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IRS proposes Form 1040 changes for 2019 tax filings

1040 tax forms

If the changes to Form 1040 this filing season frustrated you, there's some good news and some bad news.

The good news is that the Internal Revenue Service is revising the Form 1040 to be used for 2019 tax filings.

No, it's still not quite a postcard. But there will be fewer schedules to file — three instead of six — if your taxes are a bit more complicated.

The bad news is that many of us still have to fill out those schedules (and the accompanying forms for additional tax break claims that remained) instead of having things on the old Form 1040 or long 1040 like we used for ages.

Can you tell I'm a bit of a tax form traditionalist? I won't apologize. And I'm not alone.

Tax pro 1040 change reactions: Last week, the Internal Revenue Service quietly slipped a Form 1040 revision for the 2019 tax year into its draft tax forms page.

The Form 1040 proposed changes and ensuing online conversations earn 1040 this week's By the Numbers honor.

Kicking off the tax talk was sharp-eyed @Twitter pal Glen Birnbaum, who noticed the draft forms and let all us tax geeks on social media know. Thanks, Glen!

Jeanne W./@JLWCPA2 noted the IRS' stealth approach, speculating that perhaps the agency thought "maybe if we change it back slowly, they won't notice."

No such luck IRS. We noticed. And the online comments started flying fast and furious.

Overall, the anecdotal reaction from the TaxTwitterverse was "good starting move, IRS." Below is a sampling of remarks in the tax pros own words.

  • Melinda Nelson/@MelindaNCPA — Let's just admit a mistake was made and go back to 2017 format, but guess that’s not happening so, grateful for these changes.
  • @EricChaimowitz — Improvement over 2018, but a ways to go. Maybe I miss the 2017 1040 format.
  • And Nick Chertok/@golfprogress reacted musically, proposing a tax rewrite of the Dire Straits MTV plea, saying, "Still sucks but at least someone recognizes it needs to improve and they moved slightly in the right direction. I feel like belting out Dire Straits' 'I want my MTV' [coda lyric of 'Money for Nothing'], but 'Bring back my 1040' doesn't have the same ring."

Signature shift: OK, I hear ya. Enough with the tax pro yammering. What are the proposed changes?

The new Form 1040 that millions of us filed (or will by Oct. 15) this year was shorter than the three 1040s we filed before the enactment in late 2017 of the Tax Cuts and Jobs Act (TCJA).

The 2019 revision is still not quite the tax reform-promised size of a postcard. It does remain around half a letter-sized page, with lines to be completed on the front and back.

The most notable change for 2019 taxes is that the signature block that was on page 1 this filing season would be on the 2019 revised form's page 2.

Thank you! With the signature up front, the 2018 Form 1040 gave me the uncomfortable sensation that I was signing a blank check.

I know, I know. You fill out the form and applicable schedules and then sign, but still it just looked funny.

Now your signature will be, as it was for decades, under the section showing what tax you owe or refund you're due. Some 1040 order has been restored! See tax traditionalist admission earlier.

Income info will be up front: With that shift of the signature block to the 1040's back/page 2, the section for reporting income is transferred to page 1 of the 2019 form.

This is wages and salaries reported on W-2s, along with investment income, retirement plan (private and from Uncle Sam) payouts and the wonderful catchall of other income, which now covers self-employment earnings (now detailed on Schedule 1; more on this in a minute) that used to have their own line on pre-TCJA forms.

Speaking of self-employment income, the still confusing qualified business income deduction, aka section 199A, is on page 1. 

So is a line to enter adjustments to income, otherwise known as above the line deductions, which now also are on the separate Schedule 1.

When all the computations are done, including your standard or itemized deductions amount, page 1 of the 2019 Form 1040 will end on line 11b with your taxable income.

Tax calculations on the back: Now that you know how much you made will face taxes, you'll figure the U.S. Treasury's cut on the back, aka page 2, of the proposed 2019 Form 1040.

To help you reduce that amount, you'll find lines for some popular tax credits:

  • Child tax or other dependents on line 13a,
  • Earned Income Tax Credit (or as noted on the form as Earned Income Credit/EIC) on 18a,
  • Additional child tax credit on 18b and
  • American Opportunity educational tax credit on 18c.

