The Internal Revenue Service (IRS) has eliminated federal form 1040EZ and 1040-A and has instead updated its federal form 1040 for the 2018 tax year, which has an April 2019 deadline.
Although this new form is designed to make filing your tax return easy, there are six different schedules that you may need to file along with the updated 1040 form.
While you won’t need to fill out the schedules that don’t apply to you, it’s important to fill out the ones that do as well as their respective forms and turn them in with your tax return.
What are these six schedules that you can file along with your 1040 form?
Schedule 1: Additional Income and Adjustments to Income
You must file Schedule 1 to report income from unemployment, gambling winnings, alimony received, or income from a pass-through entity, such as a freelancing business or partnership.
Schedule 1 should also be filled out if you have deductions to claim from student loan interest or contributions to IRAs or a Health Savings Account. Schedule 1 covers adjustments to income that will be made on your taxes, so complete this schedule if you have any additional income to report or adjustments to your income.
Schedule 2: Tax
One of the shorter schedules, Schedule 2 is to report additional taxes, such as those for the Alternative Minimum Tax (AMT) or for excess tax credits you may have received.
If you purchased health insurance through an exchange and got too much credited towards your premium, you’ll need to repay this, and so you’ll need to include federal form 8962 along with your 1040 and Schedule 2.
Schedule 3: Nonrefundable Credits
You’ll need to file Schedule 3 with your 1040 if you’ve received any foreign tax credits, the Child Care Credit, education credits, retirement savings credits, or residential energy credits that are nonrefundable.
These nonrefundable credits cannot exceed the amount of income tax you owe for the year before withholding and additional payments. Remember, you’ll still need to include the necessary forms for each nonrefundable credit you claim along with Schedule 3.
Schedule 4: Other Taxes
Schedule 4 is for other taxes including self-employment tax that you might owe in addition to income tax. Schedule 4 should be used for unreported social security tax, additional tax on IRAs and other retirement accounts, health insurance penalties, and unreported Medicare tax.
Schedule 5: Other Payments and Refundable Credits
Schedule 5 is for estimated tax payments, payments you may have made with an extension, and refundable credits. You’ll use Schedule 5 to report payment of any taxes other than what your employer withholds.
You’ll also need to file Schedule 5 if you received the premium tax credit when purchasing health insurance through a state exchange or a federal marketplace and are owed money for paying too much for your premium based on your income. You’ll need to file form 8962 for this along with the schedule.
Schedule Six: Foreign Address and Third Party Designee
If you have a foreign address, you may want to file Schedule 6 if you want a third-party to discuss your return with the IRS. The third-party authorization is valid for one year from the due date of the return.
Future Considerations for the 1040
Keep in mind that the updated 1040 form is new for this year and so future changes are likely. Talking with a tax professional can help ensure that you file the appropriate schedules with your 1040 form for your 2018 tax return!