“New Year, new look for your tax return”

There were significant tax law changes in 2018. However, one that will be noticeable to many taxpayers is the look of Form 1040 (the Individual tax return). In July 2018, the Treasury Department unveiled a “postcard” sized 1040 to replace the 1040, and the 1040A and 1040-EZ, which were used for simpler tax returns.

The new form is smaller than previous 1040s, either consolidating information or shifting information to other schedules. Below is the information provided on the 2-paged tax return and 6 new schedules.

  •  Page 1 provides for the taxpayer and spouses basic information: filing status, name, social security, address, dependents, Presidential Election Campaign contribution, and signatures.
  • Page 2 provides for income, standard or itemized deductions, taxes, payments, credits, and space to provide banking information if you are due a refund. Several lines of page 2 refer to new schedules.
  • Schedule 1, Additional Income and Adjustments to Income. This schedule provides for additional income you receive, such as alimony, business income (from the taxpayer’s Schedule C), capital gain and rental real estate (as reported on Schedule E). Schedule 1 also reports adjustments to income, like educator expenses, health savings account deductions, and self-employed SEP, SIMPLE, or other qualified plans.
  • Schedule 2, Tax. This schedule is where alternative minimum tax and excess advance premium tax credit repayments are listed.
  • Schedule 3, Nonrefundable Credits. This schedule is where a taxpayer would report any nonrefundable credits, such as foreign tax credit, credit for child and dependent care, education credits, and residential energy credit.
  • Schedule 4, Other Taxes. Schedule 4 is where the taxpayer would report self-employment tax, household employment tax, and other taxes.
  • Schedule 5, Other Payments and Refundable Credits. This schedule is where a taxpayer would report their estimated tax payments, extension payments, and any refundable credits.
  • Schedule 6, Foreign Address and Third Party Designee. Schedule 6 is for those taxpayers to list their foreign address and any third party designee they would like to allow the IRS to discuss their tax return with, aside from their paid preparer.

Click here to view the 2018 Form 1040. Should you have any questions about your tax return, contact your tax professional.