Form 1040-SR is a version of the 1040 tax return that was created specifically for use by senior citizens. Lawmakers have been trying for years to cut seniors a bit of a break at tax time, and the Bipartisan Budget Act of 2018 finally marked a solid step in that direction. It required the Internal Revenue Service (IRS) to create a tax form that is easier to read and use for individuals aged 65 and older, which resulted in the 1040-SR.
The 1040-SR is similar to the 1040-EZ in many ways, and it's much easier for older taxpayers to negotiate than the standard Form 1040.
What Is Form 1040-SR?
Form 1040-SR was first proposed in 2013 as part of the Seniors Tax Simplification Act. The AARP, the National Taxpayers Union, and the Association of Mature Americans all supported the bill, but it didn't win the approval of the Senate.
However, on February 9, 2018, the Bipartisan Budget Act (BBA) was signed into law by President Donald Trump. The BBA required that the IRS create and publish a senior-friendly tax return and Form 1040-SR was introduced.
Who Uses Form 1040-SR?
Taxpayers born before January 2, 1956 can use this form beginning in 2021. They can file the 2020 Form 1040-SR.
Filers don't have to be retired to qualify to use this form. Only one spouse must meet the age requirement if you're married and filing a joint return.
Where to Get Form 1040-SR
Seniors can access Form 1040-SR in two ways. The IRS offers an online form online. You can complete it, then save it to your computer, and print it out. You'll also have access to the form if you use a reputable tax software provider to prepare your return. The IRS indicates that more than 90% of taxpayers now use software to prepare and file their return.
How to Read and Fill Out Form 1040-SR
You might not realize upon first glance at Form 1040-SR that you're not looking at the standard Form 1040. Many of the lines and sections are the same. The top of the first page is where you enter personal information, such as your name, address, Social Security number, and filing status.
This is followed by the section where you must state whether anyone else can claim your or your spouse as a dependent, and it's where you check the appropriate box to indicate that you were born before January 2, 1956, which would mean that you turned 65 during the 2020 tax year.
The next section asks you to identify any dependents you're claiming by name, Social Security number, and their relationship to you.
Next, you must report your various sources of income on lines 1 through 8, such as wages and salaries, dividends and interest, and various retirement benefits, including Social Security. Add them together and enter the total on line 9.
These lines are not the same as they were on the 2019 Form 1040-SR. The IRS has been busy redesigning and tweaking various tax returns since 2018.
Lines 10a, 10b, and 10c are for claiming adjustments to income, and one of them correlates with an additional schedule: Schedule 1, “Additional Income and Adjustments to Income.”
Schedule 1 also includes some additional sources of income, such as business income from Schedule C, rental and partnership income from Schedule E, and unemployment compensation. You might want to reach out to a tax professional if you find yourself dealing with multiple schedules.
The second page of Form 1040-SR is dedicated to the same information as the standard Form 1040. This is where you'll claim your standard deduction or the total of your itemized deductions as calculated on Schedule A. Schedule A must also be submitted with your tax return if you itemize.
The balance of the second page of Form 1040-SR is dedicated to claiming various tax credits you might be eligible to claim, to calculating your taxable income, and for reporting any taxes you’ve paid during the year, either through paycheck withholding or estimated taxes. Again, completing and filing some additional schedules might be required.
Another nice feature of Form 1040-SR is the large typeface designed to be easier on the older eyes of taxpayers who prefer to print out the return and fill it in by hand.
Can Form 1040-SR Be E-Filed?
Form 1040-SR can be filed electronically, just as Form 1040 can.
Where to Mail Form 1040-SR
If you prefer not to e-file, the mailing address for your completed tax return depends on the state in which you live and whether you're enclosing a payment. The IRS provides a listing of the addresses for each state.
Benefits of Form 1040-SR
Many seniors were forced to file the more complicated Form 1040 in past years simply by virtue of the nature of their retirement incomes. The IRS provided Form 1040-EZ through 2017 to make the process easier, but this form limited overall income to $100,000 and interest income to $1,500 annually.
The 1040-SR, though, doesn't put a limit on interest, dividends, or capital gains, nor does it cap overall income.
Form 1040-EZ was repealed effective 2018 when the IRS revamped the standard Form 1040 tax return. Even seniors who met the 1040-EZ income requirements no longer had that option.
- Federal legislation passed in 2018 provided for a Form 1040 tax return designed specifically to meet the needs of senior citizens.
- Taxpayers must be at least age 65 to use Form 1040-SR, with one exception. Only one spouse must be age 65 or older if they’re filing a joint married return.
- The form is very similar to the standard 1040, but the font is larger and clearer and the 1040-SR includes a chart for helping seniors determine the additional amount of the standard deduction that they’re entitled to.