The IRS proposes a new face-lift for Individual Tax Form 1040

The IRS proposes a new face-lift for Individual Tax Form 1040

The IRS Form 1040 has been given a face-lift and will be condensed to a postcard-sized form. The goal is to standardize and simplify the 1040 so all 150 million taxpayers will be using the same form; and eliminate Forms 1040, 1040A, and 1040EZ.  The proposed form condenses the first page of the 1040 to become more of an informational source about the taxpayer and dependents. The size of the form will be two half-pages in length and eliminates more than 50 lines from the 2017 version.  Items that originally appeared on the face of the 1040 will now be reportable on separate schedules that calculate tax breaks and deductions. The proposed new Form 1040 is below[1]

Taxpayers with limited sources of income, minimal or no tax deductions are likely to see the immediate simplification benefits.  The remaining taxpayers will be filing additional pages, schedules, and/or worksheets for different tax situations.  Some of the significant changes are the following:

• The new form has only five income categories:[2]
  • Wages
  • Interest
  • Dividends
  • Pensions, IRAs, annuities
  • Social Security
• The new form has 23 lines, compared to the previous 79 lines.
• Alimony and personal exemptions have been eliminated.
• Six new schedules: (1) Additional Income and Adjustments to Income, (2) Tax, (3) Nonrefundable Credits, (4) Other Taxes, (5) Other Payments and Refundable Credits, and (6) Foreign Address and Third Party Designee. [3]

[1] Moyer, Liz (2018, June 29) “Treasury, IRS reveal a postcard-size form to file your taxes”.  Retrieved from https://www.cnbc.com/2018/06/29/treasury-irs-announce-postcard-size-form-1040-for-next-year.html.

[2] McKeegan, Carrie (2018, June 27). “The Tax Law’s New 1040 Form is Here. It’s About to Make Your Life a Lot More Difficult” Retrieved from https://www.inc.com/carrie-mckeegan/the-irs-just-made-it-a-lot-easier-for-you-to-mess-up-your-taxes.html.

[3] Schreiber, Sally P. (2018, June 27). “Form 1040 to be shorter but with more schedules.” Retrieved from https://www.journalofaccountancy.com/news/2018/jun/2018-irs-form-1040-with-schedules-201819245.html.

The proposed form is part of the IRS efforts to streamline the Form 1040 into a shorter, simpler version for taxpayers.  It is not yet finalized, but look for the new face-lift Form 1040 for the 2019 tax season.