Question about tax year 2009

[brokeinKS]

Hello, My DW and I are planning to file Ch 7 , but we have some questions since tax year 2009 is coming to a close. We will not be able to file until mid to late January and since it will be a new tax year what is the likely hood of the trustee seizing tax year 2009 and 2010 refunds since we have not filed yet for 2009 and it will be tax year 2010? Should we hold off on filing until we receive the 2009 refund and use it towards Attorney fees and the rest for our upcoming birth of our child?

Thank you in advance.

[TEW]

Yeah wait until you get that return back and spent. The 2010 return should not be a problem since you did not make that money before you filed.

[brokeinKS]

Thank you for your advice. I called my Attorney and he agreed, he told us not to use it towards CC's even if we plan to keep them. He advised us to use it towards necessities, clothing, groceries, auto repairs, and the upcoming baby.

[iv65536]

Agreed. Spend the refund on necessities. As for 2010, at worst the TT will only get a small percentage of the refund. You may also want to look into changing your withholding.

[frogger]

he told us not to use it towards CC's even if we plan to keep them.

And don't be making plans on keeping the cards. That's probably not going to happen.

It doesn't take long to spend a bunch of money on baby diapers and the like. Get stocked up and ready before you file.

[ToughSpot]

More importantly why do you keep receiving large refunds. Stop giving the US Treasury a free loan. Adjust your withholding so that you are even or owe a little. Then set up a savings plan and put the extra $50, $100, $250....etc. per month into a savings account or mutual fund. This way you won't treat it as a spendable windfall if it slowly accumulates for your retirement.

[redhunter]

More importantly why do you keep receiving large refunds. Stop giving the US Treasury a free loan. Adjust your withholding so that you are even or owe a little. . .

Often it is unavoidable if you receive bonuses outside of normal payrolls, since employers need to withhold at a rate up to 35%.

[justbroke]

The likelihood of the Trustee wanting your 2010 Tax Refund (if any) when you are filing in January or February 2010, is slim to none! As for your "anticipated" 2009 Tax Refund, just have your Attorney exempt as much (or all) of it as possible.