Tax Refunds

[lisac77]

I am woefully uninformed about taxes apparently. The business losses ARE reported on our individual return after all, so we are looking at a whopping tax refund again this year. I know sometimes the trustees are interested in the refunds and sometimes they aren't, so should we just wait to file our taxes until after we've filed next month? I mean if the trustee requests a portion of it, what are we going to do? We'll give it over of course. I don't think there's any way we'd be able to get the refund and spend it before we file, we just don't have enough time.

How much of the refund do they usually get? All of it? I keep seeing mention of a "percentage" but no hard numbers.

[SinkingFast]

Actually, if you're filing BK in the spring, you wanna do your taxes, get your refund, spend that money on necessities, and then file BK. Otherwise, the Trustee is gonna take your refund for sure.

Be sure to save receipts for what you spent the refund money on to verify to the Trustee where the money went. And paying your attny and your filing fee are acceptable expenses.

[lisac77]

Actually, if you're filing BK in the spring, you wanna do your taxes, get your refund, spend that money on necessities, and then file BK. Otherwise, the Trustee is gonna take your refund for sure.

Be sure to save receipts for what you spent the refund money on to verify to the Trustee where the money went. And paying your attny and your filing fee are acceptable expenses.

Unfortunately time is not on our side. I have a cash bonus coming to me on the 28th of February. And we had a substantial savings account of my husband's that we already had to spend. I think the lawyer was nervous about us spending all that money so close to the bankruptcy. However, if I set my withholding tax to 0 and up my 401K to the max, I can reduce the amount of cash in the cash bonus pretty substantially. That would give us another 30 days or so to file, until my next bonus comes through on March 31.

The March 31 bonus is really big, so we definitely want to keep that out of the BK estate.

Is your head spinning yet? Mine is!!

[SinkingFast]

I kinda did think, OMG, MORE money to spend.

We had to do the same thing as you. Not so grand of a scale. Hubby got paid and then the paralegal called to see if Tuesday would be OK to come in and sign papers. Boy did we go on a shopping spree that weekend. Bought money orders to pay bills. Groceries. Sam's Club, you name it. I was beat!

By the time we got all said and done, we had $17 left in the bank.

[Spartan]

i could be wrong... but, speaking of tax loss, you may have tax loss carry forward... The trustee would want that. No skin off your nose. Just paperwork.