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Welcome to another episode of the Dr. Friday Radio Show! In this episode Dr. Friday Show emphasizes one key theme: planning ahead! Whether you’re considering selling stock, dealing with inherited property, or navigating retirement accounts, making decisions before the fact can save you thousands in taxes. Dr. Friday breaks down complex topics like capital gains, recapture of depreciation on real estate, and the rules around 1031 exchanges. Plus, she provides a critical update for all Tennessee residents regarding the federal disaster extension and what it means for your 2024 tax filing and 2025 estimated payments. Tune in to hear answers to listener questions on Roth conversions, overseas property, and IRA contributions.

Summary Points The Power of Planning Ahead: Dr. Friday shares a client story illustrating how planning a stock sale across two tax years (2025 and 2026) can keep you in a lower capital gains bracket and save thousands of dollars. * Navigating Capital Gains: Learn the difference between short-term and long-term capital gains and how you might qualify for a 0% tax rate on long-term gains if your income is below certain thresholds. * Understanding Real Estate Tax Implications: Dr. Friday discusses often-overlooked taxes like the “recapture of depreciation” on rental properties and how rezoning an inherited property after the owner’s passing can create a massive, unexpected tax bill. * Big News for Tennesseans: Due to a federal disaster declaration, the deadline for filing 2024 taxes and making the first three 2025 quarterly estimated payments has been extended to November 3, 2025. This also extends the deadline for 2024 contributions to IRAs, SEPs, and HSAs. * IRS Compliance is Key: You can’t make a deal or payment plan with the IRS unless you are in compliance. Dr. Friday explains how this applies to offers in compromise and what to do if you receive a CP-2100A notice about incorrect 1099 information. * Listener Questions Answered: Can you do a 1031 exchange for an overseas property? Do you need to make estimated payments after a Roth conversion? Can you contribute to both a Traditional and a Roth IRA? Dr. Friday answers these and more. * Common Pitfalls to Avoid:* Are you and your spouse filling out your W-4 forms correctly? A simple mistake on the “spouse also works” checkbox is a common reason W-2 employees end up owing taxes.

Episode FAQQ: If I do a Roth IRA conversion this year that will cause me to owe taxes, do I need to make a quarterly estimated payment to avoid a penalty?

A: Not necessarily. The IRS requires you to pay in either 90% of the current year’s tax or 100% of the prior year’s tax liability. If your regular income and withholdings already meet 100% of what you owed last year, you can typically pay the extra tax from the conversion when you file without a penalty.

Q: Can I sell a property in the U.S. and use a 1031 “like-kind” exchange to buy a property overseas and defer the tax?

A: No. A 1031 exchange is only permitted for properties located within the United States. You would have to pay capital gains tax on the sale of the U.S. property.

Q: Do I need to report large vacation expenses to the IRS, like if I take my whole family on a trip?

A: No. Spending your own money on a family vacation is not a taxable or reportable event. It is considered a personal expense, not a gift or income.

Q: I contribute to a traditional IRA for the tax break. Can I also start and contribute to a Roth IRA?

A: Yes, you can contribute to both a traditional IRA and a Roth IRA, subject to income limitations for the Roth. However, only the traditional IRA contribution will give you an immediate tax deduction. The Roth IRA contribution uses after-tax money but grows tax-free for retirement.

