Monday, July 9, 2018
The US Internal Revenue Service has announced plans to streamline the personal income tax return for the 2019 tax filing season, to reflect changes brought about by the Tax Cuts and Jobs Act (TCJA).
According to the IRS, the new Form 1040 will consolidate the existing three versions of the form (Forms 1040, 1040A, and 1040EZ) into one form, which will be about half the size of the current form.
The IRS said that the new Form 1040 uses a "building block" approach, which can be supplemented with additional schedules if needed. Taxpayers with straightforward tax situations would need to file only this new 1040 with no additional schedules, the agency explained.
Welcoming the development, the House of Representatives Ways and Mans Committee said the IRS has been able to reduce the size of Form 1040 due to simplification measures introduced under the TCJA.
"Under the old, broken tax code, 48.8m taxpayers itemized their deductions," said a blog post on the committee's website. "According to the nonpartisan Congressional Budget Office (CBO), next year 31.1m hardworking taxpayers will no longer be burdened by the complexities of itemizing, instead choosing to take the standard deduction and filing on this simple postcard system."
The CBO has also estimated that there will be a substantial reduction in the number of taxpayers needing to calculate tax under the Alternative Minimum Tax, from five million in 2017 to 222,000 this year.
In addition to simplifying the form to include only the most commonly used lines, all personal information is now to be included only on the first page instead of spread throughout the form, the committee said.