Wife Passed away at the end of the year Questions

[WMorse]

My wife passed away at the end of the year. The company that she worked for paid her PTO balance Jan of this year. Do I need to claim that as income for her when I file next year? If so how if this year I check the box that said she passed away?

Also, Next year I presume I can't file with married status; do I have to file with single status or Head of Household?

Do I have to pay taxes on any proceeds I get from Life Insurance?

[RobertB4444]

The company that she worked for issuing a payment to her in the year following her death should be issuing the payment either to you or to her estate.  Then it would be taxable income in 2022.  You should receive a W2 or 1099 for that amount next year.  If they issue the form to your spouse's social security number you should contact them to correct it.

Next year you will file as either single or, if you have a qualifying dependent, a qualifying widower.

Here is more information on that status.

Life insurance proceeds are almost never taxable unless the policy pays out in lieu of wages.  If so they will issue you a tax form.

[WMorse]

So Next year I can file as Widower and then enter her income that she got at the beginning of this year for her PTO (Vacation Time)?

[WMorse]

They paid her by depositing into her checking account. She passed on Dec 23rd and paid her on Jan 7 before I could get things cleaned up and the account closed. 

[WMorse]

I do not have a Dependent. All the kids are grown up and on their own.

[AmyC · Accepted solution]

 The form needs to have your name and social unless you have an estate opened for her. Contact the company and make sure they make the change to you. It will show box 7 as  code 4 for death payment to you. This will be a 2022 form since it happened in Jan.

You will be filing as single and may need to make adjustments to withholdings. You can use Tax bracket calculator to help.

I am very sorry for your loss.