Filing taxes after bankruptcy doesn’t have to be complicated, as long as you know what to look for, including when and how to file. The confusion for taxpayers in bankruptcy stems from the requirement for the filing of two types of tax forms. One is for the individual, the other is for the bankruptcy estate.
When filing for Chapter 7 bankruptcy, you would file your usual 1040 the same way you normally would. The trustee would then file a Form 1041 for the bankruptcy estate. One of the provisions of a bankruptcy is that the debtor may not acquire any other delinquent balances while under the court’s supervision.
Here are some tips for individuals filing bankruptcy and a tax return this year:
- Consult with an experienced bankruptcy attorney. Many offer free consultations. Let the attorney know whether you have filed a return for each of the past three years.
- If you have not filed your taxes for the year, consider doing so before filing for bankruptcy, unless you know you are going to receive a substantial refund.
- If you have already filed , make sure your attorney has all of the tax records- and make sure you have a general answer of how you used the refund money. The trustee will ask.
- If you do get a refund, and you are considering filing for bankruptcy, do not pay bills with the refund money. This will delay the processing of your bankruptcy case.
- File your taxes on time each year. The IRS assesses separate penalties for failure to file and failure to pay, and they will find out if you owe money even if you do not file. Save yourself the trouble and adhere to the April 15th filing deadline.
Click here to read more on this story.
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.
