As we gear up for the 2019 tax filing season that is quickly approaching, we want to focus on one big change that taxpayers will notice this year: the new 1040 form. In an effort to streamline the process for taxpayers, the IRS has created a shorter, simpler version of the 1040 form. This new form is about half the size of the current version. Taxpayers will no longer have to choose between Form 1040, Form 1040A, or Form 1040EZ—instead, all 150 million American taxpayers will complete the new 1040 form.
For those that have a more complicated return, such as having deductions, credits, or owing additional taxes, addition Form 1040 Schedules may need to be filed. Below, we provide a guide on all of the different 1040 schedules, giving you information about how to use them.
Guide to 1040 Schedules
Schedule 1: Needs to be filed if you have additional income including capital gains, unemployment, gambling winnings, or any prize and award money. Also needs to be filed if you claim deductions such as student loan interest deduction, self-employment tax, or educator expenses.
Schedule 2: Needs to be filed if you owe Alternative Minimum Tax (AMT) or need to make an excess premium tax credit repayment.
Schedule 3: Needs to be filed if you can claim a nonrefundable credit such as foreign tax credit, education credits, or general business credits. Child tax credit and credit for other dependents are not included as part of nonrefundable credits here.
Schedule 4: Needs to be filed if you owe other taxes including self-employment tax, tax on IRAs or other retirement plans, and household employment taxes.
Schedule 5: Needs to be filed if you can claim a refundable credit other than American opportunity credit, additional child tax credit, and the earned income credit. Also needs to be filed if you have other payments, for example amount paid with a request for an extension to file or have excess social security tax withheld.
Schedule 6: Needs to be filed if you have a foreign address or a third partu designee other than your paid preparer.
Regarding the schedules, the IRS has suggested that nearly 65% of all American taxpayers will have to submit the new 1040 with only one schedule. While the IRS has indicated that the new 1040 form will certainly be used for 2019, it’s still making minor changes before the opening of the filing season.
The new 1040 form is just one of the ways that the IRS is getting ready for the many new changes that are coming into effect as part of the Tax Cuts and Jobs Act. This is the biggest piece of tax legislation in the past thirty years, and as a result, it’s important to understand how they may affect you during the 2019 filing season. As always, if you do get a notice from state or IRS tax officials, IRS Audit Group is here to help. Contact us at 1 (888) 300-6670 to get in touch with one of our friendly team members who can answer all of your questions.