Can I change my with withholdings before filing?

[coolmom04]

ETA: SORRY! I meant to put this in the general BK talk!

We are getting back almost 8K, but a large part of this is b/c we have four children, we bought a house and two vehicles in 2009. Plus we got those other new make work pay things... etc. We *usually* get around $3,500.

When we met with one of the attorney offices, the "means test specialist" told us not to change our withholdings yet b/c she didn't want the monthly income to change.

But, what I don't get is - your gross six month income/yearly income is going to be the same regardless of what you have taken out for taxes! Why can't I go ahead and fix my witholdings? We are claiming 10 and the "W4 calculator" says to claim 14. If we don't change our withholdings, won't they just have to adjust our monthly income on paper to compensate for the refund - since that is money we SHOULD be getting every month? I guess what I mean is.. if the trustee sees we get a $3,500 refund, wouldn't they take that amount, divide it by 12 and add the total to our monthly income total? Does that make sense? My brain isn't functioning the way I want it to this morning!

(We have another attorney now, but didn't get to discuss this with him at the first meeting b/c he was running late and we had to leave early to pick up our kids. I am going to meet with him again next week, but thought I'd ask here to see if you guys could help me understand it better

[OhioFiler]

You can change your W-4 any time you like.

[lrprn]

You can change your W-4 any time you like.

Be careful here, OF, because this is not necessarily true for everyone. Some trustees specifically state that their filers are not allowed to change their withholdings after filing, especially on the Ch 13 side.

Coolmom, since your lawyer's specialist has specifically asked you to not change anything for now, I would be inclined to follow that advice. Some local trustees ask filers to bring paycheck stubs from between your filing and 341 to the 341 meeting. Any changes they see raise their suspicions, legitimate or not. This may well be the reason you've been advised not to make changes right now. Ask your lawyer if it's ok to make the withholding changes after your 341 meeting - chances are the answer will be yes, it's ok to make the changes then.

No matter what, if you are filing Ch 7, you can change your withholdings to anything you want after you are discharged and closed. The typical Ch 7 is over within 3-4 months - not too long to wait.

No matter when you make the changes, good for you for making them! Uncle Sam makes a lousy, interest-free savings account that ties up your money for a year to boot.

[coolmom04]

Be careful here, OF, because this is not necessarily true for everyone. Some trustees specifically state that their filers are not allowed to change their withholdings after filing, especially on the Ch 13 side.

Coolmom, since your lawyer's specialist has specifically asked you to not change anything for now, I would be inclined to follow that advice. Some local trustees ask filers to bring paycheck stubs from between your filing and 341 to the 341 meeting. Any changes they see raise their suspicions, legitimate or not. This may well be the reason you've been advised not to make changes right now. Ask your lawyer if it's ok to make the withholding changes after your 341 meeting - chances are the answer will be yes, it's ok to make the changes then.

No matter what, if you are filing Ch 7, you can change your withholdings to anything you want after you are discharged and closed. The typical Ch 7 is over within 3-4 months - not too long to wait.

No matter when you make the changes, good for you for making them! Uncle Sam makes a lousy, interest-free savings account that ties up your money for a year to boot.

Thank you I think you're right - we might as well wait! But, we'll still discuss it with the lawyer next week like you suggested.

[OhioFiler]

Tax liability is most often verified by looking at the tax return not the pay stub. Anyone could reduce their claimed exemptions on W-4 thus increasing the amount withheld and reducing net pay to create the illusion of lower monthly cash available for paying debt.

Tax returns don't lie. Well, if they're completed correctly they don't lie. Therefore, ACTUAL tax liability is found on those documents not on a pay stub.

[Llelxon]

We filed a 7 and used the amount deducted from my paycheck. Last year was somewhat goofy because we moved and received a bunch of moving assistance from my company that was reported on my W-2 as income. To make the matter worse, they gross that money up to cover your taxes, so I had a huge income increase. We got back around 4K last year.

Anyway, they didn't seem to calculate ours and I was expecting a refund of 2-4k for this year as well. Turns out we are getting back over 8k, which they will be taking. We had another child born this year and I never did change our exemptions at that time, but still I was not expecting that.

I guess my point is that maybe the trustees are not always diligent in checking the calculations versus just using what is coming out of your paycheck. So the taxes you are having withheld (if they are higher) would help you on the means test for expenses versus income.

I am actually worried that when I submit my return with such a high refund that it is going to flag my case