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What state exemption should I use to protect my next tax return

Resolved Question:

What state exemption should I use to protect my next tax return in Minnesota. I filed chapter 7 pro bono and have to do an amendment. Also, do I have to send a copy of my papers to all my creditors?
Submitted: 5 years ago.
Category: Bankruptcy Law
Expert:  cfortunato replied 5 years ago.
Hi JACustomer,
1) Are you asking about your tax return for the 2010 tax year, or the 2012 tax year?
2) What did you have to amend?
Customer: replied 5 years ago.

Hello, sorry for taking so long to get back to you. My trustee told me I had non-exempt property and my 2011 tax refunds as well as my stocks would be the property of the bankruptcy estate. I also had state and federal exemptions. All my exemptions were state but my stocks of $750 so I changed that to 550.37 subd. 24 and need to know if that will do it for those, will that protect them? I realized that I need to mark 18 and 21 of schedule B for the tax returns. My tax return may be around 3,000. Do I put that amound of value in both 18 and 21? How do I exempt them? I could not find any exemptions that seemed to apply.

Since I am doing this myself (foolishly) do I have to send a copy of my amended schedules to all my creditors? If so do I just send the pages I changed or the whole packet? Do I also include the amendment notification and verification as well as the signiture page? I appreciate any information you can give me. Thank you, Cindy

 

 

 

Expert:  cfortunato replied 5 years ago.

You are not allowed to use both state and federal exemptions - you must choose one of these, and use either the state or federal exemptions only.

1) Did you use the state or the federal exemptions?

2) When you said "2011" tax refunds, did you mean for the 2010 tax year (refunded in 2011) or the 2011 tax year (refunded in 2012)?

Customer: replied 5 years ago.
I now know I can only use state or federal and I chose state but I could not see any exemptions that seemed to cover tax returns. The tax return would be 2011 which I would recieve in 2012.
Expert:  cfortunato replied 5 years ago.

The Bankrutpcy estate is not entitled to any refund attributable to the period of time after you file your Bankruptcy.

1) When did you file your Bankruptcy?

2) Also, what did the trustee tell you to amend?

Customer: replied 5 years ago.
I filed june 6/23/11. The trustee said to amend my schedules. They said I chose federal and state objections (I fixed that). They said I had non-exempt property and my 2011 tax refunds as well as my interests in stock will be the property of the bankruptcy estate. They said I must amend or they will have to object to my exemptions and I will be required to turn over my non-exempt property. My stocks were under a Federal exemption but I changed it to a state exemption, I used 550.37 subd 24. It was the only one that seemed to fit. Is there another that would be better? I did not see any exemptions listed that seemed to fit tax returns.
Expert:  cfortunato replied 5 years ago.

Is the income tax refund going to be based on taxes withheld from your regular paycheck, or other income.

If other income, what type of income?

Customer: replied 5 years ago.
The income tax is from my regular paycheck but I also have an autistic son who is in my care so I get extra because of him.
Expert:  cfortunato replied 5 years ago.

The 550.37 exemption is not for regular income. The exemption for regular wages is found at 571.922(a), which you can see here:

https://www.revisor.mn.gov/statutes/?id=571.922.

 

 

Customer: replied 5 years ago.
The 550.37 is what I used to protect my stocks. There isn't an issue with my regular wages, the issue is my tax return. Thanks anyway, I can see I need to see an attorney.
Expert:  cfortunato replied 5 years ago.
Taxes that are withheld are taken out of your wages, and are your wages before they are taxes. Taxes that are returned in a refund go back to being wages.
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