IRS shrinks the 1040 tax form
The IRS is cutting the 1040 form in half.
Instead of filling two pages, the new version will take up about one, according to a draft released Friday. (The page is cut in half, and is double-sided.)
Treasury Secretary Steven Mnuchin said it delivers on the promise to simplify the tax-filing process and provide a simple, postcard-sized tax form.
It will replace the old 1040, as well as the 1040A and 1040EZ, which were shorter forms used by Americans with simpler tax situations. All taxpayers will use the new 1040 to file their taxes starting next year.
The new form has 23 lines, down from 79. It gets rid of lines for some types of income such as alimony, capital gains and rental real estate. Taxpayers who earned that kind of income will have to fill out an additional form. Some other lines, like the deduction for education expenses and the student loan interest deduction, have been moved to another form as well.
“What they have essentially done is rearranged the lines, using a lot of additional schedules,” said Joe Rosenberg, a senior research associate at the Tax Policy Center, a nonpartisan think tank.
He said the vast majority of taxpayers may not even notice a difference with the new form.
More than 90% of filers use software or a tax preparer to file their taxes, which fill in the forms for them.
“The form is more of a gimmick,” Rosenberg said.
The IRS said it will seek input from the tax community and finalize the new version of the 1040 over the summer.