Applying 2007 Tax Refund to 2008 Taxes

[Granny]

We are getting a substantial tax refund for 2007 due to earned income credit, child tax credit and child care credit because our income was almost 1/2 of what it was when we filed the Ch13. Of course, the trustee will only see the refund, he won't ever see what caused it.

According to the trustee's website, he will keep everything over $2,000. What do you think would happen if I had $1,500 applied to 2008 so that the actual amount refunded for 2007 would be less than 2K?

Would the IRS comply and keep it for this years taxes?

I know that when you owe the IRS, they won't do that, but do you think they would if I didn't owe them?

[Bandit]

Of course, the trustee will only see the refund, he won't ever see what caused it.

because they only look at the numbers & very few want to know why.

could you wait to file & do them in 2009? so you are doing two years at once?

I know that with some state taxes they do let you apply your refund or a portion to the next year as long as it is within 3 years to avoid statute of limitations, But I am not so sure about IRS.

as always, good to see you, Granny

[Granny]

Hi Bandit,

How are you?

I really want to file for 2007 so we can get the stimulus check. That should be another $1800 and we really need to have something in savings. From what I understand the IRS will stop sending stimulus checks in December. What I don't fully understand is the effect the stimulus checks will have on 2008 taxes, because as I understand it, there is a relationship.

Anybody know?

[Bandit]

I am well, & thank you.

I am pretty sure that this stimulus is just like getting some of next years tax return this year. So next year your refund would be smaller or you would owe that 600 back. Someone can correct me if I am wrong but there must be 100 threads around here on that. I have not been real concerned about it.

I do understand what you are saying about keeping that below the 2000 mark & why. Maybe just call the IRS & see if they will let you do it that way? I know on some state returns it asks would like your refund or what you owe applied to next year & you just check that box & put the amount you want for next year, but I am not sure if IRS has that.

I just got my stimulus 2 weeks ago & I am not sure why because my SS number is not for that week & isn't until July.

[Critty]

Be careful! I had to sign a form for my trustee saying that I will not apply any tax refunds to the next year taxes. Doing so could be considered somewhat fraudulent. Might want to look into it some more.