Don't Forget Your Chapter 13 Bankruptcy Tax Deductions

December 18th, 2008 by Reed Allmand

If you’re in a Chapter 13 bankruptcy repayment plan, don’t forget to carefully examine your bankruptcy payments for tax deductions. Depending on what is being repaid by the trustee in your Chapter 13 bankruptcy, you may be entitled to deduct some payments from your 2008 taxes. For the purpose of your taxes, payments made by your Bankruptcy trustee will be treated as if you made them yourself. After all, it is you who is paying; but of course through the bankruptcy trustee, so you still have a right to claim those tax deductions you would normally take if you weren’t in bankruptcy. For example, if you’re paying mortgage interest in Chapter 13 bankruptcy and/or defaulted mortgage payments, those payments may be deductible from your 2008 taxes. If you’re paying federal or state taxes, spousal support or business debts/expenses through the Chapter 13 bankruptcy this may also be deductible from your 2008 taxes. Speak with your bankruptcy attorney and tax accountant to find out what tax deductions may be available to you during Chapter 13 bankruptcy.

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About Reed Allmand

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Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."

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