MISSION ACCOMPLISHED: POSTCARD SIZE 1040

MISSION ACCOMPLISHED: POSTCARD SIZE 1040

Donald Trump on April 5th, 2018:
“This will be the last time — April — that you’re going to (fill out) that old-fashioned, big, lots of pages, complicated tax form. Because next April you’re going to, in many cases, (file) one page, one card. It’s going to be very, very different. Very, very different.”

Nicole Kaeding, an economist with the Tax Foundation in Washington, D.C.:
“I think for the vast majority of Americans their returns will be much, much simpler by eliminating a lot of the deductions and credits available [emphasis added].”

The IRS has released some preliminary tax forms for 2018 returns. How do the new forms line up with the soundbites?

We were promised a postcard-sized Form 1040, and it has been delivered.

However, what wasn’t delivered was a simple tax return. Congress removed 50 lines from the 2017 1040 form and distributed them among 5 new separate attachments for 2018.
What used to be 2 pages is now a postcard plus 3-5 attachments, along with the usual supporting schedules.
In addition, several deductions are still available, but with added strings attached in order to limit which taxpayers can take advantage.

Does that sound simple to you?

Kaiding’s observation is particularly valuable. After all, there are downsides to “simple” tax returns for most taxpayers.

Here are deductions and credits that won’t apply for most of us in 2018:

  • Adoption expenses
  • Tax Preparation expenses
  • Investment expenses and fees
  • Tuition and Fees Deduction
  • Mortgage insurance premiums
    Moving expenses – unless you’re in the military
  • Employee expenses – other than direct commission-based sales
  • Casualty and Theft losses – only deductible in a federal-declared disaster area
  • Home Equity loan interest – unless the funds were used to build or modify your primary residence.

 

As always, BattleTax works to keep client tax bills as low as possible. Message me today!

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