Full Transcription00:00-00:07No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes.00:07-00:10She’s the how-to girl. It’s the Dr. Friday Show.00:10-00:22If you have a question for Dr. Friday, call her now, 737-WWTN. That’s 737-9986.00:22-00:27So here’s your host, financial counselor and tax consultant, Dr. Friday.00:27-00:33G’day, I’m Dr. Friday and the doctor is in the house.00:33-00:38We are here live, so if you want to join the show, you can.00:38-00:47615-737-9986. 615-737-9986.00:47-00:52Taking your calls so that we can make sure that we can hopefully answer any questions.00:52-00:57I’m an enrolled agent licensed with the Internal Revenue Service to do taxes and representation.00:57-01:11And so if you’ve got questions about taxes, maybe you’ve got a situation where you might have received some sort of inheritance, or maybe you’re thinking about selling something and you’re not sure what is the best way to go about it.01:11-01:13Do you even owe any taxes on it?01:13-01:28Those are the kinds of questions that we often get, and those are good ones, because if I can help someone before they go and sell stock or sell a house or do anything like that, then it makes it a lot easier for us to be able to save tax dollars.01:28-01:50Unfortunately, sometimes people will, you know, join after they’ve already sold something or after they’ve had a couple people where they sold their primary homes, and they were under the impression that the tax law was still the prior tax law, which is as long as in two years they reinvested it into another house, which is not the current tax law that we’re operating under.01:50-02:00So just making sure that, you know, you understand what the current tax laws are, how they’re going to affect you, and what you’re going to do to make sure that you have the best information.02:00-02:05Because sometimes you’ve got to do what you’ve got to do, but other times we’ve got some windows.02:05-02:13Like I had one of my regular clients, tax clients come in, and she basically just called and she’s like, I need to sell some stock.02:13-02:22She had a fairly healthy capital gain per share, and she wanted to try to figure out what was going to keep her in the 15% tax bracket.02:22-02:26She still works and she still has other, but she needed the additional capital.02:26-02:39And so we were calculating what the capital gains that keep her as a single individual, her total income, including the sale of her stock, needed to stay under $200,000.02:40-02:51And that way, if she, and she was thinking that she could sell more of it, but she wasn’t able to, but she can sell some now and then some come January 1st to meet her goals.02:51-02:59And it wasn’t so much in this particular scenario is an individual wanting to have so much money to go do something or pay off something actually.02:59-03:01But sometimes that’s the way it works.03:01-03:08But if you can do it in advance, she actually didn’t need the money for nearly eight months or a year, I think she said.03:08-03:10And so she was thinking way in advance.03:10-03:17So gave us the window to have 25 and 26 at our fingertips to be able to say, okay, here’s what we have.03:17-03:19Here’s what our options are.03:19-03:21Here’s how much we’re going to pay in taxes.03:21-03:34Because if she had done what she initially thought she was going to pay another 3.8% tax on more than 50% of her stock sale, which would have added up to, you know, at least $10,000.03:35-03:43So, you know, by just making sure she does a far enough advance, defers and makes it happen, then there is ways of making that work.03:43-03:50So, again, putting some thought in advance of when you need something can be a good idea.03:50-03:57Sometimes I have people that, you know, kids going off to college, cars breaking down and needing to buy new ones.03:57-04:03These are all, I don’t want to say unexpected, but it is one of those things that we have with our investments, right?04:03-04:05Sometimes the money’s in the investment or sometimes.04:05-04:09And I would definitely suggest speaking to your financial planner.04:09-04:12Don’t just go and self-do.04:12-04:27I mean, at least talk to them because they may actually have options, suggestions that would be a way of you actually either borrowing, which would be less expensive than paying the capital gains tax or spreading the tax again.04:27-04:51I mean, in some cases, we’re able to do a 0% capital gains tax, which is awesome because, you know, as long as they’re a single person and you keep yourself in the 12 to 15, well, 12% tax bracket, which basically is $55,000 and a married couple about 110, then you don’t have to worry about paying any tax on long-term capital gains.04:51-04:58I want to make sure I’m saying that because short-term capital gains is taxed at ordinary income rates and there is no exclusion on that.04:58-05:07So, again, if you’ve got questions, maybe you’ve got a situation where you’re thinking about doing some purchasing or selling of something.05:07-05:15If you’ve bought real estate, keep in mind that besides the capital gains tax, we also have what’s called recapture of depreciation.05:15-05:19I have had a number of clients that do not think about that aspect.05:19-05:27Sometimes when they’re doing the math, they’re thinking, okay, well, I’ve sold the, I brought the house for this and I’m selling it for this.05:27-05:32So I’m going to pay this much tax, but they’ve had it as a rental for 10 years.05:32-05:37And now they have recapture depreciation for another 20 or $30,000.05:37-05:49And so it’s just one of those situations where you definitely don’t want to have to worry about, excuse me, that kind of situation coming up.05:51-05:53So, sorry, I’ve got a tickle in my face.05:53-05:57There we go.05:57-06:04So anyway, so if you’re working on that kind of situation, you want to make sure that you are thinking about all the moving parts.06:04-06:12So if you’ve got real estate, maybe even inherited real estate, you might be able to get zero tax on many times.06:12-06:15But I have had one that came up recently.06:15-06:19The family inherited a piece of property.06:19-06:22It was a primary home for the person that passed away.06:22-06:28And so the house appraised at the time of their passing for a said dollar amount, let’s just say $200,000.06:28-06:40But the property actually during this lifetime or the parent, anyways, they were able to get it rezoned to commercial, which then changed the whole value of the property.06:40-06:43And it was done after the person passed away.06:43-06:47So it was zoned residential when the person was living there.06:47-06:54And when they passed away, one of the beneficiaries or someone suggested they could get it zoned and they got rezoned.06:54-07:00And they were able to sell it for three times what they would have gotten for the house had it been just residential.07:00-07:09But now they have a much larger capital gain situation because you can’t go backwards and say, well, you know, when she died, it was still it was still commercial.07:10-07:17It wasn’t because it hadn’t been zoned that even if it was allowed to be commercial, it still hadn’t changed.07:17-07:21So sometimes reempting that kind of thing, thinking, hey, you know what?07:21-07:23Mom and dad live right off this main road.07:23-07:26Is this actually everything around them is almost commercial now?07:26-07:29We have a lot of that, like in Franklin and some of those areas.07:29-07:39And if it’s commercial, then you’re sitting there thinking, wait, maybe while they’re living there, maybe we should take a look and see if we need to rezone.07:39-07:48Anything because if it’s done during their lifetime and then we inherit at that zoning, then we’re allowed to be able to not have to worry about capital gains.07:48-07:53And these people, this would have saved, you know, tens of thousands of dollars in tax.07:53-07:55But, you know, no one really thought about it.07:55-07:56And it wasn’t.07:56-08:08But I’m putting in your head now to think about think about what options you might have had, what you were thinking about doing and then being able to move forward with that, because it’s very important to be able to, you know, save every tax dollar you can.08:09-08:10So we’re dealing with that.08:10-08:17There is, I had someone ask me, June 15th is the second estimated payment.08:17-08:25But keep in mind, in Tennessee, you can, so let me discourage you, you can make your second estimated payment.08:25-08:27You may have already made your first.08:27-08:29You can make it.08:29-08:31There’s nothing saying you cannot make it.08:31-08:33But we are under a federal disaster extension.08:33-08:42And so everybody, most of us that file estimates will be waiting until November 3rd to make our first three estimates.08:42-08:43So, and we won’t be late.08:43-08:52And that way we can use the money to hopefully grow and deal with versus not being able to worry about.08:52-09:01So if you are an individual that lives in Tennessee, we do have the ability to extend our current estimates.09:01-09:16It also goes with, if you haven’t filed your 2024 yet, and many of my clients haven’t working on those, those will also go into play where a lot of times, if you haven’t made the payment, there is some extension there of making that payment.09:16-09:23So you’ll be able to pay your 2024 as well as your first three quarterly estimates all before November 3rd.09:23-09:28So some people just rather get the money out of the bank and go with it.09:28-09:29Totally hear you.09:29-09:30And I understand that.09:30-09:34But, you know, some people are like, wait, I don’t want to give the money any earlier than I have to.09:34-09:38I don’t want Uncle Sam to have a dollar more than they need to.09:38-09:41And I personally agree with that as well.09:42-09:54So personally, my theory is the second, but, you know, everyone, I understand that you don’t want to have the money where you’re afraid that if it gets spent, you won’t have the money when it comes time to making your estimated payment.09:54-09:57So you want to avoid that if you, if you can.09:57-10:00No penalties is what we’re trying to avoid.10:00-10:01No interest, no penalties.10:02-10:05So if you need help doing taxes, you can certainly give our office a call.10:05-10:12But today you can join the show 615-737-9986.10:12-10:18615-737-9986 number here in the studio.10:18-10:20We’re in a few seconds or a few minutes.10:20-10:22We’ll be taking our first break.10:22-10:25But if you want to join the show, you can ask questions about taxes.10:25-10:30Like I said, I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.10:30-10:33That’s what I’ve been doing for the last 30 years.10:33-10:38And if you have questions and you’re just not sure which direction, how do you get started?10:38-10:43Maybe you’re not in compliance or maybe you haven’t filed taxes for a while or a friend hasn’t filed taxes.10:44-10:51Doing back work and doing taxes is what the main thing that we really try to do to just try to get everything.10:51-10:53Because you can’t make it.10:53-10:54I don’t care what anyone tells you.10:54-11:03I know there’s a lot of organizations on the radio and stuff, but you cannot make a deal, even a payment plan with the IRS, unless you’re in compliance.11:04-11:09I was talking actually to a really nice revenue person the other day.11:09-11:18And the gentleman I was representing hadn’t paid office 2023 and hadn’t made proper estimates for 2024.11:18-11:23I’m sorry, hadn’t paid office 24 and hadn’t made 2025 estimates.11:23-11:28And so I was able to give her the fact that we were under the federal disaster extension.11:28-11:35She looked it up and realized this particular gentleman was still in compliance because of that extension.11:35-11:37But normally he wouldn’t know what have been right.11:37-11:44He would have had to be making his first estimate should have been made and he need to be on a payment plan, at least for the 2024 taxes.11:44-11:52So again, just making sure that you you stay in compliance because then the