New IRS Form 1040-SR: What You Need to Know

New IRS Form 1040-SR: What You Need to Know

The Internal Revenue Service has released a new version of the 1040 income tax form for tax year 2019, Form 1040-SR, designed specifically with senior citizens in mind. Taxpayers born before January 2, 1955 may opt to use Form 1040-SR instead of the standard Form 1040.

Form 1040-SR is, of course, very similar to Form 1040 and uses the same instructions and schedules. They both contain the same questions and 24 total lines and sublines. There is no financial benefit or disadvantage to choosing one form over another; if you were to complete both, the figures and totals reported would be identical. Taxpayers who have used 1040EZ in the past will recognize some similarities in format and style. Compared to Form 1040, this form uses a bigger font size for improved readability and larger spaces for entering responses. It also includes a standard deduction chart at the bottom of the front page for reference, whereas the regular 1040 form simply mentions a few key points about standard deductions and instructs the filer to refer to separate form instructions for additional information.

Some critics question the effectiveness of Form 1040-SR, largely due to the increasing prevalence of electronic filing; even if someone files online using the form, the paper formatting does not apply so the key benefits are lost. However, many senior citizens choose to file a paper copy rather than an electronic one, so the improved accessibility and simplicity will benefit them.

Most recently, prior to the introduction of the 1040-SR, there were two other variations available: Form 1040EZ and Form 1040A, both of which were discontinued beginning in tax year 2018. Form 1040A was in use since the 1930s and was available to filers with a taxable income of less than $100,00 who took standard deductions rather than itemized deductions. As for tax credits, it allowed only a small, specific list of credits to be claimed such as the Earned Income Credit, child tax credits, and education credits. Form 1040EZ was introduced for tax year 1982 and was available to filers who, like those eligible for 1040A, had a taxable income of less than $100,000 and took standard deductions instead of itemized, but who did not have any dependents and were not claiming any credits or deductions (aside from the EIC). These two forms may still be used for tax years prior to 2018 but are invalid for all subsequent tax seasons. For the foreseeable future, the only alternative version of Form 1040 available will be Form 1040-SR.

About MKS&H: McLean, Koehler, Sparks & Hammond (MKS&H) is a professional service firm with offices in Hunt Valley and Frederick. MKS&H helps owners and organizational leaders become more successful by putting complex financial data into a truly meaningful context. But deeper than dollars and data, our focus is on developing an understanding of you, your culture, and your business goals. This approach enables our clients to achieve their greatest potential.

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MKS&H is committed to providing personalized tax and accounting services while developing a deep understanding of you, your culture, and your business goals. Our full view of financial systems and the people behind them allow us create and evolve the best solution that will help you and your business thrive. The accounting experts and consulting professionals at MKS&H work together to help you achieve the financial results you want.

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