What are the IRS standards used on the means test?

They are published expense allowances the Internal Revenue Service issues, and the bankruptcy forms adopt them directly. National Standards cover food, clothing, other items and out-of-pocket health care by household size. Local Standards cover housing, utilities and transportation by region. Other Necessary Expenses is the group of categories where you use your own actual monthly figures instead (11 U.S.C. § 707).

Can I deduct my actual expenses if they are higher than the standard?

Generally not on the standard lines. The form instructs you to deduct the amounts set out in those lines regardless of your actual expense. Later parts of the form do use some actual expenses where they exceed the standard, most visibly additional health care costs above the National Standard allowance that insurance did not reimburse (Bankr. E.D. La. official guidance — Chapter 7 Form Packet).

My income is above the median but my expenses are enormous. Is Chapter 7 closed to me?

Not by that fact alone. Above-median income is the trigger for completing the deduction form, not the end of the analysis. What matters is the figure left after the allowed deductions, multiplied by 60, compared against the statutory thresholds in 11 U.S.C. § 707. Many households with high income and high allowed expenses still work through the full calculation before anything is settled.

Do these expense deductions apply in Chapter 13 as well?

Yes, in a parallel form. Chapter 13 filers calculate disposable income on Official Form 122C-2, which uses the same IRS National and Local Standards on the same lines and follows the same instruction to deduct standard amounts regardless of actual expense (Bankr. E.D. La. official guidance — Chapter 13 Form Packet). The result feeds what the plan must pay rather than whether a presumption of abuse arises.

Who checks the expense figures I put on the form?

The United States Trustee. After reviewing the statement and supporting materials, that office files a statement with the court about whether a presumption of abuse arises, and the clerk sends notice to creditors. If a statement of presumed abuse is filed, the United States Trustee then files a motion to dismiss or convert, or explains why neither is appropriate (Bankr. M.D. Fla. Procedure Manual — Presumption of Abuse - Chapter 7).

Does everyone filing Chapter 7 have to complete the expense side?

No. Individual Chapter 7 debtors file a statement of current monthly income, and the deduction calculation is required only if that income exceeds the median family income for the applicable state and household size (E.D. Mich. LBR 1007-4). Separate provisions can exclude a filer from means testing altogether, including debts that are not primarily consumer debts and certain qualifying military service.

Eligibility & means testing

The Means Test Expense Deductions: What You Can Actually Subtract

On the means test, your expenses are the IRS National and Local Standard amounts plus your actual monthly costs in the categories the IRS calls Other Necessary Expenses, set for the area where you live and your household size (11 U.S.C. § 707). Standard categories are deducted at the published figure regardless of what you actually spend; only certain categories use your real numbers.

Key points

The means test does not ask what you spend; for most categories it asks what the IRS publishes for a household your size in your area.
A handful of categories do use your actual figures, including taxes, required payroll deductions, court-ordered support, childcare and term life premiums.
Household size for the form is the number of people you could claim as exemptions plus other dependents you support, which may differ from who lives with you.
Above-median income is where the calculation starts, not where it ends, because the deduction side of the form has not run yet.
The United States Trustee reviews the completed statement and files a position on whether a presumption of abuse arises.

If your income came out above the median for your state, the means test is not finished with you. The second half of the form subtracts a long list of allowed expenses, and it uses published tables rather than your own budget. This page explains which categories use standard amounts, which use your real numbers, and what changes the result.

How do the means test expense deductions actually work?

The means test runs in two halves. First you calculate current monthly income on Official Form 122A-1, using the average of the 6 full months before you file (Bankr. E.D. La. official guidance — Chapter 7 Form Packet). If that income exceeds the median family income for your state and household size, you then complete the deduction side on Form 122A-2.

The deductions are not a budget you write yourself. Congress tied them to expense allowances the IRS publishes: National Standards, Local Standards, and Other Necessary Expenses, measured for the area where you live and in effect on the date of the order for relief (11 U.S.C. § 707). The form tells you to deduct the standard amounts regardless of your actual expense, and to use actual figures only in the categories that call for them. What remains after the deductions, multiplied by 60, is the number the presumption of abuse is measured against.

What changes how much you can deduct?

Four things move the number, and none of them is how tight the month feels.

Household size comes first. The form asks for the number of people who could be claimed as exemptions on your federal income tax return, plus any additional dependents you support, and it warns that this figure may differ from the number of people in your household.

Where you live comes second, because the Local Standards for housing and transportation are set by region and metropolitan statistical area. Age matters in one narrow place: the out-of-pocket health care allowance is split between people under 65 and people 65 or older, and the older allowance is higher.

Finally, whether you make vehicle payments changes the transportation deduction. The ownership or lease expense may not be claimed if you make no loan or lease payments, it is limited to two vehicles, and your average secured payment is subtracted from the standard allowance (Bankr. M.D. La. filing packet — Ch13_Vol_Petition_ Package-2026.pdf).

What does federal law say about allowable expenses?

The controlling text is 11 U.S.C. § 707. It provides that the debtor's monthly expenses "shall be the debtor's applicable monthly expense amounts specified under the National Standards and Local Standards, and the debtor's actual monthly expenses for the categories specified as Other Necessary Expenses issued by the Internal Revenue Service for the area in which the debtor resides, as in effect on the date of the order for relief." Those amounts cover the debtor, the debtor's dependents, and a spouse in a joint case who is not otherwise a dependent, and the statute adds that they "shall include reasonably necessary health insurance, disability insurance."

Two structural points follow. The allowances are federal and published, so the court is generally applying tables rather than exercising discretion over your grocery bill. And the statute carries dollar thresholds that the result is compared against, which are adjusted periodically by notice of the Judicial Conference of the United States (11 U.S.C. § 707).

Where do state or local rules differ?

The expense categories themselves are federal and identical everywhere. What varies is the dollar value attached to them. The IRS Local Standards for housing and transportation are set by region, and the median income comparison that decides whether you complete the deduction form at all is set state by state. Those state-level figures live on our state pages rather than here.

Local bankruptcy rules generally control timing rather than substance. Districts commonly require the statement of current monthly income with the petition or within 14 days after it, with the means test calculation attached if income exceeds the applicable median (E.D. Mich. LBR 1007-4).

One genuine structural difference exists. Cases filed in Alabama and North Carolina use a separate administrative expense multiplier published by the Judiciary, because those districts have bankruptcy administrators rather than United States Trustees (U.S. Bankr. Ct. D. Ariz., Instructions for Completing the Bankruptcy Petition, Schedules and Statements).

What does this look like in practice?

Picture someone whose gross pay is above the state median, who supports several children, pays court-ordered child support, and drives a financed car. On the income side, the test looks discouraging. On the deduction side, the National Standards for food, clothing and out-of-pocket health care scale with household size, the court-ordered support is deductible, childcare is deductible at the amount actually paid, and the vehicle ownership allowance applies because there is a loan.

That is the ordinary shape of the high-income, high-expense case, and it is why the income figure alone rarely settles the question. The form exists to convert a real household into a standardised one so that cases can be compared. Whether the result lands above or below the statutory thresholds depends on the arithmetic on the second half of the form, which most people have not yet done when they conclude the answer is already decided.

Where each means test deduction amount comes from
Expense category	How the amount is set
Food, clothing and other items	IRS National Standard for your household size, deducted regardless of actual spending
Out-of-pocket health care	IRS National Standard per person, split between under 65 and 65 or older
Housing, utilities and transportation	IRS Local Standard for your census region or metropolitan statistical area
Taxes	Your actual monthly federal, state and local taxes, reduced by any expected refund divided by 12
Involuntary payroll deductions	Your actual required deductions, such as union dues and uniform costs
Term life insurance	Your actual premiums for your own term policy
Court-ordered payments	Your actual monthly court-ordered support, excluding past due amounts
Childcare	Your actual monthly childcare cost, excluding elementary or secondary tuition
Secured debt payments	Total contractually due to each secured creditor in the 60 months after filing, divided by 60

What documents and information are involved?

Most of the work here is gathering, not arguing. You need income records covering the 6 full months ending on the last day of the calendar month before you file, because that is the window current monthly income is drawn from (11 U.S.C. § 101). You need the IRS National and Local Standards for your area; courts direct filers to the Department of Justice means testing page, and note that the information may also be available at the bankruptcy clerk's office if you have no internet access (U.S. Bankr. Ct. D. Ariz., Instructions for Completing the Bankruptcy Petition, Schedules and Statements).

Then you need your own figures for the actual-expense categories, and the contractual amounts due on every secured debt.

Tax withholding, and any refund you expect to receive
Required payroll deductions, such as retirement contributions your job mandates, union dues and uniform costs
Premiums for your own term life insurance
Court-ordered spousal or child support, separated from any past due amounts
Education required as a condition of your job, and childcare costs
Health care costs above the standard allowance that insurance did not reimburse (Bankr. E.D. La. official guidance — Chapter 7 Form Packet)

What should you ask a lawyer about the expense deductions?

This is the part of the paperwork where a small input error changes the outcome, and it is reviewed by someone. The United States Trustee examines the statement and other materials filed by an individual Chapter 7 debtor and files a statement with the court on whether a presumption of abuse arises, generally within ten days after the first meeting of creditors (Bankr. M.D. Fla. Procedure Manual — Presumption of Abuse - Chapter 7).

A lawyer in your district can also tell you whether the presumption is the live issue in your case at all. Debts that are not primarily consumer debts, and certain qualifying military service, place a filer outside the presumption entirely (Bankr. M.D. La. filing packet — Ch7_Vol_Petition_ Package-2026.pdf). We are not a law firm and this is not legal advice, so treat these as preparation for that conversation.

Which of my expenses fall into the standard categories, and which use my actual figures?
Does my household size for the form differ from the number of people living in my home?
How is a non-filing spouse's income and expenses handled on my form?
If a presumption of abuse arises, what special circumstances can be raised, and how are they documented?
Would a Chapter 13 plan treat these same expenses differently (11 U.S.C. § 1322)?

Frequently asked questions

What are the IRS standards used on the means test?: They are published expense allowances the Internal Revenue Service issues, and the bankruptcy forms adopt them directly. National Standards cover food, clothing, other items and out-of-pocket health care by household size. Local Standards cover housing, utilities and transportation by region. Other Necessary Expenses is the group of categories where you use your own actual monthly figures instead (11 U.S.C. § 707).
Can I deduct my actual expenses if they are higher than the standard?: Generally not on the standard lines. The form instructs you to deduct the amounts set out in those lines regardless of your actual expense. Later parts of the form do use some actual expenses where they exceed the standard, most visibly additional health care costs above the National Standard allowance that insurance did not reimburse (Bankr. E.D. La. official guidance — Chapter 7 Form Packet).
My income is above the median but my expenses are enormous. Is Chapter 7 closed to me?: Not by that fact alone. Above-median income is the trigger for completing the deduction form, not the end of the analysis. What matters is the figure left after the allowed deductions, multiplied by 60, compared against the statutory thresholds in 11 U.S.C. § 707. Many households with high income and high allowed expenses still work through the full calculation before anything is settled.
Do these expense deductions apply in Chapter 13 as well?: Yes, in a parallel form. Chapter 13 filers calculate disposable income on Official Form 122C-2, which uses the same IRS National and Local Standards on the same lines and follows the same instruction to deduct standard amounts regardless of actual expense (Bankr. E.D. La. official guidance — Chapter 13 Form Packet). The result feeds what the plan must pay rather than whether a presumption of abuse arises.
Who checks the expense figures I put on the form?: The United States Trustee. After reviewing the statement and supporting materials, that office files a statement with the court about whether a presumption of abuse arises, and the clerk sends notice to creditors. If a statement of presumed abuse is filed, the United States Trustee then files a motion to dismiss or convert, or explains why neither is appropriate (Bankr. M.D. Fla. Procedure Manual — Presumption of Abuse - Chapter 7).
Does everyone filing Chapter 7 have to complete the expense side?: No. Individual Chapter 7 debtors file a statement of current monthly income, and the deduction calculation is required only if that income exceeds the median family income for the applicable state and household size (E.D. Mich. LBR 1007-4). Separate provisions can exclude a filer from means testing altogether, including debts that are not primarily consumer debts and certain qualifying military service.

Sources

11 U.S.C. § 707 — Dismissal of a case or conversion to a case under chapter 11 or 13 · official source
11 U.S.C. § 101 — Definitions · official source
11 U.S.C. § 1322 — Contents of plan · official source
Bankr. E.D. La. official guidance — Chapter 7 Form Packet
Bankr. E.D. La. official guidance — Chapter 13 Form Packet
Bankr. M.D. La. filing packet — Ch13_Vol_Petition_ Package-2026.pdf
Bankr. M.D. La. filing packet — Ch7_Vol_Petition_ Package-2026.pdf
E.D. Mich. LBR 1007-4
U.S. Bankr. Ct. D. Ariz., Instructions for Completing the Bankruptcy Petition, Schedules and Statements
Bankr. M.D. Fla. Procedure Manual — Presumption of Abuse - Chapter 7

By Antonio G. Jimenez, Esq. · Florida Bar No. 21022

Last reviewed July 26, 2026 · Sources verified July 26, 2026 · How we verify

Every figure on this page is drawn from a primary legal source and checked against our canonical legal database before publication. Bankruptcy.law is not a law firm and does not provide legal advice.

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