Tax Returns and What is Exempt

[RedLight]

With tax season on the doorstep, I am sure there will be an abundance of questions regarding this type of stuff. I am trying to get a jump on this and it looks like I will have a larger than normal return. We had another child and did not account for that amoung other things that are giving a larger return this year.

On Schedule C of the filing paperwork, it shows that $2,500 for the 2008 potential tax return is exempt. Also, in my district, it says I have to notify them in writing if I receive a refund over $2,500. Does this mean that $2,500 of it is mine that he can't touch? I also hope the case gets closed soon since there is little possiblity that they would reopen the case for a little bit of money. Is anyone else in agreement?

[laurannm]

I would agree with that. They will most likely take anything above $2500, especially when filing this late in the year.

They may end up keeping your case open until you receive your tax return, and then take their portion

[RedLight]

Hopefully the trustee closes the case and doesn't open the mail when I let him know my return is more than the $2,500. I guess only time will tell.

[magyar123]

One way of getting around receiving a bigger tax return than the exempted $2500, is to note on the return that you only want $2500 refunded, and to apply the rest against next year's tax liabilty.

[RedLight]

One way of getting around receiving a bigger tax return than the exempted $2500, is to note on the return that you only want $2500 refunded, and to apply the rest against next year's tax liabilty.

OMG!!! That is the smartest thing I have heard in a while. I prepare my own taxes via Turbo Tax so that would be a simple fix. Wow...I didn't even think about that.

[ThreadsSnapping]

Be careful about that. The trustee could ask to see your return and see that you were supposed to get more than $2500 back and ask for the difference anyway. You were entitled to it but you decided not to take it.

-TS

[RedLight]

Be careful about that. The trustee could ask to see your return and see that you were supposed to get more than $2500 back and ask for the difference anyway. You were entitled to it but you decided not to take it.

-TS

Don't ask, don't tell right? Hey, it said only to notify him if I "received" more than the $2,500. I guess it is all semantics.

Do the trustees receive notifications from the IRS or something...how else would they know?