The 1040 Got a Makeover!
People in the office often give me a hard-time because I enjoy the process of providing tax reviews and working with client’s CPAs regarding taxes. It’s great to see a client have a "light bulb" moment when talking about taxes. They can be complicated and escape our immediate comprehension all the time. So get ready, if you thought at one point, tax returns were crazy exciting, I’m going to talk about Tax Forms! Here we go.
American taxpayers have been using IRS Form 1040 since 1913. The first tax return was three pages with only one page of instructions. Over the last 100+ years, the length of the instruction has changed numerous times. In 2017, Congress passed the largest piece of tax reform legislation in over three decades. To conform to the changes that need to be implemented due to this new Tax Cuts and Jobs Act, the IRS released over 50 drafts or revised forms and schedules on its website in June.
The most anticipated one was the 1040, U.S. Individual Income Tax Return form. As promised, the “postcard” size was achieved and Form 1040 was reduced to one double-sided half page, as compared to the previous two full pages. This new 1040 also consolidates and replaces 1040A and 1040EZ, so starting in 2019, all 150 million taxpayers will be using the same form. I know, very exciting stuff.
Click here to see the new forms from the IRS website.
The new tax forms are still in “DRAFT” mode, so for those of you who like to get your tax forms and practice a couple of times before April 15th of next year, hold your horses, things could change.
While this post is mainly quick trivia about the aesthetics of the forms, there is quite a bit of changes to the actual tax code, as we’ve discussed many times previously on this blog.
Our aim is to try to be proactive about tax planning. We are keeping an eye on the changes and how they may affect your investments. Our goal is to understand your specific needs and then create a plan to address those needs. We anticipate sending clients a year-end tax report that will offer ideas on tax planning.
This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor.