Certified Public Accountants and Business Advisors

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IRS Releases Draft Form 1040 - It IS the size of a postcard!

The IRS has released a draft version of the 2018 Form 1040, U.S. Individual Income Tax Return, that reduces the size of the form to two half-pages in length and eliminates more than 50 lines, compared to the 2017 version of the form. The draft form moves many items that in the past have appeared on the face of the 1040 to various new schedules.

The 2018 draft Form 1040 uses the first page to gather information about the taxpayer and any dependents and for the taxpayer’s signature and jurat. The second page gathers information on the taxpayer’s income, deductions (including a new line for the Sec. 199A qualified business income deduction), credits, and taxes paid. Many of the items reported on the 1040 will be calculated on various new schedules, which have also not yet been officially posted. These schedules include:

  • Schedule 1, Additional Income and Adjustments to Income, such as business income, alimony received, capital gains or losses.
  • Schedule 2, Tax such as the tax on a child’s unearned income, the alternative minimum tax, and any excess premium tax credit that must be repaid.
  • Schedule 3, Nonrefundable Credits, such as the foreign tax credit, the credit for child and dependent child care, the education credit, and the residential energy credit.
  • Schedule 4, Other Taxes, such as household employment taxes, the health care individual responsibility payment (the individual mandate), the net investment income tax, and the additional Medicare tax. It also includes a new line for reporting the Sec. 965 net tax liability installment from Form 965-A — a form that does not yet exist.
  • Schedule 5, Other Payments and Refundable Credits, such as estimated tax payments, the net premium tax credit, and amounts paid with an extension request.
  • Schedule 6, Foreign Address and Third Party Designee, provides taxpayers who have a foreign address a place to list their country, province, and postal code.

 

Tax Alerts
October 27, 2020
Tax Briefing(s)

Tax reform legislation widely known as the Tax Cuts and Jobs Act (TCJA) ( P.L. 115-97) was signed into law on December 22, 2017. The TCJA brought forth the most sweeping overhaul of the U.S. tax code in over 30 years. However, widespread efforts to implement the TCJA amidst ongoing tax-related global developments continue to this day. Now, two years following its enactment, Treasury, the IRS, and the tax community remain steadfast in working toward understanding and communicating congressional intent under the new law.


On December 20, President Donald Trump signed the bipartisan, year-end government spending and tax package, just hours before federal funding was set to expire. Trump's signature on the over 2,000-page spending package avoided a government shutdown.


Proposed qualified opportunity zone regulations issued on October 29, 2018 ( REG-115420-18) and May 1, 2019 ( REG-120186-18) under Code Sec. 1400Z-2 have been finalized with modifications. The regulations. which were issued in a 550 page document, are comprehensive.


Right now, your highest priority is the health of those you love and yourself. But if you have time to read about some non-medical but important matters related to the health crisis, here is a summary of IRS action already taken and federal tax legislation already enacted to ease tax compliance burdens and economic pain caused by COVID-19 (commonly referred to as Coronavirus).

 We'll be sending you summaries of additional developments as they take place.