Adjusting tax withholdings to decrease refund?

[aces67]

We increased our withholdings so that our tax refund would be lower. When our lawyer found out that we did that he says we CAN'T. He says you are not allowed to do that. He says I should fix it now and hope that the trustee doesn't call us on it when he sees our taxes for this year.

Have any of you heard of this? Our refund is normally $4,000 and this year it will only be $2000. Our lawyer said our trustee's office is going to red flag this and we will have some explaining to do.


What do you think?

[chloe0724]

It may be that way in your district. Everyone's different. My attorney actually told me to change my withholdings after confirmation to decrease my refund amount.

[getmeouttahere]

We were going to change our withholdings after confirmation to give us more $ in our paycheck and so we would get back a lesser refund at the end of the year. Can't quite remember who told us we could do this, (I think it was our attorney) . . . Well . . . we were confirmed last week. Our "Order Confirming Plan" states that "We must submit all future tax refunds and shall NOT modify income tax withholding deductions during the course of the plan without prior approval of the Trustee." Bummer!!

Good Luck!

[aces67]

We were going to change our withholdings after confirmation to give us more $ in our paycheck and so we would get back a lesser refund at the end of the year. Can't quite remember who told us we could do this, (I think it was our attorney) . . . Well . . . we were confirmed last week. Our "Order Confirming Plan" states that "We must submit all future tax refunds and shall NOT modify income tax withholding deductions during the course of the plan without prior approval of the Trustee." Bummer!!

Good Luck!

That's interesting to me. I'm in TX. Where are you located? Maybe it's just our districts that do this?

[Vanda]

I also decreased my withholding and increased my 401 K contributions. I guess we'll find out whether it was a mistake or not, because I am still waiting to see what the 727 objections are.

[ccfriend]

My paperwork from the trustee said that could not change the withholding without trustee approval.

[ccfriend]

I am in Michigan

[getmeouttahere]

I am in Michigan also. What district? Maybe it's standard for our area.

[Vanda]

Whoops sorry, this is Chapter 13, I'm still in Chapter 7, waiting, waiting..

[optimistic1]

Im in AZ, and the Ch.13 trustees use a form for expenses and such. They list taxes as "actual liability". Take from that what you will.

[chucksherm]

Why would it matter anyway? After the trustee looks at the tax returns and sees the increase in income, he/she'll probably just order the plan payment increased accordingly. Either way, you pay.

[optimistic1]

Why would it matter anyway? After the trustee looks at the tax returns and sees the increase in income, he/she'll probably just order the plan payment increased accordingly. Either way, you pay.

Thats just it though, because despite what you might be led to believe, they probably dont even bat an eye at your tax returns. They just want the monthly payment.

[broncho14]

My attorney advised me to change my withholdings after confimation. I used to get between $800 and $1,000. Next year I will have to pay around $150.

[ccfriend]

I am in Eastern MI district.

[spearmint]

Oh no! I am about to file Ch13 and I was hoping to increase my withholdings. If I don't the trustee will get about $4K a year!