June 28, 2018
The Internal Revenue Service's draft 1040 tax form has been released. Aside from personal information and dependent information, the 1040 draft is 23 lines long. Yes, it is half the size of the 2017 form, but in many cases, it will require 6 new schedules. Some income items that require Schedule 1 of the 6 additional schedules: taxable refunds, capital gain or loss, rental income, partnerships, business income, and other income. Adjustments to income, such as educator expense, HSA deductions etc were also moved to Schedule 1. Additional taxes are calculated on Schedule 2 (Kiddie Tax, AMT, tax on lump sum distributions, and other taxes. Schedule 3 is for Credits (foreign tax credit, child care expenses, education credits, etc). Schedule 4 is for Other Taxes (SE Tax, tax on tip income, uncollected Soc Sec or Medicare tax, repayment of first time home-buyer credit, Net investment income tax, 10% penalty on early withdrawals from retirement accounts, etc). Schedule 5 is for reporting Other Payments and Refundable Credits (estimated taxes paid, Premium Tax credit, excess social security paid, fuel tax credit, Health coverage tax credit, etc.) Schedule 6 is for foreign addrss and Third Party designees.
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