December 23, 2025 • 17 mins
In this episode of the Teaching Taxable Podcast, co-hosts John Tripolsky and Chris Picciurro reveal significant updates to the 1040 tax form, aiming to prepare taxpayers for upcoming changes. Designed as a "holiday gift" to listeners, the episode dissects alterations targeting discrepancy issues between taxpayer filings and IRS records. Chris presents a detailed walkthrough of these modifications, while John provides annotations, shedding light on potential impacts for tax professionals and individual filers alike.
The discussion begins by addressing enhancements to the tax reporting framework, focusing on the streamlined and comprehensive design intended to resolve past IRS matching discrepancies. By integrating changes into the core Form 1040, the IRS aims to avoid issues related to digital asset declarations, dependent statuses, and marital/separation statuses. Chris explains how taxpayers can effectively utilize these updates, outlining benefits like reduced correspondence with the IRS due to common errors. An additional focus on the new Schedule 1A highlights four temporary deductions meant to aid taxpayers in optimizing their returns, using enhanced preparatory strategies to file with confidence in an increasingly digital tax landscape.
SNEAK PEEK (2025 Form 1040): https://www.irs.gov/pub/irs-dft/f1040--dft.pdf
⸻
KEY TAKEAWAYS
✅ Learn about the crucial updates to Form 1040 and how these changes aim to minimize IRS paperwork discrepancies.
✅ Insightful analysis of how new checkbox additions address various taxpayer statuses, including deceased individuals and residency queries.
✅ Discover the introduction of Schedule 1A, featuring four temporary deductions that could impact up to 40 million taxpayers.
✅ Tips on how these changes make tax preparation potentially more complicated, but also prevent errors and optimize financial strategies.
✅ The importance of staying organized in tax filing, particularly concerning tips and overtime income, to ensure an error-free submission.
⸻
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- (00:00) - Exploring Changes in the New Form 1040
- (02:25) - Navigating Mortgage Strategies and Tax Return Complexities
- (04:11) - New Changes and Checkboxes on IRS Form 1040
- (08:08) - IRS Form Updates and Software Challenges
- (09:28) - New Tax Reporting Changes and Deductions on Form 1040
- (14:24) - Tax Filing Tips and Changes for a Smooth Process
- (16:15) - Holiday Tax Tips and Commonly Missed Deductions
Mark as Played
Transcript
Episode Transcript
Available transcripts are automatically generated. Complete accuracy is not guaranteed.
John Tripolsky (00:03):
Hey, everybody. Welcome back to the Teaching Tax
Flow podcast. John Tripolskyhere from the TTF team, joined
by my co-host, Chris PicciurroToday, we're gonna talk about a
sneak peek. That's right.
We're gonna give you a littlepeek behind the curtain, what
you can expect on the new form10:40. So can't think of
anything or anybody better, Ishould say, than Chris. So,
Chris, run us through this, man.What's, what's happening with
(00:25):
the new ten forty?
Chris Picciurro, CPA (00:26):
Well, the yeah. This is our holiday gift
from teaching tax flow to you.We're gonna talk through the new
form ten forty. This is theindividual tax turn that
taxpayers that are US taxresidents fill out on an annual
basis. We'd love to hear yourcomments about it, what you
might what what you think shouldget added, what you like that
got added.
(00:47):
John's actually gonna put a linkto what we're talking about,
excuse me, in the show notes. Soif you're watching on YouTube,
yeah, definitely chime in withyour thoughts. Would love to
hear them. Remember that the oneof our three laws of teaching
tax flow is that your taxagencies are your involuntary
business partner, and the IRSand Department of Treasure
Treasury frequently change theform ten forty. It's supposed to
(01:11):
become easier.
Right? Change the form tenforty, and if you read through
the tea leaves, it's telling us,okay. What are some of the
things that that even though we,as tax professionals and
taxpayers, electronically fileour tax returns, what's getting
missed in creating some type ofmatching issue between what the
IRS gets on file on theirtranscripts and what taxpayers
file. And if there is adiscrepancy, maybe they create a
(01:33):
separate box, for the on thetaxpayer to fill out. So that's
kind of the gen that is thegenesis of what has changed on
the form ten forty.
The other thing is we do have ob three, right, then one big
beautiful bill act. So there aresome provisions on that act
that, within o b three that havechanged the format of the form
(01:55):
ten forty. So, yeah, I'm excitedto jump back in. This is a you
know, this is something thatwe're all gonna be looking at,
and we're gonna start at the toppage one of the ten forty. So,
again, if you're driving orwalking your dog or out for a
jog or just listening with awith a looking at a crackling
fire right now, we don't youknow, we're we know that you
(02:19):
might not have this form infront of you, but we want you to
be aware of what what has to be,provided.
