Tax returns and chapter 13

[lillymarlene]

I am new to this (just past my 341 but not confirmed yet) and I have a question about tax returns. I just wonder if anybody has any ideas. Do I have to turn in a copy of the return to the trustee each year that I am in the 13? Does the trustee and/or your attorney usually notify you when to do this?

I am also self-employed and my income can vary. If my gross income is slightly lower than my schedule J does this give me a greater chance of dismissal? (Though this year 2011 I would probably be closer to this schedule J since my business has much less overhead..ie. I had to let my employee go last year.)

Then, if by some chance this year 2011 I ended up with an increase in income, does the trustee adjust your plan into having you pay more?

Thanks in advance.

[enginegirl]

this is such a hard question to answer as it all depends on your trustee and your amount of payback.... some trustees want it all and some are very understanding.... some want a copy of your tax return and some don't. Best thing to do is ask your atty... he/she should know how your trustee acts and what his/her demands are.

tons of luck to you!

[despritfreya]

I just wonder if anybody has any ideas. Do I have to turn in a copy of the return to the trustee each year that I am in the 13? Does the trustee and/or your attorney usually notify you when to do this?

This will depend on the specific Trustee but, in general, yes, you must supply a complete copy of your tax returns during the course of your Chapter 13. What does the Trustee do with the return? Probably nothing once your case is confirmed as he/she has too many other cases to really look at the return. What should the Trustee be doing with the return? He/she should be reviewing the return to make sure you are not earning substantially more than you initially estimated. If you are, the Trustee has the right to file a Motion to Modify the Plan. Will he? Probably not since it is unlikely the Trustee will pick up on the issue.

I am also self-employed and my income can vary. If my gross income is slightly lower than my schedule J does this give me a greater chance of dismissal?

No. You are self employed. The income you listed on Schedule I is an estimate. You will be filing monthly business operating reports (P&L statements). So long as the amount you listed is close to your average you should be fine.

if by some chance this year 2011 I ended up with an increase in income, does the trustee adjust your plan into having you pay more?

This depends upon timing. If your average income, as shown on the operating reports, is substantially more than your estimate in Schedule I and your Plan has not been Confirmed, the Trustee may indicate that you can afford a higher payment. But, the reverse is also true. If your average is less than the estimated amount on Schedule I, the Trustee could indicate that your Plan is not feasible.

Des.

[lillymarlene]

Hi, Thanks enginegirl and depritfreya for your help. My return seems fairly close to what my attorney projected, so hopefully it should be O.K.