Forms 1040: Six New Schedules
There are six new schedules some taxpayers will file with the new 2018 IRS Form 1040. This new Form 1040 replaces the prior year Forms 1040, 1040A and 1040EZ. The 2018 IRS Form 1040 uses a cornerstone approach. This means that taxpayers only file the schedules they need with their federal tax return. The expectation is that numerous individuals will not need to file schedules, and only file the Form 1040.
Electronic Tax Filing versus Paper Tax Filing
Those who file their tax returns electronically, most likely will not notice these changes. The tax software packages usually populate the responses automatically; therefore, the Form 1040 and any necessary schedules will be done.
Did you file a paper return? Due to these 2018 changes, this is probably a good time to consider changing over to an electronic tax filing option. For taxpayers who filed paper returns in the past and the 2018 changes will get you to recognize the benefits of filing electronically. Yes, the lines that were common from previous year’s form are still part of the 2018 Form 1040. However, other lines are now Schedules 1 through 6 and arranged by category.
Do Schedules Have Numbers and Letters?
You should note that these six new schedules are in addition to the existing schedules with letters, such as Schedule A, Itemized Deductions, or Schedule C, Profit or Loss from Business. Here’s a list and description of the schedules with numbers to help taxpayers recognize what schedules they will need to file with the 2018 Form 1040:
Schedule 1: Additional Taxes and Adjustments to Income
You may not be able to enter your income or adjustments to income directly on Form 1040. The purpose of this schedule is for Taxpayers to report income or adjustments to income. This includes income from capital gains, unemployment pay, prize money, and gambling winnings. Also, this includes self-employment tax, student loan interest deduction, or teaching expenses.
Schedule 2: Additional Tax
This second of the six new schedules, is for taxpayers in unique situations. An example of such taxpayers who use Schedule 2 are those who owe alternative minimum tax or need to make an excess advance premium tax credit repayment will file this schedule.
Schedule 3: Nonrefundable Credits
Perhaps you have to report nonrefundable credits. Schedule 3 is for taxpayers to report nonrefundable credits. These credits don’t include the child tax credit or the credit for other dependents. However, these credits do include the education credits, general business credit and foreign tax credit.
Schedule 4: Other Taxes
Taxpayers use this schedule to report specific taxes. Self-employment tax, household employment taxes, tax-favored accounts, and additional tax on IRAs and other retirement plans are examples of other taxes that would go on the Schedule 4.
Schedule 5: Other Payments and Refundable Credits
Schedule 5 makes it possible for taxpayers to report certain refundable credits. Also, another purpose for Schedule 5 is for those taxpayers who have other payments withheld. These other payments include: Payment made when the taxpayer requests an extension and a payment of excess social security.
Schedule 6, Foreign Address and Third-Party Designee
This is the last of the six new schedules for the 2018 Form 1040. Taxpayers use this schedule to enter a foreign address. Anyone who wants to allow someone other than their paid preparer to discuss their tax return with the IRS will also file Schedule 6.
Do You Have Questions About the Form 1040 Tax Schedules?
Again, keep in mind that these Schedules 1-6 are in addition to the other Schedules such as Schedule A and Schedule C. You may have some questions regarding these six new schedules. I invite you to call me, Alex Franch, BS EA, at 781.849.7200. I am an active enrolled agent with the IRS. Or, email my office at firstname.lastname@example.org to schedule your appointment. Tax time is closing in, so go online and schedule your appointment now.
Alex Franch, BS EA
Alex is a Tax Specialist and Partner at Joseph Cahill & Associates / WorthTax. He has a diverse background including a Bachelor of Science from Boston College in Mathematics and extensive military service. Alex is an Enrolled Agent and has a decade of tax preparation experience. He is passionate about serving businesses with tax and financial planning strategies. Mr. Franch is licensed by the Financial Industry Regulatory Authority (FINRA). He holds a Series 6, 63, 65, and 7, and by the Commonwealth of Massachusetts Division of Insurance. Alex Franch is a registered representative of, and offers securities and investment advisory services through, Commonwealth Financial Network. He is a registered broker-dealer, Member FINRA/SIPC.
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