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  5. Everything to Know About the 1040-SR Form for Filing Seniors

Everything to Know About the 1040-SR Form for Filing Seniors

Updated for Tax Year 2021 • May 5, 2022 11:00 AM


OVERVIEW

Some recent changes to Form 1040 mean slightly different filing options available for seniors. Here's what you need to know about eligibility requirements and reporting for this new version of Form 1040-SR.


For information on the third coronavirus relief package, please visit our “American Rescue Plan: What Does it Mean for You and a Third Stimulus Check” blog post.


 

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Congress required the IRS to develop a tax form for seniors in the Bipartisan Budget Act of 2018. The idea was to make it easier for seniors with simple tax situations to file their tax returns.

As a result, the IRS created a version of Form 1040 that uses larger print and includes a standard deduction table directly on the for so that seniors can quickly look up their standard deduction amounts. Form 1040-SR uses the same line items and instructions as the standard Form 1040.

Who can file using Form 1040-SR?

Anyone age 65 or older can opt to use Form 1040-SR instead of Form 1040. There aren't any other caveats that come with using this form. For example, you are not forced to take the standard deduction if you choose to file with Form 1040-SR.

Since these forms are virtually identical in function, the main reason to use Form 1040-SR is if you're filling out your tax return by hand rather than online. Form 1040-SR has larger type and larger boxes to write numbers in, making it slightly easier for seniors to read and fill out.

Items that can be reported on a Form 1040-SR tax return

Since Form 1040-SR is functionally the same as Form 1040, you can report all the same types of income, deductions, credits, and other items that you can on Form 1040. This includes items such as:

  • Wages, salaries, tips, taxable scholarships, and taxable fellowship grants
  • Tax-exempt interest
  • Taxable interest
  • Qualified dividends
  • Ordinary dividends
  • IRA distributions and their taxable amounts
  • Pensions and annuities and their taxable amounts
  • Social Security benefits and their taxable amounts
  • Total capital gains or losses
  • Other income from Schedule 1, including unemployment compensation
  • Adjustments to income from Schedule 1
  • Above-the-line charitable contributions deduction
  • Adjusted gross income
  • Total standard deduction or itemized deductions
  • Qualified business income deduction
  • Taxable income
  • Tax
  • Certain figures from Schedule 2 and Schedule 3
  • Child tax credit or credit for other dependents
  • Other taxes, including self-employment tax
  • Federal income tax withheld from Form W-2, Form 1099, and other forms
  • Estimated tax payments and amount applied from the previous year's return
  • Earned income credit
  • Additional child tax credit
  • American Opportunity tax credit
  • Recovery Rebate credit
  • Refund amount or amount owed now
  • Estimated tax penalty

You can also use other IRS schedules (additional forms) with Form 1040-SR, such as Schedules 1, 2, and 3, to report information not directly reported on Form 1040-SR.

No Significant Form 1040-SR changes from 2020 to 2021

Like Form 1040, the 2021 Form 1040-SR is quite similar to the 2020 version. The main change is the update to the standard deduction table amounts. Otherwise, the line items on Form 1040-SR mimic the line items on Form 1040.

Question about virtual currency transactions

Form 1040-SR asks the cryptocurrency question: "At any time during 2021, did you receive, sell, send, exchange, or otherwise acquire any financial interest in any virtual currency?" The IRS is trying to make sure virtual currency transactions, such as Bitcoin purchases, are being reported. Their goal is to collect the taxes due on these transactions by requiring you to disclose if you made any transactions.

Additional above-the-line charitable contributions deduction

In 2021, you can claim up to $300 of charitable cash contributions without itemizing your deductions for non-joint filers and up to $600 for those filing jointly.

Detailed federal withholding and estimated tax payment reporting

In previous years, federal income tax withholding was input as a single line item on Form 1040-SR. This year, it is broken down into three parts:

  • Withholding from Form W-2
  • Withholding from Form 1099
  • Withholding from other forms

A line specifically for estimated tax payments, line 26, has also been added.

The Recovery Rebate Credit

The Recovery Rebate Credit is included on Form 1040-SR in 2021 and can be found on line 30. This credit is related to the 3rd stimulus check sent to many citizens in early 2021 due to the coronavirus pandemic.

Altered wording for the tax you owe with your return

Line 37 usually details the amount of tax you owe for the year. This year's Form 1040-SR states this is the amount you owe now. Certain taxes may be deferred under coronavirus relief, so the line item was updated to explain this is the amount you must pay with your return and that you may still owe additional tax from your 2020 return in future years due to tax deferrals.

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