Remember those postcard-sized tax returns? They’re here. Sort of. They’re not exactly postcard-sized, but the new form 1040 is smaller than before. The Internal Revenue Service (IRS) has made the new form 1040 and the accompanying six new schedules for the 2018 tax year available on the IRS website.
Here’s a peek at page one of the form 1040:
And page two:
The form may look easier, but the instructions didn’t get any shorter. The instructions for the form 1040 for 2018 weigh in at 117 pages.
One change worth noting (and previously called out in the drafts): The new form 1040 is intended to replace not only the current form 1040 but also forms 1040A and 1040EZ.
The instructions state:
For 2018, you will no longer use Form 1040A or Form 1040EZ as you may have in the past. Instead, you will use the redesigned Form 1040, which now has six new numbered schedules in addition to the existing lettered schedules like Schedules A, B, C, D, E and F.
The plan is for taxpayers to only file the base form 1040 plus any new schedules that apply to their own facts and circumstances.
Confused yet? Don’t be. According to IRS Commissioner Charles Rettig, if you e-file your return, you likely won’t notice much of a change at tax time. Speaking to reporters yesterday, Rettig confirmed taxpayers using tax software should expect to see roughly the “same interview format” as before tax reform.
Whether filing on paper or e-filing, taxpayers will recognize a familiar checkbox: There remains a spot to indicate whether you had full-year health coverage or whether you are exempt. It’s front and center on page one of the form 1040 for 2018 (it was on the second page of the form 1040 at line 61 for 2017).
While some lawmakers have touted the disappearance of the shared responsibility payment, the IRS reminds taxpayers that the law was still in effect for 2018. You must make a shared responsibility payment if, for any month in 2018, you, your spouse (if filing jointly), or anyone you can or do claim as a dependent didn’t have coverage and doesn’t qualify for a coverage exemption.
Here’s some more about how the new forms are alike and how they differ:
- Names and Social Security Numbers. The spaces for names and Social Security numbers remain largely the same.
- Signatures. The spaces for signatures remain on page one and are largely the same, but there is no longer a separate signature box on page two.
- Filing Status. Despite differences on the draft version, the final form 1040 retains the choices for the five filing statuses: Single, Married filing jointly, Married filing separately, Head of household or Qualifying widow(er).
- Presidential election campaign. The option to contribute to the Presidential election campaign is the same.
- Personal exemptions. There are no personal exemptions available for the tax years 2018 through 2025, so those line items have been removed on the first and second pages of the form 1040.
- Dependents. On the 2017 form 1040, there was space on the front page to list four dependents, but the draft form eliminated two lines, meaning families like mine (I have three kids) would need to add another page. That’s been changed in the final version to again include space for four dependents (thanks, IRS).
- Income reporting. The income reconciliation (that block on the front page where you used to transfer your items of income from separate schedules) has been moved from the first page of the return to the second. Income from each of Schedules C, D, E, and F are now reported on a new Schedule 1. You can see it here (downloads as a PDF).
- Adjusted income reporting. Most of this entire block found on page one of the 2017 1040 has been eliminated or consolidated on other spots in the return. Good ol’ line 37 (adjusted gross income, or AGI) is now line 7; pay attention to this moving ahead since many other federal (and financial) forms ask for AGI by line number.
- Standard deduction. Your standard deduction amounts still appear on page two, but the amounts are different (you can find the 2018 amounts here).
- Qualified business deduction. Remember the new qualified business deduction? The potentially confusing one that requires a flowchart to understand? It gets just one line on the new 1040 (line 9) with a note to “see instructions.” The instructions are a few pages long and include an additional worksheet.
- Payments. The ten separate lines for tax payments, including certain tax credits, have been consolidated into a line for withholding, another line for refundable tax credits and instructions to complete a separate Schedule 5 if needed.
- Third Party Designee. The space that previously allowed you to designate another person to discuss this return with the IRS has been moved to a new Schedule 6, though there is a tick box if you wish for your preparer to be a Third Party Designee.