There are some clear advantages to filing before the end of the year. When you file personal bankruptcy the trustee will prepare and file your income tax return and keep the refund for the year of bankruptcy and any prior taxation year that you had not yet filed and received the refund for.
What this means is that by filing personal bankruptcy before the end of 2015 you will only lose your 2015 income tax refund (assuming you have already filed all prior year returns). Whereas by filing in the new year you will lose two income tax refunds. You will lose your 2016 income tax refund since it is the refund associated with the year in which you filed and you will also lose your 2014 income tax refund because it relates to a prior taxation year for which you have not yet filed and received your refund for.
If that’s not a good enough reason, filing bankruptcy before the end of this year, will allow you to start the new year off right. Bankruptcy can give you a clean slate to go into the new year allowing you to set new financial resolutions for the new year. Now that is a resolution worth sticking to.
Therefore, if you are considering filing personal bankruptcy and you normally get large tax refunds, it is probably in your best interest to file before the end of the year.
If this relates to you, contact our office today for a free, no-obligation consultation. We’re here to help!