Form 1040-SR U.S. Tax Return for Seniors: Definition and Filing

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Form 1040-SR U.S. Tax Return for Seniors: Definition and Filing

What Is Form 1040-SR: U.S. Tax Return for Seniors?

If you are 65 or older you have the option of using Form 1040-SR: U.S. Tax Return for Seniors rather than the standard Form 1040 when you file your taxes. It is virtually identical to Form 1040 except that it has larger type and gives greater prominence to the senior-specific tax benefits.

Form 1040 and Form 1040-SR are now the standard forms used by taxpayers, whether or not they itemize deductions. Form 1040 was revised and simplified and Form 1040-SR was introduced with the Bipartisan Budget Act of 2018. That act also abolished Form 1040-EZ, which was designed for taxpayers with uncomplicated tax situations, and Form 1040A, which was confusingly similar to the old Form 1040.

Key Takeaways

  • The new Form 1040-SR is a variant of the conventional Form 1040, which is utilized by the vast majority of taxpayers.
  • You may utilize either form if you were at least 65 by the end of 2021.
  • Form 1040-SR has bigger text and emphasizes tax advantages for seniors, notably the higher standard deduction.

Understanding Form 1040-SR

Form 1040-SR is designed to be easier on the eyes and to give greater prominence to tax benefits specific to seniors.

Most importantly, a higher standard deduction is available to seniors who do not itemize. Form 1040-SR incorporates a chart detailing the amount of this additional standard deduction for taxpayers age 65 or older.

Taxpayers who were at least 65 by the end of 2020 may increase their standard deduction by at least $1,300. The chart given with Form 1040-SR only shows the combined deduction amounts based on filing status and other considerations.

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While the former Form 1040-EZ only allowed you to declare income from wages, salaries, and tips, the new Form 1040-SR enables you to disclose income from certain additional sources.

Who Can File Form 1040-SR?

The former Form 1040-EZ and 1040-SR vary in a number of ways, including the age requirements and total income permitted.

Ages 65 and Older

One significant distinction between Forms 1040-EZ and 1040-SR is age. Any taxpayer under the age of 65 who fulfilled the income and filing criteria may use Form 1040-EZ. To file Form 1040-SR, you must be 65 or older by the end of the tax year in question. If you reached 65 on December 31, 2021, for example, you may utilize Form 1040-SR to submit your 2021 taxes in 2022.

You are not have to be retired. You may submit Form 1040-SR if you are still working at the age of 65 and otherwise qualify. Early retirees (those under the age of 65) cannot utilize Form 1040-SR.

No Income Limit

Unlike Form 1040-EZ, which restricted interest income to $1,500 and total income to $100,000 or less in a given tax year, Form 1040-SR has no restriction on the amount of your total income for a particular tax year.

Expanded Income Categories

Furthermore, IRS Form 1040-SR permits the reporting of additional categories of income than Form 1040-EZ (wages, salaries, tips, taxable scholarship or fellowship grants, and unemployment compensation or Alaska Permanent Fund dividends).

Form 1040-SR, in particular, permits you to record Social Security income as well as distributions from eligible retirement plans, annuities, and similar deferred-payment arrangements. You may also add an infinite amount of interest and dividends, as well as capital gains and losses.

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What About Tax Deductions?

Form 1040-SR, like Form 1040, may be utilized regardless of whether you take the standard deduction or itemize deductions.

Nonetheless, the great majority of Americans now use the standard deduction, which was almost quadrupled by the 2018 tax reform bill. The increased standard deduction for seniors is simply one more reason to avoid itemizing.

Special Considerations When Filing Form 1040-SR

Form 1040-SR makes it easier for seniors to file their taxes. However, if you are under the age of 65 and have Social Security, pensions, or investment income, you cannot utilize Form 1040-SR and must instead use Form 1040.

Despite this disadvantage, the release of Form 1040-SR and the redesigned Form 1040 are moves in the right direction towards simplifying tax-filing processes.

History of Form 1040-SR

The legislation that culminated in the development of IRS Form 1040-SR started on March 5, 2013, with Senators Marco Rubio (R-FL) and Bill Nelson (D-FL) introducing the Seniors Tax Simplification Act, which was joined by Senators Mike Lee (R-UT) and Tom Carper (D-CT) (D-DE).

Despite support from the AARP, the Association of Mature American Citizens, and the National Taxpayers Union, the measure didn’t pass until Form 1040-SR wording was incorporated as part of the emergency budget package signed by former President Trump on Feb. 9, 2018.

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