The Brutal Tax Treatment of Widows and Widowers

It’s often said that there are only two absolutely certain things in life: death and taxes. 

But many folks don’t stop to consider the tax ramifications of the death of a spouse, particularly on a couple who has filed jointly for decades.

For many of the same reasons some folks turn sour on estate planning and never make their wishes known, many couples may avoid the important steps needed to plan for the eventual passing of one spouse because it’s an unpleasant topic.

The Brutal Tax Treatment of Widows and Widowers

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Yes, in general, widows pay more taxes once their spouse dies. This is due to the standard deduction being cut in half when you file as a single taxpayer, compared to using married filing jointly, because of the compression in tax brackets.

Do Widows Pay More in Taxes Once a Spouse Dies?

– A decrease in Social Security and a possible increase in how much your Social Security benefit is taxed – Decreased standard deduction – An increase in your marginal and effective tax rates – An increase in IRMAA

What are the Implications of the Widow’s Tax?

In figure 2 below, note the year 2022 on the left, which we will denote for the purposes of this example as the year before death. Below are two possibilities: 2023 with and without the death of a spouse. Now we can see how death affects the following years’ taxes.

Increased Taxation of the Surviving Spouse

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