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Revision as of 08:40, 13 August 2026

Ask ten people seeking can discharge tax debts in bankruptcy and you get ten different answers. The correct answer is that you can, but in the event that certain tests are adjoined.

Contributing a deductible $1,000 will lower the taxable income in the $30,000 yearly person from $20,650 to $19,650 and save taxes of $150 (=15% of $1000). For the $100,000 1 year person, his taxable income decreases from $90,650 to $89,650 and saves him $280 (=28% of $1000) - almost double the amount!

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