IRS is really more willing to work and to deal with things.11:52-11:58If you have that ability to stay and say, hey, wait, I’ve paid everything I’m supposed to.11:58-11:59Especially staying current.11:59-12:11I have an offer in compromise I did back in, I think it was 2019, 2020, and just received a letter from the IRS saying that person hadn’t filed their 2020, 2021 or 2022 tax returns.12:11-12:14Therefore, they’re pulling the offer in compromise.12:14-12:16Again, you got to play the rules.12:16-12:17Otherwise, I had a great deal.12:17-12:21And now she may end up having to go back and pay with additional penalties and interest.12:21-12:23We’re going to take our first break.12:23-12:24You can reach us here.12:24-12:27615-737-9986.12:27-12:29We’ll be right back with the Dr. Friday Show.12:29-12:37All righty.12:37-12:38We are back here.12:38-12:38Sorry.12:38-12:39We’re here to speak.12:39-12:40Leave it.12:40-12:41This is Dr. Friday.12:41-12:42We’re Dr. Friday Show.12:42-12:44We’re back here live in studio.12:44-12:45It looks like Dean’s on the line.12:45-12:46I’m not sure what he needs.12:46-12:48But let’s see if we can get Dean to join the show.12:48-12:51Hey, Dean.12:51-12:52What’s going on?12:52-12:57I want to ask a question about a Roth conversion in the current year.12:57-13:06Our tax situation, our math indicates that we’ll probably get a refund when we file next April.13:06-13:16But if we do the Roth conversion that we have on our mind, then we would be in an owing situation next April.13:16-13:20It’s a swing of a few thousand dollars.13:20-13:26And I’m curious if I do this right after, let’s say, the middle of June.13:26-13:34Does the IRS expect me to do some type of payment on the quarterly basis?13:34-13:35That kind of thing.13:35-13:40So they basically expect you to pay 100% of what you owed the year before.13:40-13:47So if your balance in 2024, let’s just say you owed them.13:47-13:51I mean, the total tax due was $5,000 total taxes.13:52-13:58And as long as you paid in $5,000 again in 2025, then there shouldn’t be a penalty.13:58-14:04But I don’t know if your income goes up and down, right?14:04-14:06So if 2024 was a big year.14:06-14:08It was.14:08-14:12It’s pretty much straight line from year to year.14:12-14:12Okay.14:12-14:13We’re retired.14:14-14:19And I just wanted to make sure we wound up with a refund for 2024.14:19-14:25And we would have one if we don’t do the Roth conversion again.14:25-14:33But I just wanted to make sure that they weren’t going to penalize us next April because we didn’t submit something in the current year.14:33-14:33Yeah.14:33-14:38You should be fine as long as you pay in what you normally would pay in.14:38-14:39This is an exception.14:39-14:45Now, 2026 will be more challenging only because you’ll have a higher year in 2025 with the conversion.14:45-14:49But if you go back to your normal straight line, you’re getting refunds anyways.14:49-14:50You know what I mean?14:50-14:52You’re leaving money on the table per se.14:52-14:54So it should not create any kind of conflict.14:54-14:56But you should be good based on what you’re saying.14:56-14:57Great.14:57-14:59Thank you for your help.14:59-14:59No problem.14:59-15:00Thanks for calling.15:00-15:01All right.15:01-15:04You are listening to the Dr. Friday show.15:04-15:06We are live here in studio.15:06-15:14And so if you want to join us, you can at 615-737-9986.15:14-15:18615-737-9986.15:18-15:23And I would say that one of the things Dean brought up, and it’s a smart thing to do.15:23-15:30Again, I’m always trying to tell people the best thing about this show and what I hope to achieve is actually just making people think a little bit.15:30-15:32Before they do something.15:32-15:45Mainly just, you know, hey, if we want to do a conversion or want to do, we want to go on vacation and we need, or, you know, I have some clients that want to take their grandkids and their kids and they want to have these big family vacations.15:45-15:48And sometimes they have to move money around to accomplish that.15:48-15:51Nothing wrong with any of it.15:51-15:58You just have to make sure that whatever you choose to do, you do it with the idea that you understand how the tax dollars are going to work.15:58-15:58Right?15:58-16:01I mean, and if in this gentleman’s case, he’s already worked the math.16:01-16:02He knows that he’s going to owe the money.16:02-16:08He’s preempting that concept in his head, or at least on the table where he’s worked out the numbers.16:08-16:15And so when the tax time comes and he prepares his taxes, he knows he doesn’t have any kind of issue.16:15-16:21It’s not just something that is sitting there, but he also understands that, hey, I’m going to have to write a check for Uncle Sam.16:21-16:29Because the worst part about doing taxes usually is telling somebody that did not expect to have to pay is that they owe money.16:29-16:35You know, I know that some people probably think there’s a perfect ought to taxes.16:35-16:40And, I mean, numbers are numbers, but I won’t say there’s a perfect ought to it.16:40-16:42All right, let’s hit Sam before we hit the next break.16:42-16:45Hey, Sam in the borough, what’s happening, my friend?16:45-16:47Hey, Dr. Friday.16:47-16:49Thank you for taking my call.16:49-16:50Thanks for calling.16:51-16:55So my question is, I have property here.16:55-17:01If I sell this property and buy property overseas, can I do the exchange?17:01-17:09No, 1031 exchanges are only allowed in the United States is what I was told when that came up with another client.17:09-17:14Okay, so I cannot do it with a property overseas.17:14-17:19No, yeah, you’d have to buy something here with the 1031.17:19-17:22They don’t allow for the overseas purchase.17:22-17:26I guess that probably makes sense since you’re deferring taxes to buy something overseas.17:26-17:34But, yeah, great question, though, because I’ve had a couple people ask me that same thing over the last couple of years.17:35-17:42Okay, and for rental properties overseas, do we treat them like rentals here in the United States?17:42-17:43We do.17:43-17:46We have to report their income on our taxes.17:46-17:50We have to report their income on our taxes, and then you may get a foreign tax credit, depending on which countries they are.17:50-18:00And if you’re having a file in those countries, like in London and places like that, you know, you’re paying taxes in London, then you may get credit here in the United States for foreign tax credit.18:01-18:02Okay.18:02-18:02Okay.18:02-18:04Thank you so much.18:04-18:05Thank you for listening.18:05-18:06Thanks, Sam.18:06-18:06All right.18:06-18:09We’re going to, if you have a question, that’s great.18:09-18:10You can join the show.18:10-18:14615-737-9986.18:14-18:18615-737-9986.18:19-18:30For any of you guys that have not heard me before or understand what Sam and I was talking about, a 1031 exchange is what some people might also be referred to as a like-kind exchange.18:30-18:39So if you have a piece of real estate, be it residential or something other than your primary, maybe a rental.18:39-18:40It doesn’t have to be a rental.18:40-18:41It could be a second home.18:42-18:50But a piece of real estate that you want to sell, and maybe you have quite a bit of capital gains in that property if you sell it.18:50-18:53So by doing that, you can do what’s called an exchange.18:53-18:57And basically, you go buy another property for the same value of the property that you sold.18:57-19:03So if you’re selling a property for $500,000, you have to go spend another $500,000.19:03-19:13And that’s where it gets a little bit more complicated for some clients because they’re really wanting to not have to go spend that much money if the house is appreciated.19:13-19:17But you do have the ability to spend it on multiple properties.19:17-19:19So I think it’s up to three properties.19:19-19:25And you do want to touch base with an attorney that handles, usually it’s real estate attorneys that will handle 1031 exchanges.19:26-19:28And then that way you have a way.19:28-19:37But it is a way of keeping your tax dollars working for you, not always just feel like you’re paying the tax in advance.19:37-19:40I know that that was at one point back when Biden was in office.19:40-19:41It was one of them.19:41-19:44He was trying to take off the tax books.19:44-19:49He felt it was only useful for people that were wealthy.19:49-20:01But I mean, I would say most of us working people, if you have a way of taking your rental and upgrading it or not having to pay tax and keep growing it, just makes sense.20:01-20:04You know, I mean, if you want to stay in the rental or land business.20:04-20:09I mean, again, I have some people that basically are like, I’ve been doing it for 30 years.20:09-20:10I’m done.20:10-20:11I don’t want to be doing it anymore.20:11-20:17I don’t need to keep investing into real estate because it’s a little crazy sometimes.20:17-20:18I’ll be honest.20:18-20:25I know myself, I have a number of pieces of property and only one of them is out of state.20:25-20:25Thank goodness.20:25-20:28And would probably love to get rid of that property.20:28-20:29But the rest are in state.20:29-20:32But there’s not, you know, they’re good investments.20:32-20:33It’s another source.20:33-20:35I look at it as anything else.20:35-20:47And like I say, talk to your financial advisors because, you know, I will say many financial advisors will tell you that rental real estate does not usually produce as well as an investment.20:47-20:48I don’t know if I agree with that.20:48-20:52But I’ve always been a big person in diversifying.20:52-20:52Okay.20:52-20:55I’ve got so much money in stocks and bonds.20:55-20:57I need to have some money in dirt.20:57-21:00All of it will come back and play, you know, in the right direction.21:00-21:10And that’s the important part because I think, at least from my personal opinion, now this is not tax advice or definitely not financial advice.21:10-21:21Again, anytime you’re making these kind of decisions, you definitely want to do those with the help of a financial planner because they basically take in much more than just a one-time situation.21:21-21:26They’re looking at a five-year plan, when do you want to retire?21:26-21:28You know, what’s your lifestyle like?21:28-21:31How do you plan to do things with your lifestyle, et cetera, et cetera.21:31-21:33So you definitely want to talk.21:33-21:36Hopefully that person will understand some of the taxes, but who knows?21:36-21:41Let’s get Bertha on real quick and see if we can’t get her before the break.21:41-21:42That way she doesn’t have to wait through.21:42-21:44Hey, Bertha, this is Dr. Friday.21:44-21:45How can I help?21:45-21:48Is it Bertha?21:48-21:49Bertha.21:49-21:50I’m sorry.21:50-21:53Maybe I’m saying it wrong.21:53-21:55This is Dr.21:55-21:55Friday.21:55-21:56Can you hear my voice?21:56-22:00All right.22:00-22:00I’m not too sure.22:00-22:04We’ll come back to her after the break, I guess, because I don’t hear her.22:04-22:07And maybe I’m not saying.22:07-22:08Hey, this is Friday.22:08-22:09Can you hear me?22:09-22:11Yes, ma’am.22:11-22:12I had a question.22:12-22:15I heard you speaking of vacations a while ago.22:15-22:24Do you have to report to the IRS if you take your whole family on vacation and spend a lot of money or anything like that?22:24-22:25No, you do not.22:25-22:26You do not.22:26-22:37Normally, when I get involved, it’s usually when my clients have to find a way of paying for that vacation, be it selling stocks or moving money around.22:37-22:39But no, that is not a tax.22:39-22:43I mean, if you go on vacation with someone that’s not gifting, it is nothing.22:43-22:46It’s just a family getting together and enjoying themselves.22:46-22:48So no, it’s not a tax situation.22:48-22:50Thank you so much for your time.22:50-22:51Enjoy your show.22:51-22:52Thank you, sweetie.22:52-22:52Hey, you too.22:52-22:54Thanks.22:55-22:55Okay.22:55-22:56Thank you.22:56-23:00I’m glad we got her on and off before because that was a simple question.23:00-23:02And