tax refund

[mia]

I know there are serveral post on this ,but I am confused because I was told by my attorneys office that in a chapter 13,they won't take your refund
I am in ohio

[lrprn]

Whether you are asked to surrender your tax refund or not depends completely on your trustee and local bk court practices. Some trustees will take any refund you get, some will take refunds over $1000, and some won't take them at all. If your lawyer's office says your refund won't be taken, you may be lucky and have one of the trustees that doesn't take tax refunds...for now, at least.

However, if you want to be safe, then the best option is to adjust your payroll exemptions so you'll get a very small refund. This gives you the money you need (and have earned) throughout the year, rather than allowing the government to use it tax-free for 11 months, then deliver it to you with no interest gained. Here's an IRS document that helps you adjust your exemptions correctly - http://www.irs.gov/pub/irs-pdf/p919.pdf . Hope this helps!

[taxmom]

In Ohio, I was told that you keep anything less than $1500 combined (federal and state).

Best of luck to you!

[Jman30]

I filed my Chapter 13 in Ohio under the old laws. My lawyer said unless the Trustee brings up the Tax Returns at the 341 meeting, assume we can keep them entirely. He did tell me try and keep them at $2,500 or less in case they ever audit our plan. But I filed taxes twice while in a Chapter 13 and got refunds back both years.

As an FYI...if you owe money to the State of Ohio or the Feds, it will tie up your refund for weeks on end. And they won't deposit a refund electronically while you are in a BK.

[helpless]

I am in Ohio too and we were told we get to keep our refund. It doesn't even mention tax refunds in our order of confirmation.

[Jman30]

I am in Ohio too and we were told we get to keep our refund. It doesn't even mention tax refunds in our order of confirmation.

Same here. My lawyer said it wasn't mentioned at the 341 meeting and it wasn't mentioned in the confirmation, don't worry about it.

[mia]

Thanks everyone, the attorney we may choose said
that they will take any refund over $1,500
example: if our refund is $3,000, we will only get to keep $1,500
This is what he told me Tuesday.

[Jman30]

I think it just depends on the Trustee. Someone else I know in Ohio who filed was told anything over $2,500 the Trustee keep. In my case, it didn't seem to matter.

Since you can keep anything up to 1,500, make sure you adjust your withholdings to at least get yourself down to that level, or less. No sense giving the Feds an interest free loan when you can use the money up front.

[cso5@]

How about if you owe back taxes?

How about if you owe back taxes to the state and federal government? And these taxes are included in your bankruptcy plan?

I don't plan on getting a refund, I have adjusted my withholding and hope to come out pretty even -- but if you owe back taxes, will the governmental agencies just take any refund you might get even if the old amount you owe is included in your bankruptcy?

Just curious.....

cso5

[Jman30]

How about if you owe back taxes to the state and federal government? And these taxes are included in your bankruptcy plan?

I don't plan on getting a refund, I have adjusted my withholding and hope to come out pretty even -- but if you owe back taxes, will the governmental agencies just take any refund you might get even if the old amount you owe is included in your bankruptcy?

Just curious.....

cso5

First of all, once you have taxes in your Chapter 13, you go to a whole different division of the IRS that handles Bankruptcy. I know in my case, I owed money to both the Federal Government and State of Ohio. Both of these were secured claims included in my Chapter 13. When I filed my taxes through Turbo Tax, I had a refund of like $1,200 or something. The refund got hung up at the IRS for months on end. They weren't going to take any of it, since they were getting back 100% through the BK, but it just got caught up the bureaucracy of the BK Division of the IRS.
Additionally, as an FYI, if you file online and ask for the money to be direct deposited into your account, the IRS won't do it. They will send you a paper check. Eventually, I got a paper check for the $1,200 bucks it took so long it defeated the purpose of filing online.

[StevieD]

I am in the state of Georgia and have filed electronically twice over the last two years (while in the chapter 13). There was a small delay while the IRS verified the status of our bankruptcy with the trustee. Our refunds were deposited into our checking account within a couple of weeks. Both years, the refunds were about $3,000.

[Jman30]

Not me. Maybe Ohio is different or whatever. My experience wasn't so hot. It took them months to get me my refund and even then, I got in a check form and not direct deposit.

[zoomzoom]

Ok - What if you change your deductions while in Ch 13? Mine were 4 and I ended up owing IRS almost $800 this year, what if I change them so that I don't have to owe anything? If I do it now, almost the end of the year, they will take an additional $200 and some of my paychecks for the rest of the year to compensate for what I haven't paid (and therefore, avoiding to owe them again next year). Thoughts?

[CATCHMEIFYOUCAN]

I have 2 full time jobs, I claim 0 on both fed and state and even dish out additional taxes, I still dont get a refund (not from federal). I live in Virginia and the trustee is going to take my refund no matter what the amount (from Virginia) and only give me back a differce of $250. So for example if my refund is $500, he'll take half. If my refund is $1000 (which is never going to be my case) he'll give me back $250 and dispurse the rest to the creditors. I think the trustee tries and takes the most amount of money away from you so he gets paid too!

Catchmeifyoucan