Myths about taxes in bankruptcy are as common as myths about fire breathing dragons. Central to the bankruptcy tax myth is the claim that taxes can’t be discharged in bankruptcy. Not so. Bankruptcy can wipe out many kinds of taxes. And that discharge can restore order to a family’s economy. Which ones are dischargeable? Let’s see. […]
Stop Making Quarterly Tax Payments
Uncle Sam expects a quarterly tax payment from the self employed. Since you don’t get a paycheck with regular tax withholding, the burden’s on you. Lighten the burden. Make this the last quarterly tax payment you pay. Seriously. Don’t make any quarterly payments for this coming year. Think I’m advocating tax resistance? No way. The tax collectors […]
Keep Your Tax Refund Through Your Bankruptcy
For most of us, finding out that we are getting a sizable tax refund is great news. But if you’ve recently filed a Chapter 7 bankruptcy, hold your celebration. That refund may not be yours. You have a bankruptcy estate When you file bankruptcy, all of your assets become a “bankruptcy estate”. The estate includes […]
Skip Bankruptcy’s Means Test
The couple was despondent when another bankruptcy attorney told them that, despite $100,000 in old taxes, they couldn’t file Chapter 7. This fine fellow told them that the means test showed they had $3000 of disposable income per month. A Chapter 7 would be an abuse of bankruptcy under the law. Only Chapter […]
Got A 1099? How To Avoid Paying More Tax
One of life’s persistent gotcha’s is the tax consequence of having debt forgiven. Did you compromise a debt, eliminate it upon foreclosure, or have your creditor simply wipe it out without payment. You may have a tax problem. The tax code treats the forgiveness of debt as income, even though you never saw a penny […]
Old Tax Liability Discharged In Bankruptcy, If….
Discharging tax debt in bankruptcy gets lots of families out of a horrible hole. Tax debt can be large and swelled beyond the tax by interest and penalties. Collection on old tax debt often compromises the ability to stay current on more recent years. Bankruptcy can save their bacon because taxes found on returns […]
Chapter 13 Fixes Tax Trouble
Chapter 13 bankruptcy offers powerful alternatives to fighting with the IRS. When you’ve got tax troubles, it’s easy to feel powerless. After all, you’re confronting a federal agency who wrote the tax rules. And they have hordes of employees with nothing else to do. Chapter 13 can turn the tables on the IRS (and state […]
Five Tax Tips For Two Cents
The tax filing deadline approaches. So why is a bankruptcy lawyer talking about taxes? I’ve found over three decades as a bankruptcy lawyer that there’s a surprising degree of overlap between bankruptcy and tax . All too often, it’s tax troubles that brings a family to me for help. Here’s my two cents on what […]
How Consumer Remedies Were Gutted By Little- Noticed Tax Code Changes
Tax code changes effective in 2018 inflicted a crippling blow to consumers who must sue to enforce their rights. And few have yet noticed. The tax deduction for miscellaneous itemized deductions under IRC Section 212 is gone. So now, consumers who prevail under statutes that award attorneys fees to the successful plaintiff are denied a […]
The Tax Deduction No One Tells You About
Did you file Chapter 13 to save your house from foreclosure? Making payments to the trustee to catch up on the mortgage? If you haven’t claimed a tax deduction for the bankruptcy plan payments that go to the lender, you’re leaving money on the table. That’s money that fattens Uncle Sam’s coffers at the expense […]
