While the new Form 1040 is smaller, the IRS has added six new numbered schedules that feed into this form. As a result, the new 1040 is in some ways more complicated. Below we share the six updates on the new 1040 tax form. You can also download a PDF of the form here.
The New 1040 Tax Form
Page one of the new 1040 has lines for taxpayer names including names of up to four dependents and signatures. You’ll also find checkboxes to select your filing status among Single, Married filing jointly, Married filing separately, Head of household and Qualifying widow(er), as those have all been retained in the new tax law.
Page one also has a checkbox for full-year health care coverage since this is still required through 201 (Starting in 2019, there will no longer be a penalty for not having health insurance.)
Page two is a summary page that pulls together all your income and deductions, then calculates your total tax, tallies up your tax credits and your tax payments to come up with a refund owed to you or the amount you still owe the IRS. The income reported on page two includes wages, interest, dividends, and retirement benefits, including Social Security. According to the IRS, this will cover the majority of U.S. taxpayers.
Six New Numbered Schedules
Because of the more condensed Form 1040, the IRS had to add six new numbered schedules that feed into the 1040. Here are the types of information that will be reported on these new numbered schedules:
Schedule 1 – Additional Income and Adjustments to Income: Here you’ll report other types of income. This includes income from Schedules C, D, E, and F. Alimony and any other miscellaneous income also have spots on this form. The adjustments include most of those that previously appeared on the bottom block of page one of the old 1040. Missing are the deductions for the domestic production activities deduction (DPAD) and moving expenses for anyone not in the armed forces, as these were eliminated in the new tax law.
Schedule 2 – Tax: This schedule currently includes only two additional taxes: alternative minimum tax, and the excess advance premium tax credit repayment.
Schedule 3 – Nonrefundable Credits: Here you’ll report nonrefundable credits, which include the foreign tax credit, daycare credit, education credits, energy credits and credits from Forms 3800 and 8801.
Schedule 4 – Other Taxes: If you owe additional taxes, such as self-employment tax or taxes for household employees, those amounts will be reported here.
Schedule 5 – Other Payments and Refundable Credits: If you make estimated tax payments or an extension payment, those are reported here. You’ll also report excess Social Security tax here.
Schedule 6 – Foreign Address and Third Party Designee: Taxpayers living outside the country will record the name of the country and the postal code here. This is also where you’ll report the name and phone number of any third party to whom you grant permission to discuss your return with the IRS.
According to the IRS, if you file your return electronically, you won’t notice much difference from the old form. And if you work with a CPA, the tax forms you receive for your records will look a bit different, but the method for getting your tax return done shouldn’t change at all.
Contact us to learn more about the new tax law and how it may affect you.