I don’t mean to confuse you.23:02-23:06Sometimes, you know, I get talking and sometimes I just obviously confuse people.23:06-23:06All right.23:06-23:09We’re going to take our second break here in about a minute.23:09-23:15And so if you want to join the show, you can 615-737-9986.23:15-23:20615-737-9986 is here in the studio.23:20-23:24I did have someone text me between the first and second break here.23:24-23:29And they had gotten a letter from the IRS and it had to do with 1099s.23:29-23:42They had issued 1099s for their business and they had submitted the information to the IRS and they have gotten a letter coming back that basically it’s a CP-210A, 2100A.23:42-23:46And it basically says that the information you provided is not correct.23:46-23:55The people you 1099 and their name and or number, social security number or EIN number does not match their records.23:55-23:58And they were concerned that they need to do something.23:58-23:59There is something you need to do.23:59-24:12You need, if you’re still using those vendors, you need to go back to them and have them correct their W-9 or if the information on the W-9 is correct, then you have to start taking withholdings.24:12-24:18The IRS says the best person is not in compliance and we have to start taking 25%.24:18-24:19And this is out of a vendor.24:19-24:21This is not your employees.24:21-24:27So if you’re listening and you have someone, two options, one, make sure everything’s right.24:27-24:35Two, make sure that you, if they’re not right or they’re not willing to give you the information, if they’re still working with you as a subcontractor, you need to start withholding money.24:35-24:37All right, we’re going to take our next break.24:37-24:41If you want to join the show, 615-737-9986.24:42-24:44We’ll be right back with the Dr. Friday show.24:44-24:48If you want to join the show, 615-737-9986.24:48-24:53615-737-9986.24:53-24:59Had someone call, I guess they had not heard that we were under a federal disaster.24:59-25:05The Federal Emergency Management Agency issued a disaster declaration for your area.25:05-25:12This means the IRS has automatically granted you disaster relief, which includes postponements of deadlines for you to file returns and make payments.25:12-25:16This means that you have additional time to pay beyond the due date listed in your information.25:16-25:19So, and our due date now is November 3rd.25:19-25:28So if I haven’t already done that enough, there is one more time where we are under this because I do know this is such a unique situation.25:28-25:34I always tell my clients, this is probably once in a lifetime that you’ll have this kind, at least I hope so.25:34-25:46I’m hoping that most people, I will say in Spring Hill and in Williamson County that I deal with, most of them have not had major damage due to the storms.25:46-25:47Thank goodness.25:47-25:52But we do know there’s some major areas, especially Asheville and things.25:52-25:58I have some clients up that way that have completely lost their entire businesses.25:58-26:03So that’s being reestablished and they’re, they’re working hard, but I’m just saying it’s not straight and forward.26:03-26:19But if you have had damage or a national disaster hits your property, keep in mind that, you know, there is losses that you can claim on your tax return, assuming that you didn’t get fully reimbursed for your tax output.26:19-26:28So if your home was fully damaged and you paid your insurance deductible and everything else was covered by the insurance, great.26:28-26:33But sometimes people aren’t insured for as much as what it costs to get everything fixed.26:33-26:42Or sometimes, you know, I mean, the insurance companies, I mean, again, just don’t, always, you don’t have the proper documentation.26:42-26:44Therefore you don’t have what they need.26:44-26:47And that makes it even harder for them to give you what you need.26:47-26:54So if that happens, make sure you document everything, document what money you did receive from FEMA and any other organizations.26:54-27:06And then we can possibly see if there’s a tax advantage or at least a, I don’t want to call it an advantage because you had to lose something to get it, but a way of getting some of your losses back on your tax return.27:06-27:09But documentation is essential in these situations.27:09-27:11They want to know how much things were worth before.27:11-27:13They want to know how much things were worth after.27:13-27:17And you have to have a very detailed list.27:17-27:25So usually whatever you’ve turned into the insurance company will do a very good job of getting us a start on what it is that you’re looking for.27:25-27:29But, you know, just again, just making sure everything is just the way you need it.27:29-27:31And, you know, that you’ve got the documentation.27:31-27:38Hopefully most people have been re reinvested for most of their losses because that would be the best way to have it.27:38-27:48But if you’ve got questions, maybe you have suffered a loss or if you have now keep in mind, it has to be a loss situated with a natural disaster.27:48-27:51You have to be within the federal natural disaster area.27:51-28:02So if you, you know, you lost some, your car got damaged and you lost it and you didn’t have insurance or, you know, any other kind of losses, those are no longer on the tax books.28:02-28:06We used to be able to take losses, but those are completely gone.28:06-28:15So just, again, making sure you understand that this is only federal disaster losses that we can talk about as far as for tax purposes.28:15-28:23So if you’ve had other kind of loss, a fire, or I had one person at their home actually did have fire damage.28:23-28:29But again, there’s nothing I can do for tax purposes unless it’s a federal disaster.28:30-28:34So hopefully, hopefully you don’t need it, but just keep that in mind.28:34-28:40So if you’re thinking many of you haven’t filed your taxes yet, many people are waiting for me to finish their taxes, which I’m working on.28:40-28:52But if you haven’t filed your taxes, the advantage is that we now can make sure that we can still pay into your IRA, which normally you could not do after April 15th.28:52-28:57But because of this disaster extension, we are able to pay into our IRAs.28:58-29:02So this may be a year to maximum your IRA contribution.29:02-29:09Also, SEPs, which usually expire on 10-15, will be good till 11-3.29:09-29:14But again, that’s a self-employment plan for my entrepreneurs.29:14-29:15So both of those.29:15-29:17Also your HSA.29:18-29:23So maybe you didn’t quite get enough money paid in in 2024, but you want to maximize it.29:23-29:27Now you can still do that in the year of 2025.29:27-29:33Again, normally this would not be, normally you’d have to wait till, I mean, April 15th or you couldn’t do any more of it.29:33-29:40And if your health savings account is through your employer, I, you know, I don’t think you can do anything about it.29:40-29:46This would be individuals like myself who actually have health savings accounts outside of that situation.29:46-29:53But if you have any of those types of contributions, you, you have an extended time to make them.29:53-30:02So, you know, this is the year to think about all those little extra things you might be able to do or might be able to extend out and, and get straight.30:02-30:12Because this would be the year where maybe you could pay off your 2024 and pay your estimates on time, which would all be November 3rd, instead of maybe getting penalized.30:12-30:19I mean, I can’t tell you how many times I’ve had people ask me, you know, making estimated payments is a, is a choice.30:19-30:20I don’t have to do that.30:20-30:24And I’m not too sure where that rumor started, but it’s not a choice.30:24-30:26You, you don’t have a choice.30:26-30:34I mean, theoretically, if you owe more than $500 last year, you should be making estimated payments this year.30:34-30:37If you normally get refunds, this doesn’t apply to you.30:37-30:42But if you actually owe money every single year, then it does apply to you.30:42-30:46And even if you’re an employee or you’re retired, I mean, it doesn’t make a difference.30:46-30:53If your money, if you owe money every single year, there is, should be vouchers, 1040 ESs that are being prepared.30:54-30:59If you do your own taxes or your tax person’s doing it, they should be issuing those forms to you.30:59-31:10So that way you can be paying your estimates because there is a penalty 0.5% per month for not making estimated payments, plus interest on the money you did not pay.31:10-31:17Some people will say, well, I can earn more money than what it’s costing me to give Uncle Sam their money on time.31:17-31:18That is a personal choice.31:18-31:23But to say that estimated payments are a choice?31:23-31:24No, they’re not.31:24-31:26This is part of the tax code.31:26-31:27It is a mandate.31:27-31:32You may choose to ignore that mandate and pay the penalties that come along with that.31:32-31:37But again, those are personal choices, not true tax law.31:37-31:41So if you are, and a lot of times people think it’s only for entrepreneurs.31:41-31:48I have a large number of retirees that basically have two options.31:48-31:57They either make quarterlies or they make sure enough is coming out of distributions like IRA distributions and Social Security.31:57-31:59Because a lot of times people say, well, Social Security is not taxable.31:59-32:00Yes, it is.32:00-32:03If you have other income that makes it taxable.32:03-32:11If you’re living solely off Social Security or you’re living off, you know, $250 a month plus Social Security or some small pension.32:11-32:14No, you probably don’t have to worry about it.32:14-32:16There’s probably not even a mandate for you to file taxes.32:17-32:27But in most cases, people have retirement income, be that 401ks, IRAs, and they are taking that money to live.32:27-32:32And by doing that, some of that, that then turns their Social Security into taxable.32:32-32:37Up to 85% of what you get in Social Security can be taxed.32:37-32:43Now, we know that the big, beautiful bill has some of this in here where they’re going to hopefully correct that.32:43-32:45I don’t know if that’s going to happen.32:45-32:46I really don’t.32:46-32:53I’m trying to figure out how they’re going to finance it all if it does happen because, you know, they’ve already means tested Medicare.32:53-33:00And so this is just one of those situations where, you know, it just gets more and more going that direction.33:00-33:03So I’m just saying that you don’t know for sure.33:03-33:15But if you’re planning or doing something with your finances and just making sure that you’re not going to be taxed on the money or do your taxes and then you turn around and you’re like, oh, my gosh.33:16-33:17Why am I, why do I owe money?33:17-33:18I mean, I can tell you.33:18-33:22After 30 years of doing taxes, that’s usually one of the top lines that’s used.33:23-33:27And normally it often comes with change.33:27-33:29Like sometimes they’ve changed jobs.33:29-33:35People on W-2s should not owe money if that’s all the income they’re reporting is their W-2s.33:35-33:41It should be pretty straightforward unless you’ve changed jobs or maybe you don’t understand how withholdings.33:41-33:45I had a couple come in and they’re married and they both just work.33:45-33:46There’s no extra income.33:46-33:52But somehow she’s she’s only paying like $40 a year in withholdings.33:52-34:03So we had to review her W-4 form because finding out that she was claiming married in two, thinking that she was married and then her and her husband would be two.34:04-34:07I hear the words.34:07-34:08I can’t say I totally understand it.34:08-34:10But that’s where people get.34:10-34:16And then on the new W-4 form, it says, does your spouse work?34:16-34:25That’s a very important box to click because both of you claiming married and zero means that both of you are saying that you’re supporting another person with your income.34:26-34:30And if your spouse