ladies and gentlemen how's it going! On this episode of money and life TV we're
gonna take a look at the new 2018 IRS draft tax forms and honestly I've looked
at them and they look kind of weird now I will point out that these are only in
draft form so they could still change based on what we're looking at here on
screen here in just second the way to find this and I'm going to include links
in the description section below but if you just type in 2018 let's see
if I can type here on-screen IRS draft forms into Google and hit enter it's
going this first link right here is going to take you to a special spot on
the IRS website where you can look at draft versions of tax forms every single
year the IRS typically updates new forms and every single year you can find them
on this part of the website I'll leave a link for you guys in the description
section down below so let's look at the main tax form the 1040 this is what it
looks like so part of this looks similar but you'll notice that there's a lot of
changes to it now typically on a 2017 form you would have your your name
address information dependents your income information and then adjustments
to gross income you'll see here on the first page you're really just gonna have
your name address dependents and just your guys are thinking well you had
heard that personal exemptions we're going away and for the most part they
have so you're probably thinking yes I can finally get rid of those crazy
complicated qualifying child rules and qualifying relative rules oh they're
still gonna be in the play in fact you're just gonna use them differently
but the rules the same set of rules for qualifying child to claim a qualifying
child are gonna be used now to help you claim the qualifying are to help you
claim the child tax credit so they they said we've made these really complicated
rules let's not throw them away let's just use them for something else so
they're using them now for the child tax credit so as you guys can see your basic
information is gonna go here but notice there's no income detail like there used
to be it just ends right here they're supposed to be trying to
simplify things to make it easier for people to file their taxes which is a
good thought it is you'll notice that they didn't even use the whole page so
if you want to print this now you're gonna notice there's so
pages you would have to print and there's all this blank space hey guys I
want to make a quick correction here cuz as I went back and I watched this video
I realized I needed to clarify some things the reason there is so much space
on page one and two of this new draft 1040 is because it's supposed to be a
postcard it supposed to be front and back so that's why there's that blank
space there now on the front of the postcard you have your name and address
information things like that and then on the back of the postcard you have your
basic income information adjustments etc they're supposed to simplify things or
that's the idea behind all this so what they've done is on the first two pages
it's basically supposed to be a postcard but to compensate for leaving out the
other lines like for real estate income business income credits and other
deductions they've added six new schedules to have to keep track of now
so I'm not really sure how much they simplify things let's go ahead and
continue with the video and look this is now the second page of the 1040 as as
far as this draft form goes now you're seeing okay well here's my wages let me
zoom in for you guys here's my wages here's my tax exempt interest dividends
pensions etc Social Security notice notice a big difference I don't see real
estate income or rental real estate your income or income from partnerships and
things like that I do not see income from a business so if you're a sole
proprietor or self-employed you're not gonna see it whereas on the 2017 1040
you would totally see all that right there on the first page
I think they're doing that because they say and hey look this is what most
people have this is what the majority of Americans this is the forms of income
they have they have wages they might have some interest they might have some
dividends they have some 401k or IRA distributions coming on which would go
right here and they have Social Security and so I think that's why they did that
and I think that's why they kept other stuff separate from that but I don't
know I'm just speculating here and then as you can see here it goes right on to
the standard deduction which is right on the second page which is kind of cool
and then here's the ona point this out the qualified business income deduction
that's the very complicated $1.99 a deduction I was wondering where they're
gonna put that where apparently it's gonna show up on the second page of this
new 1040 so let's move on down the line here so then you have your tax then you
have your child tax credit if you qualify total tax etc refundable credits
like your Earned Income Credit and so on and so forth and then whether
or not you've got a refund or if you're overpaid would show up right there okay
let's look at a whole new form now and it's called that schedule one so
remember that schedule one so all those other income items we were just talking
about that are no longer on the first page of the 1040 are now gonna be found
on this whole schedule one thing and you're gonna see here there's taxable
refund and credits here's your alimony your business income so if your sole
provider your that's where you're gonna report your total income your capital
gains from sales of stocks or from sells of business property and so on and so
forth because there's your forty seven ninety seven right there these if it
