Q: A couple months back I read that the IRS will be offering a new senior-friendly tax form this tax season that will be easier to use. What can you tell me about this?
A: The Internal Revenue Service has created Form 1040-SR, a new federal income-tax form specifically designed for senior taxpayers, age 65 and older, that should make filing a little easier this year, particularly those who don’t file electronically. Here’s what you should know.
Created by the 2018 Bipartisan Budget Act, the new two-page simplified federal income tax form is similar in style to the old 1040-EZ form that the IRS discontinued last year. 1040-SR has larger print and better color contrast that makes it easier to read.
In addition, it also includes a chart to help older taxpayers calculate their standard deduction, which may help ensure that fewer seniors neglect to take the additional standard deduction that they are entitled to. For 2019, the additional deduction for those 65 or older or the blind is $1,300.
The 1040-SR form also has specific lines for retirement income streams such as Social Security benefits, IRA distributions, pensions and annuities, along with earned income from work wages and tips. And, it allows a child tax credit for seniors who are still taking care of a dependent child or grandchild.
You can also report capital gains and losses, as well as interest and dividends on this new form. Any of the tax schedules available to those using the standard form 1040 may also be used with the 1040-SR.
You should also know that the 1040-SR doesn’t put a limit on interest, dividends, or capital gains, nor does it cap overall income like the old 1040-EZ form did. But, if you have to itemize because of state and local taxes or charitable giving, then you will not be able to use 1040-SR.
Seniors who use tax-preparation software to file their taxes will be able to generate a 1040-SR, but the new form will provide the most significant benefit to taxpayers who still fill out and file their returns on paper.
Last year, about 88% of the 153 million individual federal tax returns filed to the IRS were filed electronically. About 5% were prepared using tax software, then printed out and mailed to the agency, while about 7% were prepared on paper.
To use the new 1040-SR tax form for the 2019 filing year, taxpayers, including both spouses if filing jointly, must be at least age 65 before Jan. 1, 2020. You also don’t have to be retired to use the form – older workers can use it too. But early retirees (younger than 65) cannot use 1040-SR.
To see the 2019 draft version of the new 1040-SR form, go to IRS.gov/pub/irs-dft/f1040s—dft.pdf.
Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” book.
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