So
John Tripolsky (02:26):
I love you said the word easy too because that
word usually doesn't come out ofyour mouth very often. Although,
in in your defense, you did notsay that it is easy. You said
their goal was to make thiseasier.
Chris Picciurro, CPA (02:35):
Their goal is to make it yeah. Remember,
we're supposed to have a postcard, but we certainly do not.
Ad Read (02:40):
This episode is sponsored by Wealth Builders
Mortgage Group, powered byMovement Mortgage, one of the
top mortgage teams in the nationand a powerhouse in the real
estate investing world. Withover $1,100,000,000 in closed
mortgage volume and more than3,000 investor deals under their
belt. They don't just talk thetalk, they walk it. Their team
(03:01):
specializes in helping shortterm and long term rental
investors scale smart withcustomized lending strategies.
They offer all STR loanproducts, including second home,
investment, non QM, bankstatement, asset based, and
HELOCs.
They also offer all primary homeloan products, too. Whether
you're just starting out orexpanding an existing portfolio,
(03:22):
their unique path of 10 strategyis designed to help you move
from a nine to five job tofinancial independence. If
you're looking for a lendingpartner who truly understands
the investor mindset, visitwealthbuildersmortgagegroup.com
and start building your roadmaptoday.
Chris Picciurro, CPA (03:39):
Remember, there's no such thing as an easy
tax return. That is that is abelief that that we have. So,
alright, let's talk about thatnew ten forty. Obviously, here
are some of the changes andthings that now this information
that I'm gonna talk about mayhave been reported within tax
software or somewhere else onthe ten forty through a schedule
(04:02):
or a separate form, but now aspart of that base form. So the
first thing is is not toopleasant.
If a if a taxpayer deceased or aspouse deceased, before you the
you would indicate that whenyou're preparing the tax turn,
and it would print out on theten forty and allegedly get get
(04:22):
reported to the IRS. Well,obviously, that might not have
went as smoothly as expected. Sonow on the top of the first page
of the ten forty, there's a boxthat says if someone deceased
and the date that they passedaway is clearly indicated on
that form ten forty. So that'schain that's change number one.
There also is a new interestingright?
(04:43):
Remember when digital assetscame out, in that question? That
question is actually the same.There's a new question that
says, check here if your mainhome or your spouse says if
filing a joint return was in TheUS for more than half of 2025.
So what they're trying to figureout, residency. Right?
So you're gonna check that. Thedefault's gonna be yes. Most
people's main home was in TheUnited States for over half the
(05:04):
year, but some taxpayers mighthave lived abroad as their main
residence for for more than halfthe year. That's a brand new
question on the first page ofthe ten forty. Now dependents
have always been listed on theten forty, the first page, where
they asked for the first name,last name, Social Security
(05:24):
number, and the relationship toyou.
But now it's also asked that ifthey've lived with you for more
than half of the year. Yes orno? And was it in The United
States? There's also a spotwhere you have to identify if
the dependent is a full timestudent. Now remember that mean
(05:47):
that doesn't mean they're a fulltime student the entire year.
That means they were a full timestudent for at least half of the
year, which is defined by fivemonths. So that's why a lot of
times colleges will trickle intothat May before they graduate,
or they start that August. Soyou're technically a half full
time student for half the yearif you're if you're doing one
semester. And I guess you couldhave both. Are you permanently
(06:10):
and totally disabled?
Though so those are twocheckboxes now on the front of
form ten forty. There are alsotwo credits. Now these
checkboxes were there before,where are you eligible for the
child tax credit or anothercredit? So those were always,
out there. You know, that wasthere before, but now we have
that new checkbox for full timestudent and disability.
(06:32):
Here's another very, veryinteresting thing, John.
Remember, and I think we'vetalked about this in our filing
status episode. Gosh. I don'tremember the episode number
anymore.
John Tripolsky (06:41):
It's been a bit. At least a couple months.
Chris Picciurro, CPA (06:43):
Yeah. We've had
John Tripolsky (06:44):
it Oh, maybe a year.
Chris Picciurro, CPA (06:45):
Filing status. There's now a check.
Because remember, you could bemarried, legally married, but
for tax purposes, unmarried.Okay? If you've lived apart for
at least six months of the year,And, obviously, there's a lot of
discrepancy.
You might have had someone onespouse file as married separate.
