Redacted Tax Returns Required Annually
Everyone in a chapter 13 case is required to submit a redacted tax return to the trustee through our office each year before the end of April.
The only exception is for those who are not required to file returns, and for those clients we have to submit a statement from you indicating that you are not required to file and why.
Why are you required to do this?
Because the Court has ordered you to do it.
It is a Court Order.
It is part of the confirmation order in every case.
What does the trustee do with this information?
Two things.
One, they want to see your refund can keep up to $3,000 in Dayton, Cincinnati and Columbus, and for the Northern part of Ohio, normally all of the refund must be turned over.
Note, that tax refunds paid in do NOT shorten your plan, it is an extra payment to the creditors.
And, the trustee is looking for increase in your income, compared to the year you filed your case, if the income goes up enough, we might be asked to update your income and expenses.
Be aware that an increase in your income does not necessarily mean that your payment will increase, because often your expenses have increased too. If we get a request from the trustee, we will review it with you.
You need to send us your complete federal tax refund, including all schedules, everything you send to the IRS has to be sent to us so we can provide it to the trustee.
Your tax information has to be redacted, this means removing personal information, like the first 6 digits of your social security number, leaving only the last 4, the names and complete social security numbers of the children as well as your bank account info, routing number and account number.
Many people have their tax returns on their computers in pdf format. Some of you might have software that will help you redact this information… but there is also a free pdf redaction program, called Canva that can help you do this quickly and easily.
I have created a video to show you how to use it, and it works on all kinds of pdf, both editable and image types.
Some of our clients do not have computers and cannot conveniently use this program, but they do have their tax returns in pdf format on their phones.
If this is your situation, then you may send your pdf tax info to us and we will redact it for you.
If all you have is a paper return, then you can make a copy of the return, take a black marker and redact the personal information, and use a free app called genius scan on your phone to take photos of your tax information and email it to us. I have created a video for genius scan that shows you how to install it on an iPhone or android, and how to use it.
Now, you have just your individual return to process, but we have hundreds and hundreds of tax returns to review and upload, and all must be reviewed individually and redacted.
So, please help us by doing what you can to send us redacted copies of everything you filed with the IRS.
And, don’t forget that the 1040 is a two sided document, (smile) we get a lot of page 1 only, not page 2, as most if not all of the other forms are one sided. It’s an easy thing to overlook, and many people do.
Below are the links to the Canva video that shows you how use this free online app to redact your pdf returns, and a link to the free genius scan app you can put on your phone to take photos of your redacted paper returns if you don’t have a pdf version on a computer.
This is very important.
Getting the redacted tax returns to the trustee as soon as we can is a priority.
Don’t file an extension, it is not permitted
If, for any reason you cannot file your taxes by the due date you need to tell us as soon as you become aware that there will be an unavoidable delay.
We will have to inform the trustee and request additional time for you.
If we don’t, the trustee will file a motion to dismiss your case. And if that happens we will be required to file a response, attempt to work out a solution to keep your case from being dismissed and you’ll end with additional attorney fees.
I have seen a number of cases dismissed when clients had perfect payment records, and simply failed to send in their tax returns.
We have installed new software in our office a few months ago and you will be receiving a file request email.
Please use this email file request to return your documents.
Don’t just send us the tax info … use the file request email.
The reason for this is the email is set up to place your documents sent in response directly in your file and notify us that it is received.
This helps us keep track of your documents better.
Thank you for taking the time to watch this video.
I hope that you will be able to send us your tax info redacted from a computer, even if you have to borrow one to do it.
It’s only once a year and the amount of time that it saves us, multiplied by hundreds of returns we have to individually review, is very significant.
Thank you.
Link to install Genius Scan on iPhone
Link to install Genius Scan on Android
Link to video showing you how to use Genius Scan
Link to video showing how to upload tax return with your phone by taking photo
