Filing Tax return
Hope you can clarify something for me.
If filed for Bankruptcy in Jun-08 and if all goes well, I should be discharged sometime in Mar-09. (approx 9 months ).
Do I need to file a tax return for the year ending 2008 ? or is that up to my Licensed Insolvency Trustee ?
I think you mentioned that the trustee should be filing from Jan-08 to Jun-08. Is this correct ?
Who files from Jul-08 to Dec-08 ?
If the trustee files, who pays for the services of filing before and after bankruptcy ? Thank-you
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Posted from: Ontario
The year in which a person files bankruptcy has two different tax returns.
The first is called the PRE bankruptcy return and covers the period from Jan 1 until the date the person files bankruptcy. Your trustee must see that this return is filed, any taxes payable will be included in the bankruptcy, any refund will be sent to your trustee for your creditors.
The second tax return is called the POST bankruptcy return and covers the period from the day after a person files for bankruptcy until Dec 31. Your trustee is NOT required to file this return, but many do. If your trustee files this return and you are entitled to a refund then the refund will be sent to your trustee. If you owe any income tax on the POST return you will be required to pay it.
I hope this clarifies things for you. When you are selecting a trustee simply ask them whether or not they will be preparing your POST – if you’re expecting a refund you might want to select a trustee that will allow you to file it yourself (and therefore you’ll receive the refund…)