IRS Remodels the 1040 for 2019

The IRS is reducing the number of schedules and improving the form to make it less confusing.

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As a new 1040 form tailored to seniors makes its debut, the regular 1040 is getting remodeled (opens in new tab) for 2019.

After the 1040's major overhaul last year to take into account tax reform, some taxpayers told the IRS that they found the redesigned forms confusing. In response, the agency is attempting to improve the 1040 with a variety of tweaks. An overview of expected changes was presented at the IRS Nationwide Tax Forum in National Harbor, Md., in early July.

One big change is a reduction of the schedules. Six new schedules that appeared in 2018 will be whittled down to three for 2019. Some of the schedules will be combined, while some information will return to the base 1040 form.

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There will be a new line for capital gains on the 1040, and IRA distributions will get their own line separate from pensions and annuities. An addition to Schedule 1 is a space to enter "date of divorce," which accommodates the change in tax treatment of alimony enacted by tax reform.

Tax reform also created the qualified business income deduction, which gets its own forms in 2019. Form 8995 (opens in new tab) will be for the simple version of the QBI deduction that is available to taxpayers below certain income thresholds, while Form 8995-A (opens in new tab) will be for taxpayers subject to the more complex QBI computation.

And, in an effort to modernize, the decimal places for cents are being removed from each line. The IRS says most people round, and the extra room allows for other information to be made larger or clearer. But if you want to stick to tradition and include cents on each line, Uncle Sam says have at it.

Rachel L. Sheedy
Editor, Kiplinger's Retirement Report