Thoughts on W-4 changes

[laurannm]

We typically receive a large tax refund, so I would like to adjust my W-4 accordingly. When would be the best time to do this, so that it does not have any impact on my ch 7 filing? Should I wait until after we file? After the 341? After discharge?

Thanks

[getouttadebt]

Most would probably say after the 341. I would say after discharge if you can wait that long.

[momof5]

Some might argue that this was a stupid thing to do but we have always filed a 0. With a family of 7 this was our only way to save. "If we didnt see it we didnt miss it"

Our refunds were usually around 7 to 9 thousand. (this actually is a good thing as our debt was over 3x's his yearly income and if we are asked how we intended to pay for our debt we can say we received huge income tax refunds)

Now that my husband has started a new job and the BK. We are claiming a 6. They take out almost no taxes which means our refund is going to be pretty darn small. I was also worried that the trustee may want part of our refund next year if we receive any EIC or child tax credit. If he does, then it wont hurt as bad. Although I doubt that is going to happen.

Our other fear now is that because of his job loss he automatically defaulted on a 10,000 dollar 401K loan. I believe we will have to pay income tax on that now.... this could be an issue with a small tax return but we'll cross that bridge down the road a bit.

I have read numerous times that its better to change your withholding asap.

[Cali]

I wouldn't change it until after discharge.

And as I stated in the other thread about this, we have been playing with our exemptions for 2 yrs to get it even. We claim 9 right now, and we got 285$ back. We prefer having our money during the year instead of giving Uncle Sam a free loan on our money.

[JRScott]

If you've already filed or will file soon just wait til after the 341. As Cali says it may take a year or two to adjust it properly.