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S THE MALDEN ADVOCATE–Friday, January 3, 2020 SPORTS | FROM PAGE 9 Page 17 by Jim Miller IRS Introduces a Tax Form Created for Older Taxpayers Dear Savvy Senior, A couple months back I read that the IRS will be offering a new senior-friendly tax form this tax season that will be easier to use. What can you tell me about this? Paper Filer Dear Filer, It’s true. The Internal Revenue Service (IRS) has created a new federal income-tax form specifically designed for senior taxpayers, age 65 and older, that should make filing a little easier this year, particularly those who don’t file electronically. Here’s what you should know. Form 1040-SR Created by the 2018 Bipartisan Budget Act, the new twopage simplified federal income tax form is called the 1040-SR. Similar in style to the old 1040-EZ form that the IRS discontinued last year, the new 1040-SR has larger print and better color contrast that makes it easier to read. In addition, it also includes a chart to help older taxpayers calculate their standard deduction, which may help ensure that fewer seniors neglect to take the additional standard deduction that they are entitled to. For 2019, the additional deduction for those 65 or older or the blind is $1,300. The 1040-SR form also has specific lines for retirement income streams such as Social Security benefits, IRA distributions, pensions and annuities, along with earned income from work wages and tips. And, it allows a child tax credit for seniors who are still taking care of a dependent child or grandchild. You can also report capital gains and losses, as well as interest and dividends on this new form. Any of the tax schedules available to those using the standard form 1040 may also be used with the 1040-SR. You should also know that the 1040-SR doesn’t put a limit on interest, dividends, or capital gains, nor does it cap overall income like the old 1040-EZ form did. But, if you have to itemize because of state and local taxes or charitable giving, then you will not be able to use the new Form 1040-SR. Paper Filing Advantage Seniors who use tax-preparation software to file their taxes will be able to generate a 1040-SR, but the new form will provide the most significant benefit to taxpayers who still fill out and file their returns on paper. Last year, about 88 percent of the 153 million individual federal tax returns filed to the IRS were filed electronically. About five percent were prepared using tax software, then printed out and mailed to the agency, while about seven percent were prepared on paper. To use the new 1040-SR tax form for the 2019 filing year, taxpayers, including both spouses if filing jointly, must be at least age 65 before Jan. 1, 2020. You also don’t have to be retired to use the form – older workers can use it too. But early retirees (younger than 65) cannot use 1040-SR. To see the 2019 draft version of the new 1040-SR form, go to IRS.gov/pub/irs-dft/f1040s—dft.pdf. Tax Preparation Help If you need help filing your tax returns this year, consider contacting the Tax Counseling for the Elderly (or TCE) program. Sponsored by the IRS, TEC provides free tax preparation and counseling to middle and low-income taxpayers, age 60 and older. Call 800-906-9887 or visit IRS.treasury.gov/freetaxprep to locate a service near you. Also check with AARP, a participant in the TCE program that provides free tax preparation at more than 4,800 sites nationwide. To locate an AARP Tax-Aide site call 888-227-7669 or visit AARP.org/findtaxhelp. You don’t have to be an AARP member to use this service. Send your senior questions to: Savvy Senior, P.O. Box 5443, Norman, OK 73070, or visit SavvySenior.org. Jim Miller is a contributor to the NBC Today show and author of “The Savvy Senior” book. a multi-Sectional Champ and another highly successful wrestler in the decade of the 2000s (Class of 2007) • Marcello Silva (soccer), one of the players selected as a Globe and Herald All-Scholastic as one of the region’s best, he led the Greater Boston League in scoring twice, his junior and senior years. • The 1994 Baseball Team, coached by Steve Freker; this Golden Tornadoes team was the winningest single-season team in Malden history (21-3) and featured seven future collegiate players and one Major Leaguer, Kevin McGlinchy, who pitched in the World Series as an Atlanta Braves reliever, just five years later in 1999. Bob McVicar, himself a member of the Hall of Fame