Filing for taxes after Bankruptcy is a bit different from normally filing for taxes. You must make sure that you have a few things taken care of when you file for taxes. Click here to read more about Florida Chapter 7 Bankruptcy information.
Before Bankruptcy: filing for taxes to be dis-chargeable in bankruptcy, must be personal income taxes which are at least three years old as counted from the due date of the tax return including extensions. The tax return must have been filed by the taxpayer; it can’t have been a substitute filed return prepared by the IRS. Also, the tax must be assessed at least 240 days.
Immediately after the bankruptcy discharge file IRS form 982. This will assure that you don’t have to pay taxes on any debt that is “forgiven”.
According to IRS Publication 908, Bankruptcy Tax Guide, the Bankruptcy Code requires a debtor to file an individual tax return, or request an extension. If this does not happen, the bankruptcy case can be converted or dismissed. In addition, the bankruptcy trustee is required to file an estate tax return, form 1041, for the bankruptcy estate.
File your taxes on time each year. The IRS assesses separate penalties for failure to file and failure to pay, and they will find out if you owe them money even if you do not file.
Any unspent tax refunds during the year before the bankruptcy will go to the estate. This refund is the debtors money that is unnecessarily paid to the IRS. This tax refund is treated like cash.
The year of bankruptcy, a tax refund that was filed before filing for bankruptcy goes to the estate. You can keep part of this refund if it is based off of income after the bankruptcy.
Keep in mind: Debts Discharged in Bankruptcy are not included in the Taxpayer’s income.
Here at Andres Montejo Law, Fort Lauderdale Bankruptcy Attorney can help you decide what is best for you with our free consultation. Our Free consultation includes follow up calls to be able to find out if bankruptcy is of interest to you. Please contact us if you have any questions!