Reminder: October is When Trustees Look for Tax Refunds

[Mama2LNJ]

If we owe some back taxes will the trustee still be able to take our refund? We potentially will get a $6,000 refund for 2010 but I am hoping that the IRS will just take that and use it to pay up our tax bill. Am I right that will happen like that? I was under the impression that tax debts are put at the top of the list and payed first out of bk proceeds and then it is split between the rest of the creditors. I have no problem with the trustee taking whatever is left of the refund after the IRS is payed, it wont be much but I would really like to get rid of that tax debt since it is not dischargable.

[rpg]

Question- Tax refund

I filed on Sept 18th, was discharged Jan 6 but the case is still open for my Tax refund to review. Does anyone know if the trustee actually keeps the refund check?

[HHM]

Obviously, if the trustee is keeping the case open, the trustee wants it.

[hp2002grad]

What about tax credits? Does the trustee come after those? I am in arizona and am going to recieve(hopefully) a child tax credit and education credit?

[tobee43]

if you claim the tax credit and or education credit , your amount owning or refund is based using those figures in the total calulation. if the two credits bring your tax situation to a refund, then a refund it will be. however, you can have your tax consultant see which works best for you.

[goturtlego]

When would be a "good time" to file? April-Sept?

[HHM]

When would be a "good time" to file? April-Sept?

With regard to tax refund, yes. Pretty much May to Sept. If filing in the first half of the year, you need to make sure you file your taxes, receive the refund, and have SPENT it before you file (in a reasonable way).

But in the big picture, in chapter 7, you are talking about ONE years tax refund, not really a big price to pay to eliminate debt.

[FreeInTheSon]

Thanks for all the great info on this site. My question is: If you've filed in the "magic time" (Apr-Sept) AND you've already received your refund & spent it out, do you even list it on Schedules B or C where it talks about "taxes OWED to you"? Seems to me that if you already "got" it earlier in the year and used it up, you don't have any taxes "owed" to you in the future, and thus don't need to list it as personal property in Schedule C...? Please correct me if I'm wrong or if I'm right, then I would appreciate a confirmation, as I'm finishing that exact schedule as we speak! Thanks!