You might have one spouse fileas single or had a household. So
(07:06):
now on the front page of tenforty, there's a checkbox that
says, check if your Maryland ifyour filing status is married,
filing separate, head ofhousehold, and you lived apart
from your spouse for the lastsix months of 2025, or you're
legally separated according toyour state law under written
separation agreement or decreeor separate maintenance, and you
did not live in the samehousehold as your spouse at the
(07:28):
2025. So, ultimately, rememberthis, John. When someone passes
away or when someone is born orwhen someone gets married or
when someone is legallyseparated, Typically, those are
things that get filed with astate or locality, especially
marital status.
The IRS, federal governmentdoesn't know your marital
status. It's a self reportingthing. So that means when you do
(07:51):
get married or if you getlegally separated for at the end
of the year, by the end of theyear, and if you've lived apart
for six months. So again,obviously, there are issues with
people not either, you know,formerly married people that
didn't file, the same way forlack of a better term. Right?
That's the best I think
John Tripolsky (08:09):
the trend here, I mean, some of these changes.
Right? It's I could absolutelysee how there could be a
discrepancy. And and I think yourefer to it as matching, like
matching discrepancies. Soreally putting it all in one
form, it does make more I mean,in in my humble opinion.
Right? Like, it does make moresense, I would say. Right? And
and I could see why some ofthese even and, Chris, I could
be wrong. This is the first timeI've looked at this, even though
(08:31):
we've talked about this specificform update, first time I've
seen it, is even the way in thethe formatting look different
for dependents.
I'd I don't remember it beingcolumns like that, but I could
be wrong.
Chris Picciurro, CPA (08:42):
No. It was rows. So it went from rows to
columns. Absolutely.
John Tripolsky (08:46):
So they got a new director of spreadsheets or
something over at the IRS wholikes, you
Chris Picciurro, CPA (08:50):
know, columns and studies. Yeah.
Remember the federal government,the the IRS's software has been
designed ages ago. So they needto chain you you think chain if
you're listening to this and youwork somewhere or own a business
and you think changing from, youknow, Microsoft three sixty five
to to the Google Suite's a painin the butt or changing tax
softwares or changing your CRM,can you imagine the federal
(09:13):
government trying to change yoursoftware? I can imagine.
Data security that they have tokeep in in place. So
John Tripolsky (09:20):
I don't know long they've using Abacus until
probably, like, ten years ago.So if anybody doesn't know what
an Abacus is, look it up.Probably played with one at some
point. But So the
Chris Picciurro, CPA (09:28):
other change yeah. The other changes,
we when you have a child thatthat has dividends or investment
income, sometimes you're youmight be a parent that is
subject to the kiddie tax. Andyou can make an election
basically to just report yourdependent children's income on
your personal return instead ofthe dependent child filing a
(09:49):
separate tax return, having tofigure out your tax rate. That
obviously was an issue. So nowon the form ten forty, if you're
in that situation, you can checkand say, yeah.
My child's dividends are part ofmy tax return. My child's
capital gains are on my taxreturn. Because think about it.
Those capital gains anddividends are getting reported
on a year end statement,typically a ten ninety nine b or
(10:10):
ten ninety nine d I v in thechild's Social Security number.
So if you do report your child'sincome on your personal return,
that's telling the IRS, hey.
Don't send me a nasty letter.Where's my tax return for the
dependent child? Yeah. I Ialready reported it on my
return. But we've never hadthat.
I mean, obviously, you couldcheck some boxes in the tax
(10:31):
software, but maybe that wasn'tgetting through into the IRS
transcript. So now there's aseparate box that you can check
for that. There's also a new boxfor IRA distributions if you do
what's called a QCD. Now wetalked about this. This is an
amazing tax planning tool forpeople that are required to take
a minimum distribution fromtheir retirement accounts and
(10:53):
elect to send that directly to acharity to and that's called a
qualified charitabledistribution.
That's not new but there's a newbox now because obviously,
again, you gotta think wheneverthere was a matching problem,
now there's a new box just to toidentify that. So the QCD box is
new. There's another new boxunder Social Security benefits
(11:15):
talking about the, LSE, lump sumelection. So what that means and
we will talk about this in ourfuture podcast episode, we're
gonna break down the s SocialSecurity Fairness Act, SSFA, and
we have a lot of taxpayers thatare gonna get a lump sum from
(11:35):
Social Security either from frombasically back Social Security
pay they should have receivedwhen due to it getting limited
and before the Social SecurityFairness Act was enacted. Or
what if they were applied fordisability and had to wait
several years to get paid?
