2018 Form 1040 to be shorter but with more schedules

06-30-2018Tax Information

The IRS is still working on a draft version of the 2018 Form 1040, U.S. Individual Income Tax Return. The 1040 will be two half-pages in length, but moves many items formerly on the 1040 to new schedules.

• Schedule 1 - Additional Income and Adjustments to Income
• Business income, alimony received, capital gains or losses, and adjustments including educator expenses and student loan interest expense. (Formerly on lines 10-37)
• Schedule 2 – Tax
• Tax on a child’s unearned income (kiddie tax), Alternative Minimum Tax, and any excess premium tax credit that must be refunded.  (Formerly on lines 44-47)
• Schedule 3  - Nonrefundable Credits,
• Foreign tax credit, credit for child and dependent child care, the education credit, and the residential energy credit. (Formerly on lines 48-55)
• Schedule 4 - Other Taxes
• Household employment taxes, health care individual responsibility payment, the net investment income tax, and the additional Medicare tax. It also includes a new line for reporting the Sec. 965 net tax liability installment from Form 965-A — a form that does not yet exist.  (Formerly on lines 57-63)
• Schedule 5 - Other Payments and Refundable Credits
• Estimated tax payments, the net premium tax credit, and amounts paid with an extension request.  (Formerly on line 65-74)
• Schedule 6 - Foreign Address and Third Party Designee,
• Requires taxpayers who have a foreign address a place to list their country, province, and postal code and provides all taxpayers with a place to list information for a third-party designee who can discuss the return with the IRS.  (Formerly on page 1 and 2)

The draft Form 1040 and the new schedules also refer to various existing schedules, which presumably will continue to exist in updated form:

• Schedule A, Itemized Deductions (but remember there will be a $10,000 limit on state taxes and other deductions (e.g. investment fees, unreimbursed employee expenses, union dues, tax prep fees, etc.) are eliminated)
• 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.

Interestingly, Schedule B, Interest and Ordinary Dividends, Schedule J, Income Averaging for Farmers and Fishermen, and Schedule R, Credit for the Elderly or the Disabled, are not mentioned on the new form and schedules.