What is the New IRS Form 1040?

The new IRS Form 1040 has been making waves in the tax industry. The first draft of this brand-new Form 1040 came out back in June 2018, with a variety of problems.

However, the IRS returned to the drawing board and made changes to the IRS forms that most people are happy with. From this coming tax year, the new Form 1040 is valid, so you need to know what changes have been made.

So, what are the most important points you need to know about Form 1040?

Is it Postcard Sized?

The Tax Cuts and Jobs Act (TCJA) legislation brought in a major overhaul of the tax system. One of the boasts of President Trump was that you can file your taxes on something that’s the size of a postcard.

Well, it’s a big postcard, but this is true. Those with extremely simple tax affairs will find filing their taxes much easier. However, those with more complex returns will need to deal with submitting new Schedule forms.

The IRS said that they expect most taxpayers to only have to submit one additional schedule. The truth is that the IRS still needs the same information, so for most people filing their taxes won’t be easier than before.

The Building Block Approach

The philosophy behind the new Form 1040 is the building block approach. The old Form 1040A and Form 1040EZ no longer exist. It’s estimated that nearly all 150 million taxpayers will now have to use the redesigned Form 1040 instructions and the six new Schedules and printable IRS tax forms.

As your tax affairs get more complicated, you’ll have to build on Form 1040 with more and more Schedules.

So, in practice the tax system hasn’t become simplified it’s merely changed.

What about Taxpayers Who Use Online Tax Preparation Software?

The truth is that practically nothing will change for these taxpayers. If you’re using software like TurboTax, you’ll still have to answer the same questions.

Remember that the IRS still requires the same information about you. The difference is they want it on different documents.

So, the new Form 1040 is not relevant because online tax preparation software will input the correct information into the correct forms for youwhen you file your taxes.

What About Form 1040X?

The only variation of the old Form 1040 that remains is Form 1040X. This is if you need to file an amended tax return because you made a mistake.

The IRS has also indicated that Form 1040X should still be used to file tax returns for previous years.