If you are one of the many Americans who have experienced financial instability, then you may be worried about filing an income tax return after filing for bankruptcy. Truthfully, filing taxes should not cause you any grief if you know what to look for, and know when and where to file.
As specified by the IRS Publication 908, Bankruptcy Tax Guide, the Bankruptcy Code instructs a bankruptcy trustee to file an individual tax return, or request an extension. If this does not happen, the bankruptcy case can be changed or dissolved. Furthermore, the debtor is required to file an estate tax return, form 1041, for the bankruptcy estate.
An important thing to note when experiencing bankruptcy is that you (the debtor) may not obtain any other delinquent balances while under the court’s custody. Your taxes may be deemed “new debt” if you are unable to pay them by April 15. Such “debts” could change the course of your entire bankruptcy case.
Here are some tips for filing taxes after bankruptcy:
- Meet with a tax resolution attorney for a bankruptcy case. Notify your attorney as to whether or not you have filed a return for every one of the last three years. Contact the specialists at Federal Tax Management Inc. today to learn more about your options.
- If you have yet to file your taxes, think about filing them prior to filing for bankruptcy, unless you have a chance of receiving a considerable-refund sum.
- If you are someone who has already made a decision to file your taxes, make sure your tax resolution lawyer has received your tax records. Also, be prepared to tell trustees how you spent your refund sum, they almost always inquire about it.
- If you did receive a refund, and have yet to file for bankruptcy, do not pay your debts or bills with the refund money. Doing so will alter and hinder the speed of your bankruptcy case.
- File your annual taxes on time, every time. The IRS evaluates individual penalties for forgetting to file and to pay. The IRS will discover if you owe them money even if you do not file. So save yourself a headache and file by the April 15 deadline.
If you or someone you know is experiencing bankruptcy, or owes the IRS money in back taxes, have them contact a tax resolution specialist as soon as possible. The tax resolution lawyers at Federal Tax Management Inc. are trained to provide quality customer care, and legitimate tax resolution advice specific to your individual needs.