Getting Ready for Tax Form Changes!
 

The 2018 Tax Forms Look Very Different!

Besides sweeping tax changes in the tax law that became effective in 2018, the IRS has redesigned the Form 1040. The basic form which was 2 pages is now 8 half pages or large postcards.

Page 1 is for your name, social security number, dependents, and signatures.

Page 2 is for reporting income coming from other schedules, such as wages, interest & dividends, pensions and social security benefits.

Page 3 is a new Schedule 1, which has lines for additional income and adjustments to income.

Page 4 reports the amount of tax.

Page 5 is for any credits that may be available for a taxpayer.

Page 6 is for other taxes that may be due such as the Alternative Minimum Tax.

Page 7 is for estimated tax payments a taxpayer made and tax withheld from their wages or retirement income.

Page 8 is for a foreign taxpayer and for designating a third party.

The above pages will be pretty much standard on all tax returns. Additional schedules will still be required if needed. Other forms such as Schedule A for itemized deductions, Schedule B for detail of interest and dividend income, Schedule C for self-employed persons, Schedule D for capital gains and losses, and Schedule E for rent and royalty income will need to be included when filing the tax return.

As in the past, there are hundreds of other forms to use for taxpayers with unique types of income, deductions or credits.

Many wage earners were allowed to use the simpler Forms 1040-EZ and 1040A in the past, those have been eliminated.

The new forms are intended to be a postcard, 8 big ones. The new format reduces the number of lines from 98 to 93.

Many more taxpayers will be taking the standard deduction in 2018 rather than itemizing their deductions on Schedule A. This is because the new law substantially increased the standard deduction. If your deductions do not add up to more than the standard deduction, then it is more beneficial to use the higher standard deduction.

For example, a married couple both 65 years of age or older, the standard deduction will be $26,600; both under 65 it is $24,000. Singles would divide the above numbers by 2.

Basically Itemized deductions include:
Medical expenses exceeding 7.5% of your Adjusted Gross Income
Taxes, sales or state income tax, and real estate taxes, all limited to $10,000
Charitable contributions

Itemizing your deductions will only be beneficial if they add up to more than your standard deduction.
The tax law is always changing but the forms have typically looked the same for decades. Let’s hope the tax filing season runs smoothly for the taxpayer, preparers and the Internal Revenue Service.

If you are looking for a CPA, please call for an appointment soon as it is gearing up to be a busy tax season. I have now opened an office at 4807 CR 466A in Wildwood. Please call me first at 425 941 5224 if you would like to meet. For those unable to make it to the office, I will accommodate you by coming to your home. bobbloomcpa@aol.com

I thought we could do our returns on a postcard!

It will not be "one postcard". It is actually half sheet forms, and until released, I am not sure if all have to be sent in or just most, depending on what will apply to the individual. However, definitely not one postcard. I will update once the forms are released.

Thanks for taking the time to provide this info.

Your post was very informative and helpful. Thank you.

Tax forms
 

:bigbow:thanks so much for the info! Very helpful!!

Turbo Tax does away with all the headaches, quick, easy and even easier if you use It's Deductible throughout the year.

Most people got a tax cut
 

I have seen or heard so many people comment that this was a fake tax cut plan, that most people would not actually see any savings. That is a totally false narrative. I took the old tax rules and brackets, the new tax rules and brackets, and ran several scenarios from a single taxpayer to a family of four at various income levels. The middle class does well under the new system and virtually everyone benefits. The losers might be higher income people from the highest tax states. People from Florida should all do very well. My savings will be considerable.

My accountant told me that when filing my 2018 Tax Return the deduction for medical expenses remains at 7.5%.
It does not go up to 10% that you quoted until 2019. Please clarify.

Get your data together including a copy of last years tax return and take advantage of the Villages AARP Tax-Aide with no charge and e-filing included.

I stand corrected, my error, it remains at 7.5% for 2018. Good catch!

Thanks for the info!

The basic form is only two half-pages, not 8. The other 6 pages are schedules that some (most) income-earning, interest-paying, dividend-earning people have to include. If you are unemployed, or underemployed, not collecting unemployment compensation, OR have a very low income (including dividend income or income from sales of stocks/bonds), aren't collecting social security or medicare benefits, are not disabled, and aren't claimed as a dependent by someone else, then the form is only the two half-pages long. So basically, if you're a college grad working at Burger King, have 4 roommates sharing the rent, mom and dad don't help financially, and your first student loan bill hasn't come in yet - then you only have to fill out the main form which is two half-pages long.

For most of the rest of the country, it is MUCH more complicated than it was last year. Hope no one here is surprised to learn that.

If you are retired and can read and copy the information from a 1099, pension, and Social Security statements, then you can probably do you own taxes using Turbotax. Easy peasy.

Aw right, you guys, knock it off!

Bob Bloom is trying to help us with good, professional information.

Gimme those six-shooters so I can put ‘em here, right behind the bar, where I can keep an eye on ‘em.

If you can’t even stand to hear any mention of the new tax laws without getting in a shoot-em-up, it might be time to get outa Dodge — er, I mean this thread.

Miss Kitty Boomer

PS: Thank you, Bob.