One of President Trump’s campaign promises involved simplification of the tax return process for most filers; he specifically mentioned being able to file on a postcard-sized tax form. While that particular goal still hasn’t really come to fruition, Form 1040, the tax form used by most individual and married households throughout the country, has indeed undergone an overhaul.
Understanding how the tax forms have changed in light of the new tax law passed in 2017 is vital to avoid red flags that could potentially trigger an audit, result in under-withholding or mean that you could owe the IRS big money come tax time next year.
Form 1040 itself is, as promised, indeed smaller now. Basic demographic information and income reporting is done on a single page that is smaller than the standard sized ones used in the past. Keep in mind, however, that tax returns don’t consist just of the single form, however. There are still myriad schedules and addendums that must be filed as well. We likely will never see a legitimate postcard-sized IRS filing, if for no other reason than it could easily lend itself to identity theft.
In addition to the original form, there are six individual schedules that cover such topics as standard deductions, as well as itemized or specialty income, expenses and more. Additional schedules and worksheets cover other topics, like self-employment income, sales of securities, rental real estate and more.
To fill out your taxes correctly, it’s vitally important to know what your proper withholding should be. Withholding tables changed dramatically under the new law, so many filers could end up paying in the end unless they’ve reviewed their withholding and adjusted it. Recent estimates say that around 30 million individuals and couples might end up owing the IRS money for tax year 2018.