Line 30 - Means Test

[minan]

Question: Line 30 reads:

Other Necessary Expenses: taxes. Enter the total average monthly expense that you actually incur for all federal, state, and local taxes, other than real estate and sales taxes, such as income taxes, self employment taxes, social security taxes, and Medicare taxes. Do not include any real estate or sales taxes.

My question: For those of us that are self-employed, do I use the actual amount I paid (via automatic from my account) during the look-back period (Jan - June) or how much I actually incurred (regardless of whether I had paid estimated taxes yet or not)?

Can someone help clarify this?

[justbroke]

If you are doing self-employment taxes, the amount here should be for all taxes withheld from your pay. This should include any self-employment tax (aka the other 7.65%), state tax withholdings, city/county tax withholdings, and federal tax withholding... for all income tax.

Now, to answer your question. This number should be the actual, not what was withheld! Some Trustees vary on this, but most want you to use your actual/average over that period of 6 months. You could just use what you "paid" (withheld), but some Trustees will look at last year, divide by 12, and come up with the "average" to compare what you put on Line 30. (This is just their tactic to make sure you don't have overwithholdings resulting in a refund.)

So, I know I made it more confusing, but in general, just use the average paid. If you know that you have overwithholdings, be prepared for the Trustee to object or to set your DMI payment higher.

[minan]

Justbroke: I went through my bank account and the actual total of what came out of my bank account is around 14600 which averages out to 2400/mo per the 6 months (Jan to Jun).

This is more than what the atty has on this line which is 1900.

So can I safely say the 1900 is a mistake and I need to let my atty know at our meeting so this can be corrected?

If yes, then my DMI just went down from 570 down to about 110.

Is my thinking right?

[justbroke]

Your attorney may be using "actual" based on last year?

[minan]

Your attorney may be using "actual" based on last year?

I just figured out where the atty may have gotten the number. I just need to tell them about the additional 3K I paid. I had forgotten about the 3k because I didn't have my bank statements at this particular meeting with the atty.

The actual amount I paid was 14600 which averages out to approx 2400/mo.

So this does bring my DMI down.