Taxes & Bankruptcy

Discussion in 'The Watercooler' started by klmno, Apr 3, 2011.

  1. klmno

    klmno Active Member

    Finally, I'm getting ready to file my taxes online while doing laundry. Since I filed bankruptcy last year, can I still use the 1040EZ? Is there anything I need to look out for on the tax form due to the BK?
     
  2. HaoZi

    HaoZi Guest

  3. klmno

    klmno Active Member

    Thanks but I'm not smart enough to know what all that means. LOL!
     
  4. HaoZi

    HaoZi Guest

    "If the debtor filed a chapter 7 or 11 case, the debtor must file a Form 1040 for the tax year involved. The bankruptcy trustee files a Form 1041 for the bankruptcy estate. If the debtor is in chapter 11 bankruptcy and remain as the debtor-in-possession, the debtor must file both a Form 1040 and the Form 1041 for the bankruptcy estate (if the estate meets the return filing requirements). "

    Does that help? There's also some examples and all on http://www.irs.gov/publications/p908/ar02.html
     
  5. klmno

    klmno Active Member

    Ok- so I'll use the standard 1040- I had forgotten but I need to anyway. I don't have to itemize though, do I?
     
  6. HaoZi

    HaoZi Guest

    I don't know. Might be worthwhile to consult one of the professionals, I'd check what the requirements are for free professional help.
     
  7. rlsnights

    rlsnights New Member

    You have left it kind of late to get help but most communities have free tax preparation help for people with low income/seniors. Here I see the notices about that help mostly in libraries, community centers, public buildings, senior centers and churches. Your state tax department is likely to have links or info about free tax help on their website.

    Ditto for getting help from a paid preparer but you are more likely to get help from them than the free help with only 2 weeks before the filing deadline of April 18, 2011.

    At the minimum you want to file for an extension which will give you until October to actually file your return(s). But to file for an extension you have to pay the amount you expect to owe by payroll deduction or by sending payment with your request for an extension.

    The free tax programs have income limits and some will only let you file a 1040EZ. I don't know if any of them will let you do a 1041.

    My personal advice is to walk in to one of the big paid preparers shops and ask them about their fees and whether they can help you file a return or an extension.

    If this is your first return since the bankruptcy it may well be worth the expense. I don't know if filing a 1041 raises your risk of being audited but even if it doesn't, if you make a lot of mistakes it is much more likely to get you audited.

    Good luck.
     
  8. klmno

    klmno Active Member

    i TRIED TO READ THRU (AND UNDERSTAND) (sorry- caps were on) the link provided and it appears that the bankruptcy attny should have turned in a 1041 if it was needed. I didn't have any taxes owed when I filed for BK and even the real estate taxes were paid so I am just going to assume this is ok and file as normal, using a 1040. The attny I used was pretty good at letting me know what I needed to do and follow up on so I hope this is all ok.
     
  9. rlsnights

    rlsnights New Member

    You might want to check with the attorney to make sure the 1041 was submitted.

    Good luck
     
  10. klmno

    klmno Active Member

    I just read some more on it- it says:

    My "estate" had no income. It appears this would be more applicable to self-employed people, farmers, etc.
     
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