Death of spouse

[JSmith417]

My spouse died recently. How will loss of his income, receiving half of his retirement benefits, the receipt of insurance and paying off home affect my taxes

[AR_CPA2 · Accepted solution]

Hello  JSmith417

Sorry to hear about your loss!

For the year of death of your spouse, you can still file jointly, until unless you get remarried in the same year, then you can file jointly or separately with the new spouse.  If you happen to have dependent children, and you don't remarry, you can file as Qualifying Widow/Widower for the next two years.  Receiving less income will put you in the lower tax bracket.  Life insurance proceeds are not taxable.  Paying off mortgage will reduce your monthly expenses, but you will not have the mortgage interest deduction in case you itemize.