Posts Tagged: ‘Tax Refunds’

Coordinating the Timing of Your Bankruptcy and Tax Refund

January 25, 2018 Posted by kingcade

If you are considering filing for bankruptcy, timing can be everything. The last thing you want to do is file for bankruptcy, receive a large tax refund and have to hand it over to the bankruptcy trustee.  If you are anticipating a refund, it is important to time your Chapter 7 bankruptcy filing just right.

In a Chapter 7 bankruptcy, all assets are considered to be part of the bankruptcy estate which is controlled by the bankruptcy trustee. If the asset is tied to what is known as an exemption, the asset can be protected. Otherwise, the asset can be liquidated and used to pay off the qualifying creditors. A tax refund is one of those assets that is not tied to a bankruptcy exemption, which means that this sum of money can be used by the trustee to pay back creditors before the remaining debt is liquidated.

Any unspent tax refund the year before bankruptcy will go to the bankruptcy estate because this money is considered to be unnecessarily paid to the IRS, just like cash in a bank account. If the refund is received during the year of Chapter 7 bankruptcy, the amount of tax refund that is based on the income earned before filing for bankruptcy will go to the bankruptcy estate. If the refund is based on income earned after the date of filing, the debtor can keep this money. Any refund received for income earned the year after bankruptcy is safe.

What this means is the timing of when you file bankruptcy is key. A bankruptcy attorney can discuss these options with you. If someone is anticipating filing, that person can adjust his or her withholding on paychecks to the minimal amount so that the debtor pays only the tax that is owed. He or she can also spend the refund on what are considered to be necessary expenses. These expenses can include mortgage payments, food, utilities, medical care, education or car payments. Necessary expenses do not include purchases for luxury items, repayment of a credit card or paying back a friend or family member.

It is possible to keep your tax refund as part of an exemption. In every bankruptcy case, each debtor is allowed to exempt a certain amount of property, depending on the state. It is possible that a tax refund can be included in this exemption. A bankruptcy attorney can discuss this possibility with you, addressing the pros and cons of utilizing this option.

Click here to read more on this story.

If you have any questions on this topic or are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade Garcia McMaken has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade Garcia McMaken website at www.miamibankruptcy.com.

 

IRS Warns Consumers of Tax Refund Phone Scam

February 7, 2017 Posted by kingcade

Tax time often brings with it a series of scams, and this year is no different.  Thousands of consumers have already received phone calls from scammers trying to take their tax refund money.

“Before there is an arrest warrant issued, I want you or your attorney to give us a call back,” the scam caller says.

Since 2013, scams like this have conned more than 10,000 victims out of $54 million.  Know that the IRS will never call and demand immediate payment using a specific payment method such as a prepaid debit card or wire transfer.  The IRS will first mail you a bill if you owe any taxes. You will also be given the opportunity to question or appeal the amount they say you owe.

REMEMBER: The IRS does not initiate contact with taxpayers by email, text messages or social media channels to request personal or financial information. In addition, the IRS does not threaten taxpayers with lawsuits, imprisonment, calling the police or other enforcement action.  Being able to recognize these signs of a phishing or tax scam could save you from becoming a victim.

Here is more information on Scams Targeting Taxpayers directly from the IRS website.

If you are in financial crisis and considering filing for bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

Related Resources: http://abc7chicago.com/news/irs-warns-of-major-phone-scam/1730957/

Beware of Identity Theft this Tax Season

January 17, 2014 Posted by kingcade

The IRS has issued identity theft warnings this tax season. Following the recent data breaches consumers have experienced, taxpayers need to be extra careful with their personal information. According to the IRS, identity theft is one of the fastest growing crimes in the nation and theft related to tax refunds is one the agency’s biggest problems right now.

Below are some tips to keep your personal information safe this tax season and year around!

• Do not give your personal information out to just anyone, make sure it is a trusted individual.

• Do not carry your social security card on you or anything with your social security number on it.

• If you file your taxes electronically, make sure your computer’s security system and virus protection is up to date.

• Never share your personal information through social media or email.

Click here to read more on this story.

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced Miami bankruptcy attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia website at www.miamibankruptcy.com.

How the ‘Fiscal Cliff’ will Affect Taxes and Federal Spending

November 16, 2012 Posted by kingcade

A compromise is yet to be made between President Obama and Congress regarding the dreaded ‘fiscal cliff.’ The term fiscal cliff is used to describe the state of the government at the end of the year when the tax cuts enacted by the Bush administration expire. Without action by Congress, America will soon face the following:

• A rollback of the “income triggers” for alternative minimum tax (AMT) to their 2000 levels. Without the patch, between 30 and 31 million taxpayers would be paying AMT.
• An increase in maximum capital gains taxes to 20% from their current 15%. Dividends, now taxed at a maximum of 15%, would be taxed at ordinary income rates.
• Federal spending on discretionary and defense uses would be cut by $110 billion per year.
• The 2 percent payroll tax cuts would expire.

Co-Director of the national tax department and Ernst & Young, Eric Solomon said 2012 tax refunds would likely be delayed if America enters into the fiscal cliff. President Obama has proposed higher taxes on upper-income taxpayers, which a predominantly Republican House does not agree with. Many suspect a compromise might not be made until the eleventh hour.

To read more on this story visit: http://www.usatoday.com/story/money/personalfinance/2012/11/07/how-taxes-will-change/1688699/

If you are in a financial crisis and are considering filing bankruptcy, contact an experienced attorney who can advise you of all of your options. As an experienced CPA as well as a proven bankruptcy lawyer, Timothy Kingcade knows how to help clients take full advantage of the bankruptcy laws to protect their assets and get successful results. Since 1996 Kingcade & Garcia, P.A. has been helping people from all walks of life build a better tomorrow. Our attorneys’ help thousands of people every year take advantage of their rights under bankruptcy protection to restart, rebuild and recover. The day you hire our firm, we will contact your creditors to stop the harassment. You can also find useful consumer information on the Kingcade & Garcia, P.A. at www.miamibankruptcy.com.