Feb. 20--As required by the Bipartisan Budget Act of 2018, the Internal Revenue Service (IRS) has created a tax form specifically designed for older Americans in mind.
The 1040-SR is a new two-page simplified federal income tax form created for Americans 65 or older by the end of either 2019 or by the end of the tax filing year.
Married people filing jointly can use the Form 1040-SR regardless of whether both spouses are aged 65 or older or retired.
The form was created for seniors who have uncomplicated finances and who otherwise would file a regular Form 1040. The 1040-SR is for seniors both working or retired. However, the form is not for those individuals who have retired early. Those using the form must be 65 or older.
The Form 1040 allows a taxpayer to report income from wages, salaries, tips, and other income sources just like a regular Form 1040.
More specifically, Form 1040-SR allows one to report Social Security benefits, distributions from qualified retirement plans, annuities, etc.
Similar in style to the old 1040-EZ form that the IRS discontinued last year, the new 1040-SR has larger fonts and better color contrast that makes it easier to read.
Unlike the 1040-EZ however, the 1040-SR will not limit the interest income, or total income one can claim. The form 1040-EZ limited interest income to $1,500 and total income to $100,000 or less.
According to the IRS's website, the Form 1040-SR is for both the taxpayers who want to take the standard deduction, and eligible taxpayers who wants to file itemized deductions.
Those wishing to itemize deductions can file the new form with a Schedule A, Itemized Deductions when filing their return.
It is worth noting that the standard deduction for those 65 or older has increased for the 2019 tax season. Those 65 or older filing as single will receive an additional $1,650 on their deductions, totaling $13,850. If you are filing jointly and only one spouse is over 65, your deduction increases by $1,300. If both spouses are over 65, the standard deduction increase by $2,600.
There will be no increase on standard deductions in the 2020 tax season.
The 1040-SR will include a standard deduction chart for those wishing not itemize.
The IRS's website goes on to say that the 1040-SR uses the same "building block" approach that was introduced last year for the regular Form 1040. Which means each form can be supplemented with additional Schedules 1,2 and 3 as needed. However, the website notes that many taxpayers with basic tax situations can file the form without any additional attachments.
The IRS is hopeful that the new tax form will help older Americans when filing this tax season, whether they are filing the form in person or online.
The IRS and the state of Kentucky started officially accepting 2019 tax returns on Jan. 27. The IRS expects to receive more than 150 million individual tax returns, with the majority of them coming before the April 15 deadline.
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