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New 1040 Draft Creates Stir

Recently, the Treasury Department released a draft of Form 1040 for the 2018 tax year.

This is still only a draft, but it has created a stir, since the draft has significantly fewer lines than the current version of Form 1040.  In addition, the Treasury Department has discussed eliminating Forms 1040A and 1040EZ and using only the shortened version of Form 1040.

In order to shorten Form 1040, many types of income and other amounts would be reported on new schedules, with only a summary total shown on Form 1040.  Therefore, while the Form 1040 itself might appear shorter, the detail that is currently reported on Form 1040 would merely be outsourced to other schedules that would need to be attached to Form 1040.

The June 29, 2018 draft forms include six proposed new schedules to be attached to the new Form 1040.  These schedules are modeled after the lines on the old version of Form 1040 that were removed from the face of draft Form 1040.  They include schedules for: Additional income and adjustments to income, taxes (such as the alternative minimum tax), nonrefundable credits, other taxes (such as the self-employment tax), other payments and credits (such as estimated tax payments), and third party designee (and foreign address, if applicable).

Even though the size of each schedule is less than a full page, this draft format could result in Form 1040 being as long as eight pages for some taxpayers, instead of the current length of two pages.  (This number of pages does not include the other forms and schedules that also may need to be attached to Form 1040, such as Schedule A for itemized deductions.)

It is possible that the final version of the 2018 version of Form 1040 will differ from this draft.  Stay tuned!

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