of the House Ways and Means Committee, left, holds up a "Simple, Fair 'Postcard' Tax Filing" card while making an opening statement next to ranking member Representative Richard Neal, right, during a markup hearing in Washington, D.C., U.S., on Monday, Nov. 6, 2017. The House tax-writing committee began debate on the GOP's proposed overhaul, kicking off four frantic days for lobbyists and lawmakers to revise a bill that represents President Donald Trump's final hope for a signature legislative achievement this year. Photographer: Andrew Harrer/Bloomberg
Andrew Harrer/Bloomberg
Schedule 2, Tax, is for those who are subject to the alternative minimum tax or need to make an excess advance premium tax credit repayment.
Schedule 3, Nonrefundable Credits, is for taxpayers who can claim a nonrefundable credit besides the child tax credit or the credit for other dependents, such as the foreign tax credit, education credits or the general business credit.
Schedule 4, Other Taxes, is for taxpayers who owe other taxes, such as self-employment tax, household employment taxes, additional tax on individual retirement accounts or other qualified retirement plans and tax-favored accounts.
Schedule 5, Other Payments and Refundable Credits, is for taxpayers who can claim a refundable credit aside from the Earned Income Tax Credit, the American Opportunity Tax Credit or the Additional Child Tax Credit. They may also have other payments, such as an amount paid with a request for an extension to file, or they want to report excess social security tax withheld.
The IRS has not yet announced the start of filing season when the tax forms can actually be submitted, and it will probably depend on when the partial government shutdown finally ends since the Treasury Department and the IRS are among the affected agencies (see Treasury and IRS try to reassure taxpayers about shutdown).
The Treasury is warning Congress that it needs lawmakers to unlock funding for the Internal Revenue Service that could be rescinded due to legislative language.
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