Form 1040-SR Benefits
By Latesha Anderson, Brand Ambassador
Posted October 11, 2019
Filing your taxes is universally not viewed as an enjoyable or exciting experience (except for the wonderful staff at WCG of course)! Filling out tiny boxes with numbers all bunched into a stack of pages to describe your financial status is not fun at any age, so imagine having to do this in your mid-60s and later! After thinking of the huge 2018 tax reform from the Tax Cuts and Jobs Act, the last thing you’d like an update on is another tax change, but trust us this is a good one.
Thanks to Section 41106 of the Bipartisan Budget Act of 2018 (yawn), seniors now have their own tax form, Form 1040-SR. Oh, you missed that on Ellen? No worries… Follow the link to read the full bill if you’re feeling really bored (or wide awake at 2 AM)! It goes by the name of IRS Form 1040-SR and its main goal is to make tax filing easier for seniors!
Father time is undefeated… we’ll all be seniors one day. Form 1040-SR will be your friend!
How to Qualify Form 1040SR
Qualifying to use this new tax form, Form 1040-SR, is simple:
- Be at least 65 years old any time during the tax period (so before the end of 2019). Yes, if you’re a New Years Eve baby you still qualify for the 2019 tax year!
- File using the standard deduction. In 2019, $12,200 for single filers, $18,350 for head of household filers, and $24,400 for married individuals filing jointly. You also get an extra $1,300 to add on top of those amounts! So, Form 1040SR does not allow you to itemize your deductions which makes sense since the bulk of those deductions is commonly property taxes and mortgage interest.
Just like Bugs Bunny… That’s all, folks! By the way, Bugs Bunny was born July 27th, 1940 and is 79 years old today. He has a bunch of charitable donations that exceed his standard deduction so he cannot use Form 1040-SR. Goofy on the other hand…
Form 1040-SR: Pros, Cons, and In-Betweens
The new tax form has many benefits. Qualifying is easy-
- Retirement is not a requirement (you can still work!),
- Form 1040-SR will have larger font and higher contrast to make reading easier (and you can still rock the clear frame readers),
- It is only two pages (we love this!), and
- Form 1040-SR will even include a clear chart that shows the calculation of your standard deduction for seniors over 65 for you to refer to (they farmed this out… the IRS doesn’t make clear charts).
Another benefit is that those who qualify will not have to file Form 1040-EZ. Form 1040SR completely replaces it and does not limit interest, dividends, capital gains, or cap income (unlike the ugly stepsister the 1040-EZ)! The IRS also expects this form to take less time to complete! Of course they do… they serve at the pleasure of the taxpayer. Really! (ok, not really).
A possible factor that may be considered a con is that Form 1040-SR is strictly for filing individual returns. If you own a business, you will still have to use the usual Form 1040 and the correlating Schedule C (and if you make more than $30,000 net income you should be an S Corporation). Another con is that if you are filing married jointly, both spouses must be at age 65 to qualify. Ouch! Cougars everywhere are canceling wedding plans for sure.
The final draft of Form 1040SR should be released before the end of 2019 and will be available for use for the 2019 tax season. If you are unsure about which form to use or have any questions about filing your taxes, we’d love to help! Schedule a consultation with one of our tax professionals and let us help ease the stress of tax return preparation.
Latesha Anderson is the Brand Ambassador for WCG, a business consultation and tax preparation firm located in Colorado Springs.