So the bottom line is there area lot of Social Security
(11:57):
recipients that get SocialSecurity back pay or disability
back pay that applies to aprevious year, but they received
it in the current year, you canmake an election to be taxed at
the previous year's rate ifthat's better for you. That's
called the lump sum election.Before you used to have, there
was never a checkbox. You wouldreport it but there's an
obviously that was an issue withIRS. They were struggling to
(12:20):
pick that up.
They're struggling to calculatethe IRMAA, which is a Medicare
premium, having to pay Medicarepremiums that are higher than
the normal. Bottom line is nowthere's a box you could check to
say the lump sum election. And,also, if you're married, filing
separate, and lived apart fromyour spouse for the entire year,
there's another box you cancheck. So, obviously, there's an
(12:40):
issue with people that areeither, you know, married filing
separate or in the process ofgetting legally separated.
There's matching problems forthose taxpayers.
So very interesting. You knowwe're gonna have another new
schedule A, but the other maindifference we're gonna talk
about is on the tax and creditdeduction, area of the $10.40.
(13:04):
The final thing I'm gonnamention is that we have the new
schedule one a, and thatschedule one a calculates four
new temporary deductions.Comment if you are gonna if you
think you're gonna be eligiblefor any of these deductions on
our YouTube channel, and I canpromise you we have additional
content on this, but that'sgonna be the no tax on tips, no
tax on overtime, a new vehicleinterest deduction, and the new
(13:27):
senior deduction. All four ofthose deductions get reconciled
on a schedule one a.
That schedule one a flows ontothe 10:40 on line 13 b. So my
point is if you are one of theestimated 40,000,000 taxpayers
that will be affected by thosenew rules, you will have a more
complicated ten forty. And, yes,you're gonna have to file
(13:48):
schedule one a, and that'll jumpjump on the the ten forty. So I
know I threw a lot at you. Manypeople really don't stare at the
ten forty that much, and I'mglad for that because you
probably have a better sociallife than than I do.
But I want everyone to be awareof some of the changes, and it
all comes down to making sureyou have your ducks in a row
when you either self prepareyour return or you work with a
(14:12):
tax professional. If you wantthe best result possible, you
need to be organized, especiallyon those tips and overtime. You
need to look at those previousor that final pay stub, and
hopefully, breaks down. Thatthat breakdown is provided from
your employer. If you're selfemployed, you could definitely
have tip income.
Right? And you're gonna wannamake sure that that gets
reported properly as well.
John Tripolsky (14:33):
Absolutely. No. But this I mean, it's good that
we go over this. Right? BecauseI think if anything, this can
kinda be viewed as almost youryour text filing compliance
playbook, for lack of betterterms.
Right? Like, see this.Obviously, they've made
adjustments to fix issuesthey've had in the past. So
kudos to them. They acknowledgedit, they did something about it.
Whether it makes it more easy orcomplex, we'll find out with
(14:56):
time. But really a lot of this,right, it's knowing what they're
gonna ask always helps you aheadof time. It's like preparing for
an interview. If Like, you havethe questions that you're gonna
ask before the interview, youknow what to prepare for. Same
thing here.
It saves you from rufflingaround, you know, the the day
before a deadline to geteverything together. So kudos to
you, Iris. We'll give you alittle round
Chris Picciurro, CPA (15:14):
of more thing in. One more change. I I
should have said this before,but I agree with you. Prepper
you know, being prepared isimportant. If you made estimated
tax payments, this is where itgets confusing where if you're
married filing joint, you madethe estimated tax payments
together.
A lot of times that only showsup potentially on the on the
first spouse's social number. Soif you made estimated tax
(15:35):
payments with your former spouseand you're splitting those
estimated tax payments, you needtheir Social Security number to
put on your tax return. So,again Ah. Be very aware now.
One.
Very and and yeah. And and itmakes sense, and we wish
everyone a very safe, happy,blessed holiday season. This
(15:58):
little gift is from the teachingtax flow team. Again, John's
gonna put the link to what we'retalking about this form. So you
got, John, you got to open aChristmas or Hanukkah or holiday
gift a little earlier thaneveryone else if you listen to
this or watched us.
John Tripolsky (16:15):
K. We'll take it. We'll take it. I'll give you
one more little preview. Right?
So next week, we're gonna talkabout something really fun,
which is the most commonlymissed deductions, which I look
forward to that one because Iknow there's a ton of them that
people miss and they havequestions about. So we're gonna
solve that one too. And thatgives it gives you something to
listen to when you're drivingback from family members' houses
or something over the holidaysand, you know, you gotta put
(16:38):
headphones in.
