Tax Reform

6 New Schedules Some Taxpayers Could File with the New Form 1040

Taxpayers may notice a new look to Form 1040 this tax season. Starting in tax year 2018, the new Form 1040 is replacing prior year Forms 1040, 1040A and 1040EZ. With the simplified new form, comes new schedules as well, some of which may need to be filed with your Form 1040.

The new simplified form and supporting schedules should be used to file your 2018 tax return. Individuals file only the schedules they need with their federal tax return.

While some people only need to file Form 1040 without any of the new schedules, people with more complex income reporting will need to use some of them.

Details on the Six New Schedules

There are six new numbered schedules. This adds on to the list of existing schedules, such as the Schedule A, Itemized Deductions, or Schedule C, Profit or Loss from Business. The six new schedules you may need to file in conjunction with Form 1040 are:

Schedule 1Additional Taxes and Adjustments to Income

This schedule is used to report income or adjustments to income that can’t be entered directly on Form 1040; including:

  • Capital gains and losses
  • Unemployment compensation
  • Prize money
  • Gambling winnings
  • Student loan interest deduction
  • Self-employed deductions
  • Educator expenses
  • IRA and HSA contributions

Schedule 2Additional Tax

Taxpayers should use Schedule 2 in addition to the new Form 1040 if they owe alternative minimum tax or need to make an excess advance premium tax credit repayment.

Schedule 3Nonrefundable Credits

This schedule reports nonrefundable credits outside of the child tax credit or other dependent credit including the foreign tax credit, education credits, and general business credit.

Schedule 4Other Taxes

This schedule reports self-employment tax, household employment taxes, additional taxes on retirement distributions, the ACA shared responsibility payment, and other miscellaneous taxes.

Schedule 5Other Payments and Refundable Credits

Taxpayers who claim certain refundable credits, including the additional premium tax credit, or made estimated tax payments or are applying an underpayment from 2017 should use this schedule.

Schedule 6Foreign Address and Third-Party Designee

The Schedule 6 applies to expats and anyone who wants to allow someone other than their tax preparer to communicate on their behalf with the IRS.

Final Thoughts

The new Form 1040 is just one of the many changes that will impact your tax return this year. Tax reform may make significant impacts to your tax outcome this year. Do you feel prepared to handle the new filing requirements yourself? If not, leave it to the experts at Block Advisors to help.

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