Will filing for bankruptcy affect my taxes? 23 Answers as of March 05, 2012

Maybe. It will not affect anything except your right to a refund. If you are entitled to a refund, it smut be listed on Schedules B and C, and can be seized by the bankruptcy trustee in a chapter 7 case unless can exempt the money under the federal exemption scheme. Contract a qualified lawyer to determine your exemptions.

No. If you are expecting a refund, it is an asset and must be listed on Schedule B and exempted on Schedule C. If you do not take these steps tp protect it, the trustee is likely to take it for the benefit of the creditors.

No, no effect. Just make sure to let your attorney know if you're expecting a tax refund so that they protect it for you.

No. Generally speaking bankruptcy is not a taxable event. Also generally speaking a bankruptcy filing would not affect the previous year's taxes anyway. The taxes you would be referring to are your 2011 taxes and it is now 2012. Even if there were something unusual about your bankruptcy, such as you were discharging a mortgage on a depreciated property that you were then going to surrender, it would not effect your 2011 taxes. The only way it could have an impact is if a creditor forgave a debt last year and gave you a 1099 as a result. The IRS treats a forgiven debt as income. A debt discharged in bankruptcy is not treated as income. So if you discharge the debt that the bank forgave, you may be able to convince the IRS not to treat the debt forgiveness as income. I do not know if the IRS is required to do this or not. I do know that I have gotten them to this without too much trouble.

Yes, you will have to exempt it if you have enough exemption value left or surrender it to the trustee.

Filing the bankruptcy should not affect your taxes especially if you owe. If you are getting a refund, you need to make sure that you can protect the entire amount.

No. However, if you have already received your refund and not spent it on necessities the trustee could take it.

The only affect that a bankruptcy has on an individual bankruptcy filing is 1) if you have unpaid back taxes or 2) if you are entitled to a refund for this year and cannot exempt it from the trustee. It does not affect the current year if you do not owe or if you have received and spent your refund before you file.

A bankruptcy normally does not affect your tax situation unless you owe taxes. The big issue for you filing now is whether you are able to fully exempt any tax refunds you may receive. Generally most people are able to easily exempt their tax refunds utilizing CCP 703 exemptions. However there are limits to using this. If you have any home equity or to much other property your refunds could be at risk.

There is no easy answer on this. Your bankruptcy refund (not including any portion received as Earned Income credit) after bankruptcy is "property of the bankruptcy estate." The trustee may or may not take the refund and use it to pay your creditors. One easy answer is to delay your filing until after you receive your refund check for this year. But overall, the best thing to do is to talk to a bankruptcy lawyer to get more information on your options.

If you are entitled to a tax refund the trustee will take the refund when it comes. If you have already received the refund when you file you will have to account for where it went. If you still have it, the trustee will order you to turn it over to him. The trustee is also entitled to a pro-rated share of any refund you might receive next year based on when you file this year. For example, suppose you file on July 1, 2012. When you get your 2012 refund in 2013 the trustee will be entitled to of that refund because you filed half way through 2012.

No. But you will need to include the amount of refund you're getting as part of your asset. If you spend it all already it's fine, but be prepared to explain to the trustee what you spent it on.

Probably not. You can exempt any tax refund under the value of the exemption amount, so you get to keep your tax refund.