Income Tax and Bankruptcy
I went bankrupt in May of 2003. I am still bankrupt in 2007. I am self-employed. I understand that there will be an income tax return filed from January-May 2003 (presumably by the trustee). I understand that a further return is filed from June to December, 2003 (optionlly by the trustee). What happens to the for returns for the years 2004, 2005 and 2006.
Your child tax benefit is calculated based on your total income for the year (i.e. pre and post bankruptcy returns).
if you owe income tax and you file for bankruptcy Do you still owe the taxes
Taxes are discharged when you go bankrupt (meaning that you don’t pay the taxes owing when you go bankrupt).
Any tax returns after the year of bankruptcy become your responsibility and you will be required to ensure that they are filed (and the quicker the better, CRA charges a fairly significant interest rate for returns filed as far past the due dates as you are.