The holiday season is in full swing with the stores full of shoppers and the usual madness. I prefer to do most of my holiday shopping online, though I usually end up in the stores at some point or another because of my procrastinating and don’t have time to wait for everything to ship. Hopefully you are less of a procrastinator than I am.
The Internal Revenue Service has given us an early Christmas present – the new tax forms and schedules for 2018! They are looking deceptively simple compared to prior years by being much shorter – the proudly touted “postcard size” return that so many politicians like to say. The reality is that a lot of lines from the original Form 1040 have been pulled off and put into Schedules 1, 2, 3, 4, 5 & 6, and we still have the common Schedules A, B, C, D & E. Many of my clients will likely have the new Schedule 1, where state tax refund and capital gain income are declared, while all my self-employed clients (including myself) will have the Schedule 4, where the calculated self-employment tax is listed, along with Investment Income and Additional Medicare taxes are also listed. The calculations behind the numbers shown on these new schedules are on other forms (i.e. Schedules D & SE, Forms 8959 & 8960) that will also still need to be filed. As a result, for most of my clientele, they’ll just have their returns spread out over more pages than before, with less data being shown on each page.
It doesn’t seem any more efficient to me, but the masses always love the idea of a “postcard size” return – I remember during the 1996 presidential election, Republican candidate Steve Forbes had a vision for an extremely simplified and flat income tax where everyone would file their taxes on a return the size of a postcard (filing electronically was generally not available back then) – but in reality, his proposal to revamp the tax code and make it so much easier was vague on a lot of important details, not well thought out and never came to fruition. Still, like so many other politicians, he had a great gimmick and for a while was a serious threat to the eventual Republican nominee Robert Dole, being a serious contender before his campaign fizzled out just a few months before the GOP had its annual convention.
While political campaigns are built on a lot of gimmicks, our tax code and policy have to be built on the reality that our country and its economy are a complicated one with a lot of different interests at stake. Take a look at the new Form 1040 and the new schedules 1 through 6, available at this link or for download below:
Tax season will be upon us soon… until then, Happy Holidays!