Toward the end of June, the IRS released the first public draft of the newly formatted federal tax return. Trimming the federal tax return from about 79 lines to 23 lines, the IRS seeks to replace the 1040 tax form variations like the 1040A and 1040EZ with this new postcard-sized (almost) tax return. While the form is still being reviewed and has not been finalized by the IRS, it is helpful to look at some of the most noticeable features of the new 1040 tax form because you will most likely be using it next year.
Features of the 1040 “Postcard” Form
Smaller is Better – the new form is about the size of the top half of a 8.5” x 11” sheet of paper. The tax overhaul helped to reduce the form be removing deductions like moving expenses, personal exemptions, and domestic manufacturing.
Electronic is Better – The new 1040 only affects those who still file on paper, not e-filers.
Financing Campaigns – The option to support presidential election campaigns is still present on the form
Abbreviations & Shorthand – Less space, more abbreviations.
Catch-All Phrasing – Line 64 references “other taxes”, an obvious referral to Schedule 4 where high-income household taxes, individual mandate, etc. will now be reported.
Less Details – Many deductions were taken off of the new 1040 form, being placed on schedules instead. State-tax refunds, capital gains, and unemployment compensation are listed on Schedule 1, instead of the 1040 form. Be sure to review the appropriate schedules so you are claiming all of your deductions.
Talk to The Experts
If you have any further questions regarding the new 1040 form or the tax overhaul, contact MBS Accountancy, and our tax law experts and accountants will be more than happy to advise you on your unique situation. Contact us today!