.On June 25th the New York Times took a look at the draft "postcard" tax form that is to be unveiled next week and reported the following -
If you prepare your own taxes, it will be more complicated to do so with this new form unless you have a very simple tax life. The new form could also make things more complicated for the IRS. More than 90% of taxpayers now file electronically but if more people opt for the postcard return which has to be handled manually, the IRS could be overwhelmed, given the budget cuts over the past several years that have reduced staffing, delaying the issuance of refunds.
For many taxpayers, an additional complication may be created by the state tax return they need to prepare and submit. Many states have not adopted the changes in the federal law and so far no state has announced it will go to a "postcard" form.
The postcard form assumes that taxpayers will claim the standard deduction, rather than itemizing. That may not result in the highest deduction, but taxpayers will not know that unless they calculate their itemized deduction and compare that to the standard deduction. Additionally, while it may be advantageous to claim the standard deduction on your federal return, that may not be the case on your state return.
Turner's Tax Service will be closely monitoring this new form as well as all the other changes as a result of the Tax Cuts and Jobs Act (TCJA). As additional information becomes available, it will be posted here.
- The form shrinks the form to postcard size by eliminating more than half of the 78 lines on the current form
- The new form omits lines for a variety of popular deductions, including those for student loan interest and the teachers' credit. Those are found on one of six accompanying worksheets.
- Business income, capital gains and several other forms of income are also omitted from the postcard and must be reported on accompanying worksheets.
- There is a line for the child tax credit but if you claim child care expenses you'll have to find the right worksheet to claim that credit along with a number of other credits.
- There is no line to reconcile the health care premium, even though the requirement to have health insurance or be penalized remains for Tax Year 2018.
If you prepare your own taxes, it will be more complicated to do so with this new form unless you have a very simple tax life. The new form could also make things more complicated for the IRS. More than 90% of taxpayers now file electronically but if more people opt for the postcard return which has to be handled manually, the IRS could be overwhelmed, given the budget cuts over the past several years that have reduced staffing, delaying the issuance of refunds.
For many taxpayers, an additional complication may be created by the state tax return they need to prepare and submit. Many states have not adopted the changes in the federal law and so far no state has announced it will go to a "postcard" form.
The postcard form assumes that taxpayers will claim the standard deduction, rather than itemizing. That may not result in the highest deduction, but taxpayers will not know that unless they calculate their itemized deduction and compare that to the standard deduction. Additionally, while it may be advantageous to claim the standard deduction on your federal return, that may not be the case on your state return.
Turner's Tax Service will be closely monitoring this new form as well as all the other changes as a result of the Tax Cuts and Jobs Act (TCJA). As additional information becomes available, it will be posted here.
RSS Feed