When a husband or wife dies, the surviving spouse may eventually face a higher income tax bill. Why? Filing status shifts from married filing jointly to single or head of household, triggering higher tax rates at lower income levels. So, if income remains relatively steady, the survivor can be pushed into a higher bracket. In addition, required minimum distributions from retirement accounts can increase taxable income. Careful evaluation of spousal IRA rollover options based on age and cash-flow needs may help. But the right approach depends on each individual’s circumstances and goals. Contact our firm for guidance on planning for this difficult challenge.
