Thread: Trump's New IRS 'Postcard' Is Not So Simple And Not Really A Postcard

Trump's New IRS 'Postcard' Is Not So Simple And Not Really A Postcard

June 29, 20185:00 AM ET
Brian Naylor

The IRS is planning to unveil a new tax return form — as soon as Friday — that is the size of a large post card.

It's been touted as a way to simplify tax filing, and is something President Trump pushed congressional Republicans to come up with. Treasury Secretary Steven Mnuchin said the document "will be a post card, as we've promised and hard-working taxpayers won't have to spend as much time filling out their taxes."

Sounds good, right? Imagine, filing your taxes on a post card. What could be easier?

But a look at a draft version of the form, obtained by NPR, show things aren't quite so simple.

For one thing, it's a rather large two-sided document, about the size of a half of a sheet of paper.

A draft of the new 1040 tax document, obtained by NPR, that the Trump administration says fits on a "postcard."

It does have fewer lines, 23. The current 1040 form has 79. But, people will still be required to file several pages of work sheets if they wish to itemize deductions.

And, unlike an actual post card, this one will have to be put in an envelope to be mailed — unless you want your Social Security Number and private financial information on full display.

It's kind of a silly 1950s concept that makes for a good photo op, but it doesn't really change peoples lives."

Howard Gleckman, a senior fellow at the Tax Policy Center, a Washington tax think tank, says the whole concept of a written tax form postcard is kind of irrelevant these days. After all, who uses paper anymore to file their taxes?

"More than 90 percent of us file our tax returns electronically," Gleckman noted, "and I suspect if you ask most 30 year-olds about post cards they won't even know what you're talking about.

"So it's kind of a silly 1950s concept that makes for a good photo op, but it doesn't really change peoples lives."

President Trump and congressional Republicans promised to slim down the size of the 1040 form to post-card size when they first talked about their tax-cut bill. The president even kissed a mock up during a White House appearance with congressional Republicans.

Gleckman did point out that the new tax law Congress approved will make it easier for some filers, as it "significantly increases the size of the standard deduction." That will simplify tax filing for millions of people and, "that's a good thing in terms of simplicity," he said.

But, he added, changing the form for everyone else "is a P.R. stunt and really has no effect on their lives."

Except maybe to complicate them actually.

For instance, if you receive alimony or can claim deductions for teachers expenses or are claiming energy credits, you'll need to use one of six new worksheets.

Some entries, once on the tax form itself, are now on separate worksheets, which means they could be overlooked by some taxpayers.

And some lines on the new form, such as the one for people wishing to claim the earned-income tax credit, are harder to find.

Because those worksheets and the new "post card" itself will all have to be stuffed into an envelope, as Gleckman points out, you probably won't even save on postage.

https://www.npr.org/2018/06/29/62440...lly-a-postcard

It's all the rules behind the form that complicate it. The rules for thousands of categories of deductions means thousands of pages of rules about these deductions.

If you have the total gross income and total dependents, that requires 2 lines. Those can then be used to lookup the tax rate based on the adjusted income. So with identification and addresses, you could fit it on a post card.

If we keep itemized deduction for home, charities and such, it gets more complicated.

If compared to a sales tax method, it is just as simple. Necessity credits are automatically incorporated in the tax rate based on the deductions (dependents). A sales tax must use a "rebate" to make such accommodations.

No, you didn't read the article. It's 23 lines of information and calculations on both the front and the back of the half page form, so a full page of 23 lines of information and calculations for the simple 1040 standard deduction filing. Then on top of that you have to read the instructions and do the worksheets to know what to put on the 23 lines. But it's a lot better than the 79 lines it used to be.

Originally Posted by Judy

No, you didn't read the article. It's 23 lines of information and calculations on both the front and the back of the half page form, so a full page of 23 lines of information and calculations for the simple 1040 standard deduction filing.

YES, I READ THE ARTICLE!

My point was that all the deductions create the thousands of pages of IRS Tax Code. Without that, it could be a simple post-card, one sided, document of about 10 lines!

Without all the deduction categories, we could have a one page tax code. Just a tax table where you get a deduction amount for each dependent, deduct that from your gross income, then look up the remainder on the tax table that has a rising tax rate according to the income bracket!

Originally Posted by Judy

Then on top of that you have to read the instructions and do the worksheets to know what to put on the 23 lines.

But with my method, you only need one page of instruction for everybody, telling you to subtract the dependent deductions allowed from the gross income, then look up the remainder on the tax rate chart. Enter the tax amount and send it in, if it has not been deducted from your pay.

I'm not saying this is the system I prefer. I'm saying that this is how income tax should be calculated!

The 23 lines is only for the 1040 short form filers who have no other deductions or business income. Everyone else files the huge many many pages of long form like we always do and business owners file their business returns in addition to their personal income tax returns.

You want a gross income tax? Oh my God.

Originally Posted by Judy

The 23 lines is only for the 1040 short form filers who have no other deductions or business income. Everyone else files the huge many many pages of long form like we always do and business owners file their business returns in addition to their personal income tax returns.

Yes, on the proposed form.

Originally Posted by Judy

You want a gross income tax? Oh my God.

Yes! That's what we have now! It is all the "adjustments" that make it complex. If you take those away, it is just like your sales tax proposal, but simpler!

No, we have a net income tax now, not a gross income tax.

Originally Posted by Judy

No, we have a net income tax now, not a gross income tax.

Correct! And what I said is the same. It is all based on gross income less deductions.

If it's the same, why are you talking?

Originally Posted by Judy

If it's the same, why are you talking?

Because what I suggested is superior to your sales tax!