daisymay

Tax Calculations in Bankruptcy Paperwork

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In the case of a person who works as an independent contract (receives a 1099 instead of W2), but has not been paying their own taxes quarterly, instead pays it when they file their tax return...

When completing bankruptcy forms, should they factor in a monthly figure (or average figure) for what their taxes should be as part of their income/expenses calculations? What is the appropriate approach to use?

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I would go monthly and list taxes. When you earn the income, a piece of that needs to be escrowed by you for tax purposes. Most of us just don't have that option and are forced to pay taxes as soon as we earn it through withholding. But the point here is the same. You earn x. You owe y for the long list of taxes that we are forced to pay. Your net income is therefore x-y.

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