Are 2018 Income Taxes Easier to Prepare Under the Tax Cuts and Jobs Act?

Like any good consultant, my answer is: It depends.In the lead-up to the 2016 presidential election, then-candidate Donald Trump promised to “simplify the tax code” so taxpayers could submit their income taxes on a form “the size of a postcard.” The IRS almost delivered on the postcard-sized form, but not quite. The new IRS Form 1040, which replaces the 1040, 1040A and 1040EZ forms, fits on the front and back of a half-sheet of paper (8.5” x 5.5”.)

While the new form is considerably shorter and has fewer fields (many are consolidated from multiple lines to one,) the form still comes with 117 pages of instructions. If you are a W2 employee with limited sources of income and a fairly simple tax situation the new form may, in fact, be easier for you to complete. For many the doubled standard deduction amounts make it unnecessary to itemize deductions. Unfortunately, the only way to know for sure is to calculate your return both ways.

For individuals with more complex tax scenarios such as business owners, the new tax laws add a layer of complexity to tax preparation. Among the challenges with the TCJA, because it was passed late in 2017, it did not give the IRS an adequate opportunity to provide guidance on some of the new provisions that obfuscated facets of existing tax law.

So far, the IRS has stated that the tax season is off to a slower start than last year. Fewer returns have been filed and processed than this time last tax year. Because of this, we are recommending that all taxpayers begin earlier than usual on their tax preparation. The TCJA constitutes the largest change to the tax law in over 30 years so that, coupled with disruptions to IRS services caused by the government shutdown, promises to make it a challenging tax season. If you have any questions about the new tax law, contact one of our Zinner tax professionals.