Question

6. In 2019, Ashley earns a salary of $55,000, has capital gains of $3,000, and receives interest income of $5,000. Her husband died in 2018. Ashley has a dependent son, Tyrone, who is age eight. Her itemized deductions are $9,000.

1. What is her filing status?

b. Calculate Ashley’s taxable income for 2019.

Answer 1

a.

Ashley satisfies the requirements for a Qualifying widow (or Surviving spouse)

b.

Taxable Income For 2019

Particulars	Amount
Salary	$         55,000
Capital Gain	$            3,000
Interest	$            5,000
AGI	$         63,000
Less: Standard Deduction	$       (24,400)
Less: Personal Exemption & dependancy deduction	$                   -
Taxable Income	$         38,600

Note:

1. The $4,050 personal exemption that taxpayers claim for themselves, spouses and dependents are no longer available in 2019.
2. A qualifying widow(er) is entitled to claim the $24,400 standard deduction amount that’s available to married taxpayers for year 2019.
3. Filing tax return as a qualifying widower effectively extends the same joint married tax breaks and standard deduction for another two tax years. (in this case year 2019 and year 2020.)

Extra: JUST FOR REFERENCE

Qualifying Widow, Widower Tax Filing Status

Qualifying Widow (or Qualifying Widower) is a filing status that allows you to retain the benefits of the Married Filing Jointly status for two years after the year of your spouse's death. You must have a dependent child in order to file as a Qualifying Widow or Widower. In fact, the full name of this filing status is actually "Qualifying Widow(er) with a Dependent Child".

• If you file as Qualifying Widow (or Widower) with Dependent Child, you will get the same tax benefits that you would get if you filed as Married Filing Jointly. The Qualifying Widow (or Widower) filing status entitles you to use the Married Filing Jointly tax rates and the highest standard deduction amount (if you do not itemize deductions).
• If your spouse died during the tax year, you can still use Married Filing Jointly as your filing status for that year (as long as you otherwise qualify). For two years after that, you may be eligible for the Qualifying Widow (or Widower) with Dependent Child filing status.
• If you have a dependent child, you have not remarried, and you meet certain other requirements (see below), you can file as Qualifying Widow (Widower) with Dependent Child for two years after the year of your spouse's death.

For example, if your spouse died in 2018, and you have kept up a home for a dependent child, you may be able to use the Qualifying Widow (Widower) filing status on your 2019 and 2020 tax returns.

Qualifying and Non Qualifying Widow(er)s

For the two years after the year of your spouse's death, you can use the Qualifying Widow(er) filing status if all 5 of the following statements are true:

1. For the year in which your spouse died, you filed (or could have filed) a joint return with your spouse.
2. You did not remarry (during the two years after the year of your spouse's death). For example, your spouse died in 2018 and you do not remarry before January 1, 2021.
3. You have a child or stepchild (not a foster child) whom you are able claim as a dependent.
4. The child lived with you in your home all year, except for temporary absences. There are exceptions for birth, death, or kidnapping (see below).
5. You paid more than half the total cost of keeping up the home in which you and the child lived for the year. The total cost of keeping up a home includes food expenses, rent, mortgage interest, home insurance, real estate taxes, utilities, repairs, maintenance, and other household expenses.

If you remarried during the year, you cannot file as Qualifying Widow or Widower. Neither can you file as Qualifying Widow or Widower if you do not have a dependent child for whom you kept up a home.