Tax deductions may be hiding in your Chapter 13.
Did you file for an extension of time to file your income tax return?
Well, time to get the return done is running out: returns are due October 15th.
If you are in a Chapter 13 bankruptcy case, you may have deductions you haven’t considered found in the payments the Chapter 13 trustee has made in your case.
If your plan provides for
- curing mortgage arrears,
- paying taxes,
- spousal support or
- business expenses,
consider claiming amounts paid to those creditors through your plan as deductions.
The Chapter 13 trustee is paying those claims with your money. I see no reason that the trustee’s expenditures aren’t deductible to you.
Check with your tax professional.
And if you are several years into a Chapter 13, consider whether you can amend prior years to claim the trustee’s distributions for earlier years.
More on tax issues when you’ve filed bankruptcy: the 1099.
Lurking kitty courtesy of Aftab Uzzaman and Flickr under Creative Commons license.