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Death Taxes

  1. Death Taxes
  2. Unified Tax Credit
  3. Widow's Exemption
  4. Form 706
  5. Inheritance Tax

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Widow's Exemption: Know What Property Tax Exemptions They Get

Updated: January 13, 2023

Losing a spouse is a difficult time no matter the circumstances.

Fortunately, the government has in place what’s known as a widow’s exemption to help ease the tax burden on a grieving partner.

Read on as we take a closer look at this tax statute.

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    KEY TAKEAWAYS

    • A widow’s exclusion is a tax statute that lowers the tax burden for a widow or widower after their spouse passes away.
    • The widow’s exception typically takes the form of temporarily reduced property taxes.
    • The widow’s exception frequently appears on federal taxes as an exemption from certain caps on inheritance and gifts from the estate of the deceased.
    • State-recognized domestic partnerships are not eligible for tax relief after a spouse’s passing, only people who are legally married. 
    • State tax breaks for widows and widowers differ from one state to the next.

    What Is a Widow’s Exemption?

    A widow’s exemption is a reduction in tax obligations for a taxpayer after the passing of a spouse. State rules vary, but in general, a surviving spouse is entitled to a tax break for a predetermined time frame. This is frequently in the form of a reduction in property taxes. 

    After a death that can lead to internal economic unrest in a household, this can help survivors and their dependents financially. Widows and widowers are exempt from paying federal estate and inheritance taxes.

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    How a Widow’s Exemption Works

    Federal tax benefits under federal law can take a wide variety of forms. For example, the advantages of filing a joint return may be available to a recently bereaved taxpayer for up to two years after their spouse’s passing.

    On whatever property they inherit, the surviving spouse is also qualified for a stepped-up basis. As a result, the cost basis for that asset is changed to reflect the date of the spouse’s passing. The cost basis affects taxes when the asset is sold.

    The first $250,000 of a property’s sale proceeds are exempt from taxes according to the IRS if the surviving spouse can demonstrate that it was the couple’s primary residence.

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    What Does Widow’s Exemption Mean for Individuals?

    For individual surviving spouses, the widow’s exemption means that they can benefit from a reduction in taxes in the immediate aftermath of the death of their loved one. 

    For example, Florida permits a $500 deduction from the tax basis used to calculate property taxes. The taxable value of a property is decreased by $500 for a surviving spouse; meaning that this is not a $500 tax benefit. 

    Although this benefit is always available, it is forfeited if the surviving spouse marries again.

    Summary

    The widow’s exemption is a tax exemption that helps grieving widows whilst they are in a state of probable turmoil.

    Each state’s rules on the widow’s exemption are different. So if you are looking to gain a widow’s exemption after the loss of a loved one, it is recommended that you visit your state government website to find out how you can claim.

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    FAQS on Widows Exemption

    Do Widows Have to Pay Income Tax?

    It is dependent on the state, but most widow’s exemptions are a reduction of income or property taxes.

    Do Widows Pay More Taxes After Their Spouse Dies?

    Widows will usually file as single in the year after their spouse dies. So no, they won’t pay more taxes.

    Do Widows Get a Tax Break?

    Yes, a widow’s exemption is essentially a tax deduction that is offered after a person’s spouse dies.

    What Is a Homestead Exemption?

    Homestead Exemption is to protect the value of the homes of residents from property taxes, creditors, and circumstances that arise from the death of the homeowner’s spouse. The amount of exemption varies depending on the state.

    Death Taxes

    1. Death Taxes
    2. Unified Tax Credit
    3. Widow's Exemption
    4. Form 706
    5. Inheritance Tax

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