question about filing & income tax refunds

[monlyba]

have to give up that refund money, i guess i have to... but i'd love to know a way to save it because we could really use it... it will come around the time we will need to move (deposit for new place, etc) and my vehicle may die any day now... not to mention i might be able to use some of it to pay attorney fees to file bankruptcy!

any advice will be appreciated... thanks!

[lrprn]

is there a good/bad time to file in relation to that time of year when most people are receiving their refunds?

The best time to file is the 4-5 months AFTER tax returns come out - May through November. After that, trustees get more interested in your tax returns and may delay closing your Ch 7 case to see what you are going to get back. That's happened to several members and one of our moderators, SinkingFast.

The best option is to adjust your withholdings NOW so that you don't get such a big return back. Save the extra money as it comes in so you'll have it for moving and car expenses when you need it next year. Work with your lawyer to be sure you know how much you can have protected by your exemptions in a checking or savings account when you file. Why give all that money to the government to use for free for a year plus take the chance your trustee may take it all in the end?

Here's how to adjust your withholdings to reduce the amount you will get back - http://www.irs.gov/pub/irs-pdf/p919.pdf . You can adjust these anytime you want, so keep checking through the rest of the year and change them accordingly.

Typically if you can reduce your return to less than $500, your trustee won't be as interested in taking it.