Chris Picciurro, CPA (16:38):
Young one that you need to get to sleep.
Right? Just put this podcast on.I'm sure they'll they might
There
John Tripolsky (16:43):
you go. We'll play a little, bluey or whatever
the popular kid song is in thebackground of this for you.
Chris Picciurro, CPA (16:48):
But,
John Tripolsky (16:49):
as Chris mentioned, everybody have a
great holiday season, and we'regonna see you back here again,
as always, on the Teaching TaxFlow podcast next week. So we're
talking different date, same dayof the week, completely
different topic. Have a greatweek, everybody.
Disclaimer (17:05):
The content provided is for educational purposes
only. We encourage you to seekpersonalized investment advice
from your financialprofessional. For all tax and
legal advice, please consultyour CPA or attorney. Investment
advisory services are offeredthrough Cabin Advisors, a
registered investment advisor.Securities are offered through
Cabin Securities, a registeredbroker dealer.
The content of this podcast doesnot constitute an offer of
(17:26):
securities. Offerings can onlybe made through an offering
memorandum, and you carefullyexamine the risk factors and
other information contained inthe memorandum.
Hey, everybody. Welcome back to the Teaching Tax
Flow podcast. John Tripolskyhere from the TTF team, joined
by my co-host, Chris PicciurroToday, we're gonna talk about a
sneak peek. That's right.
We're gonna give you a littlepeek behind the curtain, what
you can expect on the new form10:40. So can't think of
anything or anybody better, Ishould say, than Chris. So,
Chris, run us through this, man.What's, what's happening with
(00:25):
the new ten forty?
Chris Picciurro, CPA (00:26):
Well, the yeah. This is our holiday gift
from teaching tax flow to you.We're gonna talk through the new
form ten forty. This is theindividual tax turn that
taxpayers that are US taxresidents fill out on an annual
basis. We'd love to hear yourcomments about it, what you
might what what you think shouldget added, what you like that
got added.
(00:47):
John's actually gonna put a linkto what we're talking about,
excuse me, in the show notes. Soif you're watching on YouTube,
yeah, definitely chime in withyour thoughts. Would love to
hear them. Remember that the oneof our three laws of teaching
tax flow is that your taxagencies are your involuntary
business partner, and the IRSand Department of Treasure
Treasury frequently change theform ten forty. It's supposed to
(01:11):
become easier.
Right? Change the form tenforty, and if you read through
the tea leaves, it's telling us,okay. What are some of the
things that that even though we,as tax professionals and
taxpayers, electronically fileour tax returns, what's getting
missed in creating some type ofmatching issue between what the
IRS gets on file on theirtranscripts and what taxpayers
file. And if there is adiscrepancy, maybe they create a
(01:33):
separate box, for the on thetaxpayer to fill out. So that's
kind of the gen that is thegenesis of what has changed on
the form ten forty.
The other thing is we do have ob three, right, then one big
beautiful bill act. So there aresome provisions on that act
that, within o b three that havechanged the format of the form
(01:55):
ten forty. So, yeah, I'm excitedto jump back in. This is a you
know, this is something thatwe're all gonna be looking at,
and we're gonna start at the toppage one of the ten forty. So,
again, if you're driving orwalking your dog or out for a
jog or just listening with awith a looking at a crackling
fire right now, we don't youknow, we're we know that you
(02:19):
might not have this form infront of you, but we want you to
be aware of what what has to be,provided.
So
John Tripolsky (02:26):
I love you said the word easy too because that
word usually doesn't come out ofyour mouth very often. Although,
in in your defense, you did notsay that it is easy. You said
their goal was to make thiseasier.
Chris Picciurro, CPA (02:35):
Their goal is to make it yeah. Remember,
we're supposed to have a postcard, but we certainly do not.
Ad Read (02:40):
This episode is sponsored by Wealth Builders
Mortgage Group, powered byMovement Mortgage, one of the
top mortgage teams in the nationand a powerhouse in the real
estate investing world. Withover $1,100,000,000 in closed
mortgage volume and more than3,000 investor deals under their
belt. They don't just talk thetalk, they walk it. Their team
(03:01):
specializes in helping shortterm and long term rental
investors scale smart withcustomized lending strategies.
They offer all STR loanproducts, including second home,
investment, non QM, bankstatement, asset based, and
HELOCs.
