At the end of June, the IRS unveiled a new draft version of the 2018 Form 1040 allowing President Trump and certain members of Congress to make good on a campaign promise of making the tax return the size of a postcard. This newly proposed postcard sized Form 1040 replaces the old Form 1040 as well as Form 1040EZ and Form 1040A. A copy of the proposed 2018 1040 form can be viewed on the IRS website.
If you clicked on the link, you can see the new form only has 23 lines which are 50 fewer than the 2017 Form 1040. However, all the information that we needed to file a complete and accurate return in 2017 is still required in 2018. Plus, new lines are needed to accommodate the new tax legislation, like the “Qualified business income deduction” for the new 20 percent pass thru deduction for business owners. The 50 plus lines removed from the old 1040 now exist on one of six new sub-schedules. These sub-schedules called Schedule 1, Schedule 2, etc. in some cases use the same line numbers and descriptions as the old 1040 just on a different piece of paper.
The bottom line is that the postcard goal is met but this new 1040 has not simplified the tax filing process, in my opinion. It appears that a majority of taxpayers will need to complete at least one of the new schedules in order to file their 1040. Even the IRS acknowledges on their website that only “taxpayers with straightforward tax situations” will be able to skip the new schedules.
A final thought, this form is still in draft status and revisions to both the postcard and the schedules are expected before it is considered final. Hopefully, we will have the final version soon to give us enough time to understand and process the new presentation as well as to give the tax software companies enough time to reprogram their software and most importantly to give the IRS enough time to reprocess their computers to receive everyone’s tax return in the new format. Otherwise, the next tax season could be especially rough.