(CBS MONEYWATCH) – Filing an IRS tax return is likely to be simpler next year for at least 10% of the 150 million Americans who do so. That’s because there’ll be a new 1040 form designed specifically for older Americans, age 65 and up, in time for filing their 2019 taxes in 2020.
Since Form 1040-SR uses large print, the rationale behind the two-page filing is that it should be easier for seniors to see. Some of the shading around the boxes that tax filers complained about has been removed, making the form brighter. It will allow them to immediately figure out what, if any, refund they’ll get back since the Standard Deductions Chart is on the form. Previously, seniors had to look it up.
Still in draft form, the 1040-SR is the result of a Congressional mandate to the IRS to allow seniors the ability to file easily and without benefit of an accountant. Since it should be finalized later this year, it will be available for those who want to use it to file their 2019 taxes, accountants say. In the interim, taxpayers can still file comments about it on the 1040-SR page of the IRS website.
The new 1040-SR form will likely help a broad swath of older Americans, including Baby Boomers, who want to handle their own finances. It can aid those in need of a simpler way to configure and pay taxes – especially seniors who are computer-adverse and prefer to file by paper rather than electronically.
“Approximately 10 percent, or 15 million, taxpayers might qualify for the 1040-SR,” estimates Kristian Finfrock, founder of Wisconsin-based Retirement Income Strategies.
The two-page form has already received recognition from the AARP, the nation’s largest association representing seniors, and generated little controversy. It’s comparable in style to the 1040-EZ form that was phased out last year, and should prove helpful for seniors who receive much of their yearly income from capital gains.
“The new form has lines for specific retirement income streams, such as Social Security benefits, IRA distributions, pensions and annuities,” said CEO Nicholas Yrizarry of California-based Align Wealth Advisors.
One sign of the times: Seniors will now be able to take a child tax credit if they’re still taking care of a “dependent child” or grandchild.
So, what’s the downside? Using Form 1040-SR doesn’t allow you to itemize. Seniors who still operate a small business will need to continue filing on standard Form 1040 with Schedule C, which details expenses and profits.
“If you have to itemize because of state and local taxes or charitable giving, then you will not be using Form 1040-SR,” said CEO Tim Sullivan of Michigan-based Strategic Wealth Advisors Group.
Form 1040-SR was not the IRS’s idea. Instead, it is the result of a long battle in Congress to make it easier for seniors to pay their taxes — a fight finally resolved by the Bipartisan Budget Act of 2018.
To use this form, you have to be 65 prior to January 1, 2020.
© 2019 CBS Interactive Inc.. All Rights Reserved.