A draft version of the 2018 Form 1040 and related schedules were recently released by Thompson Reuters Checkpoint. The document has not yet been officially posted to the IRS website since the document was obtained from congressional staff. The key takeaways impacting individual taxpayers, noted in this PDF, include the following:
- Form 1040
- Substantial reduction in length, from 79 lines to 23 lines.
- Income, tax, credits, payments, and other information previously included on 2017 Form 1040 have been moved to Schedules 1-6 (referenced below).
- May serve as an all-in-one replacement for previous Forms 1040, 1040A, and 1040-EZ.
- Schedule 1: Additional Income and Adjustments to Income
- Substitute for Lines 10 through 37 of 2017 Form 1040.
- Wages, interest and dividends, retirement, and social security reported directly on Form 1040; all other forms of income and adjustments to income will be reported on this supplemental schedule.
- Schedule 2: Tax
- Substitute for Lines 44 through 47 of 2017 Form 1040.
- Includes, but not limited to, tax on child’s unearned income “kiddie tax” and alternative minimum tax.
- Schedule 3: Nonrefundable Credits
- Substitute for lines 48 through 55 of 2017 Form 1040
- Includes, but not limited to, foreign tax, education, child and dependent care expenses, residential energy and general business credits.
- Schedule 4: Other Taxes
- Substitute for lines 57 through 63 of 2017 Form 1040.
- Includes, but not limited to, self-employment, household employment, additional Medicare, and net investment income taxes.
- Schedule 5: Other Payments and Refundable Credits
- Substitute for lines 65 through 73 of 2017 Form 1040.
- Federal income tax withheld from Forms W-2 and 1099 reported directly on 2018 Form 1040
- Includes, but not limited to, amount applied from the previous year, estimated tax payments, extension payments, excess FICA tax withheld.
Schedule 6: Foreign Address and Third-Party Designee
- Provides fields for taxpayers with a foreign address to list foreign country, province, and postal code.
- Provides the taxpayer with the option to designate third-party designee, who may discuss their return with the IRS.
The new draft version of 2018 Form 1040 has been significantly reduced in size. It contains 56 fewer lines compared to 2017 version. However, this reduction is countered by the creation of the six new supporting schedules. So, while many may think that the new format was in fact simplified, several tax professionals would disagree, as the IRS simply took an existing form 1040 and bifurcated it into a new 1040 with six new schedules.
For questions regarding the draft 2018 Form 1040, please contact Anatoli Pilchtchikov or one of our tax professionals at 301.231.6200.