IRS releases Draft 2018 Form 1040 allowing taxpayers to file federal income taxes on a new postcard-sized Form 1040, effective next tax season.
About Draft Form 1040
The new base Form 1040 will be finalized this summer, an IRS spokesperson told Wolters Kluwer on June 29. The IRS plans to work with the tax community to finalize the form. “This early release is part of our standard process to invite stakeholder input into draft forms before finalizing them,” the IRS spokesperson told Wolters Kluwer.
However, Treasury Secretary Steven Mnuchin has reportedly said the new Form 1040 is “mostly” finalized. “The new, postcard-size Form 1040 is designed to simplify and expedite filing tax returns, providing much-needed relief to hardworking taxpayers,” Mnuchin said in a June 29 statement.
A Consolidated Approach
The new, two-sided Form 1040 will replace and consolidate current Forms 1040, 1040A and 1040EZ. “This new approach will simplify the 1040 so that all 150 million taxpayers can use the same form,” the IRS said.
The shortened form reflects many of the changes to the tax code under the Tax Cuts and Jobs Act (TCJA) (P.L. 115-97), such as the higher standard deduction and the elimination of certain deductions and personal exemptions. The new form now has 23 lines, decreased from 79. However, there are now six separate schedules that taxpayers with less straightforward tax situations may need to complete and include with their return.
The new, smaller form was promised by Republicans in advance of the TCJA becoming law last December. Republican lawmakers continue to tout the new form for its simplicity.
However, several Democrats have already criticized the new form and schedules, challenging Republicans’ claims that it is simpler. “Trump’s new postcard is a smokescreen designed to conceal paperwork, additional calculations and [Trump’s] broken promise to simplify the tax code,” Senate Finance Committee (SFC) ranking member Ron Wyden, D-Ore., said in a June 29 tweet. “The postcard isn’t simple – it’s simply complicated.”
MCB tax advisors are following this closely and will release new information as it becomes available. Click here to learn more about MCB’s Tax Practice or contact 703-218-3600.