Means Test Tips

TRANSPORTATION ADJUSTMENT. Per the IRS Manual.

If your vehicle meets the following requirements you may add $200 to your transportation expense on the means test:
    1. Vehicle is older than six (6) years old.
    2. There is more than 75,000 miles on the vehicle.
    3. It is a personal vehicle.
    4. There is nothing owed against the vehicle.

I think one of the best tips I have ever had is from a friend who said: Rachel, stop and ask yourself if I was the trustee on the case what would I want to look at and ask for when reviewing a case? It does not always work but it is great advice just the same. So if you have a car that you wish to take the transportation adjustment on do something that you can prove to the trustee that it qualifies. Remember post BAPCPA we are working with 3 different levels of trustees. 7 vs 13 vs US Trustee. Each one is of a different mind set, wants and needs. Try and produce something that will satisfy anyone who is reviewing the issue.

For the transportation adjustment I recommend a CarMax appraisal and a copy of the title. The title should show the year of the vehicle and that it is free and clear of any liens. The CarMax appraisal shows trade in value and it is a free written report that documents the mileage. Unless it is a Semi I have never really had to prove that the vehicle is personal in nature other than the testimony of the debtor. Although I did have to stand toe to toe with creditor's counsel to show that a Semi was for business and not personal when I was cramming it down. Never a dull moment anymore in the Bankruptcy arena.


WITHHOLDING TAX

Remember that you should be taking the actual tax that should be withheld. This can either go in your favor or against. If your tax withholding is not accurate than your B22 figures will be false and will probably draw an objection from one of the trustees.

You can use on of the links below to estimate the tax due or double check the withholdings:

    IRS Withholding Calculator.
    Withholding Calculator.
    Tax calculator from Bankrate.com.

More often than not I find my debtors under withholding which in turns increase the drop out amount in B22.

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