The IRS Form 1040 is the cornerstone of a successful, legitimate tax claim, and every taxpayer in the country is expected to complete the form correctly.
The form itself follows a simple structure, and outlines the process for calculating total income before moving into specific tax credits, deductions and exemptions and lastly, total due or owed.
Such a critical document is occasionally updated in accordance with changes to the legislation or certain financial rules, which means it is essential that you stay up to date with the newest versions of the form to avoid missing out on exemptions that could save you a lot of money.
Although there are no new lines or captions, it is recommended that you visit the IRS website to go through the changes. Here is an overview of key changes to both Form 1040 and its schedules.
Extensions and Changes
A six-month extension is available by filling in Form 4868 or making an electronic payment. Those submitting documentation can now choose from 8 additional delivery companies added to the list of authorized suppliers.
The Electronic Filing Pin is no longer recognized, meaning all taxpayers must revert to their previous figures or self-select PIN.
AGI (Adjusted Gross Income)
In a positive move, those training teachers and educators can claim up to $250 per head per course for sending teaching staff on development courses.
There have also been changes to the IRA policy that is relevant to people who are not actively involved in a retirement plan set up by their employer. Provided their spouse is not involved in the retirement plan, people now have the freedom to make annual deductible cash contributions to an IRA, provided they meet the stipulated limitations and rules.
Tax and Credits
Individual filers qualify for a standard deduction of $12,000, which doubles in the case of joint filers. This is in addition to sweeping changes to both exemption thresholds and alternative minimum tax, which may lead to different decisions between itemized and standard deductions, and tax brackets.
Another interesting point to note is that the credit for adopted children is set at $13,460 per child, a figure which applies to non-special and special needs adoptions. However, this figure tapers if the Modified Adjusted Gross Income is more than $201,920, and is no longer available if that figure exceeds $241,920.
Other changes involve amendments to self-employment tax, certain technicalities, and rules around claiming exemptions for medical costs and expenses and general credit structures.
Interestingly, there has also been a change to the payment methods available to individuals, who can now choose to pay cash through selected IRS retail partners.
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