The IRS recently released a “draft” form of the 2018 federal Form 1040. The newly proposed “postcard” form has just 23 lines, cut down from 79 lines on the 2017 Form 1040. In conjunction with the attempt at simplification, the Forms 1040A and 1040EZ have also been eliminated. However, most of the available deductions and credits have been moved to various new schedules, six to be precise. Drafts of these schedules can be found on the IRS website.
Of course, one major addition to the 2018 Form 1040 is the new line item for the Section 199A Qualified Business Income Deduction. The new 199A deduction allows taxpayers (other than corporations) a deduction of 20% of qualified business income earned in a qualified trade or business, subject to certain limitations. Although there has been some guidance on how to calculate this deduction, the IRS has not released the specific schedule(s) related to this deduction.
We will continue to post updates about this form and other tax reform issues as they develop. If you should have any questions or would like one of our tax professionals to examine your 2018 tax situation in light of the changes related to the Tax Cuts and Jobs Act, please contact Bob Grossman, Don Johnston or Mike Weber at 412-338-9300.