Tax season is right around the corner and this is a common question regarding tax refund. If you live in California and can use California exemption, chances are, you can keep your tax refund. The amount of property you can keep through bankruptcy is governed by exemption laws. Some states have its own exemptions (including California). Other states use the Federal exemption.
In California, clients have the option of using either the 703 or 704 exemption. 703 exemptions are great for clients without equity in their home. 703 has what is known as “wild card” of $21,825 that can be applied towards any property of the debtor. This includes potential refund from either the IRS or Franchise Tax Board (FTB). Certain items have its own separate exemptions, hence you do not need to use your Wild Card to protect it.
Let’s take an example. Suppose Jane has Continue Reading »