as a football, basketball and baseball standout as a 1985 Malden High School (MHS) graduate, was honored with the Distinguished Service Award. A steady supporter of MHS athletics for over 30 years, ever since his graduation, McVicar’s generosity through personal donations to various programs and teams has been matched with continuous fundraising ventures for many years. Two Peter Donoghue Golden Eagle Awards were presented, along with a pair of $1,000 scholarship awards. Malden Public Schools Athletic Director Charlie Conefrey and MHS volleyball coach Dan Jurkowski were Golden Eagle recipients, as they were each the subject of winning essays by student-athletes they influenced. Agatha Silva wrote about Conefrey and Julia Argueta penned the winning essay about Jurkowski. In addition to the other awards, the Golden Tornado Club presented a special gift commemorating the over 25 years of service to the club put in by Jim Vozzella, who retired from the Golden Tornado Club Board in June 2019. Vozzella is also a member of the Hall of Fame as a past Distinguished Service Award winner. A good number of the players from the 1994 Golden Tornadoes baseball team were on hand for the Hall of Fame festivities, including Kevin McGlinchy, Peter Donoghue Jr., Rich Griffin, Aaron McCarthy, Milton Osborne, Sean Miller, Kevin O’Neill and assistant coach Alan Blumsack. Two other past Hall of Fame inductees as individuals who were key players on that 1994 team, which was eventually knocked out of the postseason by eventual State Champion Andover, were Kurt Gaudet and Ronnie Repoza. C The Secure Act ongress enacted The SECURE ACT (Setting Every Community Up for Retirement Enhancement) on December 20, 2019. The SECURE ACT pushes out the required beginning date to take required minimum distributions from your IRA account or 401(k) account from April 1st following the following the year in which you reach age 70 ½ to April 1st year in which you reach age 72. Non 5% owners still working do not have to take distributions from their 401(k) plan even if he or she has reached the age of 72. With the passage of the SECURE ACT, IRA contributions are now permitted by taxpayers who have reached age 70 ½. Under the old rule, even though many taxpayers were still gainfully employed at age 70 1/2, the law prohibited them from contributing to an IRA account. You still need earned income in order to contribute to an IRA. Part time workers are now eligible to participate in their employer’s 401(k) plan so long as they have worked at least 500 hours per year for at least 3 consecutive years and have attained the age of 21 at the end of that 3- year period. For the first time, if a taxpayer either had a new baby during the tax year or is adopting a child, the 401(k) participant or IRA owner is now allowed to withdraw up to $5,000 within one year following the birth or adoption of a child without paying any 10% early withdrawal penalty for not being age 59 ½. Income taxes would of course still be due on the withdrawal. There has also been a change to the required minimum distribution rules with respect to designated beneficiaries other than a spouse, a minor beneficiary, a disabled or chronically ill beneficiary, beneficiaries with special needs or a beneficiary within ten years of age of the IRA owner. Under the SECURE ACT, with respect to 401(k) and IRA account owners who die after 12-31-19, a designated beneficiary must now withdraw the entire account balance no later than 10 years after the death of the account owner. This effectively eliminates the “stretch” IRA planning tool which would allow beneficiaries to stretch out the distributions over his or her life expectancy. This is a huge change as a 35 year- old son or daughter inheriting an IRA from a parent under the old law would have over 50 years to withdraw the balance of the 401(k) or IRA account. That would have reduced the annual required minimum distribution substantially. On a $500,000 IRA, instead of withdrawing $10,000 per year in taxable income, the son or daughter would now have to withdraw $50,000 per year in taxable income. The SECURE ACT also applies to Roth IRA’s. There will much more to come following the passage of THE SECURE ACT. Joseph D. Cataldo is an estate planning/elder law attorney, Certified Public Accountant, registered investment advisor, AICPA Personal Financial Specialist and holds a masters degree in taxation. 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