The Treasury Department and the Internal Revenue Service have announced a redesign of the 1040 individual income tax return form that is being touted as one that will fit on a single postcard. The new, postcard-size Form 1040 is designed to simplify and expedite filing tax returns, providing much-needed relief to hardworking taxpayers.

The redesigned form will replace the current Form 1040, as well as the Form 1040A and the Form 1040EZ thereby consolidating all three into one form intended to be more simple. The IRS circulated a copy of the new form (pictured below) and said it will work with the tax community to finalize the new Form 1040 over the summer.

The Treasury Department also said the new form will streamline tax returns so that all 150 million taxpayers can use the same form. The IRS will still obtain the information from each taxpayer needed to determine their tax liability or refund.

The Internal Revenue Service released the first look at 100+ pages of Draft Instructions for the 2018 Form 1040

Front view of the new Form 1040
Back Side of the new form 1040

What Has Changed on the 1040 Tax Form?

Taking a quick glance, we can immediately see that the new form is about “half the size” of the current 1040 form. The IRS has indicated that the new 1040 form will also replace the 1040EZ and 1040A forms, so there is an expanded set of Schedules available for different tax filing situations. The IRS states “This new approach will simplify the previous 1040 so that all 150 million taxpayers can use the same form.”

The cosmetic changes make the form take up less space certainly, as one will notice white spacing has been sacrificed and many fields have been consolidated. The font is clearly smaller, which might affect the usability and ease in reading the form. Other changes are reflective of the Tax Cuts and Jobs Act of 2018 bill that was passed, which included more broader changes to the American tax code.  This includes removing the personal exemptions section, and expanding some of the tax credits available to filers.

Overall, the form will likely simplify the process for many Americans when filing their taxes. One of the most confusing aspects currently in choosing between the 1040A, EZ and standard form, will now be completely eliminated. However, for individuals and families with more complex filing situations, the introduction of the expanded schedules in the 1040 form might actually make things more complicated.

Is the IRS Going to Replace the 1040A and 1040 EZ Forms?

Yes, the plan is to make a single 1040 form for all Americans to use when filing. The 1040A and 1040EZ forms at this time appear to be going away.  The IRS has denoted that there could be changes and updates to this new proposed design, but this is one of the big components that is not expected to change.

IRS 1040 Tax Form Changes to Schedules

One of the bigger changes to the 1040 form is the new layout and arrangement of the Schedules. Currently there are numerous “Schedule” forms that supplement the 1040 tax form that address specific tax scenarios.  These include:

  • Schedule A – Itemized Deductions
  • Schedule B – Interest and Ordinary Dividends
  • Schedule C – Profit or Loss from Business
  • Schedule D – Capital Gains and Losses
  • Schedule E – Supplemental Income
  • Schedule F – Profit / Loss from Farming
  • Schedule H – Household Employment Taxes
  • Schedule J – Income Averaging for Farmers and Fisherman
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With the new 1040 Tax form, the schedules are being changed from letters to numbers. It also appears that the schedules have been consolidated, looking at the design for the new Schedule 1 – Additional Income and Adjustments to Income.  It would appear to combine many of the data points collected on both the Schedule B, D and E forms.

How Do I Find and File the New 1040 Tax Form?

The new form is intended for release in early January for the 2019 tax filing season. The IRS has also specified that additional changes might be made to this early preview.

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