5 important changes in tax form for 2019
The US tax filing season officially kicked off this week. The Internal Revenue Service (IRS) has unveiled a new form of 1040, reports Money Talks News.
A tax return in the form of 1040 for 2019 must be filed before April 15. But she looks a little different than her predecessor.
Changes to the declaration were made at the request of taxpayers and tax specialists, the IRS said.
If you do not want to fill out the 1040 declaration yourself, a special computer program will do it no worse than you.
What exactly was changed in the tax return (form 1040)
- Less reports
We left three numbered reports for 2019 - this is half as much as in 2018. Some reports were combined on one page, so now they occupy half as many pages.
Reports are additional forms that you in certain cases fill out in form 1040.
- No health insurance tag
In the last tax filing season, Form 1040 included the mark “Full coverage of health insurance or tax exemption”.
You (or your program for preparing a tax return) checked this box if you either had medical insurance for the whole of 2018, or you were exempted from fulfilling the requirements of the Law on Affordable Medical Services about the availability of insurance.
If you didn’t do this, you probably should have paid a penalty for the lack of insurance, which should have been paid at the time of filing the tax return.
However, this mark in the form of 1040 is no longer in this tax season because there is no longer a fine.
- Change for the elderly
Last season, one of the biggest changes to federal tax returns was the deletion of Form 1040-EZ. All used the 1040 form for 2018.
However, in 2019, they again returned to two versions of the federal tax return: form 1040 and the new form 1040-SR.
1040-SR is for the elderly. Taxpayers born before January 2, 1955 can use it instead of 1040.
The 1040-SR is an almost complete copy of the 1040, with the difference that the 1040-SR has a larger font size and contains a “Standard Deduction Chart” that reflects the additional standard deduction amounts that older people can usually apply for.
Please note that the graphs for the 1040 and 1040-SR are the same. For example, older people will need to complete Appendix A, regardless of whether they use Form 1040 or 1040-SR.
- Line of expenses and income
Form 1040 for 2018 did not include a line for revenue or loss growth.
This season, the filing of tax reports 1040 and 1040-SR have a special line for the increase in income or loss (line 6). In some situations this year, taxpayers may need to complete Appendix D.
- Virtual Currency Information
In Appendix 1 to the tax return for 2019, operations with virtual currency should be indicated. The IRS reports that taxpayers who make transactions using virtual currency must file this report with their tax return.
The question in Appendix 1 reads: “During 2019, did you receive, send, exchange or sell something, receiving any virtual currency?”
As the IRS defines, the concept of virtual currency is not limited to “convertible” virtual currencies such as bitcoins, which have an equivalent value in real currency.
If you sell or exchange virtual currency, use it to pay for goods or services, or make investments in it, you may incur a tax liability. Therefore, it is not surprising that the IRS wants to know about transactions in virtual currency.
In fact, the agency also reminds taxpayers that they are required to keep records of virtual currency:
“The tax code and regulations oblige taxpayers to keep records confirming the information presented in tax returns. “Taxpayers must keep records documenting receipts, sales, exchanges or other orders of virtual currency and indicate the fair market value of the virtual currency.”
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