Get Ready! Here Comes the New 1040…
If you’ve seen the film Jurassic Park, you may remember the dilemma chief engineer Ray Arnold is faced with after a fellow employee steals dinosaur embryos and cuts the power to one of the border fences. Not knowing if the power will come back on and facing the prospect of releasing all the dinosaurs, Ray reaches for the power switch, and delivers the most iconic line in the movie “… hold on to your butts!”
While the example of potentially being attacked by dinosaurs might be a tad extreme compared to filing your taxes, we are all in for a wild ride as we navigate the biggest tax overhaul in 30 years on a new Form 1040 with six new schedules. Now that the new Form 1040 is finalized, here are three main takeaways for this tax season:
- The main form is shorter, but additional schedules will likely be required. The new Form 1040 may appear to be simpler, but the filing process is more complex. In fact, the instructions to help complete the new form checks in at 117 pages — 10 more pages than last year. Most of the same information from the previous year is still required, except now it’s spread over multiple schedules. Industry experts are planning for a 20 percent increase in tax prep time for this filing season.
- Forms 1040A and 1040EZ are no longer available. If you previously filed with one of these forms, you will now be using the new Form 1040. In addition to learning the new form, there’s a good chance that you’ll need to add at least one of the new schedules to complete your tax return.
- Filings could be delayed. Because of the vast changes in tax laws this year, additional IRS taxpayer guidance is expected throughout the filing season. Because of this, the U.S. Treasury Department put out a warning that there might be delays to the start to the filing season. The most recent government shutdown doesn’t help the situation. If filing season starts late, tax season condenses and refunds could be delayed.
What can you do?
The best advice is to start preparing now. Grab last year’s tax return and create a checklist of documents you need to gather. Pull together receipts, travel logs and other documentation. The more organized you are, the quicker and easier the process will be for you. Have questions? Call for help or to set up an appointment.