IRS Releases Draft Simplified Tax Return for Seniors

August 21, 2019

The Internal Revenue Service (IRS) has released a draft of a simplified form for taxpayers age 65 and over, 2019 Form 1040-SR. The new form is similar to Form 1040-EZ, which was eliminated by the Tax Cuts and Jobs Act (TCJA); however, the proposed draft is free of the limitations that previously restricted the use of Form 1040-EZ for senior taxpayers.

For tax years prior to 2018, Form 1040-EZ was not eligible for use by the following groups:

  • Taxpayers over age 65
  • Individuals with a filing status other than single or married filing jointly
  • Individuals who claim dependents
  • Individuals or married couples with over $100,000 of income
  • Individuals with income from sources other than wages, salaries, tips, taxable scholarship or fellowship grants, or unemployment compensation
  • Individuals with more than $1,500 of interest income.

In an effort to provide senior taxpayers with a simpler tax return option, Congress directed the IRS to create a new form specifically for senior taxpayers that expands from the limitations of Form 1040-EZ. The new, two-page draft form allows senior taxpayers to use any filing status, as well as claim dependents. The types of income available to be reported on the return have been expanded and currently include wages, salaries, tips, interest and dividends (with no $1,500 limit), capital gains or losses, IRA distributions, pensions and annuities, and social security benefits. Senior taxpayers may also report other income that appears on Schedule 1 of the new 1040. Further, the new form will allow senior taxpayers an option to claim either the Standard Deduction or the Itemized Deductions (Form 1040-EZ previously allowed the Standard Deduction only). The draft Form 1040-SR even includes the qualified business income deduction.

Another addition intended to assist senior taxpayers with preparing their tax returns is the chart at the bottom of page 1, which shows the various standard deductions and additional standard deductions available for elderly and blind taxpayers.

For more information about the new form or filing for seniors, please contact Anatoli Pilchtchikov or Michael Adam at 301.231.6200.