Filing for bankruptcy is one method many people across Ohio use to help themselves regain their financial footing, but there are certain behaviors and lifestyle changes you will need to make after doing so. In addition to watching your spending and making sure to stay on top of all your bills, you will also need to consider how filing for bankruptcy will affect you, come tax time. At Kennel Zeigler LLC, we have a firm understanding of how filing for bankruptcy can impact your taxes, and we have helped many clients navigate their way through this and similar matters.
According to TurboTax, one of the first things you may want to think about doing if you believe a bankruptcy filing is in your future is file your taxes before moving forward with your bankruptcy case. If it is too late to do so, it is imperative that you maintain a copy of all your tax records, and you should also be able to clearly explain and outline how you used any money you got as a tax refund when questioned.
If you already filed your taxes, but have not yet received your refund, make sure not to pay outstanding bills with your refund money, as doing so can throw a wrench in your bankruptcy case and potentially slow down the entire process. While filing your taxes before filing for bankruptcy is generally wise, it is typically even more important that you file your taxes by the established deadlines.
Why? If you do not file your taxes on time, you can face a variety of fines that can end up costing you considerable money. Typically, if you find yourself in this situation, you can anticipate a fine for failing to file on time, and you can also face additional fines for failing to pay your taxes at all. You can find more about this topic on our webpage.