Less income, more tax

A widow of 67 had $1 million in a traditional IRA and lived on $5,000 a month from Social Security and her pension.

The year after her husband died, she could owe more federal tax than the two of them paid together, on less money. The return is correct, and it has a new shape.

She wanted to be secure herself and to leave something to her children. Nobody had shown her how the tax on that $1 million would land on one person's lines, or how few years she had to do anything about it.

Most retirement plans are built as if both people will live forever, and a plan like that doesn't adjust on its own when one of them dies. The plan built for two has to be run for one. Here is what changes, and when.

At a glance

• The year a spouse dies is the last year the survivor files a joint return.
• From the next year the same income is taxed on one person's brackets, with half the standard deduction.
• One Social Security check stops, and the survivor keeps the larger one.
• The lines for taxing Social Security and for the Medicare surcharge are set for one person.
• The required withdrawals from a traditional IRA don't shrink; the same dollars come out on one person's lines.

The last joint return has a date on it

The year of the death is the last year both names go on one return.

A couple files jointly for the year one of them dies, in the April after. From the following year the survivor files as a single person, unless a dependent child at home qualifies them for two more years as a qualifying surviving spouse. The change is one box on the form.

The next year, half the deduction and narrower brackets

The money coming in the door hasn't changed much. The lines it's measured against have.

In 2026 a couple filing jointly takes a standard deduction of $32,200. A single person takes $16,100. The brackets narrow the same way: the 22% bracket runs to $211,400 of taxable income for a couple and to $105,700 for one person.

A couple with $130,000 a year from a pension and IRA withdrawals, taking the standard deduction and nothing else, pays about $11,200 of federal tax. The survivor of that couple, with the same $130,000 the next year, pays about $19,900. That's about $8,700 more, roughly 77% more tax, on money that didn't change. That leaves out the extra deduction for people 65 or older, which a couple gets twice and a survivor once, and the Social Security and Medicare lines below. Each widens the gap.

One Social Security check stops

The survivor's income does fall, and it falls by the smaller check.

When one spouse dies, Social Security pays the survivor the larger of the two checks, their own or the widow's or widower's benefit, and not both. So the income goes down by one check while the deduction goes down by half and the brackets narrow by half. That is how a widow comes to pay more tax on less money.

The lines for taxing Social Security have never moved

Up to 85% of a Social Security check can be taxed, and the lines that decide how much are lower for one person than for two.

The test adds half the Social Security to everything else that came in that year. For a couple, the benefits start to be taxed above $32,000, and up to 85% of them are taxable above $44,000. For one person the lines are $25,000 and $34,000. They've never been adjusted for inflation, so a survivor with less income can still have more of the check taxed than the couple did.

The Medicare surcharge lines arrive two years late

Medicare sets the premium from the tax return two years back, so this change reaches the survivor last.

In 2026 the standard Part B premium of $202.90 a month applies up to $109,000 of income for a single person and $218,000 for a couple, and above the line it steps up. The one-person line is half the couple's, and because the premium looks back two years it reaches the survivor two years after the first return filed alone.

The required withdrawals don't shrink

The IRS sets how much comes out of a traditional IRA each year from the balance and the owner's age. It doesn't ask how many people are living on it.

From 73, or 75 for people born in 1960 or later, a set share of the balance has to come out every year and be taxed as income. At 73 it's the balance divided by 26.5, about 3.8%, and the share rises each year. On $1 million that first withdrawal is about $38,000, for one person or for two, and for a survivor it lands on the single brackets instead of the joint ones.

The widow of 67 with $1 million in her IRA stood right here. From 73 her $1 million would come out on a single person's lines and push more of her Social Security into the taxable range. Her problem wasn't that she hadn't planned. She had planned as if both of them would live forever.

What she did with the years before 73

She paid tax on purpose while her income was low, instead of being made to pay it later.

Over seven years she moved the IRA into a Roth IRA a piece at a time and paid about $330,000 of tax up front. A conversion adds the amount moved to that year's income, so each year she chose how much to take onto her lines while they were otherwise mostly empty. At the end there was no required withdrawal waiting at 73, because the owner of a Roth IRA doesn't have to take one, and under current law the money that comes out of a Roth later carries no income tax, for her and, within ten years of her death, for her children.

The quality of a retirement is set by the quality of the plan and not by the size of the bank account. Her balance was the same the day after she converted, and the tax waiting on it was not.

The usual advice, and the other side

The usual advice is to leave the tax where it is for as long as you can, and for two people sharing the brackets that is fair.

Deferring the tax built the account, and taking only what's required keeps this year's bill down. Most plans then assume the survivor will have less to spend, so the tax will take care of itself. The other side is the one above: the survivor has less to spend and more of it taxed. The married filing jointly years are a temporary opportunity, and the tax paid on purpose inside them, while two people share the lines, is often less than the tax paid later by one.

What people do, in order

The people who get ahead of this do a few plain things, usually in this order.

• They work this year's return out again as if one of them were filing alone, so they know the survivor's bill.
• They look at the IRA balance and the year the required withdrawals start, and ask what those would be on one person's lines.
• While both are here and filing jointly, they decide how much to convert each year. A conversion counts in the year the money moves and has to be done by December 31.
• They find out which Social Security check is the larger one, because that is the one that stays.
• They write the plan for one down where the survivor can find it.

What changes and when

At the death:

• Two Social Security checks become one. The survivor keeps the larger of the two.

The year after the death:

• The filing status goes from married filing jointly to single.
• The standard deduction drops from $32,200 to $16,100 (2026 figures).
• The 22% bracket ends at $105,700 instead of $211,400 (2026 figures).
• The income lines for taxing Social Security drop from $32,000 and $44,000 to $25,000 and $34,000.

Two years after the first return filed alone:

• The Medicare surcharge line drops from $218,000 to $109,000 (2026 figures).

From 73, or 75 if you were born in 1960 or later:

• Required IRA withdrawals are the same dollars as before, now taxed on single lines.

The plan built for two has to be run for one.

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General information, not advice for your situation.