Shelley B. Drevas, CPA
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Shelley B. Drevas, CPA ~ Small business accounting services

New and Improved Tax Forms for 2019

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The attempt last year to simplify and make the federal income tax return the size of a postcard was criticized heavily by both taxpayers and preparers.  In their letter to the IRS, The National Association of Tax Preparers (NATP) described it as “the form is essentially no different than it was previously, with the removed lines simply moved to another sheet of paper as an attached schedule”. They conclude by saying, “In our opinion, making the form smaller and removing lines only to move them to other schedules does not equate to simplification. “

In response, the Form 1040 for 2019 is expected to be somewhat more like the old form 1040 of years prior to 2018.  The number of schedules decreased from six to three.  It is no longer the size of a postcard but still is smaller than the older forms.  It still resembles the new 1040 more than the old one but it is closer to the pre-2018 form in functionality.

While forms 1040-A and 1040-EZ are still obsolete, there is a new form this year designed specifically for senior citizens (1040-SR).  It has larger font sizes, different shading designed to make it easier to read, and on the form the standard deduction amounts for taxpayers over age 65 are printed.  It is made for seniors whose tax situation is not complicated and the form resembles somewhat the old Form 1040-EZ.  In order to be able to use the new form, one must be age 65 by the end of the year.  You do not have to be retired.  You can still use the form if you have wages or are collecting unemployment at age 65 and otherwise qualify to use it.  On the other hand, those who retired early, before age 65, cannot use Form 1040-SR.  They must use Form 1040.

In addition, the new form allows seniors to report social security, pension and IRA distributions, interest, dividends, and sales of securities and property.  Those who itemize their deductions using Schedule A cannot use this new form.  It is only for seniors who use the standard deduction.

Lobbying for this form started as part of the Seniors Tax Simplification Act back in 2013.  It was endorsed by AARP, the Association of Mature American Citizens, and the National Taxpayers Union but did not get adopted into law until the Bipartisan Budget Act in February 2018.

While this new form will simplify filing taxes for many, even though you are eligible to use the new form, there may be circumstances when your tax situation is more complicated.  Just because the form is simplified, it may not necessarily mean that your tax situation is simplified.  Only time will tell as to whether this new form will be effective and widely used by those over age 65.

The new form 1040-SR can be found at:  https://www.irs.gov/pub/irs-pdf/f1040s.pdf

About Me

I’m a local accountant offering services to small business owners. Services include: Tax preparation, business adviser, and tax consultant.
 

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