idea because the IRS just released preliminary designs of the new form 1040 and the new schedules
that go with it. The new, shorter form 1040 will essentially replace the previous forms 1040, 1040A,
1040EZ for the next tax season. The new 1040 will utilize what they call a “building block” approach, which reduces the information that goes directly on the 1040 form itself by requiring the use of the new supplemental schedules, if necessary. These schedules are 1 through 6.
Schedule 1 is additional income and adjustments. This is for reporting any additional income such as Schedule C business income, Schedule E rental property income, Schedule F farm income, partnership, and other types of income and different types of adjustments to income.
Schedule 2 is where certain taxes owed will be reported.
Schedule 3 reports non-refundable credits like the child and dependent care credit, the residential energy tax credit, and others.
Schedule 4 is about other taxes like self-employed taxes.
Schedule 5 is for other payments and refundable credits, which will report tax withholding amounts, estimated tax payments and other tax credits.
Schedule 6 is simply to report a foreign address and to authorize a third party to be able to talk to the IRS about your return.
The IRS is for now accepting comments on this newly proposed 1040 form and schedules. If you are so inclined to give your input, just send to WI.email@example.com. The IRS may revise the forms after the comment period.
The proposed form 1040 could be the size of a large postcard, but it will be double-sided, which means it is like a one-page form. You can see the forms by going to irs.gov. This new 1040 form is fairly straightforward. And if your taxes are on the simpler side, you should find no more difficulty than you did before, and may even have a simpler process if you no longer have to do a Schedule A itemized deduction.
However, if you have a tax situation that requires more records and complexity as with businesses and
investments, you will probably not experience any real lessening of tax reporting complexity, and may
experience more depending on your situation. The doubling of the standard deduction will help a great
many taxpayers, by allowing them to not have to do a Schedule A itemized filing, unless, of course, it would benefit them to do so because of state filing issues. This would or might be beneficial in a state that allows you to file as itemized instead of the standard deduction even though you filed using the standard deduction on your federal return, like Arizona, because the particular state has or allows deductions that the federal government does not allow.
We will still have to wait and see how each state will adjust to and plan around the new federal tax
law. So, we can look at the idea of our tax returns fitting on the size of a postcard as true, but qualify
that with the awareness that it is actually a double-sided post car. Overall, a lot more people
should experience a simpler tax filing process. And some who have complex business and investments
income, could have a more complex tax filing process. QCBN
By Ernie L Gallardo, EA