Editing Form 1040 (section)

==History==

=== Original form structure and tax rates ===

[[Image:Form 1040A, 1937.jpg|thumb|Form 1040A for the 1937 tax year]]

The first Form 1040 was published for use for the tax years 1913, 1914, and 1915;<ref name= howyoumustpay>"[https://www.proquest.com/docview/97579204/ How You Must Pay Your Income Tax: Treasury Issues Form 1,040, Which Individuals Must Fill Out and File by March 1] {{Webarchive|url=https://web.archive.org/web/20241224153056/https://www.proquest.com/docview/97579204/ |date=December 24, 2024 }}". ''The New York Times''. January 6, 1914. p. 3.</ref>
the number 1040 was simply the next number in the sequential numbering of forms.<ref>{{cite journal
|journal=SOI Bulletin (Statistics of Income)
|volume=13
|number=2
|title=80 Years of Income Tax Statistics
|page=[https://books.google.com/books?id=6okwTEVpGRMC&pg=PA6 6]
|url=https://www.irs.gov/pub/irs-soi/93rpfallbul.pdf
|archive-url=https://web.archive.org/web/20170517113604/https://www.irs.gov/pub/irs-soi/93rpfallbul.pdf
|archive-date=2017-05-17
|quote=The fact is, the number 1040 was simply the next number up in the system of sequential numbering of forms developed by the Bureau of Internal Revenue.}}</ref> For 1913, taxes applied only from March 1 to December 31.<ref name= howyoumustpay/> The original Form 1040, available on the IRS website as well as elsewhere, is three pages<ref>{{cite web |url=http://www.marketwatch.com/story/100-years-of-tax-form-1040-2014-02-12 |author=Jonnelle Marte |date=April 15, 2015 |title=100 years of tax form 1040 |publisher=MarketWatch |access-date=July 31, 2016 |archive-date=August 28, 2016 |archive-url=https://web.archive.org/web/20160828132120/http://www.marketwatch.com/story/100-years-of-tax-form-1040-2014-02-12 |url-status=live }}</ref> and 31 lines long, with the first page focused on computing one's income tax, the second page focused on more detailed documentation of one's income and the third page describing deductions and including a signature area. There is an additional page of instructions.<ref name=irs-1913>{{cite web|url = https://www.irs.gov/pub/irs-utl/1913.pdf|title = Return of Annual Net Income of Individuals|publisher = [[Internal Revenue Service]]|date = October 3, 1913|access-date = January 1, 2016|archive-date = February 7, 2021|archive-url = https://web.archive.org/web/20210207021331/https://www.irs.gov/pub/irs-utl/1913.pdf|url-status = live}}</ref><ref name=tf-1913>{{cite web|url = http://taxfoundation.org/article/1913-internal-revenue-service-1040-form|title = 1913 Internal Revenue Service 1040 Form|date = January 2005|publisher = [[Tax Foundation]]|access-date = January 1, 2016|archive-date = November 1, 2015|archive-url = https://web.archive.org/web/20151101094232/http://taxfoundation.org/article/1913-internal-revenue-service-1040-form|url-status = dead}}</ref><ref name="ct_1040">{{cite news |url=https://www.chicagotribune.com/1994/03/27/history-of-the-1040-form-runs-only-80-years/ |date=March 27, 1994 |title=History Of The 1040 Form Runs Only 80 Years |newspaper=[[Chicago Tribune]] |access-date=July 31, 2016}}</ref> The main rules were:

* The taxable income was calculated starting from gross income, subtracting business-related expenses to get net income, and then subtracting specific exemptions (usually $3,000 or $4,000). In other words, people with net incomes below $3,000 would have to pay no income tax at all. The inflation calculator used by the [[Bureau of Labor Statistics]] estimates the corresponding amount in 2015 dollars as $71,920.<ref name=ct_1040/><ref name=inflation-calculator>{{cite web|url = http://www.bls.gov/data/inflation_calculator.htm|title = Inflation Calculator|publisher = [[Bureau of Labor Statistics]]|access-date = January 2, 2016|archive-date = September 17, 2019|archive-url = https://web.archive.org/web/20190917111520/https://www.bls.gov/data/inflation_calculator.htm|url-status = live}}</ref>
* The base income tax rate on taxable income was 1%.
* High earners had to pay additional taxes. The first high-earning tax bracket, $20,000–$50,000, has an additional tax of 1% on the part of net income above $20,000. Thus, somebody with a taxable income of $50,000 (over a million dollars in 2015 dollars according to the BLS)<ref name=inflation-calculator/> would pay a total of $800 (1% of $50,000 + 1% of $(50,000 − 20,000)) in federal income tax. At the time (when the United States as a whole was much poorer) these higher taxes applied to fewer than 0.5% of the residents of the United States.<ref name=wizworld>{{cite web|url = http://www.wizworld.com/taxes/|title = True Origin of the 1040 Income Tax Form|access-date = January 1, 2016|archive-date = January 8, 2016|archive-url = https://web.archive.org/web/20160108130116/http://www.wizworld.com/taxes/|url-status = live}}</ref>

