Tax Form Changes Coming in 2019

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1040 Changes

In 2018, the IRS created a shorter “postcard-sized” tax form to replace the existing Form 1040. The new 1040 has six schedules, which report items that in past years were located on the 1040. The line numbering on each additional schedule matches the number that was on the 1040 before the redesign. The six schedules report various items such as income, adjustments, credits, taxes, or payments. There is also a schedule that reports a foreign address or designates a third party. 

The IRS recently revealed that the 1040 is going to have another redesign for 2019. The six schedules that were used in 2018 are being reduced to three schedules for 2019. The three revised schedules will have the lines re-numbered, each starting at 1. This line numbering on the new schedules will no longer correlate to any previous numbering found on the 2018 schedules.

Another change to Form 1040 involves the reporting of alimony and the date of the divorce. Due to tax law changes, the date a taxpayer divorces determines if alimony is tax deductible for the payer, or if it qualifies as income for the recipient. The date of divorce must now be entered on the Form 1040 to comply with these tax law changes.

Other Form Changes

Schedule C-EZ – Net Profits From Business will be retired in 2019. Statutory employees, and, in limited situations, small businesses, use Schedule C-EZ to report business income. However, going forward, taxpayers will have to file the more extensive Schedule C – Profit or Loss From Business.

The Tax Cuts and Jobs Act essentially repealed the Shared Responsibility Payment or penalty for not having health coverage. Thus, the 2019 Form 1040 will not ask whether the taxpayer has full year health coverage or an exemption. For tax years starting in 2019, Form 8965 – Health Coverage Exemptions has been retired.

Form 2555-EZ – Foreign Earned Income Exclusion will now allow taxpayers with solely foreign earned income to claim the foreign income exclusion more quickly. The 2555-EZ is a shorter form and is easier to complete than the Form 2555 – Foreign Earned Income.