Few people escape paying income tax, even after death. If your husband dies, you – or the executor of his estate – must still file a return and report any income he earned up to the date of his death. You can typically do this by filing a joint return with him for the year he died. Depending on your circumstances, you might receive benefits similar to those associated with filing a joint married return for two more years as well.
Year of Death
If your husband dies at any point during the tax year, you're still considered married for the entire year, so you can file a joint return. This is true even if he dies in the first days of January, provided you don't remarry before December 31. Filing a joint return allows you to claim the full $11,900 standard deduction for married couples as of 2012. It may affect your tax rate as well because the Internal Revenue Service tax brackets are more generous for married individuals filing jointly. As the surviving spouse, the IRS doesn't require you to file any additional forms to claim a refund if you're due one.
Estate Income Tax
Typically, only income earned through the date of your husband's death is reportable on your joint return. Everything else is "income in respect of a decedent" and must be included on his estate's income tax return, provided his estate's income amounts to more than $600. For example, if your husband died before receiving his final paycheck, you should report that money on your joint marital return because he actually earned it before his death. However, if an investment account produces interest after the date of his death, this is income in respect of a decedent. You or the executor should include this income on his estate's income tax return instead. An exception exists if you receive the interest or other income in respect of the decedent. In this case, you should claim it as your own income and report it on your joint return.
If you remarry before December 31 of the year in which your husband dies, you can file a joint married return with your current spouse. However, your deceased husband must still pay taxes on income earned during his last year of life. You or his executor must file a return for him reporting only his own income and using the married filing separately status.
If you and your husband have a minor child, you might be able to continue claiming the benefits of joint married filing status for two more years after your husband's death. You can't file a joint married return after the year of his death, but you can file as a qualifying widow under some circumstances. You must be able to claim your child or stepchild as a dependent, and he must have lived in your home for the entire year. Exceptions exist for temporary absences, such as if your child lived away at school. You must also have paid at least 51 percent of the cost of maintaining your household during the tax year. You can't remarry during this time. After two years, if you still have a dependent child, you may qualify as head of household. Consult with a tax professional to find out, because this status gives you a better standard deduction than if you file as a single taxpayer, and it offers other tax perks as well.
Beverly Bird has been writing professionally for over 30 years. She specializes in personal finance and w, bankruptcy, and she writes as the tax expert for The Balance.