All about the Six Schedules of the New Form 1040

In a bid to simplify the tax filing process for many Americans who have quite a very simple tax affair, the Internal Revenue Service introduced a new and smaller Form 1040. This change saw many of the lines of the previous form moved to six new schedules. What are these new schedules and who are they for? Tax blog, American Tax Service provides answers to all these questions in its latest post.

The first schedule, the Additional Taxes and Adjustments to Income is used to report certain types of additional income or adjustments. This could include, capital gains, wins from gambling, unemployment compensations, etc. Student loan deductions must also be entered into this schedule.

The second schedule is seldom used as it pertains to only a few sets of people who pay the alternative minimum tax (AMT).

Schedule 3 is for Nonrefundable Credits and it applies to all nonrefundable credits apart from the child tax credit, or any other dependency-based tax credits.

Other federal taxes like the self-employment tax, household employment taxes and any additional taxes on your retirement plans can be reported using Schedule 4.

Should you decide to claim certain refundable credits or report any withheld payments, then Schedule 5 will come in handy.

The sixth and last schedule is used only if you have a foreign address. It is mostly used by Americans living and working abroad. This schedule allows a third-party file taxes on your behalf.

The American Tax Service sums up its post by recommending that taxpayers file their taxes online with the H&R Block. The H&R Block is up to date with the latest IRS tax forms and schedules and it helps taxpayers find their w2 form and file their taxes online.

To find out more about the IRS 1040 Form and the six new schedules plus how to get a 35% discount for filing your taxes online with the H&R Block, please visit, https://americantaxservice.org/the-six-new-form-1040-schedules/

Tax Benefits of Owning a Home

Besides the social privileges and freedom owning a home provides, there are tax advantages to home ownership. Homeowners who are wondering what tax incentives are available, and if there is a new home owner’s tax credit will find a recent post on the American Tax Service very informative. The post summarizes some of the benefits as well as the tax changes from the Tax Cuts and Jobs Act of 2018 that will affect all taxpayers filing as a new home buyer.

There are new major changes in the tax law that homeowners should be aware of. First, the total cap on the mortgage interest rate deduction has been lowered to $750,000 from $1,000,000. The second big change sees the standard deduction doubled. For individual filers, the amount is now $12,000 and it’s up to $24,000 for married couples. There is now a big possibility that the standard deduction might make the mortgage interest deduction now inconsequential on lower-priced homes.

The “First-Time Homebuyer credit” which was up to $7,500 for first-time homebuyers is now expired. And unless taxpayers had their home between 2008 and 2010, they are not eligible for this credit. Taxpayers can, however, claim buying a new house on their taxes. They will not be able to claim the costs of the closing process, but, they can claim any costs associated with mortgage interest, taxes, and insurance costs depending on the exact filing situation. This is capped at a total amount of $750,000 for married filers.

When buying a home, there are a number of fees and taxes applied through the closing process beyond the principal amount paid on the home. Only the taxes associated with the house are going to be eligible for a deduction. Capital gains tax are also a concern when selling a home.

For a clearer understanding of the whole process, please read the full post on American Tax Service here, https://americantaxservice.org/new-homeowners-tax-credit/