By financen | February 13, 2013 - 4:35 pm - Posted in Bankruptcy

BankruptcyHave you filed for bankruptcy recently? If you have recently filed for bankruptcy, then it is very important to file your taxes. There is no escape from it. You can always consult a professional tax attorney to review your information. Bankruptcy is considered as a red flag for the IRS and it will prominently increase your chances of getting audited.

It is also important to know that if you had your debts discharged or canceled as a part of your bankruptcy, it is treated as an income by the IRS. Talk to your bankruptcy attorney or your tax preparer and they will assist you in filing your tax forms.

If you are an independent contractor and receive 1099’s from companies that you have worked for, then you must check to see if a creditor canceled that debt and it is showing as an income on your form 1040.

If the reason of your filing for bankruptcy is because you have a lot of tax debts from the previous years, then you need to align your bankruptcy attorney or the tax preparer in the most accurately manner. They will require all the necessary facts and will have discussions with the IRS to see if your previous tax debts can be discharged or not. Most likely, you will still end up owing those back taxes even after bankruptcy because the IRS always wants to get their money back. It is important that you know all facts about taxes and bankruptcy. It can be a very complicated situation to deal with that’s why professional help is always recommended.

So how to file your past tax return? It is a very simple process much like filing the current return. Just make sure that you gather all the important documents like old W2’s, you old receipts, etc. You can also get the forms online from the IRS website and fill up everything, and then file it online. You will have to answer a few questions when you are doing it online, but there’s nothing to sweat. It might take a little longer, but as long as you have all the documents available, there shouldn’t be any problems. If you are a little hesitant in filing it on your own, then you can consult a reputable company who will assist and make sure that you don’t miss a single line or owed dollar.

Some important links:

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