2018 Form 1040: Say hello to my little friend

The long-awaited 2018 Form 1040 has been finalized by the IRS. It comes very close to the promised “postcard” size, at 8½ x 5½, two-sided.

Here’s the front page:

And here’s the back page:

You can go to the IRS.gov website to see Form 1040 “live”.

Turns out that, apparently, all that was necessary to make the Form 1040 “easier” was to just create new schedules and move lots of pieces from the old Form 1040 to the new one.

Gone from Form 1040 are many components that we’ve grown to expect: IRA deduction, for one, was always on the front page of Form 1040, one of the traditional “above the line” deductions in calculating the Adjusted Gross Income.

The IRA deduction is still available, but you have to file a separate Schedule 1 (brand new for 2018) to take it and many other above the line deductions. I suppose now we’ll start referring to these deductions as Line 7 deductions – because that’s where they landed on the new form.

There are several of these new Schedules to get used to. As mentioned, Schedule 1 is where you’d include additions to or subtractions from your gross income to arrive at the adjusted gross income. Some examples of additions include: business income (from Schedule C), capital gains and losses (Schedule D), farm income (Schedule F), unemployment compensation, prize or award money, and gambling winnings. Subtraction examples include: student loan interest deduction, self-employment tax, educator expenses, and IRA contributions. Effectively all of Schedule 1 comes from the old

Keep reading this article on Financial Ducks In A Row.