Tax season always brings lively moments to accountants and other tax professionals, and this year is no different with the Tax Cuts and Jobs Act (TCJA) seeing itself fully implemented. Individual filers will find a dramatically revised Form 1040. The IRS scuttled the 1040-EZ and 1040-A versions of the 1040. In its place for tax years 2018 and beyond, the 1040 will now be the main form that most taxpayers with simple income will file with, similar to how the 1040-EZ was used in the past.
Put Your Items on a Schedule
For certain other items like claiming certain tax credits, the IRS has provided six schedules to attach to the 1040.
- Schedule 1 focuses on additional income items (e.g. capital gains, interest income) and adjustments (e.g. IRA and student loan interest deductions).
- Schedule 2 pertains to those who owe alternative minimum tax and excess advanced premium tax repayments.
- Schedule 3 deals with claiming nonrefundable credits such as the Foreign Tax Credit and Lifetime Learning Credit.
- Schedule 4 concerns those owing “other taxes” like the self-employment tax and household employment taxes.
- Schedule 5 involves “other payments and refundable credits” like excess social security and estimated tax payments.
- Schedule 6 relates to foreign filers and third-party designees.
Popular credits like the American Opportunity Tax Credit and Earned Income Credit still require their associated attachments, such as Form 8863 for AOTC. Other schedules such as Schedule A and C haven’t changed much. Essentially, these new schedules divide up the previous 1040 form and relegate certain line items onto associated schedules to attach to the taxpayer’s 1040.
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