Form 1040-SR, U.S. Tax Return for Seniors, is an optional return for taxpayers who were born before January 2, 1955. The line numbers are the same as on the Form 1040, but the form is printed in a larger font and includes a Standard Deduction Chart on page 1. In TaxSlayer Pro, it will appear in View Results along with the Form 1040.
Three numbered schedules instead of six
The six numbered schedules in 2018 have been reduced to three in 2019.
- Schedule 4 has been folded into Schedule 2 and reports any additional taxes owed.
- Schedule 5 has been folded into Schedule 3 and reports any credits not claimed on Form 1040 or 1040-SR.
- Schedule 6 has been folded into Schedule 1, the foreign address moved to the top of page 1, and the Third Party Designee moved to the bottom of page 2.
IRA and pension reporting
(1) IRA distributions and (2) Pensions and Annuities are each on separate lines on Form 1040 line 4 (or on Form 1040-NR lines 16 and 17).
Capital gain or loss reported separately
Capital gain or loss has shifted from Schedule 1 to line 6 of Form 1040. As a result, all subsequent line numbers on the Form 1040 are incremented by 1.
Schedule 1 changes
Two changes to Schedule 1 have been introduced for 2019:
- A Yes/No question regarding whether or not the taxpayer had any interest in virtual currency during the tax year (see here for more info about virtual currency);
- If alimony is included, the month and year of the divorce or separation agreement that gave rise to the alimony must be entered.
Health care coverage shared responsibility payment
The Tax Cuts and Jobs Act of 2017 repealed the shared responsibility payment for taxpayers who didn't having minimum essential health care coverage during the year, beginning with tax year 2019. Form 8965 is thus no longer available, and the Yes/No question regarding full-year minimum essential health care coverage has been removed from Form 1040.
Earned Income Credit
The maximum earned income to receive the earned income credit has increased as follows:
|Qualifying children||Filing status||2018||2019|
|3 or more||MFJ||$54,884||$55,952|
Additionally, the penalty for failure to be diligent has increased to $530 for returns or claims for refund filed in 2020.
Increase in the Standard Deduction
For 2019, the standard deduction amount for all filing statuses has increased as follows:
- Single or Married filing separately: $12,200
- Married filing jointly or Qualifying widow(er): $24,400
- Head of household: $18,350
The additional standard deduction for Single or Head of Household filers who are 65 and older or blind has also increased from $1,600 to $1,650. (The additional standard deduction for taxpayers who are married or are qualifying widow(ers) remains unchanged at $1,300.)
Qualified business income deduction
QBI income thresholds have increased:
- Single, HOH, Qualifying Widow(er): $160,700 (up from $157,500)
- MFS, married nonresident alien: $160,725 (up from $157,500)
- MFJ: $321,400 (up from $315,000)
The 2018 simplified worksheet for computing QBID is now Form 8995. Taxpayers ineligible to use Form 8995 will use Form 8995-A. Filers with income below the threshold file Form 8995, above the threshold file Form 8995-A.
Form 2555-EZ is no longer available beginning with tax year 2019.
Schedule C-EZ is no longer available beginning with tax year 2019.
Alternative minimum tax (AMT) exemption and phase-out amounts increased
The AMT exemption amount has increased as follows:
- Single or Head of household: $71,700
- Married filing jointly or Qualifying widow(er): $111,700
- Married filing separately: $55,850
The income level at which the AMT exemption begins to phase out has increased as follows:
- Single, Head of Household, or Married filing separately: $510,300
- Married filing jointly or Qualifying widow(er): $1,020,600
Gross income limitation increase
The gross income limitation has increased from $4,150 to $4,200 for the following individuals:
- a child or stepchild of a qualifying widow(er);
- a qualifying relative for the child tax credit;
- a student for whom the student loan interest deduction is claimed.
Medical expense deduction
The AGI threshold for deducting medical and dental expenses has increased to 10% for all taxpayers.
Charitable contribution deduction
Generally, the charitable contribution deduction must be reduced by a state or local tax credit provided in return for their contribution. The taxpayer may now qualify for safe harbor rules that allow the disallowed amount to be treated as a state or local tax payment.
For a divorce agreement or alimony modification agreement executed in 2019:
- Alimony received will not be considered income
- Alimony paid will not be an adjustment to income
(Divorce agreements and alimony modification agreements executed prior to 2019 continue to follow pre-TCJA rules.)
Standard mileage rates
The standard mileage rate allowed for operating expenses for a car used for medical reasons has increased to 20 cents a mile. The business standard mileage rate and the rate for miles driven in connection with rental activities have both increased to 58 cents per mile.
Gain on empowerment zone business stock
For dispositions of empowerment zone business stock after 2018, the qualified gain attributable to periods after December 31, 2018, is not eligible for the 60% exclusion.
Disposal of qualified opportunity fund (QOF) investment
Disposition of a QOF investment is indicated by checking a box on Schedule D and including Form 8949 in the return.
Section 179 deduction dollar limits
For tax years beginning in 2019, the maximum section 179 expense deduction is $1,020,000. This limit is reduced by the amount by which the cost of section 179 property placed in service during the tax year exceeds $2,550,000. Additionally, the maximum section 179 expense deduction for sport utility vehicles placed in service in tax years beginning in 2019 is $25,500.
Income subject to Social Security tax
The maximum amount of self-employment income subject to social security has increased from $128,700 to $132,900.
Foreign earned income exclusion
The maximum foreign earned income that can be excluded has increased from $103,900 to $105,900.
Lifetime Learning Credit limits on modified adjusted gross income (MAGI)
The Lifetime Learning Credit MAGI limits have increased as follows:
- Married filing jointly: $136,000
- Single, head of household, or qualifying widow(er): $68,000
(The American Opportunity Credit MAGI limits remain unchanged.)