The good news is the IRS has released the long awaited “postcard” size Form 1040. The bad news is, it has six related tax schedules. Still you have to appreciate the attempt to simplify the tax preparation process. The six related schedules may or may not need to be filed along with the Form 1040, it depends on the taxpayer’s circumstances. See below:
Schedule 1: Additional Income and Adjustments to Income. For taxpayers who have to report additional income, such as capital gains, unemployment compensation, prize or award money, or gambling winnings, or who have any deductions to claim, such as student loan interest deduction, educator expenses or self-employment taxes.
Schedule 2: Tax. For those who are subject to the alternative minimum tax (AMT) or need to make an excess advance premium tax credit repayment.
Schedule 3: Nonrefundable Credits. For taxpayers who can claim a nonrefundable credit besides the child tax credit or the credit for other dependents, such as the foreign tax credit, education credits or the general business credit.
Schedule 4: Other Taxes. For taxpayers who owe other taxes, such as self-employment tax, household employment taxes, additional tax on individual retirement accounts or other qualified retirement plans and tax-favored accounts.
Schedule 5: Other Payments and Refundable Credits. For taxpayers who can claim a refundable credit aside from the Earned Income Tax Credit, the American Opportunity Tax Credit or the Additional Child Tax Credit. They may also have other payments, such as an amount paid with a request for an extension to file, or they want to report excess social security tax withheld.
Schedule 6: Foreign Address and Third Party Designee. For taxpayers who have a foreign address or a third-party designee other than their paid tax preparer.
For a closer look, click here: https://www.irs.gov/pub/irs-pdf/f1040.pdf
Contact Us: The “postcard” 1040 doesn’t necessarily mean that complex tax reporting is simplified. Your Fuoco Group tax professional can help make sure your tax liability is as low as possible given all the relevant factors. Our advice is to file as early as possible in light of the government shutdown. The IRS has said that even with Washington shuttered, it is confident that it will begin accepting tax returns January 28th. Please contact us for a tax season appointment ASAP, toll free at 855-534-2727.
