The year a spouse passes is one of the most complex — and most sensitive — tax filings we handle. We approach it with both precision and care.
Filing taxes in the year your spouse passes is unlike any filing you've done before. The return still has both of your names on it. There are decisions to make about retirement accounts, inherited assets, and how you'll file going forward. And all of it has to get done while you're grieving.
We handle this return regularly and understand what it involves — both technically and personally. We'll walk you through every decision clearly and take as much of the burden off you as possible.
In the year your spouse passes, you are generally still eligible to file a joint return — even if they passed away in January. A joint return almost always results in the lowest tax rate and is the most beneficial filing option. This return is also your spouse's final tax return. We coordinate both so everything is consistent.
If you have a dependent child, you may be eligible for "qualifying surviving spouse" status for the two tax years following the year of death. This allows you to use the married filing jointly tax rates and standard deduction — significantly more favorable than single filer rates. After those two years, you move to single or head of household status, which typically increases taxes owed. We help you understand and plan for this transition.
As a surviving spouse, you have options other beneficiaries don't. You can roll your spouse's IRA into your own IRA — treating it as always yours, delaying RMDs until your own required beginning date, and naming new beneficiaries. This is usually the most advantageous option if you don't need immediate access to the funds.
When your spouse passes, assets you held jointly generally receive a step-up in basis on their half. In community property states, both halves may receive a step-up. Understanding which assets received a step-up matters when you eventually sell them.
If your spouse's estate didn't use all of their federal estate tax exemption, you may be able to inherit that unused amount — called the Deceased Spousal Unused Exclusion, or DSUE. But this only happens if a Form 706 is filed within nine months of your spouse's death — even if no estate tax is owed. We assess this on every applicable estate and make sure the deadline isn't missed.
If the nine-month deadline has already passed, there is still a potential path forward. The IRS has issued guidance allowing a late portability election in certain circumstances — generally available for estates that were not otherwise required to file a Form 706 (meaning the estate was below the filing threshold and no tax was owed). This late relief can be requested, but it requires a formal filing, costs additional professional fees, and is not guaranteed. It is not a substitute for filing on time — but if the deadline has passed, it's worth evaluating whether late relief is still available in your situation.
If your spouse held assets individually — not jointly with you — those assets may pass through the estate before reaching you or other beneficiaries. If the estate earns income during the administration period (interest, dividends, capital gains from asset sales), it may be required to file its own income tax return on Form 1041. This is a separate return from your spouse's final 1040 and from your own personal return.
Additionally, if your spouse named beneficiaries other than you on certain accounts — or if the estate distributes to non-spouse beneficiaries under the will — those beneficiaries will receive their own K-1s and have their own reporting obligations. We can coordinate all of these filings together.