hopefully last dumb question

[monkatom]

In meeting with a lawyer she said we should change our exemptions right away since we normally get a tax return of over 10K. so yesterday wife and I went into online pay and changed exemptions. then i started to think about if I change my exemptions this will give me more money each money and couldn't it make me fail the means test? example if before I took means test and was showing as only having 40 bucks a month left over after bills and now I change exemptions from 1 to 4 so now I will have income of say 200 extra a month then don't I have to file a 13?? Should I not wait to change exemptions until after I file?? I have not asked the lawyer yet since I have not paid her anything and do not want to keep botehring her with things. when we met she seemed to only care about gross income and did not want teh net income. just curious
Thanks

[Gabe]

I too have the same question and I am in the same boat.

My personal opinion is I wouldn't take a chance on failing the means test for the somewhat paltry sum of the extra taxes taken out. Paying taxes for the next couple months beats the heck out of a 5 year payment plan.

Not legal advice, just my somewhat logical thinking.

[monkatom]

Thats what I was thinking too so I may change teh exemptions back.
Thanks

[ameliabedilia]

I am confused here. I thought the means test was your gross income, not after tax take home pay. That money is already included in the means test. I know schedule I is after tax take home. If you are negative and wanting to keep your car, it would be in your best interest to have more monthly take home so you break even.
If I am totally wrong, someone please correct me!

[HHM]

The means test looks at your "prior" 6 months of gross income. If you only just changed your exemptions and are filing soon, it should not matter.

There are plenty of forms out there, this forum has links to forms on which you can take the means test yourself and sample Schedules I & J (income and expenses), it is not that hard. So instead of speculating, grab the form, get the information you need, and do the means test.

[ameliabedilia]

The means test looks at your "prior" 6 months of gross income. If you only just changed your exemptions and are filing soon, it should not matter.

There are plenty of forms out there, this forum has links to forms on which you can take the means test yourself and sample Schedules I & J (income and expenses), it is not that hard. So instead of speculating, grab the form, get the information you need, and do the means test.

You still didn't answer my question, I don't think. How would your exemptions change your prior 6 months gross income for the means test? Gross is how much your employer pays you. Your witholdings are part of that amount, not added to that amount, right? If you change your witholdings to bring home more each month, your 6 month gross wouldn't change. I know it can matter for the schedules, but not for the means test. I am still confused.

[HHM]

Your right, the with holding does not effect the "presumption of abuse" test, i.e. state median income. However, the with holding can effect schedule's I and J when it comes to figuring disposable income.

[leftyf]

I used the Quicken.com tax estimator and divided it by 12 for my federal taxes based on what my situation is right now (i.e. renting, not a homeowner.) I've changed exemptions over the year so it has been quite up and down in the tax area on my net pay. I hope this will fly.

[PaKettle]

I was told that the thing to do is to change your taxes AFTER YOU FILE. Don't take my word for it, I'm not an attorney. But that is what I hear through the grapevine.

The problem is, at this late date, if you're filing this month, it will not affect your 2007 taxes much at all because we only have one month left in the year! I am changing mine anyway (because we just filed last week), at least to get more money in my pocket during December and less tax return in February.

However, the thing about the trustee taking your tax return, in a ch. 7, depends on what exemptions your state has, and what is the "practice" of your district trustee(s).

For example in California I was told "the trustee is not interested in your tax return" and also we have a homestead exemption of $20+k that can be used for anything if you don't have a homestead. In other states there are other exemption laws. So I'd ask your attorney specifically if your trustee takes tax returns and if there is any exemptions you can apply towards it. $10 is an amazing amount of taxes to get back! I thought we were crazy to get back $3k or so each year. You do know, that it is best to put that "extra money" into an interest bearing savings account instead of letting the gummit have it, don't you?

Good luck!