Tax Return Amendment

[justbaby]

Well today was the day! I went to start the process of a Chapter 13 bankruptcy with an attorney that I respect and actually like alot! She's awesome!! Some of the docs that were requested were my 2008 and 2009 tax returns. Well because my tax "professional" apparently didn't read his manual, he filed me as head of household. Of course because I am not tax saavy, I didn't know any better...just took the hefty refunds that were given. Well of course because I am married and have been since 2002, I should not have filed head of household. So my next step - amend tax returns...

1. What is the best way to amend tax returns? Can it be done with Turbotax? Or should I try to dish out money to an accountant?
2. Is this is a lengthy process and could delay my bankruptcy?
3. I know that I probably would have been due a refund, just not as much..how do I calculate what will actually be due now and will I have to payback the excess I rec'd?
4. If I do have to payback, can it be included in the bankruptcy?
5. If I do need to payback, AND the amount is included in the bankruptcy, will I lose my refunds for the next 5 years? (if I'm due one)?

[LadyInTheRed]

1. What is the best way to amend tax returns? Can it be done with Turbotax? Or should I try to dish out money to an accountant?

I amended a return with TurboTax and wasn't happy with the functionality, but it got the job done. I'm not sure how it will work if you did not prepare the original return with TurboTax. I would insist the preparer who filed the original returns file an amendment at no charge. Is it your attorney who caught the error? If so, ask her to review the draft amendment before it is filed.

2. Is this is a lengthy process and could delay my bankruptcy?

It will take as long as it takes to prepare the amendment. It should be able to be done pretty quickly and shouldn't delay your BK.

3. I know that I probably would have been due a refund, just not as much..how do I calculate what will actually be due now and will I have to payback the excess I rec'd?

You will have to pay back the excess with interest and maybe even penalties. But, you may be able to get penalties waived by blaming the preparer. You have to prepare the amended return to figure out how much will be due.

4. If I do have to payback, can it be included in the bankruptcy?

I don't think such a recent tax debt is dischargeable.

5. If I do need to payback, AND the amount is included in the bankruptcy, will I lose my refunds for the next 5 years? (if I'm due one)?

The IRS will probably take future refunds to pay off any past due taxes. Whether the trustee takes your refunds depends on your trustee.

Since you have an awesome attorney, don't take my word for any of this. Ask your attorney these questions. That's what you pay her for.

[justbaby]

This does help me some! I tried to contact my tax preparer but he's MIA during the summer months (or non tax season months)...so I would either have to pay an accountant or try to fix it myself. Of course, I'm trying the latter and was just trying to figure out the easiest way to do it.

Well she didn't catch it but while talking to her, she asked me how I filed...told her head of household. She then told me that "they are catching all of those" lately! Gotta fix it!
She's not too tax saavy so she gave me the name of an accountant but they can be quite expensive...