Tax status ?

[911mom]

Right now, i claim 9 on my taxes to have the least amount of tax taken from my check..been doing that for about 6 mths so i could have extra income to try and keep up with daily living expenses...my ? Is should i change it back to the regular claiming of 0 or 2 before i file chap 13? I know they look at take home pay to decide your payment...and i don't want to have to pay in at the end of the year...

Thanks

[forgotten]

Yes. Change is back right away. If you are waiting less than 6 months to file your attorney will need to adjust the numbers on your schedule I & J and explain this to the trustee, otherwise your payment will be higher.

Also, keep in mind you are probably going to have a large tax bill due next year when you file your taxes.

[HHM]

You should change to the point where you are essentially break-even on taxes.

Here is the link to the IRS withholding calculator. http://www.irs.gov/individuals/page/0,,id=14806,00.html

[catleg]

Yes. On the bright side, if you have a tax deficiency and don't file your Bk13 until next year you can roll the amount due into your plan.

[chicagoed195]

That is one of the most important things people need to adjust prior to filing, especially if they happen to live in a district that doesn't allow withholding changes after the filing. One of the worst things you can do is not manage your tax payments and end up with a large refund that the court will take to give to your unsecured creditors if you are in a less than 100% plan. You also don't want to have a large balance due that might cause your plan to fail.

[Pandora]

with claiming 9 in order to "keep up with daily living expenses" - what reason are you considering filing Ch. 13 vs Ch. 7?

[mlsj2009]

Tax Status

You might want to consult with a tax accountant and/or attorney, but you should change your number of dependents so you won't owe more than $1000 at the end of the year in taxes (they will penalize you for that one) or so you won't get much of a refund at all. The latter action should make your payment plan more accurate from the start allowing you to make all your expenses. Otherwise, if you get back a large refund during a Chapter 13 plan, the refund can possibly be distributed to the unsecured debtors because it is considered disposable income.