says reserved it basically means they they haven't figured out what they're
gonna put there yet rental income so if you have rental properties and rental
real estate or if you get a k1 from partnership if you get a k1 statement
from an S corporation or just you know other income items you're gonna put them
right there on line seventeen and unemployment compensation is right there
so remember when you're preparing your taxes this here if you can't figure out
where to put your other sources income go to schedule one it's pretty much
gonna have it there for you also on Schedule one you're gonna see your
adjustments to income as you guys can see here our deduction
student loan interest deductions and things like that which is very familiar
as you know the current 1040 for 2017 all right now let's go on to schedule
two there's several new schedules so it's scheduled to schedule two they it
looks like they still have some work to do on this but as you guys can see here
it only says tax and there's four lines 38 and 44 they haven't figured out what
they're gonna put here but uh there's alternative minimum tax here on line 45
we can't get rid of that can't we access advanced premium tax credit repayment
and just there's only a couple line items so I don't know if they're gonna
consolidate some of this stuff and narrow down the schedules because look
how much blank space there is here guys if they keep it this way we're going to
be burning a lot of extra pages if you actually want a printed copy of your tax
return
no I feel like the IRS is using the whole grocery store approach or a
department store approach to their tax forms so you know the grocery store you
know you go there for if several months and then after a while they start to
move things around on you see if they can get you lost they start moving the
bread on the other side of the store they move they move the the rice they
move the ketchup and so you're wandering all throughout the store then let's go
on the schedule of three schedule threes for non refundable credits so there's a
foreign tax credit there's the credit for a child dependent care expenses
education credits retirement savings contribution credits residential energy
credit etc let's go on the schedule for as other taxes so yours here's your
self-employment tax there it is it's hiding on schedule four is that let's
see so schedules to in schedules for our other four taxes are different kinds of
taxes and then looking at schedule five real quick so we see that this is for
other payments and refundable credits so we have our 2018 tax payments amounts
applied from the previous year we have our net premium tax credit we have
amounts paid with extensions excess Social Security credit on federal tax or
on fuels and so on and so forth let's take a quick look at the itemized
deductions schedule now because it looks pretty similar as in years past however
there are a few differences so notice you'll notice one of the key differences
right away is the new limitation on state on the on salt which is your your
state income taxes your property taxes and things like that you can see right
here it says enter the smaller of line ten thousand five thousand if married
filing separately because you're limited to ten thousand now on your income state
income taxes your property taxes and things of that nature real quickly guys
you might be wondering well what about interest and dividends well for the most
part I haven't noticed any significant changes here for Schedule B it looks
pretty much the same as it used to there might be some verbage differences down
here that I haven't noticed just yet so Schedule B what about Schedule D for
stock sales it looks pretty much the same
I haven't haven't noticed any major changes yet but you can you can see here
it looks very similar to in years past I'll
looked at the schedule F if you're a farmer it looks pretty much the same
Schedule C looks the same so there's a lot of forms are pretty much remaining
the same I they haven't really updated too much but the main forms which I just
pointed out for you guys is the 1040 in the 1040 page to the schedule one is for
additional income and adjustments to income schedule two is for taxes
schedule three is for non refundable credits schedule four is for other taxes
and schedule five is for other payments and refundable credits so I just wanted
to give you guys that quick preview the IRS is trying to use the grocery-store
approach and move all things around like I said their plan is to simplify this
for the average person I don't want to give my opinion on that yet because I'm
kind of excited to prepare the new new taxes under these new forms and see if
it's actually easier to prepare my only thought so far is that I feel like I'm
gonna have to jump around a lot to figure out where the heck things are at
so it's gonna take me a while to get used to it okay guys I just want to give
you a brief heads up that this is what's coming down the pipe unless the IRS
changes the format to these draft forms this is what your 2018 1040 is gonna
start to look like so just be mindful of that it's gonna be changing and things
are gonna be different so it might take you a little bit longer than normal to
prepare your taxes well if that being said guys I hope you enjoyed the video
if you did make sure you drop a like be sure to subscribe if you're not already
you guys know this channel on money live TV is all about teaching you finances
investing and taxes so you can be fiscally fit well until next time guys I
hope you have a wonderful week and I'll see you all in the next video
remember to take this information and use it to live your life on gauged bye
guys peace