Tax Questions?

[Chicken123]

We are required by our trustee to send paper copies of our tax returns each year (we are now in our 3rd year) and also required to file for a check return (no direct deposit)..my question is our 17 year old daughter found her a part-time job after school, now are we required to also send a trustee a copy of her tax forms? And does she have to request paper check delivery also?

And then I have another question! I know we are unable to apply for student aid for her (can't take on anymore debt) , being that she wants to attend college in the fall...is it okay for her to apply and hopefully receive financial aid only in her name? Or is this also something we have to run by our attorney?

Thanks for any help!

[Flamingo]

There should not be an issue as to your daughter's part-time job but since it will increase "household" income and since you probably claim her as a dependent for tax purposes, run it by your attorney to be on the safe side as you should with any change in financial status.

There should also be no issue as to your daughter applying for government financial aid for school in the fall - the forms will be based on your family income and financial status and also any income she makes and are based on the tax returns you will file for the current year. The loans, if approved, will be in her name only and will need to start being paid back when she finishes her education or before if she drops out. Private student loans are another matter and would probably involve your credit. Again, check with your attorney before you fill out or sign any forms to be on the safe side.

[Chicken123]

Thank you, for your help! I will probably just go ahead and send a copy of her return with ours to the attorney, with a note stating what it is and if he feels it needs to be forwarded onto the trustee he can do so. He is so hard to get ahold of, it will probably just be simpler this way.

I am hoping she can get approved for financial aid without our help, and no we will not be signing anything...we know better!!!

[lrprn]

Unless your daughter is making a large pile of cash (unlikely at 17) chances are her contributions to the running of your household is small. Most 17 year olds don't make much and spend most of what they make. The only income the trustee cares about is the amount she is contributing to the running of the household.

Our 20-year-old daughter was still living at home when we filed and her small monthly income contribution to the running of our household (about $100) was included in our income calculations on the Means Test. However, in our five years in Ch 13 our trustee never asked for our daughter's tax returns. Our lawyer said it wasn't necessary to provide them for our daughter every year because she didn't file bk - only the two of us did.

As Flamingo suggests, ask your lawyer to be sure before shipping her tax returns to your trustee. It won't surprise me to find out it's not necessary to include her returns.

[katztoo]

We have a similar situation. Our son who is in college works part time but this is his spending money...we don't get any of it, we are paying for most of his expenses, food, gas insurance ect. I didn't even think to send his tax return to the trustee because he makes so little and its not our money. Ask you lawyer if your uncertain.
About the financial aid, you apply through FASA using yours and her income. After grants, scholarships ect. if she needs to borrow money for school she can do so. Our son needed more than the student loan limit so he was allowed to get a loan under the independent student status even though he's our dependant. We had to furnish the school with a letter from our lawyer saying that we are not allowed to borrow money, and because we can't get a parent plus loan, he qualifies for additional money.

[dmk2011]

katztoo - When you file your tax returns do you include your son as a dependent and claim the American Opportunity and Lifetime Learning credits or does he file as an individual and claim the credits himself. This is our first year in chapter 13 and my daughter is a Freshman so its our first year with tuition. As I understand it our entire tax refund goes to the trustee.

[katztoo]

dmk2011 - We do include him as a dependent and claim the education credits. We don't have much taken out of our pay so we onlly got a $130 refund (which goes to the trustee) this is after a education credit of $1375 (it offsets a large amount that we would otherwise owe in taxes). He doesn't claim it on his taxes because he only made $2700 last year and had no tax liabilit and got all his money back by not claiming his personal exemption. It would not have benefited him because of his low earnings (the credit is designed to offset your taxes owed).