Lynn Paslowski CPA

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You are here: Home / Uncategorized / What taxpayers should know about the new form 1040

What taxpayers should know about the new form 1040

July 5, 2018 By admin Leave a Comment

What taxpayers should know about the new form 1040

US News

JERRY GADDIS
Jul 5th 2018 11:32AM
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Taxpayers will be in for a surprise when they file their 2018 federal income tax returns next year as the Internal Revenue Service recently announced plans to streamline the Form 1040 into a shorter, simpler form for the 2019 filing season. A draft of the new form reveals it to be much shorter than the old one – reduced from 79 lines to 23. The new form is expected to replace the current Form 1040 as well as the shorter Forms 1040A and 1040EZ traditionally used by taxpayers with less complex tax situations.

[See: Answers to 7 Burning Tax Questions.]

Here are a few things to know about the new tax form.

First, it is not a postcard, although that seems to be the form’s new nickname. It is larger than the average postcard and is not formatted for mailing. One side contains personally identifiable information, including legal names, addresses and Social Security numbers, so an envelope will be required along with a stamp and a trip to the post office for those who file on paper.

Second, all of those lines removed from the form contained important information that needs to be reported elsewhere for an individual’s income to be properly reported, and for the tax to be properly calculated. The result is six new numbered schedules, or attachments, which will feed into the new, shorter Form 1040. They are as follows:

  • Schedule 1: Additional Income and Adjustments to Income (37 lines)
  • Schedule 2: Tax (7 lines)
  • Schedule 3: Nonrefundable Credits (10 lines)
  • Schedule 4: Other Taxes (12 lines)
  • Schedule 5: Other Payments and Refundable Credits (14 lines)
  • Schedule 6: Foreign Address and Third-Party Designee (3 rows of information)

What does this mean for taxpayers? While the final verdict is still out, shorter may not mean simpler. Many of the lines on the new form and schedules link to other forms containing external calculations, and results from one page often transfer from that page to another page, or schedule, elsewhere in the tax return. For example, capital gains and losses will be reported on one of six forms 8949 before flowing to the Schedule D, then to the Schedule 1 and then to the Form 1040. Is this really simpler? Time will tell.

Filed Under: Uncategorized

How am I qualified to support you or become part of your business team?

I began practicing in 2001 after having worked in local and regional public accounting firms in New Jersey, specializing in small business and individual taxation. After graduating summa cum laude from Georgian Court University in 1998 with a Bachelors degree in Accounting, I went on to earn an MBA from Georgian Court in 2003 and also became a Certified Public Accountant. 

I have earned many awards and accolades throughout my academic career, graduating at the top of my class, and am currently an active member of the American Institute of Certified Public Accountants as well as the New Jersey Society of Certified Public Accountants.

Please contact me for more information on how I can help you come up with new and creative ideas to minimize your taxes and help grow your business. I look forward to speaking with you soon and earning your trust.

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