How to Avoid the "Survivor's Penalty" After a Spouse Dies

• Experts suggest that after a spouse's death, some retirees may face higher taxes, but there are ways to alleviate the burden.
• When you switch from filing taxes as a married couple to filing as an individual, you may be subject to the "survivor's penalty."
• To avoid penalties, it is recommended to run tax projections and utilize lower tax brackets early.

The death of a spouse can result in unexpectedly higher taxes for some retirees.

Early planning can help couples reduce the financial burden, according to financial experts.

A "survivor's penalty" may be triggered on future tax returns if you shift from married filing jointly to single, and your income changes.

A surviving spouse may face higher taxes in the single bracket and increased Medicare Part B and D premiums, according to Judy Brown, a certified financial planner and principal at SC&H Wealth Advisors in the Washington, D.C., and Baltimore metropolitan areas.

A survivor can file "married filing jointly" with their deceased spouse for the year of death, but only if they do not remarry before the end of the tax year.

Typically, older survivors opt for the "single" filing status, which comes with higher tax rates, tighter tax brackets, and a smaller standard deduction.

Your taxable income is calculated by subtracting the greater of the standard or itemized deductions from your adjusted gross income.

In 2025, the IRS has announced higher tax brackets and standard deductions, with married couples being able to claim $30,400 and single filers being able to claim $15,200.

Some advisors suggest ways to reduce taxes for surviving spouses.

Start with a 'tax projection' for survivors

To determine how income, deductions, and other factors would affect future taxes following the passing of one spouse, it is necessary to conduct a tax projection for each spouse, according to Brown, a certified public accountant.

She suggested that after analyzing the figures, you can decide which tax strategies to implement for each spouse.

Women are more likely to outlive male spouses, resulting in the survivor's penalty affecting them more often than men. According to the latest data from the Centers for Disease Control and Prevention, the life expectancy gap between U.S. sexes was 5.4 years in 2022.

Prioritize taxes in lower brackets

In early retirement, couples may experience a temporary decrease in income before receiving Social Security and required minimum distributions.

To minimize the survivor's penalty, it is recommended to prioritize paying taxes in the lower married filing jointly tax brackets, particularly in early retirement, according to CFP Judson Meinhart, director of financial planning at Modera Wealth Management in Winston-Salem, North Carolina.

One can strategically fill up lower tax brackets by taking withdrawals from pretax retirement accounts earlier or leveraging Roth IRA conversions in lower-earning years, according to him.

Increasing your income may result in additional tax implications, including increased taxes on Social Security, capital gains, and more.