Page 2 also is where you'll enter applicable info from Schedules 2 and 3. I promise, more on all the revised schedules is coming up in just a minute.

Owing or refund: Your tax liability amount entered on page 2 will be what you've already paid via payroll withholding throughout the tax year along with estimated taxes. 

If you overpaid, you'll get a refund. If you underpaid your taxes, you'll owe.

One small style note regarding due taxes caught my eye. On the 2019 Form 1040, the section showing how much tax you still have to pay with your new Form 1040 now is much more obvious.

Specifically, as you can see from the two year's forms sections below, the print proposed for the 2019 version (the second one) is noticeably larger.

Amount you owe Form 1040 TY 2018 final

Amount you owe Form 1040 TY 2019 revision
Form 1040 (2019) Draft           

I'm not sure if that's a reaction to the many filers who ended up this year owing more tax than they had in prior years because, in many cases, they didn't adjust their paycheck withholding to account for the TCJA changes.

Then, as noted, you (and your tax preparer if you use one) sign the Form 1040.

Schedules 1, 2 and 3: Let's get real. Congress always knew there's no way to get to a postcard-sized tax return without blowing up the current Internal Revenue Code and starting over.

There's no way the House and Senate will do that, but they still liked the political rhetoric and show-and-tell visual of a postcard tax return so they kept using that phrase.

Boxed in, the IRS did the best it could in revising Form 1040 for 2018 filings, the first under the TCJA. But in trimming the long 1040 and consolidating the previous three forms into one, it had to create new paperwork.

For 2018 taxes, there were six schedules. The IRS is proposing when we file our 2019 tax returns next year, we use only three schedules to fill out the revised Form 1040.

Basically, the agency is eliminating this year's Schedules 4, 5 and 6.

Here's what the IRS wants to put on the remaining three schedules:

2019 taxes, the number of schedules has been halved. Here's what will go where next filing season:

If you …

Then use …

Have additional income, such as capital gains, unemployment compensation, prize or award money, gambling winnings. Have any deductions to claim, such as student loan interest deduction, self-employment tax, educator expenses.

Have any deductions to claim, such as student loan interest deduction, self-employment tax, educator expenses.

Schedule 1,
Additional Income and Adjustments to Income

This is essentially the same as for the 2018 tax year.

Owe Alternative Minimum Tax (AMT) or need to make an excess advance premium tax credit repayment.an  

Owe other taxes, such as self-employment tax, household employment taxes, additional tax on IRAs or other qualified retirement plans and tax-favored accounts.

Schedule 2,
Additional Taxes

This originally covered AMT issues only. Now it adds the items that for 2018 filings were on the deleted Schedule 4.

Can claim a nonrefundable credit other than the child tax credit or the credit for other dependents, such as the foreign tax credit, education credits, general business credit.

Can claim a refundable credit other than the earned income credit, American Opportunity Credit, or additional child tax credit. Have other payments, such as an amount paid with a request for an extension to file or excess social security tax withheld.

Schedule 3,
Additional Credits and Payments

This schedule for 2018 covered only nonrefundable credits. Now the refundable ones that went on 2018's Schedule 5 are rolled into this one form.

Schedule 6, which for 2018 filings was used to report a Foreign Address and Third Party Designee, would be gone.

Instead, the address section of the Form 1040 is expanded to allow entry of foreign address information. Also, a section is added to the 2019 revised tax return where you can enter third-party designee (other than your paid tax preparer).

IRS accepting public comments: OK, the proposed 2019 Form 1040, like the 2018 version, definitely is not a postcard. More like a greeting card. Or a sympathy one, maybe.

But adding some more to the Form 1040 will reduce some paperwork, as will, obviously, consolidating the current six schedules into three.

Remember, taxes are a process. So is the IRS' reworking of them. And the agency is willing to hear what you think about these proposed changes.

If you have more suggestions on how to make the 2019 Form 1040 better, the IRS wants to hear from you.

Email your comments about this draft form to [email protected] by Aug. 15.





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