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Revision as of 19:38, 14 May 2026
Ask ten people if you can discharge tax debts in bankruptcy and shortly get ten different replies to. The correct answer is that you can, but only if certain tests are met.
Remember, an individual exemption of $3650 is not deducted on tax but on your taxable income. Say for example your filing status is 'married filing jointly' with original taxable income of $100,000. This allows you to be under the marginal tax rate of 25%. Therefore the money you will save on personal exemption is $912.50 (calculation is simple: $3650 multiplied by 25%). For is they spouse, which will be multiplied by two which means you save $1825.
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