They also offer all primary homeloan products, too. Whether
you're just starting out orexpanding an existing portfolio,
(03:22):
their unique path of 10 strategyis designed to help you move
from a nine to five job tofinancial independence. If
you're looking for a lendingpartner who truly understands
the investor mindset, visitwealthbuildersmortgagegroup.com
and start building your roadmaptoday.
Chris Picciurro, CPA (03:39):
Remember, there's no such thing as an easy
tax return. That is that is abelief that that we have. So,
alright, let's talk about thatnew ten forty. Obviously, here
are some of the changes andthings that now this information
that I'm gonna talk about mayhave been reported within tax
software or somewhere else onthe ten forty through a schedule
(04:02):
or a separate form, but now aspart of that base form. So the
first thing is is not toopleasant.
If a if a taxpayer deceased or aspouse deceased, before you the
you would indicate that whenyou're preparing the tax turn,
and it would print out on theten forty and allegedly get get
(04:22):
reported to the IRS. Well,obviously, that might not have
went as smoothly as expected. Sonow on the top of the first page
of the ten forty, there's a boxthat says if someone deceased
and the date that they passedaway is clearly indicated on
that form ten forty. So that'schain that's change number one.
There also is a new interestingright?
(04:43):
Remember when digital assetscame out, in that question? That
question is actually the same.There's a new question that
says, check here if your mainhome or your spouse says if
filing a joint return was in TheUS for more than half of 2025.
So what they're trying to figureout, residency. Right?
So you're gonna check that. Thedefault's gonna be yes. Most
people's main home was in TheUnited States for over half the
(05:04):
year, but some taxpayers mighthave lived abroad as their main
residence for for more than halfthe year. That's a brand new
question on the first page ofthe ten forty. Now dependents
have always been listed on theten forty, the first page, where
they asked for the first name,last name, Social Security
(05:24):
number, and the relationship toyou.
But now it's also asked that ifthey've lived with you for more
than half of the year. Yes orno? And was it in The United
States? There's also a spotwhere you have to identify if
the dependent is a full timestudent. Now remember that mean
(05:47):
that doesn't mean they're a fulltime student the entire year.
That means they were a full timestudent for at least half of the
year, which is defined by fivemonths. So that's why a lot of
times colleges will trickle intothat May before they graduate,
or they start that August. Soyou're technically a half full
time student for half the yearif you're if you're doing one
semester. And I guess you couldhave both. Are you permanently
(06:10):
and totally disabled?
Though so those are twocheckboxes now on the front of
form ten forty. There are alsotwo credits. Now these
checkboxes were there before,where are you eligible for the
child tax credit or anothercredit? So those were always,
out there. You know, that wasthere before, but now we have
that new checkbox for full timestudent and disability.
(06:32):
Here's another very, veryinteresting thing, John.
Remember, and I think we'vetalked about this in our filing
status episode. Gosh. I don'tremember the episode number
anymore.
John Tripolsky (06:41):
It's been a bit. At least a couple months.
Chris Picciurro, CPA (06:43):
Yeah. We've had
John Tripolsky (06:44):
it Oh, maybe a year.
Chris Picciurro, CPA (06:45):
Filing status. There's now a check.
Because remember, you could bemarried, legally married, but
for tax purposes, unmarried.Okay? If you've lived apart for
at least six months of the year,And, obviously, there's a lot of
discrepancy.
You might have had someone onespouse file as married separate.
You might have one spouse fileas single or had a household. So
(07:06):
now on the front page of tenforty, there's a checkbox that
says, check if your Maryland ifyour filing status is married,
filing separate, head ofhousehold, and you lived apart
from your spouse for the lastsix months of 2025, or you're
legally separated according toyour state law under written
separation agreement or decreeor separate maintenance, and you
did not live in the samehousehold as your spouse at the
(07:28):
2025. So, ultimately, rememberthis, John. When someone passes
away or when someone is born orwhen someone gets married or
when someone is legallyseparated, Typically, those are
things that get filed with astate or locality, especially
marital status.
The IRS, federal governmentdoesn't know your marital
status. It's a self reportingthing. So that means when you do
(07:51):
get married or if you getlegally separated for at the end
of the year, by the end of theyear, and if you've lived apart
for six months. So again,obviously, there are issues with
people not either, you know,formerly married people that
didn't file, the same way forlack of a better term. Right?
That's the best I think
John Tripolsky (08:09):
the trend here, I mean, some of these changes.
Right? It's I could absolutelysee how there could be a
discrepancy. And and I think yourefer to it as matching, like
matching discrepancies. Soreally putting it all in one
form, it does make more I mean,in in my humble opinion.
