Many Tax Forms Are Changing!

August 1, 2019 | Kristine A. Tidgren

IRS unveiled many new draft forms this month. Although these forms are not final, several are worth reviewing.

Good-bye Postcard…

Although opinions about tax reform vary among tax practitioners, there is one 2018 change that was nearly universally chided. The 2018 Form 1040—while created to showcase a new, “simplified” approach to individual income tax returns—actually led to more attachments, a more cumbersome review process, and numerous tax practitioner complaints.

It appears IRS listened (and likely had its own struggles with the form), revealing this month a draft 2019 Form 1040 restoring many features from the past. Even so, the draft is a composite of old and new. We’ll still have numbered schedules and the two pages don’t quite fill the page. And notice:

  • There’s no question about healthcare because the shared responsibility payment is -0- in 2019.
  • The Qualified Business Income deduction requires a new Form 8995 or 8995-A to be attached.
  • The signature lines have returned to the back, where the bottom-line numbers are reported.


New Forms for Qualified Business Income

IRS revealed new draft forms for calculating QBI last spring. In July, the Forms 8995 and 8995-A were refined, and draft Schedules for Form 8995-A were released.

Schedule A is for Specified Service Trades or Businesses

Schedule B is for Aggregation of Business Operations

Schedule C is for Loss Netting and Carryforward

Schedule D provides Special Rules for Patrons of Agricultural or Horticultural Cooperatives


Separate Form for Nonemployee Compensation

On July 24, 2019, IRS published a draft 2020 Form 1099-NEC, a new form that would again remove nonemployee compensation from the 1099-MISC. As it currently stands, 1099-MISC with Box 7 non-employee compensation must be submitted by January 31, 2020, but other 1099-MISC forms are due March 31, 2020 (if filed electronically). A separate form would presumably make these filings more efficient.

New 1099-PATR

Once proposed regulations were issued for cooperatives and their patrons, IRS went to work to create a 2020 draft Form 1099-PATR, incorporating the new reporting requirements under the rules. The new form was revealed on August 1.