As a new filing season approaches, the Internal Revenue Service (IRS) has released a second draft of a new type of 1040 return. This new return is the Form 1040-SR, U.S. Tax Return for Seniors.
A Cousin of the Long-Lost 1040-EZ
Most of you are probably familiar with the standard Form 1040 that each U.S. taxpayer has to file annually. Prior to the inception of the Tax Cuts and Jobs Act (TCJA), some of you may have used Forms 1040-EZ or 1040-A. These were wiped out by the TCJA, leaving us all to use the standard Form 1040 last filing season.
The Forms 1040-EZ and 1040-A are by no means on their way back onto the spectrum. But, the Form 1040-SR is a resolution to an issue that has existed for years: simplifying filing taxes.
Tax professionals first heard of the new Form 1040-SR towards the end of 2017. However, we only saw the redesigned standard Form 1040 last year – the 1040-SR was still missing. This is because it wasn’t included as part of the TCJA, but was pushed through later as part of the Bipartisan Budget Act of 2018.
So What Does the 1040-SR do?
The new Form 1040-SR includes larger print and less boxes to check, simplifying the tax filing process for America’s seniors. Any taxpayers aged 65 and older at the end of the tax year can utilize the new Form 1040-SR. This is a difference from it’s predecessor cousin, the 1040-EZ, which limited income, deduction, and credit amounts.
The new Form 1040-SR also allows seniors to choose between the standard and itemized deductions as well. The form is currently in draft at the IRS, which means it is not in legitimate use at this time. The IRS is currently gathering feedback from a community of tax professionals. You can even comment on the form by e-mailing [email protected].
While the IRS says over 15 million taxpayers are eligible to utilize the new form – that number is likely inflated. Most seniors, like most other taxpayers, no longer file by hand. Even the most hesitant of seniors use tax preparation software or a tax professional instead. While this new form will likely be built into new tax software releases for the 2019 tax season, the actual purpose of the form is then missed, since a computer is still filling in the form on your behalf.
No matter what – we’re ready at Boundless Tax for all your tax filing needs. We are ready to use the new Form 1040-SR!