Charles Trautman, EA · Since 1969

Understanding the widow’s penalty

What changes for a surviving spouse, and ways to plan ahead together.

When a husband or wife dies, the survivor generally files as a single person beginning the year after the death. Household income often stays fairly close to what it was: the larger Social Security check continues, a pension with a survivor option keeps paying, and the IRAs pass to the survivor. But the tax brackets, the standard deduction, and several income thresholds are roughly cut in half. The result can be a higher tax bill on a similar, or even smaller, income.

It’s called the widow’s penalty because women more often outlive their husbands. The rules are the same for widowers.

Current as of October 2026 · Figures are for tax year 2026

What it is Joint vs. single An example When it starts Planning ideas Colorado Talk it through If your spouse has died Questions

What it is

Six places a surviving spouse is likely to feel it.

Income taxes

Similar income may land in a higher tax bracket. For 2026 the 12% bracket ends at $100,800 of taxable income on a joint return and at $50,400 for a single filer. A couple comfortably in the 12% bracket can see the survivor’s income taxed at 22%, with nothing changed but the filing status.

Social Security

The smaller of the two benefits generally stops. The survivor keeps the larger check, not both. Household income goes down, but the house, the car, insurance and the property tax bill don’t get cut in half.

Medicare premiums

IRMAA surcharges may begin at a lower income level. For 2026 the surcharge starts above $218,000 of modified AGI on a joint return and $109,000 for a single filer. The standard Part B premium is $202.90 a month; with surcharges it can reach $689.90, plus a Part D surcharge.

Taxable Social Security

More of the benefit may become taxable. Social Security starts being taxed above $32,000 of “provisional income” on a joint return, but $25,000 for a single filer, and up to 85% is taxed above $44,000 joint or $34,000 single. These lines have never been adjusted for inflation.

Senior deduction

One deduction may be lost, and the income limit is lower. A married couple both 65 or older gets two $6,000 senior deductions, phasing out above $150,000 of income. The survivor gets one, phasing out above $75,000. The extra standard deduction for age also shrinks from two to one. (The senior deduction runs through 2028.)

Investment income

The 3.8% net investment income tax applies above $250,000 of income on a joint return but $200,000 for a single filer. The 0% rate on long-term capital gains is cut in half, from $98,900 of taxable income to $49,450.

Joint versus single, side by side

The 2026 figures. The surviving spouse moves from the middle column to the right-hand column.

	Married filing jointly	Single
Standard deduction, age 65 or older	$35,500 (both 65+)	$18,150
12% bracket ends (taxable income)	$100,800	$50,400
22% bracket ends	$211,400	$105,700
24% bracket ends	$403,550	$201,775
0% long-term capital gains rate, up to	$98,900	$49,450
Social Security starts to be taxed (provisional income)	$32,000	$25,000
Up to 85% of Social Security taxed above	$44,000	$34,000
Senior deduction (65+)	$12,000 for two, phasing out above $150,000	$6,000, phasing out above $75,000
Medicare IRMAA surcharge begins (income from two years earlier)	$218,000	$109,000
3.8% net investment income tax	$250,000	$200,000
Home sale exclusion	$500,000	$250,000*

*A surviving spouse keeps the $500,000 exclusion for a sale within two years after the date of death. Brackets and deductions from IRS Rev. Proc. 2025-32; Medicare figures from CMS. The Social Security and investment income tax thresholds are written into law and are not adjusted for inflation.

An example

Less income, more tax.

A married couple, both 70, receive $60,000 a year of Social Security ($36,000 and $24,000) and $60,000 from a pension and IRA withdrawals. When one of them dies, the $24,000 benefit stops. The pension continues under a 100% survivor option, and the IRA passes to the survivor. Here are the couple filing jointly and the survivor filing single, both under 2026 rules.

	Couple, joint	Survivor, single
Social Security received	$60,000	$36,000
Pension and IRA income	$60,000	$60,000
Total income	$120,000	$96,000
Taxable part of Social Security	$45,100	$30,600
Adjusted gross income	$105,100	$90,600
Standard deduction, with age	$35,500	$18,150
Senior deduction	$12,000	$5,064
Taxable income	$57,600	$67,386
Top tax bracket	12%	22%
Federal income tax	$6,416	$9,537

Rounded. Ignores other income, credits and Colorado tax. Your numbers will be different, which is why we run them.

Income fell 20%. Federal income tax went up almost 50%. Nothing about the survivor’s life got more expensive; only the filing status changed.

We can run your numbers

We’ll prepare your current return a second time the way the survivor would file it, for each of you, so you can see the difference before it happens. Then decisions like Roth conversions and how much to withdraw from IRAs have real numbers behind them. Call 303-734-1040.

When it starts

Filing status follows a timeline, and the first year is usually the kindest.

The year of death: still joint

A surviving spouse can generally file a joint return for the year the spouse died, with the full joint brackets and standard deduction, as long as the survivor hasn’t remarried by December 31. It is often the last year at joint rates, which matters for planning.