is working, you’re not really supporting that other person.34:30-34:42So this is why so many people get in trouble with tax questions or owing money on taxes, because when they fill out their W-4 forms and they’re sitting there filling out, OK, I’m married.34:42-34:46I have two kids under the age of 17.34:46-34:50And and that’s it.34:50-34:51You know, it’s all they basically fill in.34:51-34:59And both spouses are claiming the kids, both of them put in that they have two children, but yet there’s only two children.34:59-35:07So both of you can’t claim the children and you can’t both be claiming married unless you check the box that says my spouse is also working.35:07-35:10That way they’ll tax you at a higher bracket.35:10-35:12But, you know, I’m just saying you’ve got to understand.35:12-35:21And I can’t tell you again how many times people come into my office and they’re like, I don’t understand why I’m not taking my employer is not taking enough money out of my taxes.35:21-35:24And you have to look at that W-4 form.35:24-35:28And if nothing else, box four says, do you want additional withholdings?35:28-35:35And the answer should be yes, if you’re owing money every year, because you need to have that money coming out one way or the other.35:35-35:37All right. We’re going to take our last break.35:37-35:44If you want to join the show, you can 615-737-9986.35:44-35:46615-737-9986.35:46-35:49We’ll be right back with the Dr. Friday show.35:51-35:55If you have a question or you thought that might be an interesting one to ask, you can join the show.35:55-35:58615-737-9986.35:58-36:02615-737-9986.36:02-36:08Let’s see what Scott in Cumberland has to say about IRAs or what question I might be able to help him with.36:09-36:09Hey, Doc.36:09-36:11Thanks for taking my call.36:11-36:12Sure.36:13-36:13I work.36:13-36:15I have a pension.36:15-36:15I have a pension.36:15-36:19And I add $8,000 a year into a traditional IRA.36:19-36:24And I get the $224,000 break in the year on my taxes.36:25-36:30Can I add money or can I start a Roth also and still get the tax break?36:30-36:32No.36:32-36:38Roths will not give you the tax break instantly, but they will give you the tax break later in life because it grows tax-free.36:39-36:48So when you need tax-free money, you know, I’m just saying, you know, nice to have some tax-free money and some deferred tax and then some that’s just in the bank.36:48-36:54But, I mean, I’m a very big advocate for Roth IRAs, but they’re not going to help you on taxes.36:55-36:58And I don’t know, depending on your income, there are certain income limitations.36:58-37:02Like if you make too much money, you can’t always contribute.37:02-37:07Will it take away my tax break from traditional at the end of the year?37:07-37:09No, it won’t take away from it.37:09-37:09No, sir.37:09-37:11All right.37:11-37:13Well, thank you very much for the help here.37:13-37:14Sure.37:14-37:14Thanks.37:14-37:15Thanks for listening.37:15-37:18So that was a good question.37:18-37:19Yes, you can.37:19-37:23Some people can take and put $8,000 into a traditional IRA.37:23-37:28Others, and the same person might be able to put $8,000 into a Roth IRA.37:28-37:37Roth IRAs are, just for those that may or may not know for sure, Roth IRAs grow tax-free, but we pay taxes on the money going in.37:37-37:41Traditional IRAs, we defer them like Scott was mentioning.37:41-37:44It helps reduce his taxes instantly.37:44-37:46So he gets that instant gratification.37:47-37:54But when he hits retirement age, he will pay taxes on that money when it comes back out.37:54-37:59So again, really just a matter of, and sometimes it really just depends on your income.37:59-38:04Like I have some young nieces and nephews that are kind of just out there just getting started.38:04-38:07And they’re, you know, there’s a saver’s credit.38:07-38:17So I’ve always encouraged them to either put money into an IRA or put money into a 401k, depending on if there’s any retirement available at their jobs.38:17-38:23Obviously, I suggest putting them into Roths at their age because they’re at a low income bracket anyways.38:24-38:27So putting it into a traditional, they’re not saving very much money.38:27-38:33If you’re at the higher brackets, 22, 24, 26, you’re going to have a much better situation.38:33-38:37If you’re in the 12, in my opinion, 12 or even 22.38:37-38:40And again, I am not a financial advisor.38:40-38:45So you need to double check what’s going to work best for you on these situations.38:45-38:54But if you’re looking at a tax or saving money, putting an IRA, putting $8,000 and saving 12%.38:54-39:00So, you know, that’s only less than $200 you’re saving taxes or have growth.39:00-39:11Probably better to put that into a Roth IRA and let it grow tax-free for the next 10 or 20 or depending on your age, how long it will be before you actually need that money.39:12-39:17And Roth IRAs, theoretically, you can always take the principal out without penalty.39:17-39:24You know, so it’s the growth that you can’t touch until you’re 59 and a half, I believe.39:24-39:29And again, all this when it comes to retirement, I’m talking about the tax aspects.39:29-39:34But if, you know, I’m not going to say what’s going to be best for you because it really depends.39:34-39:42In my world, I put money into a traditional SEP because my income bracket, it just seems more practical.39:42-39:46But at some point, it would be nice to be able to do the Roth as well.39:46-39:52But, you know, again, there are income limitations in situations where you have to make sure you’re complying.39:52-39:55Now, there are some backdoor IRAs.39:55-39:58You can do a traditional IRA and then do an instant conversion.39:58-40:03And therefore, basically, they call it a backdoor IRA, but basically, it’s conversion.40:03-40:12Because people that can put money into IRAs, their income can be higher than sometimes people being able to put money into a Roth IRA.40:12-40:14And again, double check that.40:14-40:15Talk to your financial advisor.40:15-40:18See if any of that is a good plan.40:19-40:32It is a way of putting money into a Roth IRA or putting money into an after-tax IRA that you don’t have to worry about meeting the criteria because you can do a conversion even if your income is higher.40:32-40:35But you are going to pay tax at a higher rate, right?40:35-40:39So, you know, it’s a catch-22.40:39-40:42You just have to figure out what’s going to be your big picture.40:42-40:55I have a number of clients, especially as they get closer and closer to retirement, that they really want to have all of their retirement or as much as possible their retirement into the Roths.40:55-40:57It’s a wonderful thing to inherit.40:57-41:08I will say that if you’re at a lower income bracket that you think your children are, and normally in retirement, we are at a lower income bracket or we may be.41:08-41:15I mean, I have clients that haven’t really changed much at all, but theoretically, many of my clients will be at a lower tax bracket.41:15-41:25And then that way, them paying tax on the converted money and leaving that money basically tax-free to their children is a gift that just keeps on giving, right?41:26-41:38I think that’s a traditional IRA where they’ve basically said, you have 10 years, you have to take the money out or you’re not going to be able to, they’re going to penalize you or basically just do a distribution.41:38-41:40And now you’re getting hit with a high tax bracket.41:40-41:43So that does take some organizing.41:43-41:50And if the money is left, I would definitely say you want to talk to your estate planners, your attorneys.41:50-41:57I don’t think traditional IRAs should be left to trust, especially with the law that basically says they have to convert it within five years.41:57-42:04Now, it can be left that the idea is to distribute it and then do K-1s to the beneficiaries.42:04-42:08But again, sometimes people aren’t thinking about that when they set up trust.42:08-42:13And I think a trust is best left directly to the beneficiaries.42:13-42:15I think it’s easier for that to be managed.42:15-42:19But I mean, I have a couple trusts that we help manage.42:19-42:24And at this point, you’re talking 15, 20 beneficiaries.42:24-42:25It’s not so straightforward.42:25-42:28You’re really looking at what’s going to be the least tax efficient.42:28-42:34In many cases, even if it’s not the least tax efficient, I have one that they don’t care if it’s efficient.42:34-42:36They just don’t want the beneficiaries to have to pay any tax.42:36-42:41So trust their tax that in many cases higher than the beneficiaries.42:41-42:43Now, that’s not straight across the board true.42:43-42:54But if you are in the 24, 26, 28 tax bracket, 30, you are going to be better off having the trust probably pay your taxes.42:55-43:02But if you’re in the lower 12, 15 or 12, 22 percent, not the same situation again.43:02-43:07So you really do want to think about taxes when you’re setting up your estate.43:07-43:11Many state of planners are attorneys or financial planners.43:11-43:18But you might want to make sure that whatever you’ve set up is going to be a benefit to the beneficiaries.43:18-43:19You know what I’m saying?43:19-43:20That’s the whole thing.43:20-43:25We want to put more money in the pockets of your beneficiaries and not more money in Uncle Sam’s pocket.43:25-43:29So doing a little advanced tax planning is probably a good idea.43:29-43:31Talk to whoever is going to be handling the taxes.43:31-43:34Most of the time, it’s your tax person.43:34-43:44So whoever your tax person is will be the ones that will usually step up and handle all of the estate plan trust and all the taxes that go along with it.43:45-43:48And so just, again, making sure that you’ve got that.43:48-43:48All right.43:48-43:50So we’re getting ready to wind up the show.43:51-43:58If you want, you can give us a call Monday morning, 615-367-0819.43:58-44:02615-367-0819.44:02-44:06You can also email Friday at drfriday.com.44:06-44:09Again, Friday at drfriday.com.44:09-44:12Or you can just check us out on the web at drfriday.com.44:12-44:16D-R-F-R-I-D-A-Y.com.44:16-44:22I am an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.44:22-44:27I have never worked for the Internal Revenue Service.44:27-44:32So sometimes people translate that as if I’m actually working for them.44:32-44:33I do not.44:33-44:36I only do what I need to do.44:36-44:38And then from that point, just educate.44:38-44:40Basically, it’s all about representation.44:40-44:55It’s all about trying to protect my clients from what could become or is a problem for them, be it back tax issues, IRS, you know, payroll tax issues, you know, could be civil penalties.44:55-44:57There are a number of things that could be coming up.44:57-44:59It doesn’t always just black and white.44:59-45:00IRS did.45:00-45:11So if you have questions or maybe you know someone that is needing to at least, our initial consultations are always free so we can make sure that we can actually help you.45:11-45:19If we can’t, then, you know, you need to go to the person that may be a court attorney or, you know, someone else.45:19-45:29So if you need help with doing what we do and how we’re going to do it, all you need to do is give us a call again at 615-367-0819.45:29-45:38Or you can check us out on the web at drfriday.com or just send me an email, friday at drfriday.com.45:38-45:41We can help you figure out where to get started.45:41-45:47So if you haven’t filed taxes in the last 5, 10, 20, in 30 years, we don’t have to go back that far.45:47-45:53We have certain amount of numbers that we have to deal with for compliance as long as the IRS has not already assessed.45:53-45:57And then we can help you get together your tax documents, right?45:57-45:58Because that’s the important part.45:58-46:03If we can get the numbers, we can then prepare the numbers and then get Uncle Sam on the right page.46:03-46:07I hope you guys are staying dry, nasty weather.46:07-46:11But, you know, as we always say in Australia, cop you later.

