Does tax return factor in to six month lookback?

[Diesel73L]

Our six month look back (we are planning on filing September 1st) is going to include April, which is likely when we'll receive our $2,300 tax return. Does that get added in with our income? We since adjusted our withholding so we should break even next year as I'm sure with a September filing the trustee will be looking for another big return.

[tobee43]

we had a HUGE return and it wasn't mentioned at all at our 341. most importantly was our filing time which was after the returned was rec'd and spent. we were not asked to return any of the money.

[momofthree]

The only time it figures in is if you are over-withholding to get a large refund, and thus have more dmi than your paycheck shows. If you have adjusted your withholding to break even at tax time next year, then your schedules will be accurate and you won't have a problem. As far as a tax refund pushing you over median, that is always a non-issue because the lookback is based on gross income.

[Diesel73L]

we had a HUGE return and it wasn't mentioned at all at our 341. most importantly was our filing time which was after the returned was rec'd and spent. we were not asked to return any of the money.

Perfect-we were planning on spending the return on the attorney fee, so it will be gone-as long as it doesn't add to our six month lookback we should be fine.

[Flamingo]

Look back periods can extend for more than six months and include all sources of income during that period of time, tax return refunds included. We had to provide explanations for all checks written over $500, any deposits or checks received over $500 (paychecks and tax refunds included), any charges made during that time over a certain amount, etc. We had to provide copies of all bank statements and certain other statements for a period of one year. Be careful here and don't surmise anything - check with the attorney who will handle your Bk as to what to do as to your particular situation.

[Diesel73L]

Look back periods can extend for more than six months and include all sources of income during that period of time, tax return refunds included. We had to provide explanations for all checks written over $500, any deposits or checks received over $500 (paychecks and tax refunds included), any charges made during that time over a certain amount, etc. We had to provide copies of all bank statements and certain other statements for a period of one year. Be careful here and don't surmise anything - check with the attorney who will handle your Bk as to what to do as to your particular situation.

Thanks for the reply-sure I get that we'll have to provide our bank statements, etc...I'm strictly talking about the means test. I went and reread what the NOLO book says about it and it does emphasize that it is a look back beginning with the calendar month BEFORE the month you file. According to that definition it is pretty much irrelevant what our income for September is or will be as far as passing the means test is concerned-I think? We can explain every expenditure over the past year pretty easily-no luxury items, no vacations, nothing frivolous. Everything has gone to bills, gas, groceries, a car, and childcare.

[catleg]

The look back is only for the means test. What you have to pay back (if anything) is based on your Schedule I/J (your budget).
You can pass the means test but if your budget shows a surplus, you still can be forced to repay (ch13). However it's much less likely.

[tobee43]

Perfect-we were planning on spending the return on the attorney fee, so it will be gone-as long as it doesn't add to our six month lookback we should be fine.

we had a chapter 7 no asset. our return was approx. 10k we didn't have to pay a dime to the trustee. our atty said get the money and spend it asap. we did and the issue never came up.

[dman]

A tax return would not count as income. It WOULD count as an asset however. So either spend it, exempt it, or hand it over.

[justbroke]

Our six month look back (we are planning on filing September 1st) is going to include April, which is likely when we'll receive our $2,300 tax return. Does that get added in with our income? We since adjusted our withholding so we should break even next year as I'm sure with a September filing the trustee will be looking for another big return.

It depends. It depends on how much of that is protected (earned income credit?) and possibly if you're over the median income.

In my District, the United States Trustee (UST) specifically takes Schedule I/J and the Means Test and runs it through a "special" spreadsheet. It looks at overpayment and underpayment of taxes. In some Districts, the UST may do this for under-the-median cases as well, but I only have witnessed this in over-the-median cases.

As you're learning from the posts... this can differ between Districts. However, most Courts find that refunds are nothing more than "overpayments" of wages and are such, wages.

Now, a "tax refund" itself may become an asset in your bankruptcy. The overpayment (the amount refunded) might be considered in your lookback calculation on the Means Test.

[help4mydebts]

Is it okay to use my tax refund money while on a trip, if I am getting ready to file bk within the next couple of months? It is by no means a 'luxury vacation' or anything like that, but would include a reasonably priced hotel, gas and food. Thanks.

[catleg]

You are free to spend your tax refund on anything you want before you file for BK.