The next two years, with a dependent child

A survivor with a dependent child at home, who pays more than half the cost of the home, can file as a qualifying surviving spouse for the two years after the death and keep the joint brackets. Most retirees don’t qualify because their children are grown.

After that: single

The survivor files single, or head of household if a qualifying relative, such as a dependent parent, makes them eligible. Head of household brackets fall between single and joint.

Medicare, two years behind

IRMAA is based on the tax return from two years earlier, so the surcharge often shows up two or three years after the death. If income dropped because of the death, Form SSA-44 asks Social Security to use a more recent year. The death of a spouse is one of the listed life-changing events.

Planning ideas to explore

Most of these work best while both spouses are living and filing jointly.

Roth conversions while you still file jointly

Converting part of a traditional IRA to a Roth IRA is taxed now, at joint rates, instead of later at the survivor’s single rates. Filling the 12% or 22% joint bracket year by year shrinks the IRA the survivor will be drawing from. Roth withdrawals don’t count toward taxable Social Security or Medicare premiums.

Keep an eye on Medicare premiums. A conversion raises income for the IRMAA test two years later, and one dollar over a threshold triggers the whole surcharge tier. We plan conversions to land just under the lines. More on Roth conversions.

The year of death

A joint return is generally still available for the year a spouse dies. If the death happens early in the year, the survivor has the rest of that year at joint rates. A Roth conversion, an extra IRA withdrawal, or a planned capital gain before December 31 is taxed in the joint brackets.

Nobody wants to think about taxes in that year. But these decisions can be made calmly in the fall, and we’ll lay them out. Call us before December.

Qualified charitable distributions from IRAs

At 70½ or older, you can send up to $111,000 a year (2026) straight from your IRA to charity. It never shows up in income, it counts toward your required minimum distribution, and it works whether or not you itemize.

For a survivor, keeping income off the return helps three ways: a lower bracket, less taxable Social Security, and lower Medicare premiums. If you give to charity anyway, this is the way to do it. The charitable giving rules.

Timing capital gains while the joint brackets are available

Long-term gains are taxed at 0% up to $98,900 of taxable income on a joint return, but only up to $49,450 for a single filer. Realizing some gains in the 0% or 15% range now, and buying back if you want, raises your cost basis at a low rate.

This one needs care. At death, the half of jointly owned property that belonged to the spouse who died gets a stepped-up basis (all of it in community-property states; Colorado isn’t one). Selling a highly appreciated asset shortly before a death can give up that step-up.

Pension survivor options, life insurance, and beneficiaries

A single-life pension pays more now; a 100% joint-and-survivor option protects the survivor, and the choice usually can’t be changed once payments start. Life insurance is generally not taxable income and can replace the Social Security check that stops. IRA, 401(k), annuity and life insurance beneficiary forms override your will.

A spending plan for the surviving spouse on one income

One Social Security check is gone, most of the bills aren’t. A simple plan for what the survivor would live on, and from which accounts, makes the other decisions easier.

Reset the withholding. Withholding on pensions, IRAs and Social Security that worked on a joint return will usually fall short on a single return. Update Form W-4P and W-4V, or estimated payments, the first year after the death. (See The Box 2 Bermuda Triangle.)

Tax impact of RMDs for the surviving spouse

Most surviving spouses roll the inherited IRA into their own. Then the required minimum distributions on both accounts land on one single-filer return. A spouse has more choices than any other beneficiary: roll it over, keep it as an inherited IRA, and in some cases delay distributions when the spouse who died was younger. If the spouse who died hadn’t yet taken that year’s RMD, it still has to be taken.

RMDs, Roth conversions and charitable distributions work together. Planning them as one picture is where most of the savings are. Final returns and inherited IRAs.

The Colorado side

Colorado’s flat rate softens the penalty, but doesn’t erase it.

No bracket penalty

Colorado taxes everyone at the same 4.40%, single or joint, so there’s no state version of the bracket squeeze.

Two retirement subtractions become one

Colorado’s retirement subtraction is per person. At 65 or older, each spouse can subtract up to $24,000 of Social Security, pension and IRA income combined (all of their Social Security if that alone is higher). A couple uses two caps. After a death the survivor generally has one, while the larger Social Security check, the survivor pension and the inherited IRA keep coming. Colorado tax can rise noticeably. How the cap works.

Survivors 55 to 64

A survivor in this age range subtracts all of their Social Security only if federal AGI is $75,000 or less, compared with $95,000 on a joint return.

Questions we recommend you talk through together

These conversations are easier to have now than later. We’re glad to sit in on them.

If one of us passed first, which income would continue?

Write down each source and what happens to it: each Social Security check, each pension and its survivor percentage, annuities, IRAs and 401(k)s, rental income.

Who manages our finances today, and how comfortable would the other spouse feel stepping in?

In most couples one person pays the bills and talks to the tax preparer. The other should know the routine before they need it.

