Your 2018 1040 tax return will look very different than years past.  With the passing of the Jobs and Tax Act back in 2017, the Internal Revenue Service is experiencing the most substantial changes to the tax code in over 30 years.  These changes include edits to many of the forms you may be familiar with. 

The basic 1040 form will have a lot of changes on the first page.  The new 2018 tax form looks like a postcard.  It only has your filing information, such as name, address, filing status, dependents, etc.  What it will not have is any of your income information on the first page.  As you can see here it looks very different.   The second page of the basic 1040 has most of your income information as well your standard deduction and tax credits. 

The main difference on the second page of the 2018 tax form is that a lot of the “other” income and adjustments to income are not listed.  Those will now be on the Schedule 1.   Business income is reported on the Schedule 1, as well as certain adjustments to income like IRA Deduction, Student Loan Interest, Health Savings Account deduction, and many more. 

Online Filing Software

Many people use free online software to file taxes; the majority of those who use Turbotax will be in for a surprise if they need to include a Schedule 1.  Turbotax is charging individual taxpayers for this additional schedule.  H&R Block is not charging for Schedule 1.  So if you have been using tax software online to do your taxes, make sure to look into this so that you do not get surprised by additional fees from these online software companies. Comparing the various programs out there could save you some money.

Self Employed Individuals

Those with self-employment income, such as any 1099 income, will still have a Schedule C to fill out and report on your 1040.  Other additional attachments will also be included.  The real difference is the attempt by Congress to eliminate the Schedule A deduction for most people.  By raising the standard deduction and capping some itemized deductions (including eliminating some all together) they wanted to simplify the 1040 return.

Balance Owed

If you are seeing that you owe for the first time (or even for the 10th time), it is important to understand you have options. Regardless of when you file your return, any balance owed on your 2018 taxes must be paid by April 15, 2019 to avoid failure to pay penalties. This means, even if you file your return in March, you would have a little bit of time to get money together. If you think filing an extension will help, you are out of luck. An extension is only an extension to file, not an extension to pay. Regardless, the balance is still due April 15 and if you pay after that date, even with a valid extension, you will be subject to penalties and interest.

If you owe more than you can feasible pay over a couple months, then you likely need to set up a payment arrangement. The IRS has multiple options that vary depending on your situation. A tax resolution payment plans are agreements direct with the IRS, which allow you to structure payment over time. These plans vary depending on your income and financial situations. Some plans can be as low as $0 per month, if the IRS determines you fall into the category of currently non-collectible. This means that you do not have any disposable income under their standards. Other plans will structure the balance over six years to allow for more reasonable payments.

If you owe, it is also important to determine how not to owe again in the future.For balances of only a couple hundred dollars, then adjusting your withholding to withhold $20.00 to $50.00 more a month, will likely solve the problem. If the balance is substantially more, you may need an analysis to figure out why there is a problem and what can be done to solve it.

Arthur Rosatti, Esq. is a licensed attorney authorized to represent clients with the Internal Revenue Service and the U.S. Tax Court. He has experience negotiating with various taxing agencies on behalf of individuals and companies.  If you have concerns about your tax liabilities, making estimated tax payments, or correcting your withholding, schedule an appointment with our office.

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