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When Would I Know (Income Tax Return Question)

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    When Would I Know (Income Tax Return Question)

    No one shout at me, please! I have searched the forums and haven't found the answer to this specific question. My apologies if it's a repeat.

    When would we know if the trustee is going to take future income tax returns?

    Our 341 was in June. PACER says the trustee says we have nothing to distribute and he is finished with the case. We are 20 days from discharge.

    Is confiscation of our 2010 ITR a given? Would we be notified? If it IS a given, how many ITRs would be taken?

    Since it hasn't been brought up, is it likely that it's ours to keep?

    TIA
    Ch 7 Filed: 4/27/09
    341 Meeting: 6/11/09

    #2
    I suppose it depends on the amount but 2 years ago when I had my case having my 341 in early July the Trustee never took my return.

    It is generally when you file in the 3rd quarter or 4th quarter that they look at it more closely.
    May 31st, 2007: Petition Filed by my lawyer
    July 2nd, 2007: 341 Meeting Held
    September 4th, 2007: Discharged and Closed.

    Comment


      #3
      Ours is usually substantial -- on the order of 7 or 8k.

      I am happy to be rid of our debt regardless, but I would love to have my ITR to pay off my student loans.
      Ch 7 Filed: 4/27/09
      341 Meeting: 6/11/09

      Comment


        #4
        I just filed a couple days ago and because of this forum I asked my attorney if we should use the last of our exemptions to protect next year's return. He said no the trustee will not take it. He probably thinks I am a jerk because I kept questioning whether he would try to take half of it because it is July, he said no we are all set. But I think this is another situation that it depends on your local bk rules and customs.

        Comment


          #5
          Originally posted by BkinTX View Post
          Our 341 was in June. PACER says the trustee says we have nothing to distribute and he is finished with the case. We are 20 days from discharge.
          If your trustee was going to take half your 2009 tax refund, he would not post on PACER that you have nothing to distribute. Looks like you should be ok. Check with your lawyer to be certain.
          I am not a lawyer and this is not legal advice nor a statement of the law - only a lawyer can provide those.

          06/01/06 - Filed Ch 13
          06/28/06 - 341 Meeting
          07/18/06 - Confirmation Hearing - not confirmed, 3 objections
          10/05/06 - Hearing to resolve 2 trustee objections
          01/24/07 - Judge dismisses mortgage company objection
          09/27/07 - Confirmed at last!
          06/10/11 - Trustee confirms all payments made
          08/10/11 - DISCHARGED !

          10/02/11 - CASE CLOSED
          Countdown: 60 months paid, 0 months to go

          Comment


            #6
            Originally posted by BkinTX View Post
            Ours is usually substantial -- on the order of 7 or 8k.

            I am happy to be rid of our debt regardless, but I would love to have my ITR to pay off my student loans.
            Loaning the Us Treasury $600-$700 interest-free each month then requestng it back the following year is not the best financial strategy. You could be applying that $600 to your student loan balance each month and reducing your interest expense.

            I have a question for you. On your Schedule I did you use the amounts on your paychecks for line 4.a. Payroll taxes and social security or did you use what was on your IRS 1040 plus ss and state and local taxes?
            Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

            Comment


              #7
              We get tax credits (EIC, child tax credit, etc). That's why the amount is so large. We certainly don't pay $600-$700 in federal taxes each month, LOL.

              I have no idea about the payroll taxes because DH and Finance handles that.
              Ch 7 Filed: 4/27/09
              341 Meeting: 6/11/09

              Comment


                #8
                Oh and thanks, lrprn, for such a clear, direct answer.
                Ch 7 Filed: 4/27/09
                341 Meeting: 6/11/09

                Comment


                  #9
                  Originally posted by BkinTX View Post
                  We get tax credits (EIC, child tax credit, etc). That's why the amount is so large. We certainly don't pay $600-$700 in federal taxes each month, LOL.

                  I have no idea about the payroll taxes because DH and Finance handles that.
                  Then you should not be paying any federal taxes on any paycheck.
                  Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

                  Comment


                    #10
                    What does that mean? Could you clarify, please?
                    Ch 7 Filed: 4/27/09
                    341 Meeting: 6/11/09

                    Comment


                      #11
                      Basically, he's saying that if you get those credits...you're not making enough money for your household size to be paying any federal taxes.
                      I think you have more children than I do so your husband should be claiming a higher number of allowances.
                      For ex, there are 3 of us and my husband claims 3 on his paycheck and pays no federal taxes. When he was claiming 0 or 1, taxes were taken out.

                      Comment


                        #12
                        It depends on your work and state BKinTX.

                        Many employers will not allow you to opt out of payroll taxes completely. However you can claim extra exemptions etc where you can reduce what is taken out in payroll taxes if you haven't done so beforehand. Even then you probably won't eliminate a tax return entirely since you get it mostly through EIC and child credits.
                        May 31st, 2007: Petition Filed by my lawyer
                        July 2nd, 2007: 341 Meeting Held
                        September 4th, 2007: Discharged and Closed.

                        Comment


                          #13
                          Our federal taxes are a whopping $48/month. DH is military and Finance ONLY deals with him. If I am reading his LES correctly, he is claiming 3 exemptions, which I believe can't be changed during bk.
                          Ch 7 Filed: 4/27/09
                          341 Meeting: 6/11/09

                          Comment


                            #14
                            Originally posted by JRScott View Post
                            It depends on your work and state BKinTX.

                            Many employers will not allow you to opt out of payroll taxes completely. However you can claim extra exemptions etc where you can reduce what is taken out in payroll taxes if you haven't done so beforehand. Even then you probably won't eliminate a tax return entirely since you get it mostly through EIC and child credits.
                            If you claim 9 exemptions you're usually pretty good. If you claim 10 or more your employer is required to make a report to the IRS each quarter.
                            Well, I did. Every one of 'em. Mostly I remember the last one. The wild finish. A guy standing on a station platform in the rain with a comical look in his face because his insides have been kicked out. -Rick

                            Comment


                              #15
                              Yeah that won't make to much difference. Still after discharge you might have him look into it and see if he could up his exemptions to keep from having it took out. Could help in post bk budgeting, I"m not sure of the military's policy on this though.
                              May 31st, 2007: Petition Filed by my lawyer
                              July 2nd, 2007: 341 Meeting Held
                              September 4th, 2007: Discharged and Closed.

                              Comment

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