Do we both know where our accounts, logins, and documents are?

A list of accounts, the passwords or a password manager, the will or trust, deeds, insurance policies, and the last three years of tax returns.

Are our beneficiary designations up to date?

Check IRAs, 401(k)s, annuities, life insurance, and payable-on-death bank accounts. They override the will, and old forms often name an ex-spouse or a parent who has died.

Who would we call first?

Name the attorney, the financial advisor and the tax preparer, and keep their numbers where both of you can find them.

If your spouse has died this year

We’re sorry for your loss. There’s no rush on most decisions, and nothing here has to be figured out alone. But a few things are worth considering before the year is out, because this is usually the last year you can file a joint return.

Use the joint brackets while you have them

This year’s return is generally still joint, with the full joint brackets and standard deduction. Income that lands by December 31 is taxed at those rates. Next year the same income may be taxed at single rates.

Worth running the numbers: a partial Roth conversion, an extra IRA withdrawal, or selling investments with gains, sized to stay within the 12% or 22% joint bracket and under the Medicare surcharge lines. We can run this calculation for you.

Take your spouse’s required distribution, if they hadn’t

If your spouse was old enough for required minimum distributions and hadn’t taken this year’s, it still has to come out, to you as the beneficiary. Take it by December 31. (The IRS waives the penalty if it’s taken by the next year’s filing deadline, but taking it now keeps it on this year’s joint return.)

Don’t rush the inherited IRA decision

A surviving spouse can roll the IRA into their own or keep it as an inherited IRA, and there’s no deadline. If you’re under 59½ and may need the money, keeping it as an inherited IRA avoids the 10% early withdrawal penalty. You can roll it over later.

Get date-of-death values

Your spouse’s share of investments, the house and other property generally gets a new tax basis equal to its value on the date of death. Ask each brokerage for date-of-death values now, and consider an appraisal on the home. These numbers decide the tax when you sell, which may be years from now, and they’re much harder to reconstruct later.

If you’re thinking about selling the house, you keep the $500,000 home-sale exclusion for a sale within two years after the date of death. Selling your home.

Check withholding and estimated payments

Your spouse’s paychecks, pension or Social Security may have been covering much of the household’s withholding. If those stopped, this year’s return may come up short. A fourth-quarter estimated payment by January 15 can avoid a penalty.

Then look ahead to next year. Update the withholding on your pension, IRA and Social Security (Forms W-4P and W-4V) for single rates. Withholding that worked on a joint return usually falls short on a single one.

Contact Social Security

Your spouse’s benefit stops, and you keep the larger of the two checks. If yours was the smaller one, call Social Security about switching to the survivor benefit. It isn’t always automatic. A payment deposited for the month your spouse died usually has to be returned. You can also apply for the one-time $255 death payment.

Make charitable gifts this year

If you give to charity, gifts made by December 31 count on the joint return. At 70½ or older, giving straight from your IRA (a qualified charitable distribution) keeps the money out of income altogether, which also helps next year’s Medicare premiums.

Update your own beneficiaries

Your IRAs, 401(k), life insurance and bank accounts probably name your spouse. Name new beneficiaries now so those accounts don’t end up going through probate.

Gather what we’ll need for the final return

Several certified copies of the death certificate, last year’s return, and this year’s statements and 1099s for both of you. If an estate is being settled and it earns $600 or more of income, it files its own return, Form 1041. Final returns and inherited IRAs.

We’re here when you’re ready

Call us before December and we’ll go through this list with you, run this year’s numbers, and handle the final joint return. 303-734-1040.

Common questions

Can I still file a joint return for the year my spouse died?

Generally yes, if you haven’t remarried by December 31. You sign the return and write “filing as surviving spouse” in your spouse’s signature area. If an executor has been appointed, the executor signs for your spouse.

What happens to our two Social Security checks?

The surviving spouse receives the larger of the two benefits, not both. Social Security also pays a one-time $255 death payment to a surviving spouse.

Is life insurance taxable?

The death benefit generally isn’t taxable income. Interest paid on proceeds you take in installments is.

If I sell our home, do I still get the $500,000 exclusion?

Yes, if you sell within two years after the date of death, haven’t remarried, and the two of you met the ownership and use tests just before the death. Your spouse’s half of the home also gets a stepped-up basis. Selling your home.

Will my Medicare premiums go up?

They might, if your income is above $109,000 as a single filer. Medicare looks at your return from two years earlier. If your income dropped because of the death, file Form SSA-44 with Social Security to ask them to use a more recent year.

Does this apply to widowers?

Yes. The rules are the same for husbands and wives. “Widow’s penalty” is just the common name.

Planning ahead, or recently widowed?

We’ll run your numbers both ways, or take care of the returns after a death. In person in Lone Tree or remotely, year round.

Start Here 303-734-1040

Sources and where to check

This page is general information, current as of October 2026, and is not advice about your situation. Tax law and Medicare figures change every year. Confirm anything that matters to you with us or at the sources below.