When a spouse passes away there are many things of a financial nature that the surviving partner needs to address. One important thing that the survivor needs to do is review and revise their income tax withholding.
The death of a spouse is one of the life-changing events when you need to contact your tax professional
The tax and withholding tables for a Single filer are different than those for married taxpayers filing a joint return. And, most important, the Standard Deduction, which most taxpayers now claim, for a Single filer is half the amount allowed for a joint filer.
While income may go down the first year a surviving spouse files as a Single taxpayer, if he or she claims the Standard Deduction, and also claimed it when filing jointly, using 2021 as an example, deductions will be reduced by at least $12,550.
One possible mitigation to the reduced deductions does exist. For most of my clients reaching the $10,000 SALT limit was not a problem whether filing as Single or married. So, if mortgage interest and excessive medical expenses or contributions are a factor, the now Single filer may be able to itemize.
You need to do, or have your tax professional do, a projection of income and deductions for the first year as a Single filer and compare the resulting tax liability to current withholding. You will probably need to file new Form W-4s (or, if applicable, W-4Vs) with your employer, pension provider or the Social Security Administration. Or you may need to begin making quarterly estimated tax payments.
This applies to both your federal and state withholding.
TTFN
No comments:
Post a Comment