The IRS has issued new tax forms for the 2018 filing year and boy are they different than what you filed previously. The new postcard size Form 1040 which is a half page front and back.
The IRS took the most commonly used lines on Form 1040 and put them on the postcard sized form, but created 6 additional half pages schedules to capture the not so common line item what used to be 2 page is now 8.
Let's walk through each form:
Form 1040 Page 1
When you look at the front page of Form 1040, it looks just like the top portion of Form 1040 for prior years. This is where you enter you name, address, dependents, if you want to contribute the president election campaign, indicate your filing status.
The bottom looks just like the bottom of page 2 of Form 1040 from prior years, where you sign and date your tax return and where your paid preparer signs and dates.
Form 1040 Page 2
This is just a very condensed version of Form 1040 from the past. Lines for the most common income items such as wages, interest and dividend are on this page. Then you report income adjustments and deductions for the standard or itemized deductions, Qualified Business Income Deduction next. You calculate your income tax and add in summaries from other schedules after that. You deduct the child tax credit and your withholding to come down to your tax due or refund. Sounds simple enough. However, you have more forms to file out, maybe.
Schedule 1, Additional Income and Adjustments to Income
This half page schedule is where you report income that was not on Form 1040, Page 2. Items like alimony received, business income and capital gain are indicated here.
If you have any adjustments to your gross income this would get reported on the second half of the form such as IRA deduction, alimony paid, Self-Employed Tax Deduction etc. On last year's Form 1040, these items were at the bottom of Page 1.
Schedule 2, Tax
This schedule has 4 lines to it. This is where you report Alternative Minimum Tax (AMT) and Excess Advanced Premium Tax Credit Repayment.
Schedule 3, Nonrefundable Credits
This schedule again is only a half page. This is where you show your Foreign Tax Credit, Child Care Credit and other credits.
Schedule 4, Other Taxes
If you pay Self-Employment Taxes, 10% penalty for early distributions from a retirement account and/or other taxes, this is where you would report that amount.
Schedule 5, Other Payments & Refundable Credits
If you have made estimated payments during the year or have credits that you haven't been able to put on another form, this is where it goes.
Schedule 6, Foreign Address & Third Party Designee
If you designate a third party to talk to the IRS on your behalf (frequently your tax preparer), this is where you would make that designation.
If you have any questions or want to learn more, email barb@calc-you-later.com
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