Taxes and Bankruptcy
Learn how bankruptcy can help relieve your tax debt and how your tax refund is treated in bankruptcy.
Learn what to look out for if you have tax debts and how to eliminate old tax debts by filing bankruptcy. Plus, learn how to protect your tax refund.
This page is your home base for learning about all things taxes.
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The most common of all of debts owed to the IRS is back, or unpaid, income taxes. Chapter 7 bankruptcy is an option if your tax debt meets certain requirements.Read More →
If you do not have official documents, it is OK to estimate your gross income. If you do not feel comfortable estimating you can look at your most recent pay statement and use it to find your gross (before taxes) income year to date.Read More →
*__It doesn't matter if you file before or after your 341 Meeting.__* The trustee is able to seize any non-exempt money that you were entitled to receive before you filed, and you were entitled to receive this refund (or at least a portion of it) based on what you paid in taxes for the whole year prior to filing.Read More →
If you were unemployed and weren't required to file your taxes: yes. If you were employed and you were supposed to file your taxes but didn't: we can't help you at the moment. Please go file your taxes that you were supposed to file and then come back to us.Read More →
Yes. If you find out that you are owed a refund there may be special instructions provided by your trustee that you will need to follow regarding your refund check that your tax preparer must know before filing your returns.Read More →
It is important to take all the necessary steps to make sure that you have copies of your tax returns or transcripts when you file for bankruptcy. Your tax returns will give the Bankruptcy Court and your Trustee an idea of your financial history. To ensure your bankruptcy case goes smoothly make sure to locate copies of them before filing your bankruptcy case, so you don’t have to rush later.Read More →
It's pretty well-known that tax debts typically can't be discharged in bankruptcy. But what if you're getting a refund? This article answers some of the frequently asked questions about tax refunds and bankruptcy.Read More →
Tax credits reduce the total tax owed by the individual or family claiming the credit. Many low-income families have all or a portion of such a tax credit refunded to them once their tax return is filed and their eligibility to claim the credit confirmed by the Internal Revenue Service. This article will review some of the most commonly used tax credits available to low-income individuals and how these credits are treated in a Chapter 7 bankruptcy.Read More →
There are not many creditors that can withhold, or set off, your tax refund before it ever hits your bank account. The most common instance of this is when the IRS keeps your refund and applies it to a prior year's balance owed. But that's not the only time this can happen. Another reason for the federal government to withhold all or a portion of your tax refund is if you're in default with federal student loans. Since student loans aren't automatically discharged in bankruptcy, this can be a blessing in disguise. However, timing matters, and depending on when your tax refund was taken by the government, you may be better off waiting a bit to file your bankruptcy case.Read More →
A married couple filing income tax returns can choose to do so married filing jointly or married filing separately. In the past, the primary reason for filing separate tax returns was to shield one spouse from the tax liability of the other spouse. Couples filing separate returns paid much more in income taxes than couples filing joint returns. Today, with tax law changes, there are situations where filing separately can result in a lower combined tax burden.Read More →
There are several different federal, state, and local government agencies that can intercept your federal tax refund if you owe money to these agencies. This procedure is known as a tax offset. This article will look at which agencies can take your refund and how bankruptcy can help you with tax refund offsets.Read More →