Form 1040 Draft Instructions Released by IRS

Form 1040 Draft Instructions Released by IRS

The Internal Revenue Service (IRS) released its Form 1040 draft instructions, debuting a smaller form with fewer lines, in contrast to the 2017 form.

The draft instructions, released Sept. 26, 2018, should not be relied upon when filling out or filing a Form 1040. Instead, it should be used as a forecast of the upcoming final instructions.

Form 1040 Draft Instructions Highlights

Form 1040 draft instructions outline a significantly shorter Form 1040 when compared to 2017’s version, with fewer form lines. However, filers with more complex tax returns may need to file additional schedules.

The draft indicates Forms 1040A and 1040-EZ may not be available in 2018, and 2017 instructions or forms with reference to them should be disregarded.

Tax Cuts and Job Acts Changes

Standard Deduction Amount Increases

  • Single, or Married filing separately: $12,000
  • Married filing jointly, or qualifying widows or widowers: $24,000
  • Heads of Household: $18,000

Personal Deductions

Personal deductions for yourself, your spouse, or your dependent cannot be claimed, according to the draft instructions.

Child Tax Credit and Dependents

The maximum credit increased to $2,000 per qualifying child, and $1,400 can be claimed for the additional child tax credit. The gross income line where the credit can begin has been increased to $200,000 single, and $400,000 for joint filings. In addition, a valid social security number is needed to claim the child tax credit.

Taxpayer’s with other dependents can claim up to $500 for each eligible dependent who can’t be claimed under child tax credits.

Qualified Business Income Deduction (Section 199A)

According to the Form 1040 draft instructions, you may be able to deduct up to 20 percent of qualified business income from a qualified trade or business. In addition, you may deduct 20 percent of qualified real estate investment trust and dividends and qualified publicly traded partnership income.

Itemized Deductions

  • Itemized deductions on Schedule A not limited due to adjusted gross income.
  • State and local income deductions limited to $5,000 single filing, and $10,000 joint filing.
  • Work-related expenses subject to the 2 percent adjusted gross-income floor are no longer deducted.

Schedules

Form 1040 draft instructions bring new schedules, 1-6. According to the instructions, additional schedules are used to complete more complex tax returns.

Form 1040 Schedules

What are the 2019 Deadlines for Form 1040?

Tax Day falls on April 15, 2019. However, residents in Maine, Massachusetts, or Washington D.C. will enjoy an extension to April 17, 2019, due to state and district holidays.