New Draft US Tax Return Revealed: IRS Backtracks in Releasing 2019 Form 1040
For many years, the US tax return (Form 1040) maintained a pretty consistent look. That was until last year, when the US tax return underwent a drastic overhaul thanks to the Trump administration’s stated goal of simplifying the form, reducing it the size of a “postcard.”
Upon the release last year of the 2018 form, taxpayers and preparers quickly noticed that in order to make the front page of the US tax return shorter and simpler, new schedules were added to include the questions that were left off the front page. The new US tax return represented more of a shifting of informational requests rather than a reduction in the requests.
Draft US Tax Return for 2019
The 2019 draft form keeps some of the changes made on the 2018 form, but in many ways reverts back to the previous US tax return style that is more familiar to taxpayers and preparers.
The compromised look of the new Form 1040 incorporates the following changes, among others:
- The detailed list of types of gross income and deductions used to arrive at taxable income is now on page 1 of the US tax return.
- Some of the income items which had been on schedules last year are back on the front page. For example, the line for capital gains or losses, which was on the 2018 Schedule 1 is now on Line 6 on the front page.
- The request for filing status at the top of Form 1040 now asks for additional information for taxpayers choosing married filing separately (the name of the spouse) or head of household (name of child who isn’t a dependent).
- Certain of the most-used credits (e.g., the earned income credit and the additional child tax credit) have been moved from schedules to page 2 of the Form 1040.
- Lines to identify any foreign address and to name a third party with which IRS had permission to discuss the return, which were on Schedule 6 in the 2018 version, have been moved to page 2 of the Form 1040.
- The checkbox for health care coverage has been removed, since health care coverage is no longer required, starting in 2019, in order to avoid a tax penalty.
Simplified US tax Return Designed For Senior Citizens
For 2019, the IRS has also drafted a new simplified US tax return for senior citizens. The new Form 1040-SR apparently replaces the Form 1040-EZ, a simpler version of the Form 1040 that was not renewed.
The draft form is just two pages long. It allows seniors to enter income from wages, salaries, tips, interest, dividends, IRA distributions, pensions and annuities, and social security benefits and to report taxable amounts of IRA distributions, pension and annuities and social security benefits.
It also provides for reporting capital gains or losses and other income that may appear on a schedule. As examples, other income reported on Schedule 1 includes alimony and unemployment compensation. The form also allows taxpayers to claim basic credits available on a US tax return, including the child tax credit or credit for other dependents, the earned income credit and American opportunity credit.
A chart at the bottom of page 1 of the form includes an easy-to-use list of standard deductions and instructions for how to claim the additional standard deduction.
By Joshua Ashman, CPA & Nathan Mintz, Esq.