Saturday October 20, 2018
"Almost a Postcard" Tax Return
On June 29, the IRS published a draft of the new Form 1040. It is similar to an oversized postcard.
The IRS press release states, "This new approach will simplify the 1040 so that all 150 million taxpayers can use the same form. The new form consolidates the three versions of the 1040 into one simple form. At the same time, the IRS will still obtain the information from each taxpayer needed to determine their tax liability or refund."
The new form reduces the 79 lines of the 2017 Form 1040 down to 23 lines. If the taxpayer takes the 2018 standard deduction ($12,000 for single taxpayers and $24,000 for married couples) and does not itemize, the new "Postcard Tax Return" may be sufficient.
However, many taxpayers will still need to use added schedules. There are six new tax schedules for reporting other income, funding a health savings account, claiming tax credits and calculating Social Security, Medicare and self-employment taxes.
Howard Gleckman is a senior fellow at the nonpartisan Tax Policy Center. He observed that the higher standard deductions "will simplify filing for millions of people."
While this simplicity in tax filing is good, Gleckman thought the "Postcard Return" will not be frequently used. He noted, "More than 90% of us file our tax returns electronically, and I suspect if you ask most 30-year-olds about postcards, they will not even know what you are talking about."
Editor's Note: This new IRS Form 1040 is a draft of the "Postcard Tax Return." The IRS expects to make multiple changes before the final form is released.