Last year, we made you aware of possible changes to Form 1040-SR. On December 19, 2019, the IRS released the final version of the form, an alternative to using Form 1040 for those age 65 or older. Form 1040-SR uses some of the same schedules and instructions as Form 1040. However, to use this form option properly, there are a few things seniors need to know.
As with Form 1040, several schedules can be used with Form 1040-SR. Rather than include an exhaustive list of these schedules in this post, you can click here for the list and guidance on how to use each with the form you file. Using Form 1040-SR may require you to use Schedules 1-3 (vs. 1-6 for Form 1040).
The IRS’s general guidance to seniors on using Schedules 1, 2, and 3, are as follows:
If you have additional income, such as unemployment compensation, prize or award money, gambling winnings, or have any deductions to claim, such as student loan interest deduction, self-employment tax, or educator expenses, then you should use Schedule 1.
If you owe other taxes, such as self-employment tax, household employment taxes, additional tax on IRAs or other qualified retirement plans and tax-favored accounts, AMT, or need to make an excess advance premium tax credit repayment, then you should use Schedule 2.
If you can claim any credit you didn't claim on Form 1040 or 1040-SR, such as the foreign tax credit, education credits, general business credit, or have other payments, such as an amount paid with a request for an extension to file or excess social security tax withheld, then you should use Schedule 3.
Many factors may influence your decision about which form is best to use. Talk to your tax advisor about this and any other items that may affect your tax form filing choices.