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Welcome to another episode of the Dr. Friday Radio Show. In this episode, Dr. Friday gets into pressing tax topics, including a potential new bill affecting overtime and tip income, strategies for handling property sales, and essential advice on IRS dealings and estate planning. Listen in as she tackles caller questions live!

Topics Covered:* Potential new federal bill: “No tax on overtime and no tax on tips” – likely a deduction, income limits, and only for income tax (not Social Security/Medicare). * Caller Question: Determining if tax filing is necessary based on Social Security and other income. * Primary Home Sale Exclusion: The two-out-of-five-year rule, $250,000 (single) / $500,000 (married) exclusion, and capital gains tax (including the 3.8% net investment income tax). * 1031 Like-Kind Exchanges: Not applicable for primary residences; rules for converting investment properties. * Inherited Property: The benefit of “step-up in basis.” * IRS Issues: November 3rd tax deadline (due to disaster), estimated tax payments, penalties, first-time abatement, and strategies for resolving tax debt (OIC, payment plans, asset considerations). * Estate Planning: Importance of wills and trusts, dangers of quick-claiming property (loss of step-up in basis), and having a team of professionals. * Caller Question: Clarification on home sale capital gains and inheritance.

Episode FAQ:1. Q: What’s this new bill about no tax on tips and overtime?A: It’s a proposed federal bill (not yet law as of May 31, 2025) that might make income from tips and overtime non-taxable for income tax purposes. Social Security and Medicare taxes would still apply. Dr. Friday suspects it will likely be a deduction on your tax return, potentially with income limits. 2. Q: I’m selling my house. Will I owe a lot of tax?A: If it’s your primary home and you’ve lived in it for at least two out of the last five years, you can generally exclude up to $250,000 of profit if you’re single, or $500,000 if you’re married, from capital gains tax. 3. Q: What’s a “step-up in basis” for inherited property?A: When you inherit property, its cost basis for tax purposes “steps up” to its fair market value at the date of the original owner’s death. This means if the heir sells it relatively soon after inheriting, there’s often little to no capital gains tax to pay. This is why Dr. Friday advises against quick-claiming property to children before death, as that can negate this benefit.

