The Form 1040, which most taxpayers use to file their income taxes, has been significantly condensed, but will it be a lot easier for taxpayers and preparers? Not necessarily.
The new form, which the Internal Revenue Service unveiled on Friday and will be used beginning in the 2019 tax season, is “postcard size,” and replaces the previous two-page version of the 1040, as well as the Form 1040EZ and Form 1040A, which were for taxpayers with simpler financial situations.
The new form reflects some of the changes that were made under the Tax Cuts and Jobs Act such as the elimination of some tax breaks, including deductions for personal exemptions. The new form decreases the number of lines to 23 from 79.
Treasury Department
The back of the new Form 1040. See: The new tax law makes hiring your kid a better idea than ever
With the new document, taxpayers can simply check a box to indicate if they are taking the standard deduction as well as any provisions that would allow them to get a higher standard deduction (for instance, if they were born before Jan. 2, 1954 or are blind). They also include their personal information, list their dependents and check a box if those dependents qualify for any tax credits. On the back taxpayers will list their incomes and withheld taxes, and whether they are entitled to any refund.
Will the changes affect taxpayers much? If they do their own taxes using tax software, not necessarily. They’ll still have to answer most of the same questions, which the program then places on the appropriate form. Their challenge will come when they compare their tax return to the prior year’s return to ensure there are no inaccuracies or inadvertent omissions, said Dave Du Val, chief customer advocacy officer at tax audit firm TaxAudit. Taxpayers will have to figure out which line number on the new forms correspond with those of the old forms. Tax professionals who file the forms themselves will have similar issues, he said.
Also see: Don’t be caught off guard by hidden taxes in retirement
The Form 1040 itself may be shorter, but it comes with six additional forms taxpayers may need to attach in certain situations, such as if they’re getting state tax refunds, or have to declare capital gains or unemployment compensation. The Treasury Department estimates that 65% of filers will use the Form 1040 plus one additional form (or schedule, as it’s called), according to the Wall Street Journal. The Internal Revenue Service will take public feedback on the new smaller form and finalize it over the summer, the Treasury Department said in a statement.
