Resources

The new form for those 65 and older is easier to read and fill out

• What You Need to Know

• Who Can File Form 1040-SR?

• Special Considerations

• History of Form 1040-SR

• If you are 65 or older (or you turned 65 any time in 2019), you will have the option to use a new simple tax form for seniors, known as Form 1040-SR: U.S. Tax Return for Seniors, when you file your 2019 taxes in April 2020.¹ In order to take it, you need to take the standard deduction—and the form incorporates the higher standard deduction for taxpayers age 65 and older.
• For 2019 taxes, the ones you file in 2020, the standard deduction for taxpayers 65 and over will increase.^2 3
• Form 1040-SR is similar to the now-defunct Form 1040-EZ, which was designed for those with a straightforward tax scenario, such as taxpayers who take standard deductions.⁴
• The new form is provided for in section 41106 of the Bipartisan Budget Act of 2018 (BBA), a two-year budget agreement passed by Congress and signed by President Donald Trump on Feb. 9, 2018.⁵ The provision creating Form 1040-SR was one of several retirement-related changes to tax policy included in the BBA, which should not be confused with the Tax Cuts and Jobs Act passed on Dec. 22, 2017.⁶
• KEY TAKEAWAYS
• The new Form 1040-SR is a simplified tax form for seniors who have uncomplicated finances and who otherwise would have to file Form 1040.
• Form 1040-SR allows an individual to report income from wages, salaries, tips, and other income sources.
• The new form requires a senior to be 65 or older by the end of either 2019 or by the end of the tax filing year.
• Other senior-friendly features include larger font and spaces to fill in the information.
• The new form also has no income tests and expanded income categories.
• What You Need to Know About Form 1040-SR
• Form 1040-SR and Form 1040 were designed to be similar to Form 1040-EZ, which was replaced for 2018 tax returns. Form 1040-SR is a simplified tax form for seniors with uncomplicated finances. While Form 1040-EZ only allowed the reporting of income from wages, salaries, and tips, Form 1040-SR allows income from certain other sources.⁷
• The new form is also designed with aging eyes in mind⁠—it features larger spaces to enter information and bigger font size than a 1040 form.
• Who Can File Form 1040-SR?
• There are additional differences between Forms 1040-EZ and 1040-SR, which are described below, including age requirements and total income allowed.⁸
• 65 and Older
• One major difference between Forms 1040-EZ and 1040-SR has to do with age. Form 1040-EZ was available to any taxpayer under the age of 65 who otherwise met income and filing requirements. To use 1040-SR, you must have turned 65 or older by Dec. 31, 2019, or by the end of the tax year for which you are filing. For example, if you turned 65 on Dec. 31, 2019, you can use Form 1040-SR when you file your 2019 taxes in April 2020. If you are 65 any time in 2020, you can use Form 1040-SR to file your 2020 taxes in 2021.⁹
• Important: You don’t have to be retired. If you are still working at age 65 and otherwise qualify to file Form 1040-SR, you may do so. On the other hand, early retirees (younger than 65) cannot use Form 1040-SR.
• No Income Test
• Unlike Form 1040-EZ, which limited interest income to $1,500 and total income to $100,000 or less, Form 1040-SR has no limit on the amount of your total income for a given taxable year.¹⁰
• Expanded Income Categories
• Furthermore, IRS Form 1040-SR allows the reporting of several types of income in addition to those allowed by the Form 1040-EZ (wages, salaries, tips, taxable scholarship or fellowship grants, and unemployment compensation or Alaska Permanent Fund dividends). Specifically, Form 1040-SR allows you to report Social Security benefits as well as distributions from qualified retirement plans, annuities, or similar deferred-payment arrangements. You may also include unlimited interest and dividends and capital gains and losses.⁹
• Form 1040-SR starts for the tax year 2019, so seniors will fill out these forms for the first time in 2020.
• What About Tax Deductions?
• Seniors who fill out Form 1040-SR must take the standard deduction. Remember that those who are 65 or over are entitled to a higher deduction. In 2019 if you are 65 or older and single your standard deduction is an additional $1,650, totaling $13,850 for the tax year 2019. If you are married filing jointly and one of you is 65 or older, your standard deduction goes up to $1,300 and if both of you are 65 or older, the deduction increases by $2,600.⁹ In the tax year 2020 the standard deduction for those 65 and older remains the same.¹¹
• Form 1040-SR features a chart on the first-page chart that spells out standard deductions based on filing status.¹²
• All pages of Form 1040-SR are available on the IRS website.¹³
• Special Considerations for Form 1040-SR
• Form 1040-SR simplifies tax-filing requirements for seniors and is much easier to complete than the much longer Form 1040 and the now-defunct Forms 1040-EZ and 1040-A. However, if you are a retiree under the age of 65, even if your income sources include Social Security, pensions, and investment income, you cannot use Form 1040-SR and must use Form 1040.⁹ Despite this, the introduction of Form 1040-SR is a big step in the right direction when it comes to the simplification of tax-filing requirements.
• History of Form 1040-SR
• The legislation that resulted in the creation of IRS Form 1040-SR began March 5, 2013, with the introduction of the Seniors Tax Simplification Act by Senators Marco Rubio (R-FL) and Bill Nelson (D-FL), joined by Senators Mike Lee (R-UT) and Tom Carper (D-DE).¹⁴ Following several failed attempts to turn the act into law—and despite endorsements by the AARP, the Association of Mature American Citizens, and the National Taxpayers Union—the bill didn’t pass until Form 1040-SR language was adopted as part of the emergency spending bill signed by President Trump on Feb. 9, 2018.⁵

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JIM PROBASCO, CPA, Form 1040-SR: Seniors Get a New Simplified Tax Form for 2019, Investopedia,[Internet],  Jan 27, 2020