Chapter 13 and taxes

[Gage35]

Our Chapter 13 was recently confirmed. We claimed our 21 year old college student daughter as a dependent on our federal taxes for the past few years while she has been in college and living at home.

In Ohio anything over a $1500 federal income tax refund has to be relinquished to the trustee. We thought we would not claim her on our 2010 income taxes and she could claim herself and receive all the refund monies due to her being a student (usually a couple thousand dollars). I believe the trustee requests copies of our income tax forms annually. Would this create a problem with our Chapter 13 plan?

[Limitman]

What part of Ohio are you from? Just curious because I'm from the northern part and didn't have to give the trustee any part of my refund. It was computed already in my payment every month. I got back $2000 last year.

[Gage35]

What part of Ohio are you from? Just curious because I'm from the northern part and didn't have to give the trustee any part of my refund. It was computed already in my payment every month. I got back $2000 last year.

We are in northeast Ohio. What do you mean "it was computed already in my payment every month?" Did you have to forward your tax returns to trustee?

[justbroke]

I think your tax question would depend on whether you are including her as part of your household. While the Trustee may not object, they certainly might want to know why you're diverting money away from the bankruptcy estate. Just a thought and certainly I am not citing any caselaw.

[Limitman]

Well I had my 341 meeting and the trustee objected to the amount of my payment per month due to the fact that I over pay my taxes per year. I was confirmed last Dec. My payment went up by about $50 a month. I was able to keep all of my tax return and the trustee never asked for my taxes at all. Even in the trustee booklet it mentions that I have to file and keep current on my taxes but it makes no mention of sending in returns. I was warned that the trustee can take any refund so I did change my witholdings for this year. To me it seems like if I make all my payments on time and stay under the trustee radar I will be ok.