The new 1040 tax form: 4 things you need to know before your file
- Everyone will use Form 1040.
- The new tax form is shorter and simpler than before.
- More complicated tax returns will include schedules.
The 2017 Tax Cuts and Jobs Act brought a lot of changes to the U.S. tax system. One big change is the new Form 1040, which is now more streamlined. There are schedules that will be used for taxpayers who have other kinds of income, itemized deductions, tax credits and so forth. Here’s what you need to know about the new Form 1040.
1. All Taxpayers Will Use the New 1040
The new Form 1040 replaced the three 1040 forms that were used in the past: the 1040, the 1040-A and the 1040-EZ. All U.S. taxpayers will now file Form 1040, U.S. Individual Income Tax Return. Many taxpayers who used the Form 1040 in the past will have to file additional schedules along with their return.
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2. The New Form Is Shorter Than Before
The new, simplified form requires your personal information — including your name, address, filing status and dependent information, as well as your signature — on the first page. On the second page, there are just 23 lines, where you’ll input your earnings, deduction amount, tax and credits. Then you’ll figure your refund or the amount you owe — and that’s it.
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3. You Might Need to Complete Schedules You Didn’t Have Before
Because the new Form 1040 is simplified, you might need additional schedules if your return isn’t simple. If you received additional income, such as capital gains or gambling winnings, or if you want to claim deductions such as student loan interest or self-employment tax, you’ll need Schedule 1. To claim credits such as the foreign tax credit or education credits, you’ll need Schedule 3. There are six schedules in all that are part of the Form 1040, but it’s possible you will not need them.
4. The New 1040 Might Not Seem That Different
If you use tax filing software, as almost 90 percent of taxpayers do, you might not notice much change. Your tax software will walk you through the information needed and will complete the appropriate schedules for you. If you e-file, the change will be fairly seamless.
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This article originally appeared on GOBankingRates.com: The New 1040 Tax Form: 4 Things You Need to Know Before Your File