Major changes are taking place this year in the way we prepare our income tax forms. Form 1040 has been redesigned, while Form 1040-A and Form 1040-EZ have been rendered obsolete by the IRS. This approach promises to transform the Form 1040 into something that all federal taxpayers can use. From a tax preparer's perspective, a single form building block approach makes sense.
Let's hope the trend continues and that we end up with fewer federal tax forms and state tax forms, with fewer gimmicks over the coming years. For now we have these six new Form 1040 Schedules 1 through 6 that we may or may not need to add to our 2018 federal income tax return.
Form 1040 Schedule 1 - Additional Income and Adjustments to Income
Attach Form 1040 Schedule 1 to your federal income tax return if you have additional income and adjustments to income to report. Additional Income examples include state and local tax credits, alimony received, unemployment compensation, and income reported on various sub-forms such as Schedule C, Schedule C-EZ, Schedule D, Schedule E, and Schedule F.
Adjustments To Income examples include educator expenses, health savings account deduction, moving expenses, alimony paid, student loan interest, IRA deductions, and Schedule SE the deductible part of self-employment tax.
Form 1040 Schedule 2 - Tax
Attach Form 1040 Schedule 2 to your federal income tax return if you owe Alternative Minimum Tax (AMT), or, need to repay your excess advance premium tax credit.
Form 1040 Schedule 3 - Nonrefundable Credits
Attach Form 1040 Schedule 3 to your federal income tax return if you can claim credits for foreign taxes, dependent care expense, education, retirement savings, residential energy, or general business credits.
Form 1040 Schedule 4 - Other Taxes
Attach Form 1040 Schedule 4 to your federal income tax return if you owe any other taxes reported on the listed sub-forms and schedules. Examples of other taxes include self-employment tax, Schedule H household employment taxes, additional tax on IRA, and the health care individual responsibility tax.
Form 1040 Schedule 5 - Other Payments and Refundable Credits
Attach Form 1040 Schedule 5 to your federal income tax return if you can claim a credit for tax payments you already made. Examples include but are not limited to excess social security tax withheld, net premium tax credit, Form 1040-ES estimated tax payments, and any amount paid with an extension of time to file request.
Form 1040 Schedule 6 - Foreign Address and Third Party Designee
Attach Form 1040 Schedule 6 if you are using a foreign address to submit your federal income tax return. Attach Schedule 6 also if you want to allow another person to discuss your return with the IRS as a Third Party Designee.
Parts of the old 1040 Long Form were obviously carved out to create the above six new schedules. Schedule A, Schedule B, Schedule EIC, Schedule R and others we may not have mentioned are still in use. Currently there is no indication which if any of those may become obsolete in the future.