Reduce Your Tax Refund Loss in Bankruptcy Lawfully

11 Oct Reduce Your Tax Refund Loss in Bankruptcy Lawfully

Here are three strategies to lawfully minimize the amount of tax refunds you will forfeit to your bankruptcy trustee if you cannot exempt the refunds in your bankruptcy case.

1) You can reduce your income tax withholding by filing a new Internal Revenue Service Form W-4 with your employer. This strategy should only be followed if you are withholding too much tax. It is a bad idea to underwithhold tax, incur penalties and owe tax at the end of the year you may not be able to pay!

2) If you are eligible for earned income credit, you can get up to $1712 in advance with your paycheck by turning in a Internal Revenue Service Form W-5 to the employer.

3) You may assign your tax refunds to your bankruptcy attorney as I have described in a previous posting, Debtors Defeat Bankruptcy Trustee in Battle Over Tax Refunds.

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Jill Michaux has helped Kansas consumers with debt problems for three decades. She and her partner, Mark Neis, are Topeka's only bankruptcy specialists, board certified in consumer bankruptcy law by the American Board of Certification. She help start the National Association of Consumer Bankruptcy Attorneys.
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