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Friday, May 8, 2020

Non-COVID Topic - Form 1040-SR and Data

I'll return to COVID-19 tax legislation policy topics soon, but wanted to note an item I noticed a few weeks ago in filing my own return.  In messing around with TurboTax, I discovered that it defaults to preparing a Form 1040-SR if the taxpayer or spouse is age 65 or older. I assume that likely confuses many affected people because they never heard of the form and might think it means they are paying more or paying less.

There is no difference between the 1040 and 1040-SR besides the "SR" and font size.  The SR form is not the idea of IRS who was already working to get rid of the 1040-EZ and 1040-A when Congress added 1040-SR starting for 2019 returns.  For more on that, please see my 7/29/19 blog post.

Perhaps other tax prep software is doing the same - defaulting to 1040-SR if the taxpayer is old enough, rather than giving a choice or defaulting to 1040.

I just note this because if we later see data on lots of seniors filing 1040-SR and thinking that means they like it, that data would be suspect of not really measuring liking the form.

For simplification and easing administrative burden for the IRS, it would be great to see the 1040-SR removed from the law AND to move towards filing systems using technology that makes filing so easy that it doesn't really matter what the tax form is called. It could be like online banking or ordering from Amazon in its ease and transparency (for more, see my 2019 post).

What do you think?

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