Right? Like, it does make moresense, I would say. Right? And
and I could see why some ofthese even and, Chris, I could
be wrong. This is the first timeI've looked at this, even though
(08:31):
we've talked about this specificform update, first time I've
seen it, is even the way in thethe formatting look different
for dependents.
I'd I don't remember it beingcolumns like that, but I could
be wrong.
Chris Picciurro, CPA (08:42):
No. It was rows. So it went from rows to
columns. Absolutely.
John Tripolsky (08:46):
So they got a new director of spreadsheets or
something over at the IRS wholikes, you
Chris Picciurro, CPA (08:50):
know, columns and studies. Yeah.
Remember the federal government,the the IRS's software has been
designed ages ago. So they needto chain you you think chain if
you're listening to this and youwork somewhere or own a business
and you think changing from, youknow, Microsoft three sixty five
to to the Google Suite's a painin the butt or changing tax
softwares or changing your CRM,can you imagine the federal
(09:13):
government trying to change yoursoftware? I can imagine.
Data security that they have tokeep in in place. So
John Tripolsky (09:20):
I don't know long they've using Abacus until
probably, like, ten years ago.So if anybody doesn't know what
an Abacus is, look it up.Probably played with one at some
point. But So the
Chris Picciurro, CPA (09:28):
other change yeah. The other changes,
we when you have a child thatthat has dividends or investment
income, sometimes you're youmight be a parent that is
subject to the kiddie tax. Andyou can make an election
basically to just report yourdependent children's income on
your personal return instead ofthe dependent child filing a
(09:49):
separate tax return, having tofigure out your tax rate. That
obviously was an issue. So nowon the form ten forty, if you're
in that situation, you can checkand say, yeah.
My child's dividends are part ofmy tax return. My child's
capital gains are on my taxreturn. Because think about it.
Those capital gains anddividends are getting reported
on a year end statement,typically a ten ninety nine b or
(10:10):
ten ninety nine d I v in thechild's Social Security number.
So if you do report your child'sincome on your personal return,
that's telling the IRS, hey.
Don't send me a nasty letter.Where's my tax return for the
dependent child? Yeah. I Ialready reported it on my
return. But we've never hadthat.
I mean, obviously, you couldcheck some boxes in the tax
(10:31):
software, but maybe that wasn'tgetting through into the IRS
transcript. So now there's aseparate box that you can check
for that. There's also a new boxfor IRA distributions if you do
what's called a QCD. Now wetalked about this. This is an
amazing tax planning tool forpeople that are required to take
a minimum distribution fromtheir retirement accounts and
(10:53):
elect to send that directly to acharity to and that's called a
qualified charitabledistribution.
That's not new but there's a newbox now because obviously,
again, you gotta think wheneverthere was a matching problem,
now there's a new box just to toidentify that. So the QCD box is
new. There's another new boxunder Social Security benefits
(11:15):
talking about the, LSE, lump sumelection. So what that means and
we will talk about this in ourfuture podcast episode, we're
gonna break down the s SocialSecurity Fairness Act, SSFA, and
we have a lot of taxpayers thatare gonna get a lump sum from
(11:35):
Social Security either from frombasically back Social Security
pay they should have receivedwhen due to it getting limited
and before the Social SecurityFairness Act was enacted. Or
what if they were applied fordisability and had to wait
several years to get paid?
So the bottom line is there area lot of Social Security
(11:57):
recipients that get SocialSecurity back pay or disability
back pay that applies to aprevious year, but they received
it in the current year, you canmake an election to be taxed at
the previous year's rate ifthat's better for you. That's
called the lump sum election.Before you used to have, there
was never a checkbox. You wouldreport it but there's an
obviously that was an issue withIRS. They were struggling to
(12:20):
pick that up.
They're struggling to calculatethe IRMAA, which is a Medicare
premium, having to pay Medicarepremiums that are higher than
the normal. Bottom line is nowthere's a box you could check to
say the lump sum election. And,also, if you're married, filing
separate, and lived apart fromyour spouse for the entire year,
there's another box you cancheck. So, obviously, there's an
(12:40):
issue with people that areeither, you know, married filing
separate or in the process ofgetting legally separated.
There's matching problems forthose taxpayers.
So very interesting. You knowwe're gonna have another new
schedule A, but the other maindifference we're gonna talk
about is on the tax and creditdeduction, area of the $10.40.
