tax tips, e-filing — July 03, 2018

The 1040 Postcard—What’s to Know?

by Susannah McQuitty

Two taxpayers fill out their Form 1040 postcards at the office.

The brand-spanking-new Form 1040 has been released, and yep, it’s the size of a postcard.

Sort of?

Let’s talk about what the new 1040 means for you.

What is a Form 1040?

Form 1040 is the backbone of the individual income tax return, and it was introduced more than 100 years ago. While the paper form itself was filled out by hand for many years, e-filing came on the scene in the mid-80s and forever changed the way people do their taxes.

Today, most everyone uses tax-filing software, which means very few people ever really interact with the Form 1040 itself. In fact, the IRS introduced an e-file mandate for tax return preparers back in 2012 and has been pushing hard to increase e-filing for more than 20 years. It’s simply more efficient and more accurate to prepare and process returns electronically.

The new 1040 postcard has information on the front and back.

If no one really uses the form itself, why did it need to be shortened?

That’s a great question. Shrinking Form 1040 to the size of a postcard was intended to make the filing process simpler, but most of us don’t really interact with the form when preparing our taxes. The computer is doing the heavy lifting, so what difference does it make if the form is shorter? Would it even matter if the form got longer? Probably not.

But wait—what about the Tax Cuts & Jobs Act? Didn’t that simplify taxes? Is that the reason they were able to cut the form in half?

Well, it’s true that fewer people will file a Schedule A and claim itemized deductions, due to the much larger standard deduction. The new safe harbor ceiling will certainly encourage a lot more people to skip the hassle with deductions. (If you think you might be able to itemize, you’ll still want to add those deductions up to compare against the standard deduction.)

Besides that, however, Form 1040 stayed virtually intact outside of a couple line items that could be removed. To actually shorten the form, tax reform would have to wipe out way more deductions and credits than it did.

Okay, but is the new Form 1040 simpler?

Not really.

It’s true that the Form 1040 can now fit on half a sheet of paper (front and back), and if you file a basic, no-frills tax return, you might find it easier to review your taxes without all of those extra lines you never use.

But for those with not-so-simple tax situations, where did all those line items go?

I was afraid you might ask that.

Form 1040 was cut down and spread out into a series of six new schedules. That’s right: six new schedules, each of which must be completed and attached to your Form 1040 if applicable to your tax situation. It’s a “building blocks” system that unfortunately increases the risk of errors and omissions.

The Form 1040 postcard might fit on a clipboard if you have a simple tax situation.

What does this mean for filing my taxes?

Here’s the good news: If you file online, you’ll see no difference. Since we lead you through a simple interview process when you file with, we’ll still do the forms like magic behind the scenes, and you’ll review the forms at the end of the process. It will be a nearly, if not completely, identical process. The main difference is that you may end up with a few extra schedules, courtesy of tax “simplification.”

If you file through a preparer, your tax preparer may end up with more review work verifying those new schedules, but her process won’t change much either. When she’s finished, you’ll probably receive your copy of the 1040 “postcard” printed out on an 8 ½ x 11 sheet of paper or sent to you as a PDF (which certainly takes some of the nostalgia away from the postcard concept).

If you are one of the few, brave citizens who still file on paper, doing your taxes may get easier, and it may not. You could end up with a smaller form to review and file, but you could also end up with that smaller form and a few new schedules that have to be added, totaled, transferred, and added again onto that cute postcard. In those cases, it actually becomes more of a nuisance, with a higher risk of mistakes.

The moral of the story is this: e-filing is still the simplest way to file your taxes, and it won’t change much (if at all) just because the form did.

Want to know more about how tax reform affects you? Check out our Tax Calculator App to see how the Tax Cuts and Jobs Act affects your situation this year.

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