As part of the Tax Cuts and Jobs Act, the Internal Revenue Service (IRS) has released a smaller, simpler, more streamlined version of Tax Forms 1040. These have postcard dimensions, which will replace multiple versions of IRS Forms 1040 including IRS Form 1040a and IRS Form 1040ez. Keep reading to learn more about this latest bit of IRS news.
In this article:
- What Is Form 1040?
- The New Postcard-Size Version of Tax Forms 1040
- Do You Really Need to Fill Out Only a Postcard?
- New Tax Schedules
New Tax Forms 1040 | Here Is What to Expect
What Is Form 1040?
IRS Tax Forms 1040 are the standard forms individuals use to report their income to the IRS. They guide you through the process of calculating your federal income tax.
Traditionally, you use the following 1040 IRS tax forms:
- 1040 (U.S. Individual Income Tax Return)
- 1040a (shorter version of the U.S. Individual Income Tax Return)
- 1040ez (U.S. Individual Income Tax Return for Single and Joint Filers with No Dependents)
- 1040NR (U.S. Nonresident Alien Income Tax Return)
- 1040NR-EZ (U.S. Income Tax Return for Certain Nonresident Aliens with No Dependents)
The New Postcard-Size Version of Tax Forms 1040
The IRS plans to streamline the Form 1040 into a shorter, simpler form for the 2019 tax season. The new 1040 – about half the size of the current version — would replace the current Form 1040 as well as the Form 1040A and the Form 1040EZ: https://t.co/4EfJvDaKrl. pic.twitter.com/qax5kMzJcH
— Robert Hall (@hallassoc_cpa) July 19, 2018
The new and improved postcard-size version of IRS Form 1040 has just 23 lines. The old Tax Form 1040 had 79.
Since the new form has the standard postcard size, it measures half of the short-sized paper, which is 8.5 x 11 inches. It also contains texts on both sides.
Like the old form, the new IRS Tax Forms 1040 require the following details:
- Your name
- Spouse’s name
- Home address
- Your Social Security number
- Spouse’s Social Security number
- Whether or not someone else can claim you as a dependent
- List of your dependents with their Social Security numbers and relationship to you
- Income including wages, salaries, tips, interest, dividends, payments from pension plans, and Social Security benefits
- Business income deductions
- Refundable credits you have earned
- Federal tax withheld from your paycheck
- Banking details if you want your tax refund deposited directly into your account
Do You Really Need to Fill Out Only a Postcard?
In some cases, you may only need to fill out the postcard-sized form. These cases include the following: you just have some income from a W-2, do not have any children, and plan to claim the standard deduction.
However, the Treasury Department estimates at least 65% of taxpayers will need to submit at least one additional schedule.
You may have to attach extra schedules or forms to your postcard if you:
- Are itemizing instead of claiming the standard deduction
- Have self-employment or business income
- Earned interest income
- Have more than two children or dependents
- Want to claim a child tax credit
- Want to claim the earned income tax credit
- Contributed to an individual retirement account (IRA)
- Want a deduction for student loan interest
- Made contributions to a health savings account
New Tax Schedules
Along with the new IRS Tax Forms 1040, the IRS has created six schedules. If you need to report income not reported on a W-2, you should submit Schedule 1. It may refer to income reported on a 1099 slip.
Additionally, you can use this schedule to report adjustments to your income based on IRA contributions, student loan interest, or contributions to your health savings account.
Schedule 3 helps you figure out nonrefundable tax credits. If you work for yourself, you need to fill out Schedule 4 to report your self-employment taxes paid and fill out the usual forms for self-employment income.
If you have income such as tips on which you have not made Social Security contributions or paid Medicare premiums, you also can report those amounts on this schedule.
Finally, Schedule 5 is for reporting the estimated tax payments you have made, and Schedule 6 lets you authorize a third party to talk with the IRS on your behalf.
There may be times when you may need to fill out a few more schedules than the six. Taxpayers who itemize need to fill out Schedule A. People who want to claim education credits should submit Schedule 8863.
If you want to claim a tax credit for your children, you need to fill out Schedule 8812 with your IRS Tax Forms 1040.
As of the tax year 2018, the child tax credit is worth up to $2,000, but only up to $1,400 of the credit is refundable. You must also have earned income to qualify for this credit, and the amount of the credit may be reduced based on your income.
Even with the simplified Tax Forms 1040, figuring out your taxes can still be complicated. You may even make mistakes such as late filing. If you have back taxes, we can help. To learn about relief options, contact us today. At Tax Relief Center, we help our clients negotiate payment arrangements and get relief from IRS tax debt.
What do you think of the new Tax Forms 1040? Share your opinions below.