I incurred a lot of CC debt while I was going through a divorce about 2 years ago. The debt was entirely in my name and I was separated from my ex. Most of it was things like utilities, meals, some clothes, and there was some of it that was spent on some photography gear and wedding rings (please no lectures). During that time I was trying to start up a photography business and it is just now starting to show promise.
So.
#1. Should I file my income taxes (jointly with husband under his name) immediately so that we can collect a 9K return (low income, 2 kids) and then spend it utilities, property taxes, personal care items, some clothes for the year, stock up the freezer with meat, etc. I had read somewhere else that income tax refunds are up for grabs. Would only half of that be up for grabs since my husband won't be filing bankruptcy (I'm remarried)? Household goods exemption is $3525.
#2. Computer exemption is $600. I own a pretty nice computer that is about a year old that I had purchased with part of last year's tax refund, to help grow my budding photography business. It was about $1100 at that time, but of course it is used now. Would the value likely be under that amount by now? Also my husband owns a computer that he uses for his job. It is probably only valued at a couple hundred bucks by now. Is that exempt because it is his?
#3. We own together about $6000 worth of photography gear. Some of it my husband purchased with his half of the tax refund last year, and some of it was accumulated a couple of years ago. Receipts for everything are gone. My husband uses the majority of the gear right now and my rig is worth about $1000. Does that matter, or do they just consider exactly half of it to be mine?
#4. Everything in the house is pretty old and/or damaged. Do we actually have to come up with values on a bunch of old stuff? Is that added to the total of the photography gear?
Obviously you can see this gear is extremely important to us as we are finally starting to get more clients and wedding bookings. It would be very difficult to start over and buy the same gear because buying it all new would cost 10K+. We have a lot of contacts in the photography business and the reputation is already there. So far we haven't made a profit, but that's because the gear costs so much.
#5. I am a student going to community college with pell grant money. I'm taking a photography class that requires a DSLR camera. Will this exempt the camera from personal property as an educational expense?
Here is what I was thinking about doing. Tell me if it will get me caught and in trouble.
File tax return as soon as possible in late January or early February. Get $9K refund. Immediately pay 2K in overdue property tax, as well as 1K in spring property tax. Pay $1K in late house payments and utilities. Pay 1K to bankruptcy lawyer for filing fees. This leaves me with 4K left over.
Was thinking about spending the remaining 4K on clothing, medical, and dental visits for the family, and stocking the deep freezer with groceries.
But seriously, do I really need to do all that to make it all kosher to keep the tax refund? We normally rely on that as income so we definitely can't just let the trustee take it. Should I just pay off the taxes, house payment, and utilities and then cash out the remaining 4K and just say I bought groceries, clothes, and car repairs with it? Or would only 2K be considered "mine" since my husband is not filing?
So.
#1. Should I file my income taxes (jointly with husband under his name) immediately so that we can collect a 9K return (low income, 2 kids) and then spend it utilities, property taxes, personal care items, some clothes for the year, stock up the freezer with meat, etc. I had read somewhere else that income tax refunds are up for grabs. Would only half of that be up for grabs since my husband won't be filing bankruptcy (I'm remarried)? Household goods exemption is $3525.
#2. Computer exemption is $600. I own a pretty nice computer that is about a year old that I had purchased with part of last year's tax refund, to help grow my budding photography business. It was about $1100 at that time, but of course it is used now. Would the value likely be under that amount by now? Also my husband owns a computer that he uses for his job. It is probably only valued at a couple hundred bucks by now. Is that exempt because it is his?
#3. We own together about $6000 worth of photography gear. Some of it my husband purchased with his half of the tax refund last year, and some of it was accumulated a couple of years ago. Receipts for everything are gone. My husband uses the majority of the gear right now and my rig is worth about $1000. Does that matter, or do they just consider exactly half of it to be mine?
#4. Everything in the house is pretty old and/or damaged. Do we actually have to come up with values on a bunch of old stuff? Is that added to the total of the photography gear?
Obviously you can see this gear is extremely important to us as we are finally starting to get more clients and wedding bookings. It would be very difficult to start over and buy the same gear because buying it all new would cost 10K+. We have a lot of contacts in the photography business and the reputation is already there. So far we haven't made a profit, but that's because the gear costs so much.
#5. I am a student going to community college with pell grant money. I'm taking a photography class that requires a DSLR camera. Will this exempt the camera from personal property as an educational expense?
Here is what I was thinking about doing. Tell me if it will get me caught and in trouble.
File tax return as soon as possible in late January or early February. Get $9K refund. Immediately pay 2K in overdue property tax, as well as 1K in spring property tax. Pay $1K in late house payments and utilities. Pay 1K to bankruptcy lawyer for filing fees. This leaves me with 4K left over.
Was thinking about spending the remaining 4K on clothing, medical, and dental visits for the family, and stocking the deep freezer with groceries.
But seriously, do I really need to do all that to make it all kosher to keep the tax refund? We normally rely on that as income so we definitely can't just let the trustee take it. Should I just pay off the taxes, house payment, and utilities and then cash out the remaining 4K and just say I bought groceries, clothes, and car repairs with it? Or would only 2K be considered "mine" since my husband is not filing?
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