2020 tax filing season promises slightly smoother than 2019. There are still a number of changes that taxpayers should be aware of.
Form 1040SR: U.S. Tax Return for Seniors
Form 1040SR was created for taxpayers age 65 and older. While these forms are similar to the standard Form 1040, the fonts are larger, and it includes a chart of the standard deduction and additional standard deduction amounts for taxpayers over 65 years old or blind.
Form 1040: Revised and Redesigned
Form 1040 has been updated for 2019 there are now three schedules instead of the six schedule that appeared in 2018. Some of the forms have been combined for ease of reading. The signature line was moved to the end.
Notable Tax Changes
Alimony is No Longer Deductible.
Alimony is no longer deductible to the payer and is no longer taxable to the payee for separation, divorce agreements or decrees that were effective on or after January 1, 2019.
Eliminated Health Insurance Mandate Penalty.
The IRS has eliminated the penalty for failing to obtain health insurance coverage under the Affordable Care Act. However, some states have their own health insurance mandates requiring coverage. To date, California, the District of Columbia, Massachusetts, New Jersey, Rhode Island, and Vermont have passed state individual mandates.
Medical Expense Deduction Threshold Remains at 7.5 Percent.
The medical expense deduction threshold was extended to 7.5 percent threshold through 2020 (including tax year 2019).
The standard tax deduction is $12,200 for single filers and $24,400 for married couples filing jointly and $18,350 for head of household. If you’re 65 or older and married, you may increase your standard deduction by $1,300; as a single filer 65 or older, you increase will be $1,650.