Just over 350,000 forms were filed in 1914 and all were audited.<ref name=ct_1040/>[[Image:Form 1040, 1941.jpg|thumb|Form 1040 for the 1941 tax year:  The basic layout and main entries are familiar, but there are more of them now and the Schedules letters have been reassigned]]

=== Subsequent changes ===
[[File:Form 1040a, 2015.pdf|thumb|Form 1040A, 2015 tax year]]For 1916, Form 1040 was converted to an annual form (i.e., updated each year with the new tax year printed on the form).<ref>See Publication 1796-A, ''IRS Historical Tax Products'' (rev. Feb. 2007), Internal Revenue Service, U.S. Dep't of the Treasury.</ref> Initially, the IRS mailed tax booklets (Form 1040, instructions, and most common attachments) to all households. As alternative delivery methods (CPA/Attorneys, Internet forms) increased in popularity, the IRS sent fewer packets via mail. In 2009 this practice was discontinued.

With the [[Current Tax Payment Act of 1943]], income tax withholding was introduced. The [[Individual Income Tax Act of 1944]] created standard deductions on the 1040.<ref name="historical_highlights">{{cite web |url=https://www.irs.gov/uac/Historical-Highlights-of-the-IRS |title=Historical Highlights of the IRS |access-date=December 31, 2015 |publisher=Internal Revenue Service |archive-date=January 3, 2016 |archive-url=https://web.archive.org/web/20160103193316/https://www.irs.gov/uac/Historical-Highlights-of-the-IRS |url-status=live }}</ref>

The tax return deadline was original set at March 1. This was changed to March 15 in the [[Revenue Act of 1918]], and in the [[Internal Revenue Code of 1954]], the tax return deadline was changed to April 15 from March 15,<ref name="historical_highlights" /> as part of a large-scale overhaul of the tax code. The reason for March 1 was not explained in the law, but was presumably to give time after the end of the tax (and calendar) year to prepare tax returns.<ref name="thorndike">Joseph Thorndike, "[http://www.taxhistory.org/thp/readings.nsf/ArtWeb/130DAA7F164C86018525827100645499 Why Is Tax Day April 15?] {{Webarchive|url=https://web.archive.org/web/20200718064406/http://www.taxhistory.org/thp/readings.nsf/ArtWeb/130DAA7F164C86018525827100645499 |date=July 18, 2020 }}", ''taxanalysts''; "[https://www.forbes.com/sites/taxanalysts/2017/04/13/why-tax-day-is-usually-april-15/ Why Tax Day Is Usually April 15] {{Webarchive|url=https://web.archive.org/web/20200718042201/https://www.forbes.com/sites/taxanalysts/2017/04/13/why-tax-day-is-usually-april-15/ |date=July 18, 2020 }}", ''Forbes'', Originally published in Tax Notes magazine on April 16, 2012: "According to the 1913 revenue act, anyone with an annual income exceeding the exemption ... was required to file a return "on or before the first day of March, nineteen hundred and fourteen." Lawmakers offered no explanation for that date, but it seems likely that it was selected to give taxpayers adequate time to gather materials and complete their returns following the end of the tax (and calendar) year."</ref> The two-week extension from March 1 to March 15 occurred after the Revenue Act of 1918 was passed in February 1919, given only a few weeks to complete returns under the new law. The month extension from March 15 to April 15 was to give additional time for taxpayers and accountants to prepare taxes, owing to the more complex tax code, and also helped spread work by the IRS over a longer time, as it would receive returns over a longer time.<ref name="thorndike"/><ref>"More Time for Taxpayers: One-Month Extension in Filing Individual Income Tax Returns, Making Deadline April 15, Passes House Unit," The Wall Street Journal, Feb. 17, 1954, at 3.</ref>

The '''1040A''' was introduced by the 1930s to simplify the filing process and discontinued after tax year 2017.<ref>{{cite web |title=Tax History: The Love-Hate Relationship With the Standard Deduction |first=Joseph J. |last=Thorndike |url=http://www.taxhistory.org/thp/readings.nsf/ArtWeb/FD4865793851996185257D1B0041C875?OpenDocument |access-date=December 31, 2015 |publisher=Tax History Project |archive-date=March 4, 2016 |archive-url=https://web.archive.org/web/20160304191433/http://www.taxhistory.org/thp/readings.nsf/ArtWeb/FD4865793851996185257D1B0041C875?OpenDocument |url-status=live }} Apparently gives date as 1941, which is evidently not correct.</ref> It was limited to taxpayers with taxable income below $100,000 who take the [[standard deduction]] instead of [[itemized deduction|itemizing deductions]].<ref name="1040a_turbo">{{cite web|url=https://turbotax.intuit.com/tax-tools/tax-tips/IRS-Tax-Forms/What-is-the-IRS-1040A-Form-/INF14500.html|title=What is the IRS 1040A Form?|publisher=TurboTax|access-date=December 31, 2015|archive-date=September 8, 2015|archive-url=https://web.archive.org/web/20150908174511/https://turbotax.intuit.com/tax-tools/tax-tips/IRS-Tax-Forms/What-is-the-IRS-1040A-Form-/INF14500.html|url-status=live}}</ref>

