If I don't file taxes before filing BK do I have to wait?

[lalap123]

I can't file BK after getting my tax refund b/c my state/district counts it as income. With that being said, will I be allowed to file my taxes the day after I file my BK? My attorney has told me that half of our refund will be our husband's and I know that I can exempt around $600 of my half. Do you think the trustee would have a problem with me doing this as long as I have saved the portion that will be his?

[HHM]

Are you "sure" they treat the tax refund as income, for the means test. Reason being, the means test is based off of "gross income" and a tax refund DOES NOT increase gross income. A tax refund is only over withholding of taxes. If you had proper withholding (break even withholding), your GROSS income would be no higher, you would only have higher net income since you would be receiving more money per paycheck.

But, for purposes of net income, the tax refund counts, but that only becomes a factor AFTER you have failed the means test and are required to go chapter 13.

But in districts that take a more strict view of the refund, you can usually pro rate the refund over 12 months. For example, if your refund is $3,000 and you file BK 2 months after receiving it, instead of counting the entire $3,000, you would divide $3,000 by 12, and only add 6 months worth (or half).

If you are above median already, the problem you run into on the means test is that it only allows you to deduct the "actual tax obligation", not the total of your withholding.

However, attorneys should be trying to fight this issue because of the fact I pointed out above. It is double counting income if you add a tax refund into Gross Income.

[lalap123]

Thanks for your reply. I am sure that in my state (GA), they do count the tax refund as income. I talked to two attorneys who both told me the same thing, plus I've read it online as well.

I would prefer to spend down the refund and just wait to file, but I'm already at a year of not paying my CCs, plus the median income for GA is going to go down (again) on March 15. I'm looking for full-time work as well, so with my luck I'd get an offer in April which would put me even more over the median.
I'm really close to the median right now.

I think my attorney will be filing in the next week. What if I filed my tax refund the day before filing my chapter 7? Obviously I wouldn't be getting the refund prior so it wouldn't count as income, and it might not look or sound as bad as having to explain to the trustee why I waited until right after my BK was filed to file my taxes. Normally I wouldn't be so worked up about getting our refund, but my husband's portion would really come in handy right now with three kids and me only working part-time on and off.