The post-tax-reform decline in the Schedule A, the redesign of the 1040 and the continuing prevalence of e-filing will reshape the future filing landscape, according to the IRS.
The IRS Statistics of Income Division’s recently released “The 2019 Calendar Year Projections of Individual Returns by Major Processing Categories” (Publication 6187) presents multi-year projections of the number of individual 1040 series returns to be filed with the IRS by such categories as filing medium (paper versus electronic); and other characteristics such as refund returns.
Among the significant trends:
- Impact of the Tax Cuts and Jobs Act. As a result of the increase in the standard deduction, Schedule A volumes are estimated to decrease in 2019 almost 65 percent from 2018. More balance-due returns may be expected in 2019, with the refund volumes projected to decrease some 2 percent from CY 2018. As taxpayers adjust to tax law changes over time, projected refund volumes are expected to return to normal.
- 1040-SR. This new form, to be used by individuals who are at least 65 years old by the end of the taxable year, will be available beginning with filing year 2020. The IRS projects that some 1.8 million paper and some 17 million 1040-SRs will be filed in the first year of availability.
- New schedules. Starting with the 2019 filing season, the new 1040 replaced the 1040, 1040-A and 1040-EZ, and could be accompanied by one or more schedules. The IRS projects some 13.9 paper versions and some 152 million electronic versions of these schedules will be filed in calendar year 2019. Starting with the 2020 filing season, Schedules 2 and 4 will be consolidated into one, as will Schedules 3 and 5. Schedule 6 will be eliminated.
- E-filing growth. Since the IRS Restructuring and Reform Act of 1998, the number of individual returns e-filed increased from 24.6 million in calendar 1998 to 134.7 million in 2018. Individual e-filing is expected to continue to grow at about 1.8 percent in 2019 to some 137.2 million returns, reaching 152.4 million returns by 2026.