The '''1040EZ''' was used for tax years 1982–2017. Its use was limited to taxpayers with no dependents to claim, with taxable income below $100,000 who take the [[standard deduction]] instead of itemizing deductions.<ref name="ez_investo">{{cite web|url=http://www.investopedia.com/ask/answers/071514/whats-difference-between-irs-forms-1040ez-and-1040a.asp|title=What's the difference between IRS Forms 1040EZ and 1040A?|publisher=Investopedia|access-date=December 31, 2015}}</ref>

Electronic filing was introduced in a limited form in 1986, with the passage of the [[Tax Reform Act of 1986]], and starting 1992, taxpayers who owed money were allowed to file electronically.<ref name="historical_highlights" /> The [[Electronic Federal Tax Payment System]], jointly managed by the IRS and [[Financial Management Service]], started in 1996 and allowed people to make estimated payments.<ref name="about-eftps" /><ref name="historical_highlights" />

With the passage of the [[Tax Cuts and Jobs Act of 2017]], a new, redesigned Form 1040 was released for tax year 2018. It reduced the number of lines from 79 to 23, removed two of the variants (1040A and 1040EZ) in favor of the redesigned Form 1040, and redesigned the supplemental schedules.

=== Changes to complexity and tax rates ===
The complexity and compliance burden of the form and its associated instructions have increased considerably since 1913. The [[National Taxpayers Union]] has documented the steady increase in complexity from a 34-line form in 1935 to a 79-line form in 2014,<ref name="ntu">{{cite web|url = http://www.ntu.org/foundation/policy-paper/a-complex-problem-the-compliance-burdens-of-the-tax-code|title = A Complex Problem: The Compliance Burdens of the Tax Code|last = Tasselmyer|first = Michael|date = April 8, 2015|access-date = January 1, 2016|publisher = [[National Taxpayers Union]]|archive-date = March 4, 2016|archive-url = https://web.archive.org/web/20160304202840/http://www.ntu.org/foundation/policy-paper/a-complex-problem-the-compliance-burdens-of-the-tax-code|url-status = live}}</ref><ref name="ntu.org">{{Cite web|url=https://www.ntu.org/foundation/detail/tax-reform-bill-made-modest-progress-toward-simplification-but-significant-hurdles-remain|title=Tax Reform Bill Made Modest Progress Toward Simplification, But Significant Hurdles Remain|website=National Taxpayers Union|language=en|access-date=2019-09-08|archive-date=April 16, 2019|archive-url=https://web.archive.org/web/20190416214839/https://www.ntu.org/foundation/detail/tax-reform-bill-made-modest-progress-toward-simplification-but-significant-hurdles-remain|url-status=live}}</ref> decreasing to 23 lines in 2018. ''[[Quartz (publication)|Quartz]]'' created an animated [[Graphics Interchange Format|GIF]] showing the gradual changes to the structure and complexity of the form.<ref>{{cite news|url = http://qz.com/36239/line-for-line-us-income-taxes-are-more-complex-than-ever/|title = Line for line, US income taxes are more complex than ever|last = Yanofsky|first = David|work = [[Quartz (publication)|Quartz]]|date = December 13, 2012|access-date = January 1, 2016|archive-date = January 1, 2016|archive-url = https://web.archive.org/web/20160101184813/http://qz.com/36239/line-for-line-us-income-taxes-are-more-complex-than-ever/|url-status = live}}</ref> The NTU table is below with data through 2014:

[[File:F1040ez 2011.pdf|thumb|Form 1040EZ, 2011]]

{| class="wikitable sortable"
! Tax year !! Lines, Form 1040 !! Pages, Form 1040 !! Pages, Form 1040 Instruction Booklet
|-
|2018
|23
|2
|221
|-
|2017
|79
|2
|220
|-
|2016
|79
|2
|215
|-
|2015
|79
|2
|211
|-
| 2014 || 79 || 2 || 209
|-
| 2013 || 77 || 2 || 206
|-
| 2012 || 77 || 2 || 214
|-
| 2011 || 77 || 2 || 189
|-
| 2010 || 77 || 2 || 179
|-
| 2005 || 76 || 2 || 142
|-
| 2000 || 70 || 2 || 117
|-
| 1995 || 66 || 2 || 84
|-
| 1985 || 68 || 2 || 52
|-
| 1975 || 67 || 2 || 39
|-
| 1965 || 54 || 2 || 17
|-
| 1955 || 28 || 2 || 16
|-
| 1945 || 24 || 2 || 4
|-
| 1935 || 34 || 1 || 2
|}

