What You Should Know About Income Tax When You Lose a Spouse

ALBANY, NY (03/10/2011)(readMedia)-- The death of a spouse can be devastating and uncertainty about income tax issues can add to the stress of the situation. You should meet with your family attorney and/or your tax advisor as soon as possible to review your tax and estate circumstances. If you do not have an attorney or tax advisor, call the IRS at 1-800-829-1040 or visit the IRS website at www.irs.gov.

Once you've selected a trusted advisor, the next step in settling your spouse's affairs is to collect the proper paperwork for the meeting. Start with the following:

-- Death Certificate;

-- Insurance Policies;

-- Marriage Certificate;

-- Birth Certificates for Dependent Children;

-- The Deceased's Will; and

-- Certificate of Discharge from the Military (if applicable);

-- A listing of any jointly held bank or financial accounts; and

-- A detailed list of your questions.

You should ask your advisor about any life insurance proceeds, supplemental security income, veteran's benefits, and welfare benefits as these payments may or may not be subject to income tax.

Here is some basic information that you may also find helpful:

-- In most cases, it will not be necessary to file a return with the IRS until your usual filing date.

-- A surviving spouse can file a joint return for the year of death, and under certain conditions for the next two years.

-- On the deceased's final income tax return, you can claim any tax credits such as those for the elderly or disabled, earned income credit, etc., that applied to the spouse before death.

This is just a brief introduction to some of the tax issues facing you. For more detailed information on income tax liability after a spouse's death, contact the IRS at 1-800-829-3676 to order forms, instructions and publications, or visit the website at www.irs.gov. The IRS has several publications which may also be helpful with settling the estate of a spouse: "Guide to Free Tax Services"; "Survivors, Executors and Administrators"; and "Pension and Annuity Income."

PLANNING AHEAD

Thousands of New Yorkers are also choosing to preplan/prepay their funeral and burial expenses to spare their surviving spouse the emotional burden of having to make decisions at a time of great stress and grief. Selecting a funeral home takes careful thought and planning. To help with your search, know that members of the New York State Funeral Directors Association, Inc. (NYSFDA), observe the highest standards of professional and ethical conduct. To search for a trusted NYSFDA member funeral home, visit www.nysfda.org.

(Bonnie McCullough is executive director of the New York State Funeral Directors Association, an organization of more than 900 funeral homes.)

If you have a question about funeral service or would like a list of NYSFDA member funeral directors in your area, contact NYSFDA, 426 New Karner Road, Albany, NY 12205 or visit the website: www.nysfda.org)

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Editor's Note: For more information, or to schedule an interview with NYSFDA Executive Director Bonnie McCullough, please call Vera Nuspliger at 518-882-9816 or Randy McCullough at 518-452-8230.