Another Year, Another New 1040

 

October 2, 2019

 

Last year’s changes to the From 1040 added 6 new schedules and in a result created a lot of confusion. Although these changes were in attempt to make the tax-filing process simpler, the IRS is  now revising the form and removing schedules. Here is what you need to know:  

 

More Information on the Main Form. 

To make it easier for the IRS to match pertinent information across related tax returns, new fields have been added on the main Form 1040. For example, there’s now a spot for your spouse’s name if you choose the married filing separate status. In addition, there’s a separate line for IRA distributions to more clearly differentiate retirement income.

 

3 Schedules are Gone.

What was your favorite memory of Schedules 4, 5 and 6? Was it the unreported Social Security tax on Schedule 4? Or the credit for federal fuels on Schedule 5? While those schedules will no longer exist, those lines (and many others) have found a new home on one of the first three schedules. Less paperwork, but still the same amount of information.

 

You Can Keep Your Pennies!

For the first time, the IRS is eliminating the decimal spaces for all fields. While reporting round numbers has been common practice, it’s now required.

 

Additional Changes on the Way. 

The current versions of Form 1040 and Schedules 1, 2 and 3 are in draft form and awaiting comments on the changes. Because of the importance of the 1040, the IRS is expecting to make at least a few updates in the coming weeks (or months) before they consider it final. Stay tuned for more developments.

 

How to Prepare for the Changes

The best way to prepare is to be aware that 1040 changes are coming. The information required to file your taxes will remain the same, but some additional hunting will be necessary to find the shifting lines and fields on the modified form.

 

Contact Your CPA to Discuss Changes to Tax Forms.

Contact Your CPA to Discuss Bookkeeping.

Bringing clarity to your financial world.™

Bringing clarity to your financial world.™