2019 tax season is coming in hot and has some necessary changes. For many individuals’ taxes are a stressful time and it is hard to stay up to date on all the new policies and the changes that are happening to the forms. For 2018 taxes, there was a huge 1040 overhaul and the form looked very different from the 2017 1040. Well the good news is that the form only has small changes.
The biggest change to hit the 2019 tax filing season is the new 1040-SR form for individuals over the age 65. This form is very similar to the 1040 but is designed to allow senior citizens a simplified form that they can list their social security and pension and annuities with ease. Before individuals over the age 65 did not qualify for the 1040-Ez form because the now nonexistent form did not have lines to input social security and retirement incomes.
The tax credits impacting families have increased and became refundable. If your household has earned income over $2,500, then up to $1,400 of the tax credit can be refunded to the taxpayer. In combination with the Earned Income Credit, for households, the new policy can aid families with the social assistance that is needed.
Another new change is that the IRS has issued is a simplification of the attached schedules to the tax forms. The normal schedules like SCH A, SCH B, SCH C, SCH D and SCH E all remain, the new schedules that were introduced on the 2018 form have been condensed. On the 2018 form, we saw schedules 1-6, now we only have schedules 1-3. Schedule 1 still is for all of your other income sources from SCH B, SCH C, and SCH E. Schedule 2 contains the breakdown of any and all additional taxes. This is the schedule where you can find self-employment tax, AMT Tax and Health Care premium tax. On Schedule 3 you will find any additional credits i.e. childcare credit.
On the 1040-SR main page IRA, Pension and Annuities are all listed on separate lines (4a, 4b and 4c.) to distinguish the taxable amount of the retirement plans.
Capital gains are no longer reported on Schedule 1 with other incomes. Capital gains are all reported on line 6 on the 1040. This is to help taxpayers see the difference between their capital gain investments and what they earned from their other income sources.
A big change this year is that individuals and families will not have to report whether they had health insurance or their health care exemptions. This means that there will not be a penalty for not having health insurance. If you have marketplace health insurance, you will still need to report your insurance because we will have to report the subsidy.
The Standard Deductions increased this year to be the following amounts: