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This New Tax Form May Help Simplify Filing for Seniors

Jan. 31, 2020
Income Taxes, Personal Taxes, Taxes
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If you’re 65 or older, you have a new option this year for filing your tax return: IRS Form 1040-SR.

But even though the form has bigger type and more spacing that may make it easier to read and fill out, many seniors will likely file a regular Form 1040 this year, according to two tax pros. Here’s what they say is unusual about the new tax form — and whether using it can save you any money.

The 1040-SR looks different, but it doesn’t change the math

The most notable differences between the 1040-SR and the regular 1040 are largely cosmetic, says Jay Porter, a certified public accountant at Porter & Associates in Huntington, West Virginia. “It purely looks like all they did was increase the font size and put the blurb down at the bottom on the first page about calculating your standard deduction,” he says.

Those changes may help some people do their taxes, but the 1040-SR isn’t a magic portal to extra tax breaks, says Jason Watson, a certified public account and managing partner at WCG Inc. in Colorado Springs, Colorado. Filers can still itemize deductions, claim various tax credits and file supplemental schedules and tax forms, too. “It doesn’t make sense that we would have a tax form that gives you a different tax obligation simply based on the form that you use,” he says. “The difference in tax shouldn’t be dependent on which form you pick.”

Few people might actually use it

There are two reasons lots of seniors might not use the 1040-SR. First, it’s optional. Although the 1040-SR is for taxpayers 65 and older, those taxpayers can still use the regular Form 1040, according to the IRS.

Second, many seniors probably won’t actively choose the Form 1040-SR. Tax preparation software often selects tax forms automatically for users, Porter notes, and many human tax preparers will likely funnel their clients to the regular Form 1040. “Unless somebody specifically requests form 1040-SR, I don’t think we’re going to put anybody just on it because, ‘Hey, you’re 65 and you can,’” he says.

That suggests that most of the love for Form 1040-SR may come from taxpayers who file their tax returns by hand on paper, Porter predicts. “That leans into why they just made it with a bigger font — if you are an older individual and you’re paper filing, it’s easier on the eyes.”

Still, the 1040-SR could help you make a key decision

For seniors who have itemized on their tax returns for decades, the 1040-SR’s embedded standard deductions table could help them quickly decide whether it’s still a good idea financially to keep itemizing, Watson says. The standard deduction nearly doubled in recent years, and seniors and those who are blind may qualify for an even bigger standard deduction.

“Maybe this form is built to say, ‘Hey, why pay a tax professional to do all this extra work when the IRS is already spotting you $24,400 or whatever extra [being] 65 years old gets you. … You know what I mean?”

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