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Changes to 2019 tax forms

One of the goals of The Tax Cuts and Jobs Act (TCJA) was to allow many taxpayers to fill out their individual income tax returns on a postcard.

To achieve this, the IRS created a new Form 1040 for 2018 tax returns and claimed to have simplified the Form 1040.  Unfortunately, this wasn’t true for most taxpayers.  The truth is smaller is not necessarily simpler.

The 2018 Form 1040 was drastically reduced so that its size could be compared to a postcard.  However, the catch was that the reduced lines weren’t actually eliminated.  The information was moved to six new, numbered schedules in addition to all the old lettered schedules.

Taxpayers who prepared their returns by hand couldn’t find the lines where the information had been previously entered.  Instead, they were required to look through the six additional new schedules and learn which forms were required and figure out how to correctly fill them out.  Then after the schedules were entered and totaled, the numbers were taken from the schedules and entered on the 1040.

As an example, the 1040 for 2018 omitted a variety of popular deductions, including teacher’s supplies and student loan interest.  Taxpayers were required to look through the six numbered schedules in order to be able to take the deduction.  A considerable amount of time was spent by many taxpayers just to find which form was required and determine how to complete the new form.  In previous years the amount of the deduction was easily found on the 1040 and then deducted.

The new 1040 was not well-received by tax professionals either.  The National Association of Tax Professionals (NATP) reported to the IRS that it got approximately 540 comments which were overwhelmingly unfavorable, from its members when it asked for feedback about the shortened form.

Here’s what the NATP wrote about the newly created 1040 used for 2018 tax returns:

“Many of the comments focused on the observation that the form is essentially no different than it was previously, with the removed lines simply moved to another sheet of paper as an attached schedule.  Many felt this does not accomplish the goal of simplification, but rather it creates confusion”

The six additional schedules used for 2018 tax returns have been reduced to the three following schedules for 2019 tax returns:

Schedule 1 Additional Income and Adjustments to Gross Income.  This was the Schedule 1 in 2018 also, but it has been renumbered.  Some of the information from the 2018 Schedule 1 has been moved back to the first page of the Form 1040 return for 2019.

Schedule 2 Additional Taxes, This includes all the same information that was on the 2018 Schedule 2, but also includes the information that used to be entered on Schedule 4.

Schedule 3 Additional Credits and Payments.  This includes all the same information from the 2018 Schedule 3, but now includes information from the 2018 Schedule 5 also.

David Zubler is a tax accountant in East Tennessee, the author of four books, and a philanthropist.  All of his proceeds from the books go to a charitable foundation he created for underprivileged children.  He is also the founder of Your Tax Care which provides tax education. David can be reached for questions and consultation at yourtaxcare.com.