Transcript: Dr. Friday Radio Show – May 31, 2025 (Segments 2, 3, & 4)Dr. Friday:

[00:02] All right, we are here live in studio.

Dr. Friday:

[00:05] And if you want to join the show, you can at 615-737-9986, 615-737-9986. I know we’ve had a little bit of a test going on this morning, but I think we’re good to go.

Dr. Friday:

[00:20] I’m not too sure if you guys were able to hear everything that I was saying earlier, but just wanted to make sure that if there was any questions, we are talking a little bit about the new bill that could be passing about. It’s the one big, beautiful bill, I believe it’s what it’s called now, you know, with Donald Trump. But, you know, are your taxes, are you going to have no tax on overtime and no tax on tips? Big question.

Proposed Tax Bill: No Tax on Overtime and TipsDr. Friday:

[00:50] Everything I’ve said, even if it passes and it goes into law, which I’d say we have a 50-50 chance, it looks like that it’s going to become a deduction on your tax return. So it looks like you’ll still be paying the tax throughout the year. You’ll still be claiming and reporting all of your tips and everything. And then you’re going to have a deduction available on your personal tax return where you’ll get that money back potentially.

Dr. Friday:

[01:22] I think it’s going to be all based on dollar amounts of how much money you earn. They’ve already basically said overtime for anyone that’s getting overtime over 160 will not get any credits for overtime. But then again, I’m not too sure. Most people that are making $160 or more are probably salary-based, not really based on am I clocking in every hour and then being paid overtime? I don’t think that’s something.

Dr. Friday:

[01:47] There are some states, several of them had no tax on tips in overtime. Some say, like Alabama, North Carolina, New Jersey have also proposed similar legislation. So if you’re in some of those states, Alabama being next door, obviously, it may be able to get it in either state. So we’ll just have to figure out which one will accept. First, we got to get the federal to pass, and then we’ll see if the states will follow suit or if they will not.

Dr. Friday:

[02:17] So if you have a question, because I’ve gotten a lot of emails on this, actually, you know, and I wasn’t too sure if it was going to be something most people were curious, but I have gotten quite a few. And a lot of people think it’s already passed. It has not. We have not gotten that through yet.

Dr. Friday:

[02:33] So one of the things I did see on one of the bills said the tax deduction amount is for $25,000 or under if you’re making tips. Again, this has not passed. This is just a lot of people guessing on what will pass or how it will affect individuals.

Dr. Friday:

[02:51] So I think it’s going to be really interesting because the Fair Labor Act, The Department and Federal and State Departments of Labor have worked so hard to get people to reporting tips so that they can actually see how much money people have been being paid. And now, if this is some sort of change, now will people not be reporting it or not be reporting as much on that or not? I’m not absolutely sure.

Dr. Friday:

[03:19] So we’ll let’s go ahead and hit Matt in Donaldson. Thank you for calling because they’re crazy morning. What can I do for you, bud?

Caller Question: Tax Filing Threshold with Social Security IncomeCaller:

[03:30] federal income tax can i give you some numbers and tell me i did good

Dr. Friday:

[03:35] I’ll do my best yes

Caller:

[03:37] total amount was 30 700 social security was 28 000 of that and pbc was another 2 000

Dr. Friday:

[03:48] okay so the 28 000 is that the 85 or 100 of your social security

Caller:

[03:54] It was actually 28,704. That was the total.

Dr. Friday:

[04:00] So taxable amount would be 24,4 for simple math. And did you actually file taxes or are you thinking that you’ll be under with this dollar amount?

Caller:

[04:12] I did not file. I just want to know if you think…

Dr. Friday:

[04:15] I don’t think you should have. I think you did the right thing.

Caller:

[04:20] I’ll go with that.

Dr. Friday:

[04:21] You got it buddy. I think you’ll be just fine.

Caller:

[04:25] Bye-bye.

Dr. Friday:

[04:26] Bye-bye. Thanks. So that’s a great question. He was just basically wanting to see if, you know, again, there are very few times in life that we don’t have to file taxes. I can’t tell you how many people in their 80s and 90s come in my office and say, hey, Friday, when can I stop filing taxes? Thinking that age would be the determining information and that is not you, you know, death and taxes. We’ve all been raised on that comment, two things you have to do or two things that will be done, pay tax and die.

Dr. Friday:

[04:59] And you will be paying taxes until you die, unless you get fortunate enough to plan your income where you either have Roth IRAs or other sources of income that are completely non-taxable. And then obviously like social security, social security itself is not taxable. It only becomes taxable when you have other things that come into play. And that’s why with this gentleman with 24,000 or only 28,000 of the 31 that he actually earned being social security, he didn’t earn enough to qualify for taxes. So it’s a nice thing. It’s a, it’s a beautiful thing if it happens. Unfortunately, most of us will not have that happen. So we just don’t know which way we’re going to go with that and make sure that we’re, you know, on track or whatever. So we’ll just keep moving.

Dr. Friday:

[05:46] I’m not too sure if I should be taking a break or we’re just going to go straight through to the next one because the commercials let me know. So I’m going to keep talking. But anyway, so if you have questions, you can join the show. 615-737-9986. 615-737-9986 in the studio.

Primary Home Sale Exclusion and Capital GainsDr. Friday:

[06:05] So maybe you have a situation where you’ve either had some inheritance. Maybe you’re thinking about selling some property. Maybe it is not your primary or maybe it is your primary. You’re not sure if you have taxes due. This last few years, we’ve had a number of people that have had their primary home because of the exclusion. They still have ended up having to pay tax. And that’s, thanks guys, I got it. That’s the important part.

Dr. Friday:

[06:35] So let’s talk about that exclusion really quick because I know a lot of times, first thing, you have to meet the two out of five years, which means unless there is some reason, a medical, a working, something that comes up that creates a reasonable reason for you, divorce, then you have to have lived in this house two out of the last five years. Then you have to take whatever you purchased it and then the difference of whatever you sell it for.

Dr. Friday:

[07:01] So let’s use some basic numbers. Let’s say you purchased it at 200 and you sold it for $450,000, then as a single person, you would pay zero tax on the additional $250,000. That’s your exclusion. And that’s doubles when you’re married. So it’s a $500,000 exclusion when it comes down to knowing what you have, right? So again, if you brought a house for $200,000 and you sold it for $700,000 and you’re married, then you’d also be in a zero tax situation.

Dr. Friday:

[07:34] But I have had a number of people that either they’ve married someone and the second spouse has not lived in that house two out of the last five years. So they don’t qualify for the exclusion. Yet the house is purchased at $200 and sells for $700. You cannot claim your spouse lived in the house for two years if she didn’t or your husband or whatever. So in those cases, you know, you have $200,000 investment. The one person would get the exclusion of $250. So 450 of the 700 would be tax-free. The remaining difference would be taxable income or $250,000. And that would kick you into not only past the 15% tax bracket, most likely hitting the 18.8.

