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Individual Tax

IRS releases draft of new simplified tax return for seniors: Form 1040-SR

Thomson Reuters Tax & Accounting  

· 5 minute read

Thomson Reuters Tax & Accounting  

· 5 minute read

The IRS has released a draft of the new simplified tax individual income tax form, Form 1040-SR, which may be used by taxpayers 65 and over (senior taxpayers) for tax year 2019 and future returns. The new form is a similar to Form 1040-EZ but without the limitations that restricted the use of Form 1040-EZ.

Congress directed the IRS to create a new form, designated Form 1040-SR, for use by individuals age 65 and older in section 41106 of the Bipartisan Budget Act of 2018 (BBA, PL 115-123) The BBA required Form 1040-SR to be as similar as possible to Form 1040-EZ, but without the limitations that restricted the use of Form 1040-EZ. (BBA Sec. 41106)

The Congressional mandate was required because the use of Form 1040-EZ was restricted. Individuals could only use Form 1040-EZ if their filing status was single or married filing jointly and they did not claim any dependents. Also, the following taxpayers could not use Form 1040-EZ: those over age 65; individuals or married couples with more than $100,000 of income, or income from sources other than wages, salaries, tips, taxable scholarship or fellowship grants, unemployment compensation, or Alaska Permanent Fund dividends; taxpayers with more than $1500 of interest income.

New Form 1040-SR

The draft of the Form 1040-SR is two pages long. It allows seniors of any filing status to use the form. It also allows senior taxpayers with dependents to use the form. The draft Form 1040-SR allows taxpayers to enter income from wages, salaries, tips, interest, dividends, IRA distributions, pensions and annuities, and social security benefits and to report taxable amounts of IRA distributions, pension and annuities and social security benefits.

The draft Form 1040-SR also provides for reporting capital gains or losses on line 6 and prompts the taxpayer to attach a Schedule D, if required. On line 7(a), Form 1040-SR allows senior taxpayers to report other income that may appear on Schedule 1. Other income reported on Schedule 1 includes alimony and unemployment compensation.

On line 9, the draft Form 1040-SR prompts the taxpayer to enter either the standard deduction or itemized deductions from Schedule A. Taxpayers using Form 1040-SR will be able to claim the qualified business income deduction on Line 10.

A chart at the bottom of page 1 includes a list of standard deductions and instructions for how to claim the additional standard deduction.

The draft Form 1040-SR also allows taxpayers to claim the child tax credit or credit for other dependents, the Earned Income Credit and American opportunity credit.

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Correction, 7/11/2024: This article has been updated with a corrected quote in paragraph four regarding bank and insurance company audits. …