Thursday September 24, 2020
IRS Introduces a Tax Form Created for Older Taxpayers
The Internal Revenue Service (IRS) has created a new federal income tax form specifically designed for taxpayers age 65 and older. This form should make filing a little easier this year, particularly for those who do not file electronically. Here is what you should know.
Created by the 2018 Bipartisan Budget Act, the new two-page simplified federal income tax form is called the 1040-SR. Similar in style to the old 1040-EZ form that the IRS discontinued last year, the new 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 more seniors take the additional standard deduction available to them. 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. It also allows a child tax credit for seniors who are taking care of a dependent child or grandchild.
The form allows taxpayers to report capital gains and losses, as well as interest and dividends. Any of the tax schedules available to those using the standard form 1040 may also be used with the 1040-SR.
Form 1040-SR does not put a limit on interest, dividends or capital gains. Nor does it cap overall income like the old Form 1040-EZ did.
Paper Filing Advantage
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 and submitted 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. To see the 2019 version of the new 1040-SR form, go to https://www.irs.gov/pub/irs-pdf/f1040s.pdf.
Tax Preparation Help
If you need help filing your tax returns this year, consider contacting the Tax Counseling for the Elderly (TCE) program. Sponsored by the IRS, TCE provides free tax preparation and counseling to middle and low-income taxpayers, age 60 and older. Call 800-906-9887 or visit IRS.treasury.gov/freetaxprep to locate a service near you.
AARP is a participant in the TCE program that provides free tax preparation at more than 4,800 sites nationwide. To locate an AARP Tax-Aide site call 888-227-7669 or visit AARP.org/findtaxhelp. You do not have to be an AARP member to use this service.
Savvy Living is written by Jim Miller, a regular contributor to the NBC Today Show and author of "The Savvy Living" book. Any links in this article are offered as a service and there is no endorsement of any product. These articles are offered as a helpful and informative service to our friends and may not always reflect this organization's official position on some topics. Jim invites you to send your senior questions to: Savvy Living, P.O. Box 5443, Norman, OK 73070.