Archive for category IRS forms

2005 Bankruptcy Law Changes

Posted by denverheat in IRS forms, bankruptcy, bankruptcy lawyers denver, chapter 7 bankruptcy, denver bankruptcy lawyer on June 14th, 2010

Bankruptcy Denver

Bankruptcy

Bankruptcy lawyers are fully aware of the changes that have happened to both chapter 7 and 13 federal bankruptcy law since 2005 code changes, but the average person using old information from the library to file may not be so lucky. The main difference to the law is that chapter 7 bankruptcy is now harder to file.  States with personal income tax like Colorado make it harder to file without the help of a Denver bankruptcy attorney.

People with high incomes are now no longer eligible for to file for chapter 7 bankruptcy. Those with high incomes might have to file a hybrid that repays some debts with chapter 13. All applicants must now apply for credit counseling in addition to budget counseling like before.
The new rules encourage those with high incomes to repay their debts instead of choosing liquidation through chapter 7.
Under the new laws, anyone with a median income above their state average must pass another hurdle before they can file for chapter 7. This hurdle is called the means test, where the court decides if you have enough disposable income after debts to make chapter 13 payments every month. You and your Denver bankruptcy lawyer will go over your income and see if there is enough left after subtracting expenses and debts.
Most citizens choose chapter 7 if there is any possibility of not meeting these requirements.
A means test calculator is available from most bankruptcy lawyers. Let’s say you are a Denver HVAC company in serious debt but with enough income to meet secured payments without going under. In this case you would probably have to file for chapter 13 protection.
Credit counseling agencies approved by the federal government can be found through your court appointed trustee, or at www.usdoj.gov/ust
The counseling is another step where the court tries to see if bankruptcy is really necessary in your case. Even if the current state of affairs is obviously impossible, counseling is still required… but you do not have to follow the plan they set in place. The agency’s plan will have to be submitted to the court however.
After bankruptcy is filed, you must attend another session on budgeting and finance management. This is the last step before the court wipes out approved debts.
The main effect of the changes is that attorney fees and time and effort involved in bankruptcy has increased. Some lawyers are switching from injury and motorcycle law to bankruptcy because of the increased workload.
One more change to chapter 13 law is that expenses are calculated from IRS allowable expenses, instead of just total expenses.

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Important Divorce Forms

Posted by hawkeye11 in Denver Attorney, IRS forms, denver divorce attorney, denver divorce lawyer on March 22nd, 2010

Unfortunately, a divorce is happening more and more these days.  When a divorce occurs a family is forced to divide their assets and time with their children.  When a family divides their assets, this means all of their finances, property and any other mutual investments.  Even in the simplest of cases, when finances are involved this means federal tax obligations must be taken care of.  This is why it is important to get a Denver divorce Attorney who understands the tax consequences of different situations of a divorce can bring on.  It does not matter how good of a negotiator your attorney is if they do not understand the consequences you will be faced with in taxes. 

There are 3 documents you will want to make sure you have been aware of by your attorney.  The first form being the IRS 2120 Form which is used if there are multiple people claiming a child a dependent.  This form is to help with tax exemption in the event if your spouse also claims the dependant.  The second form is the IRS 8857 Form which gives relief to a spouse from their join tax return if their spouse was audited and penalized.  It is important to find a Denver divorce attorney that completely understands the innocent spouse relief rules to correctly educate their client through negotiation of the divorce.  The last form is the IRS 8379 Injured Spouse claim and Allocation Form.  This form is important to the couple that also filed out a joint tax return prior to the divorce.  When the prior joint return is filed and the refund is used to pay the other spouse for child support, that individual may be considered the “injured Spouse”.  They may fill out the 8379 Form to claim their portion of the tax return.

If you hire an attorney who does not understand how a divorce can affect individual’s taxes, you could miss out on a lot of money.  Make sure to hire a Denver divorce attorney who has experience in divorce cases and tax benefits.

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