Photo by Kelly Sikkema on Unsplash. Did you receive unemployment benefits in 2020? 1 in 4 Americans did. Under the American Rescue Plan you don’t pay tax on the first $10,200. Unemployment Benefits Are Generally Taxable As the IRS states plainly, “[i]f you received unemployment compensation during the year, you must include it in gross income.” Unemployment Compensation, IRS Topic … Read More
Photo by Manasvita S on Unsplash How do you time your bankruptcy case to write off income taxes? Usually you just need to wait long enough (but there may be other factors). Our blog post of two weeks ago introduced the importance of timing your bankruptcy filing right. We gave a list of 15 examples of timing considerations. Last week … Read More
Photo by Olga DeLawrence on Unsplash. You’re considering bankruptcy, and you have some unfiled tax returns for the IRS and/or your state. Should you prepare and file them, and when? Our last two blog posts have been about what you should and should not do before filing bankruptcy. These are important to consider even if you hope to avoid bankruptcy … Read More
Photo by Kelly Sikkema on Unsplash The new coronavirus law temporarily allows amend Chapter 13 plans to extend to a 7-year period instead of the current 5-year maximum. Last month we described the changes to bankruptcy law made by the coronavirus CARES Act enacted on March 27, 2020. One of those changes is the ability to extend the length … Read More
The IRS just postponed the April 15 deadline BOTH to file your income tax return and to pay the taxes, for individuals AND businesses. IRS Income Tax Return Deadline Postponed Responding to the COVID-19 pandemic, the IRS has postponed the deadline to file federal income tax returns by 3 months. This was announced (on Twitter, no less!) on … Read More
Do your 2018 taxes just add to your earlier income tax debts, making it all the more unmanageable? Chapter 13 may be your best solution. Last week we got into a big advantage of filing a Chapter 13 “adjustment of debts” case in early 2019. Doing so enables you to include 2018 income taxes into your Chapter 13 payment … Read More
Discharge more income tax debts through smart timing. You may be able to do so by filing your bankruptcy after certain dates of 2019. The right timing of the filing of a bankruptcy case can make a tremendous difference. Our last 8 blog posts have all been about smart timing. If you need to use the bankruptcy laws to … Read More
Chapter 7 can sometimes help you deal with unaffordable income tax payment plan. But Chapter 13 is often a better way to escape a tax mess. Tax Agreement Payments Too High We laid out the problem last week. You’d entered into a monthly payment plan with the IRS or your state because you couldn’t pay what you owed. But … Read More
Breaking an IRS/state income tax payment plan usually has very bad consequences. But filing bankruptcy lets you escape a tax payment plan. Tax Installment Agreement You Can’t Afford It’s a common problem. You owed income taxes a year or two ago when you sent in your tax returns. Money was very tight so you couldn’t just pay it … Read More
If you owe some income tax which qualifies for discharge and some that doesn’t, can Chapter 7 “straight bankruptcy” help you? Tax Liens under Chapter 7 Last week we showed how Chapter 7 can sometimes permanently prevent an income tax lien from hitting your home. It does that by stopping the recording of the tax lien, and then discharging … Read More
Usually you can discharge–write off–an income tax debt by just waiting long enough. Here’s how to discharge a tax debt under Chapter 7.
If a creditor’s proof of claim is a “priority” or secured debt is too high, object to it to avoid paying too much in your Chapter 13 case.
File your Chapter 13 “adjustment of debts” case at the right time to include all possible tax debts. Then budget right to prevent new ones.
In spite of you filing bankruptcy, the taxing authorities can still take certain very specific actions as exceptions to the automatic stay.