turbotax and BK...

[kst7488]

i just used the small buisness/personal/state version on turbo tax online but i was suprised to see it didnt have any mention of bankruptcy filings or being able to deduct legal fees for ch 13.

did i miss it or does it not exist? i just saved my session and logged out till i get an answer.

[justbroke]

i just used the small buisness/personal/state version on turbo tax online but i was suprised to see it didnt have any mention of bankruptcy filings or being able to deduct legal fees for ch 13.

did i miss it or does it not exist? i just saved my session and logged out till i get an answer.

No, because legal fees are not deductible unless they are in support of tax issues, from what I know.

I prepare taxes for 20-30 people a year. While I haven't dealt specifically with taxes and bankruptcies (well, one Chapter 7), I don't think you can deduct any legal fees unless it's from litigating with the IRS, or a legitimate business expense.

Don't ask me anything else. I'm not a CPA. You didn't mention if you had a business.

[kst7488]

i am a indipendent contractor aka exotic dancer ;)

[justbroke]

That's a tough one for me. Do you have a CPA? (Okay, that was dumb, you're using TurboTax online.)

[kst7488]

haha nope. i didnt think i needed one since im filing obcenely low and i have no papertrail since my BR filing.

i was just suprised to see no mention of bankruptcy. but i guess the irs already knows since half of my filing payments are going to them

[Flamingo]

Legal fees in filing either Chapter 13 or Chapter 7 are not deductable on taxes. Fees for tax advice from an attorney are but you would be given a letter/statement specifically stating the amount that is considered tax advice. If you are in doubt as to what to do for your situation specifically, give the IRS a call or have your taxes done professionally to be on the safe side. It's better than having them contact you several months down the road for an audit or saying you owe more taxes (and interest/penalties) if you list something incorrectly. I've had Turbo Tax do a major boo boo on us for tax year 2004 (ended up owing $1,000 more that what it calculated and the error was not ours) so I don't trust Turbo Tax and would not even consider it for a state tax return.

[OhioFiler]

i am a indipendent contractor aka exotic dancer ;)

As a former accountant, I say, call me we can discuss your situation!

[kst7488]

haha, nice....

[njguy1972]

KST - I used turbo tax and they asked a question about legal fees. I was about to include them but then in their explanation it mentioned that a bankruptcy is not eligible.

As a dancer you may be in a good situation for a ch 13 since most of your earnings is under the table (figuratively).

What you claim as income may be very different from what you actually take home. When the trustee determines your monthly payments based on reported earnings, you may have extra earnings that never get reported. Also, if you moonlight away from your normal establishment, again you have earnings that never get reported.

[kst7488]

just wanted to add that i filed taxes this year on my own the firs ttime ever with turbo tax and it worked out fine. as of now there was no issues filing and i have not been audited.

[jribe]

i just used the small buisness/personal/state version on turbo tax online but i was suprised to see it didnt have any mention of bankruptcy filings or being able to deduct legal fees for ch 13.

did i miss it or does it not exist? i just saved my session and logged out till i get an answer.

you can't deduct legal fees unless they were needed to keep your job. Just legal fees in general do not count as deductions.

[kenshirley]

Just a warning for those that use TT.
I had used it for some 12 or more years without a problem.
This year, when I filed my taxes as usual everything went well again. Then I needed a copy of my return for filing my BK so I thought it would be just as easy to print another copy rather than copy the one I printed when I filed using their services.
To my shock my return had been changed and showed some $1500 or more less deductions which of course changed the bottom line and I owed even more money to the IRS and State than I did before!

The funny thing is that I had my IRS debt scheduled to to be paid via them and it was paid, for the figure that was on the original paperwork, not this amended stuff that they showed online some 6 weeks later.
I emailed them and ask what the H*ll was going on. I wanted to know~

1) Why was my returned modified by them without my knowledge?
2) Why was I not notified?
3) Has this new version of my filings with the IRS and State been sent to them?

I sent them 3 emails and never got a response. I will not and cannot use TT this coming year as the paperwork they now have on file is not what I filed electronically with them and they won't tell me why it's different.
The fact is that the paperwork they now have on file is wrong as far as I, the IRS and the State are concerned and if I were to use them that new paperwork would cause confusion to say the least next year.
I cannot use a company that is non responsive and maintains false paperwork in their files on me that is supposed to be legal documentation.

[OhioFiler]

I would never use an online preparation and filing service.

[kenshirley]

I would never use an online preparation and filing service.

I am not sure why.
But I know many that would never put a credit card number online to buy stuff, never pay bills online with their bank and still can't set a clock on their 30 year old VCR either.
My Grandmother told me in the very early 1950s that automatic transmissions in cars were going to kill people as they were dangerous.
At one time or another you have to decide to go with the flow.

[Billssuck]

No, bk lawyer fees are not deductible. Only legal fees are deductible if they are business expenses.

I've used TT several years WITH CAUTION and on my home computer only. I have also prepared taxes (have accounting degree) in tax offices. TT can screw you up if you don't answer the questions correctly (or if they are asked in a poor way by the program). I've used it but had to manually correct items I know were handled wrong in my own tax returns. For example this year, I had to amend my tax return for adding an education credit for my son who paid college expenses with a student loan (that I didn't know about when I filed). Anyway, TT was very poor at doing amended returns and would have completely messed up my state if I didn't know myself what needed to be done.

For the majority of people, the program works fine. But if your return gets technical or more complicated, it could screw you up.