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Income on Tax Returns Versus Last 6 months

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    Income on Tax Returns Versus Last 6 months

    I'm getting close to filing and I'm actively consulting an attorney now. I'm below the median income for the last 6 months after subtracting business expenses. I'm below by a solid 10K. My attorney is having an issue with my total yearly income though. for 2011 my income is below the median. For 2012 I'm 50K above the median. For 2013 I'm 90K above the median. I'm self employed and tend to make a good portion of my money in April, May, and June. Is this an issue even though I'm 10K below the median for the last 6 months. Thank you all in advance for the replies.

    #2
    It really only matters, as far as the silly/arbitrary Means Test is concerned, about your income for the past 6 months. The Trustee will examine your past tax returns to look at trends. The Trustee is likely to ask questions. If your attorney is picking up on this "low" season in your self-employment income, then the Trustee is likely to see it as well. I can't tell you whether the Trustee will pick and prod and poke at your numbers, but that is their job.

    You will just need to work with your attorney and listen to his/her advice. To me, and this means nothing, it reads as if this could be a totality of circumstances case. That is where the Trustee, and Judge, look beyond your 6-month lookback to find the real number. In fact, your Schedule I/J should closely resemble your actual (or future) income and expenses.

    If your attorney is willing to still file and you're willing to answer any questions that arise, then go ahead and file.
    Chapter 7 (No Asset/Non-Consumer) Filed (Pro Se) 7/08 (converted from Chapter 13 - 2/10)
    Status: (Auto) Discharged and Closed! 5/10
    Visit My BKForum Blog: justbroke's Blog

    Any advice provided is not legal advice, but simply the musings of a fellow bankrupt.

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      #3
      Thank you for your reply Justbroke. I appreciate the information.

      Comment

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