Q: My husband passed away in September 2022. Please provide guidance on how to prepare a Form 1040 for 2022.
— SP, email
Our condolences on the loss of your spouse. Both of the column’s authors are widowers. We understand the grief, pain and uncertainty that is part of your life right now. If the spouse dies, you are considered married for the whole year. Thus, you and your deceased spouse can file a joint declaration.
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The 1040 for 2022 includes all of your income and deductions for 2022 and your husband’s income and deductions on or before his date of death. The standard deduction is the amount for the joint filing of spouses. Other “write-offs” most likely to be reported in the 2022 filing include contributions your husband made into an Individual Retirement Account (IRA) or other qualifying pension plan, penalties for early withdrawal of savings, and any capital gains or losses (up to up to $3,000) on property held solely on his behalf.
The joint statement should include both of your names. Assuming there is no executor or executor, sign the declaration followed by “Filing as Surviving Spouse.”
The Indiana Form IT-40 follows the same procedures. Be sure to include the date of death on Plan 7.
Q: Two other refunds have been received in addition to my usual small refund from Indiana from Indiana in 2022. How are these items reported?
— LL, email
Two refunds — one for $125 and another for $200 — (called “Automatic Taxpayer Refunds” or ATRs) were paid by Indiana in 2022 by either direct deposit or check. It is uncertain whether the ATRs are taxable for federal tax purposes. The Indiana Department of Revenue reports that “…Indiana and other states are waiting for the IRS to clarify how refunds such as the ATR on federal tax returns are reported…”
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No IRS guidance has occurred at this time. However, Indiana has already confirmed that if the refund is taxable for federal purposes, an offsetting deduction will be made to remove the ATR number from the Indiana return…making it nontaxable at the state level. Stay tuned, we’ll be listening for additional leads from the IDR and/or the IRS.
The Ken & Klee tax book – The fourth installment of the estimated 2022 taxes for federal and state purposes is due on January 17. If you’re anxious to get your return done as soon as possible, the IRS will hold up a “Caution” sign saying you must have all your “key documents” before preparing and filing your 2022 income taxes. “Key documents” include interest income, dividend income, capital gains (losses), and other “paper trails” that add to or deduct from your taxable income. Good news on this front is that the previously announced Form 1099-K requirement of $600 in revenue from third-party transaction networks (e.g., Venmo, Paypal, e-Bay, and Etsy) has been pushed aside. The $20,000 threshold for over 200 transactions remains.
Tax Talk will continue as a regular Sunday topic through April 16. Please email your questions to the information below.
Rick Klee served as Director of Taxes at the University of Notre Dame from 1998 to August 2019. A former CPA, Klee is a graduate of Notre Dame. You can reach him at [email protected]
Ken Milani is Professor of Accounting at Notre Dame, where he served as the faculty coordinator of the Notre Dame Tax Assistance Program. Contact him at [email protected]
Email questions to either.
