New IRS tax form specially designed for people 65 and older

For the 2019 tax year, the IRS have introduced the new Form 1040-SR (U.S. Tax Return for Seniors). This exciting development is proof that the Feds care deeply about the tax-filing needs of older folks. Not quite. Actually, Congress required the IRS to develop a new form that was simpler and easier for senior taxpayers. The IRS response with new Form 1040-SR was the least they could do. Literally. 

What you need to know about the new form

You can only use Form 1040-SR if you were born before January 2, 1955. In other words, you had to be age 65 or older as of the first of this year (1/1/20). 

To say that the new Form 1040-SR closely mirrors the 2019 version of the “regular” Form 1040 is an understatement. 

* The only differences on page 1 of the two forms is that Form 1040-SR has bigger print, bigger spaces for the information and numbers that senior taxpayers must enter, and a more easily-decoded standard deduction table with bigger print. Because, you know, some seniors have poor vision. 

* Page 2 of Form 1040-SR continues with the bigger print and bigger spaces theme. Otherwise, it’s identical to page 2 of the regular Form 1040. 

* Instructions for both the new Form 1040-SR and the 2019 version of the regular Form 1040 are included in the same document (TAX YEAR 2019 1040 and 1040-SR INSTRUCTIONS). The instructions for each line item pertain equally to both forms.

So, if you as a senior taxpayer choose to use the regular Form 1040 instead of the new 1040-SR, the information and numbers you must fill in on each line will be exactly the same. But you have a bit more space to work with. This is the government’s idea of proactively addressing the special needs of senior taxpayers. 

Other things to know about 2019 returns

For both the new Form 1040-SR and the 2019 version of the regular Form 1040, IRA distributions and income from pensions and annuities are reported on separate lines on page 1 of the forms. Use lines 4a and 4b to report total IRA distributions and the taxable amount, respectively. Use lines 4c and 4d to report total pensions and annuities and the taxable amount, respectively. 

For both the new Form 1040-SR and the 2019 version of the regular Form 1040, report net capital gain or loss on page 1, line 6. 

For the 2019 tax year, there are only three numbered supplemental schedules for both Form 1040-SR and the regular Form 1040, instead of the six supplemental schedules that pertained to the 2018 version of the regular Form 1040. 

* Schedule 1 (Additional Income and Adjustments) is used to report things like business income from Schedule C, E, or F and deductions that you need not itemize claim — like alimony paid pursuant to a pre-2019 divorce agreement, the deductible portion of self-employment tax, and HSA contributions). The 2019 version of Schedule 1 is essentially the same as the 2018 version. 

* Schedules 2 and 4 from 2018 were combined into new Schedule 2 (Additional Taxes) for 2019. Use Schedule 2 to identify any additional taxes that must be reported on line 15 of Form 1040-SR and line 15 of the regular Form 1040 (such as the alternative minimum tax (AMT) for the few that still owe it, self-employment tax, the 0.9% additional Medicare tax for higher-income folks, and the 3.8% Net Investment Income Tax for higher-income folks). 

* Schedules 3 and 5 from 2018 were combined into new Schedule 3 (Additional Credits and Payments) for 2019. Use Schedule 3 to identify any tax credits that are not claimed directly on page 2 of Form 1040-SR or page 2 of the regular Form 1040 (such as the higher education credits and the residential energy credits). 

* Schedule 6 (Foreign Address and Third Party Designee) has been eliminated for the 2019 version of the regular Form 1040 and is not required for the new Form 1040-SR. 

Mind the recently enacted extenders legislation

Late last year, the new Taxpayer Certainty and Disaster Tax Relief Act of 2019 (the Act) became law. That legislation retroactively resurrected and/or extended a bunch of individual federal income tax breaks often called the extenders. The extensions generally go through 2020, so keep the extenders in mind when preparing your 2019 Form 1040-SR. 

The bottom line

Larger print on Form 1040 would be nice for many of us. But it’s only available if you qualify to file the new Form 1040-SR. Big news? No. The legitimate big news is the list of extenders that can potentially be claimed by seniors on their large-print Forms 1040-SR. See the sidebar below for more information. The other news is that the IRS just announced that 2019 returns are now being accepted. So, if you have all your 2019 tax info on hand, go for it.