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Joint-Return Rates for "Surviving Spouses"
By Julian Block

There is a special filing break for some widows and widowers. They may be entitled to the benefit of joint-return rates for two years after their mate dies.

In the case of a return for tax year 2002, make sure to take advantage of this frequently-missed tax trimmer for surviving spouses if your spouse died in 2000 or 2001 and you have a dependent child. To get the benefit of this break, just check the box for "qualifying widow(er) with dependent child" on Line 5 of Form 1040 or Form 1040A (it's unavailable on Form 1040EZ, the shortest version of the tax return).

By way of background, the death of your spouse bars you from filing a joint return, unless you have remarried. Nor are you allowed to claim the personal exemption for your spouse as you are on a joint return. Nevertheless, you still might be able to figure your 2002 tax using the rates for a joint filer, which are lower than for a single person or a head of household.

To qualify as a surviving spouse and use joint-return rates for 2002, you must meet these four requirements:

(1) You did not remarry before Jan. 1, 2003.

(2) For the year in which your spouse died, you were entitled to file jointly with him or her, whether you actually filed that way or not.

(3) During all of 2002, your home is the principal residence of your child, adopted child, stepchild, or foster child whom you can claim as a dependent. Your home need not be in the same location for the entire year.

EXAMPLE. You do not disqualify yourself for joint-return rates merely because you move from one dwelling to another during the year.

TIP. In determining whether your child lived in your home, you are allowed to ignore temporary absences by your son or daughter because of vacations, sickness, school or military service. But you do become disqualified if your child moves out permanently before the year end or fails to qualify as your dependent.

(4) You furnish over half the cost of maintaining your home. In calculating the cost, note the instructions that accompany Form 1040, you are allowed to count such items as rent, property insurance, real estate taxes, mortgage interest, upkeep, repairs, utilities, telephone, domestic help, and food consumed within the home.

CAUTION. Do not count the cost of clothing, education, medical treatment, vacations, life insurance, transportation, or the value of work done in the home by you or your child. Nor are you permitted to count the rental value of a home that you provide for your child, even though you do count its value in determining whether you contribute over half of the child's total support for the year and are, therefore, entitled to an exemption for him or her.

TIP. Another break is that the standard deduction is higher for a surviving spouse ($7,850 for tax year 2002, up from $7,600 for 2001) than for someone with the filing status of single ($4,700 for 2002, up from $4,550 for 2001) or head of household ($6,900 for 2002, up from $6,650 for 2001).

TIP. All is not lost if you fail to qualify during 2002 as a surviving spouse who can use the joint-return rates. You still may be able to avoid the single-person rates and use the more favorable ones for a head of household. The head-of-household rates fall about halfway between those for joint filers and those for singles. If you are no longer eligible for treatment as a surviving spouse but you remain unmarried and your child lives with you, you may qualify as a head of household even if you are ineligible to claim an exemption for your child.

Additional Resources
The following Special Reports are also available for purchase. Please read the press reviews about these reports below. To purchase a Special Report click on the link.

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Press Reviews
- "Provides more depth than the other books" The Wall Street Journal
- "Easily the best available" Forbes
- "Offers numerous short money-saving tips, as well as sophisticated strategies... one of the best books... New York Times
- "Block's book covers all the bases on tax planning... The language is easy to understand and the examples are plentiful" New York Daily News