The number of pages in the federal tax law grew from 400 in 1913 to over 72,000 in 2011.<ref name="FaceTheFacts">{{cite web |url=http://www.facethefactsusa.org/facts/when-tax-complexity-puts-dinner-on-the-table/ |title=When tax complexity puts dinner on the table |date=15 August 2012 |work=Face the Facts USA |publisher=[[George Washington University]] |access-date=27 August 2012 |archive-date=July 27, 2016 |archive-url=https://web.archive.org/web/20160727034948/http://www.facethefactsusa.org/facts/when-tax-complexity-puts-dinner-on-the-table |url-status=live }}</ref> The increase in complexity can be attributed to an increase in the number and range of activities being taxed, an increase in the number of exemptions, credits, and deductions available, an increase in the subtlety of the rules governing taxation and the edge cases explicitly spelled out based on historical experience, and an increase in the base of taxpayers making it necessary to offer longer, more explicit instructions for less sophisticated taxpayers.<ref name=ntu/> As an example, whereas the initial versions of Form 1040 came only with a [[rate schedule (federal income tax)|rate schedule]] included in the tax form itself, the IRS now publishes a complete tax table for taxable income up to $100,000 so that people can directly look up their tax liability from their taxable income without having to do complicated arithmetic calculations based on the rate schedule.<ref>{{cite web|url = https://www.irs.gov/pub/irs-pdf/i1040tt.pdf|title = Tax Tables 2014|publisher = [[Internal Revenue Service]]|access-date = January 1, 2016|archive-date = February 24, 2009|archive-url = https://web.archive.org/web/20090224123930/https://www.irs.gov/pub/irs-pdf/i1040tt.pdf|url-status = live}}</ref> The IRS still publishes its rate schedule so that people can quickly compute their approximate tax liability, and lets people with incomes of over $100,000 compute their taxes directly using the Tax Computation Worksheet.

In addition to an increase in the complexity of the form, the tax rates have also increased, though the increase in tax rates has not been steady (with huge upswings and downswings) in contrast with the steady increase in tax complexity.<ref name=qz-tax-rates>{{cite news|url = http://qz.com/74271/income-tax-rates-since-1913/|title = Check your US tax rate for 2012—and every year since 1913|last = King|first = Ritchie|work = [[Quartz (publication)|Quartz]]|date = April 14, 2013|access-date = January 1, 2016|archive-date = January 5, 2016|archive-url = https://web.archive.org/web/20160105145438/http://qz.com/74271/income-tax-rates-since-1913/|url-status = live}}</ref>

===Cost of filing===

{{Main|Tax preparation#Controversy}}
For tax return preparation, Americans spent roughly 20 percent of the amount collected in taxes (estimating the compliance costs and efficiency costs is difficult because neither the government nor taxpayers maintain regular accounts of these costs).<ref name="GAO">[http://www.gao.gov/products/GAO-05-878 Tax Policy: Summary of Estimates of the Costs of the Federal Tax System] {{Webarchive|url=https://web.archive.org/web/20160910192703/http://www.gao.gov/products/GAO-05-878 |date=September 10, 2016 }} by the U.S. Government Accountability Office</ref> As of 2013, there were more tax preparers in the US (1.2 million) than there were [[Law enforcement in the United States|law enforcement officers]] (765 thousand) and [[Firefighting in the United States|firefighters]] (310,400) combined.<ref name="FaceTheFacts"/> The National Taxpayers Union estimated the 2018 compliance cost at 11 hours per form 1040 vs. 12 hours in 2017, with a total of $92.5 billion spent in individual income tax compliance vs. $94.27 billion in 2017.<ref name="ntu.org"/>

In 2008, 57.8 percent of tax returns were filed with assistance from paid tax preparers,<ref>{{cite web |url=http://www.taxpolicycenter.org/briefing-book/why-do-low-income-families-use-tax-preparers |title=Why do low-income families use tax preparers? |publisher=[[Tax Policy Center]] |access-date=September 16, 2016}}</ref> compared to about 20 percent of taxpayers employing a paid preparer in the 1950s.<ref>{{cite book|url=https://books.google.com/books?id=VpVGAd7TknkC&pg=PA11 |title=Learning to Love Form 1040: Two Cheers for the Return-Based Mass Income Tax|author=Lawrence Zelenak |year=2013 |publisher=[[The University of Chicago Press]]|isbn=9780226019086}}</ref>{{rp|11}}