The IRS is about to officially release a draft of a postcard Form 1040. The smaller size is meant to convey that taxes are simpler after the enactment of the Tax Cut and Jobs Act. Take a look at the draft Form 1040 postcard and see for yourself if the 1040 postcard is the answer to the public’s need for simple tax.
The form is not really a postcard as it must be submitted in an envelope (and it has no pretty pictures with “wish you were here” sentiments). The 1040 postcard does have fewer lines, but their are six new schedules that go with it.
Schedule 1 reports “additional income and adjustments” including income reported on the Schedules C, D and E. It also will include adjustments including the $250 teacher deduction and student loan interest.
Schedule 2 reports other “tax” including AMT and the excess premium tax credit.
Schedule 3 reports “non refundable credits” including the foreign tax credit, the dependent care credit, and the education credit.
Schedule 4 reports “other taxes’ including household employment taxes, the individual mandate penalty and the 3.8% tax on net investment income. Schedule 5 reports “other payments and refundable credits” including estimated tax payments, extension payments, earned income credit and any net premium tax credit.
Schedule A can be used for a “foreign address and third party designee.” In addition to the new schedules, most old schedules and forms will continue to be required.