December 19, 2020

2020 Form 1040

2020 Form 1040 welcome to my presentation today you've reached the video CPA I am Michael Scott and I am the video CPA we're going to talk today about the introduction to the new 1040 SR it's a new form for seniors a couple. Of things you need to know about the form if you're under 65 you won't be allowed to use it, a couple other things you need to know about this 2019 filing season coming. Up is that if you are under 65, you're not allowed to use the 1040ez or the 1040 a because both of those have been done away with so you're going to you're looking at using the 1040 which is. A 1040 long form in the introduction here I have a couple of disclaimers one is it. Says the 1040 SRS and draft state and the, instructions are also on draft States so you need to be aware of that this form should be completed and finished pretty quick the other disclaimer is for affiliate links if, you press on affiliate link and an affiliate link in this video and go to a merchandiser and buy something we actually get a commission and, so we have the responsibility of disclosing that to you the other disclaimer is a educational disclaimer that basically says that, we try our best I try my best to keep everything accurate in these videos, but in special situations I might make a, mistake and so you need to do your own research and can fault consult your tax advisor I mentioned in the introduction that this form is for those 65 and older so the first question you need to, ask yourself is do you really need to file a form do you really need to file a tax, return if you're 65. And earn under thirteen thousand eight hundred and fifty dollars you don't have to file a tax return if it's if, your joint it's twenty seven thousand dollars before you have to file a tax return so you need to make.

Sure that you look at that first because you don't want to file a tax return if you really don't need to there's a few. Benefits for seniors that file this form one they're the only ones that can and it's the only short form available now so they're gonna report several types, of income on it but it, is restricted as to the types of income that can be reported and so many seniors although they're over 65.

Won't be able to use the form because they have income that cannot be reported on this form there's, also no limit to the amount of income that you can include on the form the old 1040ez actually had a hundred thousand dollar limit and so on this form there's no limit so let's look at the. Types of income that are the disadvantages of the form of the types of income later that can be reported, on this form a major disadvantage we have going into, the 2019 filing season is that the 1040 a and the 1040 ez both been discontinued.

The only short form available now is the 1040 SR and it can only be filed by the taxpayers that are over 65 and actually many taxpayers over 65 will have income types that will, not allow them to do the use that 1040 SR so in effect the majority of taxpayers now, are going to have to use the 1040 long form several items will.

Prohibit taxpayers from using the 1040 SR first you have to have been born before January 2nd of 1955 that basically qualifies you. To be over 65 but there's several income types that will prohibit you from using the form two and that's income on. Schedule C which is business income it's income from. Schedule F which is farm income and income for Schedule E which is rental income that could also be partnership income it could be income from my S corporation. So those types of income if any of those types of income exists on your tax return you're going to. Have to use the long form instead of using that 1040 SR.

An additional factor that will prohibit you from using the 1040 SR is if you want to Ida Mize your deductions so you need to look, at your deductions compared to the new standard deduction, amounts that we have and decide which is most beneficial for you if you do society to itemize your deductions like I say again you won't be allowed to use the. 1040 SR you can see on this slide that, the standard deduction amounts are much higher than what they've been prior to 2018 so just take a look at those and decide where, you are and that will tell you whether you can use a 1040 SR or not if you decide that you can use the, 1040 SR here's some of the includable income that you can put on the 1040 sr first is your wage income interest income. Could go on there and dividend income IRA distributions pension distributions Social Security benefits capital gains or losses and none other income such as. Hobby income or bartering income prize winnings gambling income that type of stuff some of these things were never, able to be reported on the 1040 ez and so most, of these income items you can see are closer related to senior citizens and they are to younger people a couple of credits are also listed on, the form one is the child tax credit or the credit further dependents another one for the enduring come earned income, credit and there are two other credits on the form – and in my research I didn't see any. Mention of those anywhere so I don't know whether. They'll be included in the final form when it comes out or not I want to remind you that the form 1040 SR is still in draft.

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