Can someone explain tax refunds and C7 to me?

[DivorceRuinedMe]

How does it work in terms of tax refunds and C7?

I live in Florida and am only allowed a $1000 exemption for personal property. All of that will be eaten up by regular household stuff I'm sure. Thankfully, I have literally nothing as my ex took most everything in the divorce but I'm still imagining what little I do have will be taken quite fast with the measly 1K exemption. My fiance has stuff too but he brought most of it into the marriage (we are getting married in 1 week!) so thankfully I won't be destitute with the trustee wanting to take my furniture and dishes as a lot of the stuff in the house is my fiancees. My point is that I won't have any exemptions left over to cover a tax return if the trustee does want it.

So - onto my question. I plan to file by myself (without my new husband) in October/November 2007. I got a refund this year from 2006 (I filed as married filing separately as my divorce wasn't final until early 2007). The refund amount was 4K. Will the trustee want that refund? (I already spent it on moving, paying bills, etc so I'm a bit concerned). Will he want any refund I get from 2007's wages in 2008? How does that work? I'll be married in 2007 so part of the refund would be my new husbands as we will file as married filing jointly, right? I just changed my exemptions to allow for the 2 step children that I am now supporting so I know I won't get anywhere near what I used to get back (I always just claimed married and 1 when I had 2 exemptions of my own to claim so we'd get a larger refund).

If the trustee does want it from 2006 and I don't have it, how does that work?

[JollyGG]

Since you are not filing until October or November the tax return you received from 2006 won't be an issue. You already spent it, it is long gone and it will have been over six months since you received it come October or November.

The trustee may be interested in 2007 tax return. If you file in October he would be entitled to 10/12 of your refund. So the easiest thing to do is make sure their isn't much of a refund. Go to this calculator on the IRS website. http://www.irs.gov/individuals/artic...=96196,00.html Enter the information from you and your future hubby's pay stubs and it will tell you how to set your deductions to come as close to breaking even as possible. You don't want a refund next year and you certainly don't want to owe money. A couple times throughout the year it would probably be a good idea to go back and reenter the information from your pay stubs to make sure you are on track. That way you are getting your refund every month in your paycheck instead of leaving it open for the trustee to take.

[DivorceRuinedMe]

Since you are not filing until October or November the tax return you received from 2006 won't be an issue. You already spent it, it is long gone and it will have been over six months since you received it come October or November.

The trustee may be interested in 2007 tax return. If you file in October he would be entitled to 10/12 of your refund. So the easiest thing to do is make sure their isn't much of a refund. Go to this calculator on the IRS website. http://www.irs.gov/individuals/artic...=96196,00.html Enter the information from you and your future hubby's pay stubs and it will tell you how to set your deductions to come as close to breaking even as possible. You don't want a refund next year and you certainly don't want to owe money. A couple times throughout the year it would probably be a good idea to go back and reenter the information from your pay stubs to make sure you are on track. That way you are getting your refund every month in your paycheck instead of leaving it open for the trustee to take.

I think we'll be spot on or pretty close to it if I claim married and 3 exemptions. We have 3 kids we can claim. We also will itemize. Does this calculator thingy take itemizations into account?

Also - won't the trustee only be able to take half of any refund that I do get if I'm married? After all, half of the refund is my new hubby's right?

[jal1129]

Thats a good question for when you consult with a lawyer. Every state & district handles tax returns differently. Some states you can exempt all or part of it, some trustees won't take it if you spend it on neccesary items, some trustees just take it no matter what, it really varies.

The best thing to do is take jollys advice and try to come as close as you can to breaking even for next year.

[SinkingFast]

We went into our 341 in October withholding Married, 4, with 6 people in the family. Our attny told us to jack our Exemptions after the 341 for the rest of the year. Get the taxes withheld as close to $0 as possible.

Using the Calculator JollyGG referenced, once you get to the 3rd or 4th page, you do get to enter deductions. It's kind of a shortened version of the 1040, Schedule A.

You can check that tax calculator periodically to see how you're doing. Make adjustments as you need to.

Our attny said some people get all their taxes withheld at the start of the year. Then they jack their Exemptions to the max to have big paychecks at the end of the year for the Holidays.