Can anyone tell me how my 2009 Ch. 7 will impact my tax return a year from now? I'm wondering if it will actually have any impact on it at all. I will no longer own a home, but my cc debt never did have anything to do with my tax return. I had a a first and second mortgage and could deduct the interest on both of those, which I won't have next year, so . . . am I missing anything?
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It's a good idea to estimate your tax liability for 09 - as you mentioned, your deductions will be much smaller and you definitely don't want a tax refund to worry about the Trustee taking any part of next year! -
More than likely, you will not itemize deductions at all next year, so you'll have the standard deduction. It is usually mortgage interest that gives people the ability to itemize, but it can be a big difference, because you also itemize state income tax (or sales tax), owner's tax on vehicles, property tax (which, this year, can be used to increase your standard deduction if you don't itemize), charitable donations, and un-reimbursed employee expenses (most people don't qualify for that one).
Last year (tax year 07), with my home, my itemized deductions totalled about $20,000. This year, when I filed, I had to use the standard deduction of $10,900. This meant that I had $9,000 in additional taxable income. Since I am in the 15% tax bracket, I paid about $1350 more because of this change.
If you are using a tax program for this year's tax, you might just look at the difference between using the standard deduction vs. itemized deduction to get an idea of what's to come.Comment
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