Tax Refund

[hrh25]

I have a question regarding Tax refunds, i am in the process of filing chapter 7 but waiting until i get my tax refund. The question i have is, do you include tax refund as income for the means test? I am reading where some lawyers are saying that tax refunds are included as income in the mean test. I thought i read in this forum somewhere that tax refunds are not included as income.

Thanks

HRH

[JollyGG]

I have seen various opinions on this on this forum. However the tax return should not be considered income as the means test is based on your GROSS income. Your gross income is your income before taxes are taken out. Therefore the money you overpaid in taxes and are now recieving as a refund was already counted when you listed your gross income. If you listed your refund as income that money would be being counted twice. Once before you paid it an once when you got it back.
However a refund is an asset that must be explained, exempted and delt with as an asset.

[butterflywings]

You are most certainly supposed to list your tax refund under Other Income portion of your BK Matrix. It is considered part of your look back of your 6 months of income.

[FreshLikeADaisy]

Butterflywings, what matrix are you speaking of? There's a creditor matrix, but $$$ (like a tax return) and other assets belong on the schedules and other forms, such as the means test. Could you be more specific? Thanks.

[aachudneymiles]

Butterflywings, what matrix are you speaking of? There's a creditor matrix, but $$$ (like a tax return) and other assets belong on the schedules and other forms, such as the means test. Could you be more specific? Thanks.

Yeah what a bk matrix?

I would agree with the first person mean test is asking for gross income average over last 6 months .. since your tax refund is apart of your wages which you loan out to the government and they give it back to you at tax time every year ,you have earned ( the tax refund) thoses wages it a part of your gross income -- (total income before taxes and other expenses are deducted) also agree tax refund does have to be exempted with proper exemptions base on your states exemptions allowed other wise trustee mite grab it

[magyar123]

Get your bankruptcy filing in ASAP - and do your taxes on April 15. If at the 341 hearing you are asked about your tax refund just tell them you haven't done your taxes yet

[hrh25]

The problem is if i file now the trustee is very likely to take the money because my 341 meeting will not be until end of Febuary or early March. I am looking at about $6500 of refund and the only chance i have of keeping some of it is that am filing bk 7 alone but file taxes as married, also i am not sure how they will determine how much my wife gets to keep as i make most of the money. I am still confused as to including the tax refund as income for the past six months. I can understand that taking the tax refund will depend on the trustee but inculding it as income should be a clear cut rule of the bk law i would think?

Thanks again.

regards

HRH

[woohoogirl]

I have seen various opinions on this on this forum. However the tax return should not be considered income as the means test is based on your GROSS income. Your gross income is your income before taxes are taken out. Therefore the money you overpaid in taxes and are now recieving as a refund was already counted when you listed your gross income. If you listed your refund as income that money would be being counted twice. Once before you paid it an once when you got it back.
However a refund is an asset that must be explained, exempted and delt with as an asset.

I agree with Jolly.

[tay666]

I have no answer to this question but I have another wrinkle to throw into the question.
Sure a refund is getting the taxes back that you paid the govenrment.
But what if you also get the earned income credit.
If the refund doesn't count as income, would the EIC count as income?
That would be money you are getting that you didn't pay from your gross already.

[keepmine]

Get your bankruptcy filing in ASAP - and do your taxes on April 15. If at the 341 hearing you are asked about your tax refund just tell them you haven't done your taxes yet

That's not going to work. If the trustee is interested in refunds, they'll discharge you but not close the case until, they see a copy of your tax return. Besides, if your income hasn't changed much from the prior year they'll have a good idea of what your refund should be from looking at your last tax return.

[hrh25]