I've been a tax preparer for 7 years. This new "postcard" tax form is more than silly. People are going to screw up their taxes because of it. Here's why…
For people who use the IRS forms to do their taxes, the lines on the form are essentially a checklist for what you need to include and what tax benefits to claim. The "postcard" takes away a lot of lines on that checklist.
For example, teachers get to deduct up to $250 for what they pay out of pocket for classroom supplies. That used to be on the 1040, so any teacher doing their taxes would see it. Now teachers have to look at the new "Schedule 1" to know this exists.
Same thing for deductions for student loan interest, IRAs, and moving expenses for troops. The last one is especially concerning. Moving expenses for everyone else are no longer deductible under the new tax law, so hopefully servicemembers remember they can still deduct this.
The new "postcard" also squeezes major refundable credits for working-class families onto one small line that's easy to miss. The old form spelled out "Earned Income Credit" (and bolded it). The "postcard" just has a checkbox on part of one line that says "EIC."
Don't know what EIC means? Glossing over that checkbox could cost a working class family thousands of dollars.
It's even worse for the refundable part of the child tax credit. The label on the "postcard" for that checkbox just says "Sch. 8812."
Hope you looked up what Sch. 8812 is! If not, that's thousands more you might leave on the table.
Hope you looked up what Sch. 8812 is! If not, that's thousands more you might leave on the table.
If you have business income, including income on Form 1099, hope you know not to report that as wages. This is clearer on the old 1040, where business income has a separate line. On the "postcard" you have to go to Schedule 1 to see that. Screwing this up will get you audited.
The "postcard" also makes the math trickier by squeezing multiple operations on the same line. Line 10 says "Subtract lines 8 and 9 from line 7." So you have to sum 8+9 and then subtract that from 7. On the old forms, you write the sum on one line, then subtract on the next line.
This sounds picky, but math is hard! The IRS forms, including the old 1040, break up the calculations to help people avoid errors.
For people with good software, the postcard is mostly just silly. You weren't using the forms directly before, and you won't use them now.
But as @RyanLEllis points out, the postcard still makes recordkeeping messier by screwing up the presentation of the tax return.
Some tax software also models the tax form. I use FreeFile Fillable Forms, which means I'll probably have to navigate this "postcard" nonsense.
And paid tax preparers are not perfect. Some are quite bad! If they're using the new tax form "postcard," or software that tracks the forms, they might screw things up for their clients too.
If your taxes are simple, congratulations! You could have already made this double-sided half-page "postcard" by folding the 1040-EZ in half.
We disagree on a lot of tax policy, but @RyanLEllis and I are on the same page on this "postcard."
Also, the tax "postcard" isn't even a real postcard! @USPS postcard size limits are 4.25" by 6". A half-sheet of paper is 5.5" by 8.5".
There's more to say about the "postcard", but this thread has already gotten too long as it is. Hopefully the comments on this will cause the IRS to change course.
