Should I or shouldn't I? (ask to retain income tax refund again this year?)

[tigergem]

Just wondering if anyone thinks the Trustee or the Judge will think I am being "abusive" of the system if I ask to retain my income tax refund again this year? I know it is permissible under the law, but I also don't want to squander any measure of good will I might have developed with my Trustee and my Judge. Am I worrying about that angle for nothing? Should I just "go for it" to the extent that the bk law allows?

[justbroke]

The key is only whether it is necessary for you to keep the refund, in order to deal with real needs. If I were in a Chapter 13, which I am no longer in one, I would try to keep my "refunds" to a minimum (lowest amount).

I'll keep saying this, but a Chapter 13 is not meant to be punitive. If you have a legitimate reason to seek permission to keep part or all of your refund, then I would seek permission.

Stuff happens. The worse they can say is "no".

[tigergem]

The key is only whether it is necessary for you to keep the refund, in order to deal with real needs. If I were in a Chapter 13, which I am no longer in one, I would try to keep my "refunds" to a minimum (lowest amount).

I'll keep saying this, but a Chapter 13 is not meant to be punitive. If you have a legitimate reason to seek permission to keep part or all of your refund, then I would seek permission.

Stuff happens. The worse they can say is "no".

Thanks for your response, jb. I do have real needs for it, but I wasn't sure that was going to matter. I did minimize the refund. The only reason I have any refund at all is tax credits, not an actual tax amount that I paid that is going to be refunded. For years, I have tried to keep it as close to $0 as possible. I don't bank with the IRS. Never have. And I try not to underpay by too terribly much during the course of the year either.

[justbroke]

You are the type of taxpayer that the IRS wishes they had fewer of. I meant that as a compliment. Many people give the IRS a free loan rather than put their money in an interest bearing savings account. Even if the savings account only yield 1.00% APR, that's better than 0% from the IRS. There was this one time that a State taxing authority actually paid me interest for an entire year because they made a mistake in not issuing a refund!

[tigergem]

I agree with you absolutely on that point, jb, and I was fortunate that I learned that particular line of reasoning very early on in life. For many years (actually most of my working adult life) the amount I owed to state taxes at filing time was approximately equal to my IRS refund, and in both cases less than $100, coming or going, and basically very close to ZERO from my perspective. Texas, of course, has no personal income tax, so that aspect has gone away. In three of the last four years, tax credits have gotten applied that resulted in a much higher "refund" than I anticipated. The first of those, however, was a result of VERY bad advice from a professional real estate/tax person and that is how I ended up with IRS tax debt included in my Chapter 13. In hindsight, although I have not recalculated it to find out for sure, I do believe my tax line would have been $0 for that problematic year if I had kept my blinders on and just tended my own business the way I normally do. Then I went back to doing my own taxes, which is what I had always done previously without any complications, issues or drama. Three years ago I believe I achieved a perfect $0. Last year there was a little bit of a tax refund with a tax credit, but not much of that was an actual "refund" of money I had paid into the system. I think I was still under $100 on that part. This year, again I would have achieved a perfect $0 except for another unexpected tax credit. And as oddball as it might seem, achieving that ZERO at filing time is actually a personal annual goal and gives me joy lol.