(13:04):
The final thing I'm gonnamention is that we have the new
schedule one a, and thatschedule one a calculates four
new temporary deductions.Comment if you are gonna if you
think you're gonna be eligiblefor any of these deductions on
our YouTube channel, and I canpromise you we have additional
content on this, but that'sgonna be the no tax on tips, no
tax on overtime, a new vehicleinterest deduction, and the new
(13:27):
senior deduction. All four ofthose deductions get reconciled
on a schedule one a.
That schedule one a flows ontothe 10:40 on line 13 b. So my
point is if you are one of theestimated 40,000,000 taxpayers
that will be affected by thosenew rules, you will have a more
complicated ten forty. And, yes,you're gonna have to file
(13:48):
schedule one a, and that'll jumpjump on the the ten forty. So I
know I threw a lot at you. Manypeople really don't stare at the
ten forty that much, and I'mglad for that because you
probably have a better sociallife than than I do.
But I want everyone to be awareof some of the changes, and it
all comes down to making sureyou have your ducks in a row
when you either self prepareyour return or you work with a
(14:12):
tax professional. If you wantthe best result possible, you
need to be organized, especiallyon those tips and overtime. You
need to look at those previousor that final pay stub, and
hopefully, breaks down. Thatthat breakdown is provided from
your employer. If you're selfemployed, you could definitely
have tip income.
Right? And you're gonna wannamake sure that that gets
reported properly as well.
John Tripolsky (14:33):
Absolutely. No. But this I mean, it's good that
we go over this. Right? BecauseI think if anything, this can
kinda be viewed as almost youryour text filing compliance
playbook, for lack of betterterms.
Right? Like, see this.Obviously, they've made
adjustments to fix issuesthey've had in the past. So
kudos to them. They acknowledgedit, they did something about it.
Whether it makes it more easy orcomplex, we'll find out with
(14:56):
time. But really a lot of this,right, it's knowing what they're
gonna ask always helps you aheadof time. It's like preparing for
an interview. If Like, you havethe questions that you're gonna
ask before the interview, youknow what to prepare for. Same
thing here.
It saves you from rufflingaround, you know, the the day
before a deadline to geteverything together. So kudos to
you, Iris. We'll give you alittle round
Chris Picciurro, CPA (15:14):
of more thing in. One more change. I I
should have said this before,but I agree with you. Prepper
you know, being prepared isimportant. If you made estimated
tax payments, this is where itgets confusing where if you're
married filing joint, you madethe estimated tax payments
together.
A lot of times that only showsup potentially on the on the
first spouse's social number. Soif you made estimated tax
(15:35):
payments with your former spouseand you're splitting those
estimated tax payments, you needtheir Social Security number to
put on your tax return. So,again Ah. Be very aware now.
One.
Very and and yeah. And and itmakes sense, and we wish
everyone a very safe, happy,blessed holiday season. This
(15:58):
little gift is from the teachingtax flow team. Again, John's
gonna put the link to what we'retalking about this form. So you
got, John, you got to open aChristmas or Hanukkah or holiday
gift a little earlier thaneveryone else if you listen to
this or watched us.
John Tripolsky (16:15):
K. We'll take it. We'll take it. I'll give you
one more little preview. Right?
So next week, we're gonna talkabout something really fun,
which is the most commonlymissed deductions, which I look
forward to that one because Iknow there's a ton of them that
people miss and they havequestions about. So we're gonna
solve that one too. And thatgives it gives you something to
listen to when you're drivingback from family members' houses
or something over the holidaysand, you know, you gotta put
(16:38):
headphones in.
Chris Picciurro, CPA (16:38):
Young one that you need to get to sleep.
Right? Just put this podcast on.I'm sure they'll they might
There
John Tripolsky (16:43):
you go. We'll play a little, bluey or whatever
the popular kid song is in thebackground of this for you.
Chris Picciurro, CPA (16:48):
But,
John Tripolsky (16:49):
as Chris mentioned, everybody have a
great holiday season, and we'regonna see you back here again,
as always, on the Teaching TaxFlow podcast next week. So we're
talking different date, same dayof the week, completely
different topic. Have a greatweek, everybody.
Disclaimer (17:05):
The content provided is for educational purposes
only. We encourage you to seekpersonalized investment advice
from your financialprofessional. For all tax and
legal advice, please consultyour CPA or attorney. Investment
advisory services are offeredthrough Cabin Advisors, a
registered investment advisor.Securities are offered through
Cabin Securities, a registeredbroker dealer.
The content of this podcast doesnot constitute an offer of
(17:26):
securities. Offerings can onlybe made through an offering
memorandum, and you carefullyexamine the risk factors and
other information contained inthe memorandum.
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