Income tax and Schedule I

[allboyz]

My attorney said we would get to keep our tax refund. However, I keep reading that the trustee gets the tax refund. On our schedule I on number 8h there is a notation of tax overpayment with dollar amount. Is this why we get to keep the tax refund? Then under the question if there is an anticipated increase or decrease within a year yes is checked. Then $1,000/12 months refund is noted. Just curious if anyone has similar notations on their paperwork.

[dmc-2008]

I haven't looked but I have to give it to trustee anyway. :-(

[LadyInTheRed]

Your normal refund is included in your dmi. So, your plan payment already includes the income. That is why you get to keep your refund. Has your plan been confirmed? It may be that refunds over a certain amount will have to go to the trustee.

This is something that varies by plan. So, don't worry about whether other people could keep their refunds if your attorney says you can keep yours.

[justbroke]

If your average income tax refund was divided by 12 and included in your Schedule I as "other income", then you would not need to turn over any tax refund, because it was already calculated in your DMI!

(Tax overpayments are considered income for the purposes of the Means Test. Most Districts require that attorneys prepare the Schedule I with the average overpayment (refund) converted into a monthly amount, and included on Schedule I. In that manner, no income is "hidden" in tax withholding!)

[Andy]

That is good advice.

[allboyz]

THANK YOU for the great explanations Ladyinred and justbroke!!! I understand now.