What Does Sr Stand for in Overwatch
There are hundreds of different tax forms available from the IRS, and while you may not need to use many of them during your lifetime, understanding some of the most common — along with how they can assist you — is an effective way to ensure they serve their most important purpose: helping you file your taxes properly. One of these is Form 1040-SR, which is relatively new, having been introduced in 2018.
Form 1040-SR is one of the results of efforts to simplify the process of filing taxes. It's configured specifically to capture the unique forms of income and expenses that are common for people age 65 and over, and it's also designed to be easier to read and understand.
If you meet the age requirement, it's important to know how utilizing Form 1040-SR can benefit you — and whether you might want to choose the typical 1040 instead. To help you with this decision, we're discussing the basics you need to know to understand how to read and fill out Form 1040-SR next time you're completing your taxes (or helping a senior loved one do so).
Form 1040-SR, officially titled U.S. Tax Return for Seniors, is an adapted version of Form 1040 — which most Americans use to file their taxes each year — that's built to better suit the needs of senior citizens. Taxpayers who are at least 65 by the final day of the year for which they're filing taxes are the only people who are eligible to use Form 1040-SR. Seniors who are eligible to use Form 1040-SR may still opt to use the regular Form 1040, too.
Although Form 1040-SR accounts for some income categories that are unique to retirees, such as pensions and income from Social Security benefits, your retirement status isn't what determines whether or not you can use the form. Retired taxpayers who are younger than 65 cannot file Form 1040-SR. Taxpayers 65 and over who work may still file Form 1040-SR.
What Information Is Reported on Form 1040-SR?
The core purpose of any version of a 1040 form is to determine how much a taxpayer owes (or will be refunded) for their federal income taxes. Finding that number requires calculating your income and deducting the amounts of all applicable expenses and credits. Form 1040-SR has extra income and deduction categories that more commonly apply to people who are age 65 or older.
These categories include:
- Tax-exempt interest
- Taxable interest
- Qualified dividends
- Ordinary dividends
- IRA distributions
- Pensions
- Annuities
- Capital gains
- Charitable contributions
There are also spaces to note business deductions, child tax credits, other taxes, federal taxes already withheld, earned income credits, child tax credits, American opportunity credits and recovery rebate credits.
How Is Form 1040-SR Different From the Regular 1040 Form?
Both the regular and SR version of the 1040 forms have the common goal of determining whether a taxpayer owes taxes or will receive a tax return. They both calculate income, expenses and tax credits, and both forms utilize information from other common tax forms like W-2s. The two forms are so similar that instructions for both forms are explained in the same instruction booklet from the IRS.
One very visible difference between the two forms, however, is the font size. Form 1040-SR has larger text to account for the higher rates of visual impairment among citizens over age 65. While the regular Form 1040 is two pages long, the 1040-SR is four pages long to make the document easier to read.
Page four of Form 1040-SR includes the standard deduction table for the form. The IRS allows for higher standard deductions for seniors. For example, a single filer using Form 1040-SR has a standard deduction of $14,050 for the 2020 tax year. The deduction increases to $15,700 if the taxpayer is legally blind. The regular 1040 for 2020 doesn't have such a detailed standard deductions chart available; there's only a blurb next to item 12 indicating that a single taxpayer using Form 1040 has a standard deduction of $12,400.
Schedules 1 to 3 of Form 1040-SR help to account for some of the unique forms of income that seniors often have, such as draws from tax-deferred retirement accounts and capital gains from liquefying investments. Form 1040-SR is also different from the regular 1040 because the senior version of the tax form has no income limit. The regular 1040 has an income limit of $100,000. This lack of a limit is helpful for seniors who may be turning long-term investments into liquid assets.
How to Use Form 1040-SR
If you opt to file using Form 1040-SR, you'll start by gathering some personal details: your filing status, your Social Security number and the Social Security numbers of any dependents. Have easy access to financial information and any other tax forms that employers, businesses or government agencies have sent you before getting started.
Start by completing the demographic information on the top half of the first page. Next, the numbered section of the form asks you to enter the totals of different income, credit and expense categories. If a certain number doesn't apply to you,leave that spot blank and go to the next number. Some numbers instruct you to attach additional tax forms and schedules.
The IRS has three schedules that can be filed along with Form 1040-SR for taxpayers with unique circumstances. Schedule 1 is for taxpayers who have more income or deductions to file that weren't included on the main form. This could include bingo winnings or earnings from an unemployment claim. Student loan interest is a common deduction that requires a taxpayer to file Schedule 1. Schedule 2 is for taxpayers who owe additional taxes, such as taxes associated with hiring a full-time helper around the house. Schedule 3 is for claiming tax credits that weren't included on Form 1040-SR. One of the most common additional credits claimed is the foreign tax credit.
These schedules are similar to worksheets in the sense that they help you add or subtract additional figures in an organized manner. Each schedule includes instructions for where the totals from the schedules go on Form 1040-SR.
The IRS publishes fillable PDF versions of Form 1040-SR, so you can fill out Form 1040-SR online. The IRS will also send a physical copy of the form if you request it. If you use tax filing software, you can have a Form 1040-SR automatically generated simply by answering the program's on-screen prompts.
Other 1040 Tax Forms
Form 1040-X is an amendment form used to correct errors on a Form 1040 that has already been filed. You can use this form to claim additional tax credits or recognized deductions that you didn't include on your other 1040. Any taxpayer can use this form.
Form 1040-EZ is a defunct tax form that's been out of use since 2018. The form was briefly introduced to make filing easier for taxpayers whose financial situations were relatively straightforward. IRS Form 1040-A is another out-of-use form that was briefly introduced for taxpayers who had more details to file than the 1040-EZ had room for but whose financial situations were still considered less complicated than the regular Form 1040.
Today, there are only three 1040 tax forms. Forms 1040 and 1040-SR are the basic forms. All taxpayers complete their original filing on one of these two forms. If amendments are necessary, a taxpayer can file amendments using Form 1040-X. Seniors who choose to use Form 1040-SR enjoy the benefits of larger fonts, larger deductions and schedules that account for their unique financial situations.
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What Does Sr Stand for in Overwatch
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