Tax Planning Tax Implications for Taxpayers Who Have Lost a Spouse Read the Article Open Share Drawer Share this:Click to share on Facebook (Opens in new window)Click to share on Twitter (Opens in new window)Click to share on LinkedIn (Opens in new window)Click to share on Pinterest (Opens in new window)Click to print (Opens in new window) Written by TurboTaxLisa Modified Nov 22, 2019 3 min read If you are grieving a spouse, we are so deeply sorry for your loss. During such an emotionally difficult time, tax and financial implications are likely the last things on your mind (and understandably so). In an effort to reduce the complications caused by the need to deal with federal and state tax issues following a loved one’s passing, TurboTax has compiled a list of tax implications to keep in mind when you file as a widow/widower. Filing status: When filing taxes, you can file a joint tax return with your spouse in the year of death and will be able to sign the tax return as the representative. Tax Breaks: You may have heard about tax breaks for a “qualifying widow(er)”. If you still have a child that meets certain qualifications, you may be able to file as a qualifying widow(er) two years after your spouse’s death, which will give you the same tax breaks as filing jointly. That means that if you can claim the standard deduction, you can claim the larger $24,400 standard deduction for married filing jointly instead of $12,200 for taxpayers filing as single in 2019, and you will be taxed at the more favorable tax rates. If your spouse owned property, the share of that property receives a “stepped-up basis”, which means that when you sell that property, you get a stepped-up basis instead of using the original cost as the cost basis and can use the fair market value at the date of death — this allows you to only owe taxes on the post-death appreciation of the property. This also applies to any assets owned, such as real estate, stock and/or mutual funds. If you and your spouse owned the property as community property, then both halves of the property get the stepped-up basis (not just the half that they owned). There are special rules that govern if you and your spouse owned rental property. Since it qualifies for a step-up in tax basis to its value at the date of their death, you can use that increased tax basis for depreciation purposes. That means more depreciation currently, which will reduce your taxable income each year until you sell it. Social Security: Another area that’s impacted is social security retirement benefits. As a widow/widower, you are now eligible to collect full benefits based on your deceased spouse’s earnings record, if those benefits are greater than the benefits you were collecting on your own. You can collect reduced widow benefits as early as age 60, or wait and collect full benefits at age 66. However, don’t forget that social security doesn’t usually deposit the full amount of those benefits into your bank account since those monthly benefits are reduced by the cost of Medicare premiums. Don’t worry about knowing these tax rules. TurboTax will ask you simple questions and give you the tax deductions and credits you’re eligible for based on your answers. If you have questions you can connect live to a TurboTax Live CPA or Enrolled Agent to get your tax questions answered. TurboTax Live CPAs and Enrolled Agents are available in English and Spanish and can review, sign, and file your tax return. Previous Post What is FAFSA & How to Apply? (FAFSA Help Guide) Next Post Happy Posada! 9 Ways to Host While on a Holiday… Written by Lisa Greene-Lewis Lisa has over 20 years of experience in tax preparation. Her success is attributed to being able to interpret tax laws and help clients better understand them. She has held positions as a public auditor, controller, and operations manager. Lisa has appeared on the Steve Harvey Show, the Ellen Show, and major news broadcast to break down tax laws and help taxpayers understand what tax laws mean to them. For Lisa, getting timely and accurate information out to taxpayers to help them keep more of their money is paramount. More from Lisa Greene-Lewis Follow Lisa Greene-Lewis on Twitter. Leave a Reply Cancel reply Browse Related Articles Tax Planning Real Talk Series: I Am Recently Widowed. How Will Thi… Tax Deductions and Credits Tax Implications of Getting Married Taxes 101 Tax Filing Status Taxes 101 Income Tax Filing Requirements Tax Planning The High Tea on Tax Implications Before and After #Suss… Life Should Married Couples File Jointly or Separately? Tax Planning Do I File Jointly if I’m Divorced or Separated During… Tax Deductions and Credits Your Guide to Filing Taxes as the Head of Household Tax Tips Together in Life and Taxes Too? Tax News DOMA Struck Down: What Does This Mean for Your Taxes?