Well the draft of the new 1040 is out. This will change again more than likely on December 30th. I know you think I am joking but the government is notorious at waiting until the last minute to make final changes to tax laws and definitions. I don’t see why 2018 should be any different.
So what do we know now?
New Form 1040 draft highlights
1. The new Form 1040 will replace the current form plus Forms 1040-A and 1040-EZ. That means if you previously filed your return using Form 1040-A or Form 1040-EZ, you’ll use Form 1040 going forward.
2. The two-page draft is shorter in length than the current form. Many line items were consolidated or shifted to other forms and schedules.
3. All spaces to list names and Social Security Numbers remain untouched.
4. The signature lines still live on page one, but the separate signature box on page two was removed.
5. While there are still five filing statuses under the current tax law, only three boxes are available to mark your status. That’s because the form defaults to Single or Married Filing Jointly depending on the number of names listed. If a taxpayer wishes to file as Married Filing Separately, Head of Household or Qualifying Widower, he or she will need to check the appropriate box to overwrite the default.
6. In the past, healthcare coverage was reported on line 61 of Form 1040. On the revised form, taxpayers will simply report their coverage by checking a box on the front page. An additional form may be required based on the coverage details. (The healthcare insurance mandate is still in effect through tax year 2018. At the start of 2019, taxpayers are no longer required to carry insurance and are no longer subject to the tax penalties for inadequate coverage. Note: The IRS announced last year it will not process any e-filed returns that don’t include proof of health insurance.)
7. At least six new schedules accompany the new Form 1040. That’s in addition to the familiar schedules taxpayers used in the past, like Schedule A and Schedule C. The only difference is the new schedules are designated by numbers instead of letters.
- Schedule 1: reports additional sources of income (not from a W-2) or adjustments to income (i.e., IRA contributions, student loan interest, health savings account contributions)
- Schedule 2: reports other forms of taxes (i.e., child’s unearned income
- Schedule 3: reports nonrefundable credits
- Schedule 4: used to add up certain taxes, like self-employment tax and uncollected Social Security and Medicare taxes
- Schedule 5: used to add up tax payments (i.e., self-employment taxes)
- Schedule 6: used to appoint a third-party designee to hold the rights to discuss your tax return with the IRS on your behalf
8. Due to the changes under the Tax Cuts and Jobs Act, these tax items are no longer listed on the draft form: personal exemption, alimony deduction, and miscellaneous deductions.