OK.  You all know that we are now living under a new tax law (PL115-97, aka Tax Cuts and Jobs Act). One with a purported “much” higher standard deduction, which means fewer folks will be able to (or have to) itemize.

Why did I say purported?  Because the tax change removed  personal exemptions from the equation, so a family of four that previously was entitled to $ 16,200 of exemptions, as well as  $ 6350 of a standard deduction in 2017, it  now has a standard deduction of $ 24,000- a paltry gain of $ 1450.

But, maybe not a gain at all.  Because the new law also means that any charity, mortgage, SALT (state and local taxes) must exceed $ 24,000 in total to be deductible.  Where last year, they could affect taxable income once they exceeded $ 6350 (and often did).  Not to mention that this year SALT deductions are limited to a maximum of $ 10K.

To further convince you how great this tax change is, the Feds have been revising the tax forms we must submit.  (I admit that most of us use electronic filing [89%!!!], so we really don’t pay attention to the forms, but this is for advertising and “attaboys” for the new tax plan.)

In so doing, the IRS has cut the size of the 1040 form dramatically.  But, really, that smaller form just means you must fill out a bunch of other schedules and forms, which had never exited or been  required before.

So, let’s compare the forms.

As you can see from the 2017 1040 form posted above, there are 79 items that may or may not be filled in.    But, the whole bottom of page 1 has disappeared off the new 1040.  (Hold on- that’s not really true- but we’ll get to that).

But, page 1 of the new 1040, as shown above?  Oops.  There’s nothing to compute on this page.  We just have to fill in our names and our dependents (of course, we need to add the social security numbers for everyone), and our signatures (as well as the identity and signature of the preparers we use.)

Oh, yeah, to make the form look simpler, these requests are not numbered.  So, POOF! We’ve lowered the number of lines by 6- doing absolutely nothing to make the taxes simpler or easier.

Page 2 of the new 1040 (shown directly above) now requires the information that was present on the old form in lines 7 through 9- our salaries, our dividends, our interest, and on lines 15 and 16 that detailed our pensions, IRAs, and social security.  So, the 1040 is shorter- there’s a total of 23 items (plus the 6 that aren’t counted, remember?), instead of 79.

Now, how has this legerdemain been accomplished?  Oh, by requiring taxpayers to complete up to SIX new, separate schedules.  Admittedly, most folks won’t need Schedule 6 (which covers a third party designee and foreign addresses).

Schedule 5 (above) will only be needed by those who get a health insurance tax credit (and underpaid or overpaid according to the credit given and deserved), excess social security taxes withheld (those with two or more jobs), and to reconcile payments filed with extensions to file.  Schedule 2 (below) will be needed by those subject to AMT (alternative minimum tax- which requires a whole bunch of computations), and those health care credit payments- so not many of us will need to deal with this, either.

Schedule 1 (below) includes all those things on the bottom of the old 1040, page 1.  Plus, a few from the top of page 1- those of us who are self-employed, have rental properties, pass-through entities, and farms will have to compute the data behind these questions.   That is a whole bunch of us.

Schedule 3 (below) will also be used by a bunch of folks- it covers child tax credits and child care expenses.   As well as education credits and contributions to be deducted for our retirement plans, among other such items.

Schedule 4 (below) will be used by the self-employed and the wealthy (to determine those dreaded extra Medicare and Social Security taxes).  Plus for those of us who have household employees, this schedule addresses the taxes due for that situation.

So, in reality, the tax forms are not really simpler.  We (that’s the government) just want to fool you into thinking they are.

And, you can rest assured that the Feds are betting a whole bunch of us will miss the deductions and other items that were found on the old page 1.  And, that includes the Earned Income Credit (EIC), which is abbreviated- and many of those so entitled don’t really use the abbreviation. Another big OOPS.

I still like my form.  As long as I don’t have to pay the piper.