As the US continues to undergo major tax reform changes, there is one in particular that might catch your eye. The IRS released a draft of a new post-card sized Form 1040 that will streamline tax returns and allow all American taxpayers to use the same form. The updated form will replace and consolidate the 1040 with the 1040A and 1040EZ as well, eliminating the latter two. The IRS plans to complete the streamlined Form 1040 over the summer with the help of the tax professional community. The 1040 forms are the most common tax forms and this will be the first major change to the forms in decades.
The form will be about half the size of the current version and uses a building block approach. The form can be supplemented with on to five other schedules if needed. If you have a clear-cut tax situation, you will only need to file the 1040 with no additional schedules. If you want to itemize your deductions including deductions for health savings account contributions or educator expenses, you will need to file Schedules with your 1040.
Even though the forms are merged, the IRS will still receive the same information required to assess your tax liability or refund. If you do choose to mail in your tax return, keep in mind that your financial information is still required and should be mailed in an envelope to protect taxpayer privacy. Nine out of every ten taxpayers use software or a tax professional to file their taxes, the IRS plans to further work with the tax community on helping to provide a smooth transition for people who utilize the electronic filing process, are familiar with tax prep software products, and the interview process used to prepare tax returns.
If you need help filing your 1040 or any other tax return, Polston Tax can help! We have a team of tax accountants that can help make sure your return is filed and that you remain compliant with the IRS. Call us today at 844-841-9857 or click below to schedule a free consultation.