The New 1040

The IRS is working on a draft version of the 2018 Form 1040, U.S. Individual Income Tax Return.  It reduces the size of the form to two half-pages in length and eliminates more than 50 lines.

The 2018 draft form uses the first page to gather information about the taxpayer and any dependents. The second page gathers information on the taxpayer’s income, deductions, credits, and taxes paid.

The other items reported on the 1040 will be calculated on various new schedules, which have also not yet been officially posted. They include:

Schedule 1: Additional Income and Adjustments to Income –

such as business income, alimony received, capital gain or losses, and adjustments including educator expenses and student loan interest expense.

Schedule 2: Tax –

such as the tax on a child’s unearned income (commonly called the kiddie tax), the alternative minimum tax, and any excess premium tax credit that must be refunded.

Schedule 3: Nonrefundable Credits –

such as the foreign tax credit, the credit for child and dependent child care, the education credit, and the residential energy credit.

Schedule 4: Other Taxes –

such as household employment taxes, the health care individual responsibility payment, the net investment income tax, and the additional Medicare tax.

Schedule 5: Other Payments and Refundable Credits –

such as estimated tax payments, the net premium tax credit, and amounts paid with an extension request.

The draft Form 1040 refers to various existing schedules including;

Schedule A – Itemized Deductions

Schedule C – Profit or Loss From Business

Schedule D – Capital Gains and Losses

Schedule E – Supplemental Income and Loss

Schedule F – Profit or Loss From Farming

Schedule H – Household Employment Taxes

Schedule SE – Self-Employment Tax

Schedule 8812 – Child Tax Credit

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