On Friday June 29, 2018, the IRS released the much anticipated draft “postcard-sized” Form 1040 that was promised by the GOP during the lead-up to tax reform. The new “postcard” Form 1040 will replace and consolidate the Forms 1040, 1040A and 1040EZ. This new draft Form 1040 has changed the presentation 1) to remove many of the items of income and deductions from the face of the Form 1040 and 2) to include many additional schedules beyond what a taxpayer is used to filing. The IRS has stated that since (to date) more than 80% of taxpayers filed their 2017 income tax returns electronically, by either using a tax professional or a self-preparation software, the change will have minimal impact on the way taxpayers file their returns.
Some opponents to tax reform have stated that this new filing will do nothing but increase the cost to those individuals using preparers who base their fee on the number of forms and schedules that a taxpayer’s return includes.
The IRS has stated that it has released this draft to “invite stakeholder input”, but Treasury Secretary Steve Mnuchin has stated that the draft is also mostly finalized. So it appears that come January 2019, all taxpayers will be filing their income tax returns using the new “postcard” Form 1040.
Schneider Downs will continue to monitor the draft Form 1040 as it works its way through the Treasury Department and will provide updates as to the status until the final version is released.
