IRS Updates Federal Income Tax Return Form for 2018 by Angie Adames, CPA
Posted on November 06, 2018 by Angie Adames
The IRS recently released a revised draft of Form 1040 that it expects taxpayers to use in 2019 to file their federal income tax returns for the 2018 tax year. The most significant change taxpayers will notice is the smaller size of the form. However, despite the new postcard-size 1040, taxpayers will need to attach to their annual filings six new schedules in addition to the existing Schedule A for itemized deductions, Schedule B for interest and dividends, Schedule C for business profit and loss, Schedule D for capital gains and losses and other forms. These new schedules, many of which, require additional worksheets for taxpayers to attach to their returns, include the following:
Schedule 1 – Additional Income and Adjustments to Income
Schedule 2 – Tax
Schedule 3 – Non-Refundable Credits
Schedule 4 – Other Taxes
Schedule 5 – Other Payments and Refundable Credits
Schedule 6 – Foreign Address and Third-Party Designee
It is true that certain provisions of the Tax Cuts and Jobs Act will make it easier for millions of taxpayers to figure out their income taxes and reduce the amount of income subject to tax by simply taking advantage of the expanded standard deduction of $12,000 for individuals or $24,000 for married taxpayers filing jointly in 2018. This will save many taxpayers a considerable amount of time that they previously spent itemizing deductions, many of which disappear under the new tax law or have reduced benefits.
As a result of the tax-return revamp, taxpayers may spend less time completing their 1040s. However, the time they save, likely, will instead be spent completing the additional forms. In light of tax reform and the changes to tax reporting and filing requirements, taxpayers should engage the counsel of experienced accountants and tax advisors to ensure they remain tax compliant and maximize the opportunities the new law provides.
About the Author: Angie Adames, CPA, is an associate director of Tax Services with Berkowitz Pollack Brant, where she provides tax and consulting services to real estate companies, manufacturers and closely held business. She can be reached at the firm’s Miami office at (305) 379-7000 or via email at firstname.lastname@example.org.
Information contained in this article is subject to change based on further interpretation of tax laws and subsequent guidance issued by the Internal Revenue Service.