What Is Form 1040-SR: U.S. Tax Return for Seniors?
If you are 65 or older you have the option of using Form 1040-SR: U.S. Tax Return for Seniors rather than the standard Form 1040 when you file your taxes. It is virtually identical to Form 1040 except that it has larger type and gives greater prominence to the senior-specific tax benefits.
Form 1040 and Form 1040-SR are now the standard forms used by taxpayers, whether or not they itemize deductions. Form 1040 was revised and simplified and Form 1040-SR was introduced with the Bipartisan Budget Act of 2018. That act also abolished Form 1040-EZ, which was designed for taxpayers with uncomplicated tax situations, and Form 1040A, which was confusingly similar to the old Form 1040.
- The new Form 1040-SR is a variation of the standard Form 1040 used by most taxpayers.
- If you were at least age 65 by the end of 2021, you can use either form.
- Form 1040-SR uses larger type and gives greater prominence to tax benefits for seniors, particularly the additional standard deduction.
Understanding Form 1040-SR
Form 1040-SR is designed to be easier on the eyes and to give greater prominence to tax benefits specific to seniors.
Most importantly, a higher standard deduction is available to seniors who do not itemize. Form 1040-SR incorporates a chart detailing the amount of this additional standard deduction for taxpayers age 65 or older.
Taxpayers who were at least age 65 by the end of 2020 can add at least $1,300 to the standard deduction. The chart included with Form 1040-SR lists only the combined deduction amounts depending on filing status and other eligibility factors.
While the old Form 1040-EZ only allowed the reporting of income from wages, salaries, and tips, Form 1040-SR allows income from certain other sources.
Who Can File Form 1040-SR?
There are differences between the old Form 1040-EZ and 1040-SR, which are described below, including age requirements and total income allowed.
Ages 65 and Older
One major difference between Forms 1040-EZ and 1040-SR has to do with age. Form 1040-EZ was available to any taxpayer under the age of 65 who otherwise met income and filing requirements. To use 1040-SR, you must have turned 65 or older by the end of the tax year for which you are filing. For example, if you turned 65 on Dec. 31, 2021, you can use Form 1040-SR when you file your 2021 taxes in 2022.
You don't have to be retired. If you are still working at age 65 and otherwise qualify to file Form 1040-SR, you may do so. On the other hand, early retirees (younger than 65) cannot use Form 1040-SR.
No Income Limit
Unlike Form 1040-EZ, which limited interest income to $1,500 and total income to $100,000 or less, Form 1040-SR has no limit on the amount of your total income for a given taxable year.
Expanded Income Categories
Furthermore, IRS Form 1040-SR allows the reporting of several types of income in addition to those allowed by Form 1040-EZ (wages, salaries, tips, taxable scholarship or fellowship grants, and unemployment compensation or Alaska Permanent Fund dividends).
Specifically, Form 1040-SR allows you to report Social Security benefits as well as distributions from qualified retirement plans, annuities, or similar deferred-payment arrangements. You may also include unlimited interest and dividends and capital gains and losses.
What About Tax Deductions?
Form 1040-SR, like Form 1040, can be used whether you take the standard deduction or itemize deductions.
Nevertheless, the vast majority of Americans now take the standard deduction, since the amounts allowed were virtually doubled with the 2018 tax reform law. That additional standard deduction for seniors is just one more incentive to avoid itemizing.
Special Considerations When Filing Form 1040-SR
Form 1040-SR simplifies tax-filing requirements for seniors. However, if you are a retiree under the age of 65, even if your income sources include Social Security, pensions, and investment income, you cannot use Form 1040-SR and must use Form 1040.
Despite this drawback, the introduction of Form 1040-SR and the revised Form 1040 are steps in the right direction when it comes to the simplification of tax-filing requirements.
History of Form 1040-SR
The legislation that resulted in the creation of IRS Form 1040-SR began March 5, 2013, with the introduction of the Seniors Tax Simplification Act by Senators Marco Rubio (R-FL) and Bill Nelson (D-FL), joined by Senators Mike Lee (R-UT) and Tom Carper (D-DE).
Following several failed attempts to turn the act into law—and despite endorsements by the AARP, the Association of Mature American Citizens, and the National Taxpayers Union—the bill didn't pass until Form 1040-SR language was adopted as part of the emergency spending bill signed by former President Trump on Feb. 9, 2018.