Tax Refund question while filing BK

[Toby34]

How does our Tax refund affect or BK?

What if we make an amendemnt to our Taxes next year to this years taxes...how is that effected?

[lrprn]

In 99% of districts, your tax refund is not counted as income when you file. You already earned that money - counting it in again is double-dipping. The only exception is if you count too many exemptions - then there might be a question about that from your trustee.

If you haven't filed yet and you make an amendment to your tax forms for last year, then that could change what is on your forms. You or your lawyer should recalculate with the new changes.

If you've already filed (but not closed yet) and now you are getting more money back than you thought previously, then it depends on how serious your trustee is about taking your tax refunds.

[Toby34]

I'm self empolyed. My wife isn't. My business, has been pulling in negative amounts so my 07 taxes show me Negative for the year.

But due to equipment purchased, we could get back $8000 in Taxes due to depreciation of equipment and the business going negative.

So really my question is.....should we file this way......or file not including the equipment depreciation, so our tax refund is around $1500.....then ammend our taxes next year.

Our lawyer said that our refund is divided by 12 months and counted as money that is added to income to pay our living expenses each month.

[lrprn]

I'm self empolyed. My wife isn't. ... So really my question is.....should we file this way......or file not including the equipment depreciation, so our tax refund is around $1500.....then ammend our taxes next year.

A question first - is your self-employment incorporated as an S-corp, LLC, etc?

Our lawyer said that our refund is divided by 12 months and counted as money that is added to income to pay our living expenses each month.

If your lawyer told you any refund is counted as income in your district, then I'm very sorry to hear you have to file in the small minority of districts that do that

[Toby34]

A question first - is your self-employment incorporated as an S-corp, LLC, etc?

If your lawyer told you any refund is counted as income in your district, then I'm very sorry to hear you have to file in the small minority of districts that do that

I am just a Sole Proprietor.

[DivorceRuinedMe]

I asked my lawyer this same question as I could either get a large return back or a small one depending on the deductions that I claimed. I had two houses that I paid mortgage interest and taxes on, as well as 2 new cars that the sales tax was deductible. I ended up NOT claiming the deduction for the interest and taxes on the house that is in foreclosure and also not claiming the deductions for the sales taxes for the new cars. This made my tax refund $1800 lower than it normally would have been (I did this in order for the trustee to let me get my engagment ring back and keep the measly $500 return that I got without claiming those deductions. )

I asked the attorney if I could amend my return to add those deductions and she told me that if I did, it would be risky and that I would need to report that I did this to the trustee thus giving her the right to re-open my case, change it back to an ASSET case and take my return AND my non-exempt ring.

I chose to just let those deductions slide and move on.