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tax deductions, new tax form, older Americans

New, Simpler Tax Form on the Horizon for Older Americans

Concerned with taxes and tax deductions? Good news for seniors filing taxes in 2020: there will be a new, simpler tax form called form 1040SR.

This new tax form comes into fruition as part of the Bipartisan Budget Act of 2018 (BBA). The BBA is a new budget agreement President Trump signed last February that includes many changes to tax policy. In fact, form 1040SR has been in the works since 2013, when Senators Marco Rubio (R-Florida) and Bill Nelson (D-Florida) included it in the the Seniors Tax Simplification Act.

The new form is much like form 1040EZ for those under 65, which makes it simple to file taxes for people with finances that aren’t complicated. However, while with 1040EZ you can only report income from wages, salaries, and tips, with the new 1040SR you’ll also be able to report income from other sources.

tax deductions, new simpler tax form, seniors

What to know about form 1040SR

Here are some facts to know about the new tax form 1040SR:

  • It’s for people age 65 and older by December 31, 2019, or by the end of the tax year for which you’re filing
  • You don’t have to be retired to use it
  • There are no income limits for using it
  • On the form, you can report:
    • Social Security income
    • Income from retirement plans
    • Income from annuities
    • Interest, dividends, capital gains and losses

Before you get too excited, this new form won’t be available to fill out until the Spring of 2020 (filing for 2019).

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Tax Deductions for 2019

With form 1040SR, you will take the standard deduction, which will be $13,300 for an individual for tax year 2019. The tax deduction for a married couple in which one is 65 or older will be $25,300, and in which both are 65 or older will be $26,600.

This new form 1040SR will simplify the process of filing taxes for seniors going forward.

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