IRS Reveals 2019 Form 1040 Draft
The Internal Revenue Service (IRS) revealed a first draft of the 2019 Form 1040 and it includes many features from earlier versions.
2018 Form 1040
2018 Form 1040 was drastically altered from earlier versions to implement the many tax law changes that were introduced by the Tax Cuts and Jobs Act (TCJA). With TCJA, the postcard format was introduced, and six new schedules were added to allow for the reduction in size including:
- Schedule 1: Additional Income and Adjustments to Income
- Schedule 2: Tax
- Schedule 3: Nonrefundable Credits
- Schedule 4: Other Taxes
- Schedule 5: Other Payments and Refundable Credits
- Schedule 6: Foreign Addresses and Third-Party Designee
Notable Changes from 2018 to 2019
Although the top half of the first page is nearly identical to last year’s form, additional information is required in the filing section, including a spouse’s name if filing Married Filing Separately or a child’s name if filing as Head of Household or Qualifying Widow(er). The lack of this information on the 2018 form led to the IRS having difficulty processing and matching tax return information. The health care coverage checkbox has also been removed from the first page because coverage is no longer mandatory starting in 2019 under TCJA. Finally, the signature section has been moved back to page two, which is comparable to the 2017 and earlier years Form 1040.
Lines for detailed income items have returned to the first page of Form 1040, including a line for Schedule D capital gain or loss, which was reported on Schedule 1 in 2018. Adjustments to income and deductions, standard or itemized, and the qualified business deduction, are also reported on the first page. Including each of these line items on page one means that in 2019, page one of Form 1040 will now show total income, adjusted gross income (AGI), and taxable income.
The second page of draft 2019 Form 1040 summarize taxes, tax credits, tax payments and includes sections for third party designee information and signatures. Also new in 2019 are separate lines for commonly used credits such as the earned income credit (EIC), additional child tax credit, and American opportunity credit.
Many of the new features of pages one and two of the draft 2019 Form 1040, along with some modifications to the supplements schedules, result in Schedules 4, 5, and 6 being obsolete for 2019. The following schedules are included as part of the draft 2019 Form 1040:
- Schedule 1, Additional Income and Adjustments to Income: Like the 2018 version, but will now require taxpayers with alimony to report the date of the original divorce or separation agreement. This is due to the change under TCJA that only alimony payments on pre-2019 agreements will be includible income by the recipient or deductible by the payee.
- Schedule 2, Additional Taxes: Will now include several of the other taxes that were previously reported on Schedule 4.
- Schedule 3, Additional Credits and Payments: Combines the nonrefundable and refundable credits that were reported on Schedules 3 and 5 in 2018.
Because the draft was released to allow time for review and comments, the IRS has indicated that this draft will continue to change before the final form is released.
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Article written by Annika Naumann