Deductions

Means Test
Allowable Expense Deductions

IRS Standards, actual payments, and special deductions that can make the difference between qualifying and not.

Types of Deductions

If you're above the state median and must complete Part 2 of the means test, these deductions reduce your disposable income. The lower your disposable income, the more likely you qualify for Chapter 7.

IRS National Standards

These are set amounts based on household size for food, clothing, personal care, and other necessities. You use the IRS amount regardless of your actual spending. For 2026, a single person gets approximately $785/month; family of 4 approximately $1,673/month.

IRS Local Standards -- Housing and Utilities

These vary by county and household size. They cover mortgage/rent and utility costs. You use the IRS amount OR your actual payment, depending on the form instructions. In high-cost areas, these deductions can be substantial.

IRS Local Standards -- Transportation

Ownership costs (car payment or lease) and operating costs (gas, insurance, maintenance) have separate allowances. If you own a car free and clear, you can still deduct operating costs but not ownership costs.

Actual Expense Deductions

Some expenses use actual amounts: mandatory payroll deductions (taxes, Social Security), health insurance premiums, disability insurance, term life insurance, court-ordered payments (child support, restitution), child care, education for employment, and care of elderly or disabled household members.

Secured Debt Payments

Your average monthly payment on secured debts (mortgage, car loan) divided by 60 is deducted. If you pay $1,500/month on your mortgage and $400/month on your car, that's $1,900/month in deductions.

Special Circumstances

If standard deductions don't capture your actual situation, you can claim "special circumstances" that justify additional expenses. Common examples: medical conditions requiring ongoing treatment, necessary educational expenses for a disabled child, or natural disaster expenses. You must document these thoroughly.

Frequently Asked Questions

What expenses can I deduct on the means test?
IRS National Standards (food, clothing), IRS Local Standards (housing, transportation), actual secured debt payments, taxes, insurance premiums, child care, and other documented expenses.
Do I use actual expenses or IRS Standards?
It depends on the category. Some expenses use the IRS standard amount regardless of actual spending. Others use actual amounts. The means test form (122A-2) specifies which applies.
What are special circumstances deductions?
Additional expenses not captured by standard categories. You must demonstrate they are reasonable and necessary. Examples: medical treatment, disabled family member care, or extraordinary commuting costs.
Can I increase my deductions to pass the means test?
You should claim all legitimate deductions. However, fabricating or inflating expenses is fraud. An experienced attorney can identify deductions you may have missed.

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Last updated: April 2026. Not legal advice.

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