Understanding the new 1040 form for 2018

The brand new 1040 form both simplifies your return, but also complicates it in the sense that there are six new schedules that take the place of line items that used to be on the two page return. This article is mostly about what those six new schedules are. You still have your usual Schedule A (itemized deductions) Schedule B (Dividends and Interest) Schedule C (Business income) etc.

One quick note before we begin is that you will notice that there are no longer exemptions on the return.

Let’s get to these six new schedules, what they mean and how they work on the new form. 

Schedule 1:
Your capital gains, unemployment benefits and gambling winnings are now on this Schedule. Your student loan interest deduction, self-employment tax, and educator expenses also go on here. This schedule basically replaces the same line items that were under the dependents section on the first page of previous 1040s.

Schedule 2: Additional taxes such as AMT and others are included here. This schedule replaces the line items that were on the second page of the 1040 after the basic tax calculation is made.

Schedule 3: This is for your nonrefundable credits such as the foreign tax credit, education credits, and general business credit. These credits were on the second page of the 1040.

Schedule 4: Other taxes like self-employment tax, household employment taxes, tax-favored accounts, and additional tax on IRAs and other retirement plans are put here. This is again from the second page of the old 1040.

Schedule 5: Miscellaneous payments like your estimated tax payments (if 1099’d or self employed) go here.

Schedule 6: This is where the foreign address and third party designee information goes.

Hopefully this helps clear up some confusion with respect to the new form. If you have any questions, feel free to contact me!