Dr. Friday:

[08:20] And I know people will go, there’s no 18.8 in capital gains, but there really is. Anytime people tell you that the capital gains tax is 15 and 20, they are totally bypassing the 3.8 tax that we have on investment income. And it kicks in basically once a single person hits 200,000, including everything, all of their income, or a married couple making 250,000, a little marriage penalty there. So, you know, and then it kicks in. So then you have another 3.8, which makes capital gains tax at that point, 18.8. So let’s let the numbers be what they are.

Dr. Friday:

[08:56] So anyway, so that’s the kind of ways we want to sit down. We want to calculate, make sure that we have prepared for that tax because then what happens is a lot of times people go out and they, this happens in multiple things, but they go buy another home and they think, well, as long as I’ve invested all my gains into another house, I don’t have to pay tax. That is not the tax law. If you buy a house and you sell that house, you have to either pay tax or you meet the exclusion. And then you can, if you wish, buy another house. It is not mandated. That was back, goodness, 20 years ago, I think, when I first started, even before that. But where the tax law basically said you had two years to reinvest the gains from your home and it wasn’t taxed. That is not the tax law. You do not have to buy another home. But what you do have to do is report the sale and either pay tax or get the exclusion. So making sure you’re on the current tax law and making sure you understand.

1031 Exchanges and Inherited PropertyDr. Friday:

[09:55] And also you cannot do what a lot of people, I heard a gentleman talking the other day and he’s like, well, as soon as I sell, because he brought a home back in Franklin 25 years ago, it’s now worth like 1.5 million. He paid like 250,000. And he’s done some improvements and things, but all in all, it’s the land, it’s the property that’s going to be worth that money. And so he’s turning around and he’s like, well, I’m just going to do a 1031. This is his primary home. And he cannot do a 1031 or a like-kind exchange on your primary home. That’s specifically in the law.

Dr. Friday:

[10:32] And you cannot take an investment home, buy a like-kind, and turn it into your primary. At the time that you decide to make it or you report it as your primary home, you have to now pay the tax that you deferred during a like-kind exchange or what we refer to as a 1031 exchange.

Dr. Friday:

[10:51] So there are ways of deferring tax on investments, and then there are ways of deferring tax on your primary home, but they don’t really work together. You can’t do a 1031, but you don’t get the step-up-in basis or the exclusion of the tax $250,000 or $500,000. So making sure you understand, A, what you have, and then you can do certain things.

Dr. Friday:

[11:17] I mean, obviously, if you inherit a piece of property, that’s always nice because you have normally the step up in basis. So what I mean by that is that if I inherited something today from a family member and that person passed away, whatever that property was worth at the time that I inherited it, then you’ll be able to deal with what you want to do and go for it. Got it.

Dr. Friday:

[11:46] So again, just making sure that we know how the taxes are going to work. So you know, if I sell this or if I exchange this, what is going to be taxes and what is not going to be taxes and how you’re going to make it work. So you put more money in your pocket. I mean, that’s really what the game is. You need to understand the tax law. So that way you can keep more of the money and be prepared to pay because I’ve had a number of people that were not prepared to pay when they actually had it come up. And then next thing you know, it’s there on top of it. And you’re like, oh my gosh, I owe this much money. Where am I going to get? Because now the money’s tied up in something.

Announcer:

[12:21] All right. We’re going to take a break here. You can join the show at 615-737-9986. 615-737-9986. We’ll be right back with the Dr. Friday show.

Announcer:

[12:31] We are back here live in studio. You can join us at 615-737-9986.

Clarification on “No Tax on Tips/Overtime” BillDr. Friday:

[12:43] 615-737-9986 is the number here live in studio. And I did get an interesting email where someone says, well, will I not have to pay any tax on my tips if this goes through? And I do want to clarify, you’re not going to pay income tax. They will still be charging you Medicare and Social Security on tips and overtime. These bills are only talking about income tax.

Dr. Friday:

[13:12] So just keep in mind that you’re still going to have 7.65% of your wages going towards your Social Security and Medicare. So I just think that was important to point out because a lot of times people are thinking, oh, I’m going to get this money free. It’s just going to be completely without any tracking and, you know, now people can go with it and what, you know, what’s going to change. So it’s going to change a bit.

Dr. Friday:

[13:31] So, you know, you must be able to report that tips without paying tax have to be making as much as $20 or more in tips or something. There’s some, I haven’t got the details yet. And again, this has not passed law. So we’re going to keep you in the loop as things go and make sure we understand exactly, you know, what’s going to happen. And they’ll give us a, they’ll give us a lowdown once, once it actually passes, we’ll have a much better idea of what it is.

Dr. Friday:

[14:00] But I do know a lot of people work for tips and, uh, you know, a large number of people get overtime. Um, and you know, again, without being taxed, I don’t know if that’s still going to require, because I mean, the whole reason for overtime was to make sure people were getting paid, um, you know, for their time, right. Anything over 40 hours, time and a half. And then there’s holiday pay and different things. And that’s part of the federal department of labor. And then them saying not being paid on overtime, does that mean just that half, you know, there’s still, you’ll still be responsible for paying tax on all of the ordinary income. And then over time, the time, the half, just that half, or are they talking all of the overtime, the time and a half? I don’t know. These are questions that are being asked and I do not have the answers yet. So we’ll just keep you the loop.

Tax Deadlines and Estimated PaymentsDr. Friday:

[14:49] If you’ve got questions or something on your mind thinking about how this is going to work, feel free to join us here live. I know it’s never too scary or maybe it’s a little scary to call a radio station, but trust me, we’re not tracking or doing anything. You can just reach us at 615-737-9986, 615-737-9986, taking your calls, talking about my favorite subjects.

Dr. Friday:

[15:18] We all know that we have a little different deadline. November 3rd is the deadline here. Now keep in mind that also does not change for states. So if you happen to have to pay a Kentucky state or if you’re a business owner here in Tennessee and not really directly affected by the storms, but you’re under the federal disaster situation, then you need to make sure that you filed your business license and especially your franchise excise because the extensions already come by. So you need to really just file and you’ll be getting some wonderful love letters on that if you haven’t already filed it. So that way you can make sure that you’re getting and staying in compliance. That’s the important part of all this.

Dr. Friday:

[15:58] And I’m telling people, this is a great year to really play catch up. Normally, you know, if you don’t pay your first estimate by April, your next one by June 15th, the last, you know, the next one in September and the last one in January, you know, there’s penalties, right? We all get hit with some decent sized penalties if we don’t pay these on time. And I know a lot of people think that making estimated tax payments is an option. It’s a choice. It is not a choice. It is tax law. And there are penalties if you choose not to do it. And that’s your choice. Again, that is where the choice comes in. Your choice is if I don’t want to pay taxes until April 15th, then that’s perfectly fine, but you’re going to pay penalties and interest.

Dealing with IRS Penalties and First-Time AbatementDr. Friday:

[16:41] I had a gentleman, we resolved his tax issue as a 2021 issue and it took us forever. And he kept getting, he said, they haven’t resolved it. They haven’t resolved it. And finally, I saw the letters they were sending him and they had resolved his tax issue, but the penalties and interest on the issue was another $10,000. And so he was thinking he still was getting collected on for not doing the correction. But it wasn’t. I mean, he only owed like 20 and it’s a 50% penalty by this point, because it’s like three years old. And he didn’t find the mistake until last year or whatever, or the IRS found the mistake for him. And of course, at that point, the penalties and interest had already started. We’re going to see if we can reduce the penalties.

Dr. Friday:

[17:24] And you can do that yourself. If you get a love letter. Now, the problem is a lot of times people kind of start, I don’t want to say freaking out, but they basically get all wound up about a $50 penalty. And I get it. No one should have to pay a penalty, period. But it’s fact of life. But when you have a $4,000 or $5,000 or $6,000 penalty, and that can also happen, you don’t want to waste your one-time, you know, first-time abatement is what they refer to it as. I call it the one-time get-out-jail-free card. But either way you want to look at it, that first-time abatement, you don’t really want to waste that on a $50 deal. Okay?

Dr. Friday:

[18:00] you know you might want to just see what you can do because it just seems like in life you’re most likely going to have something more than $50 that is your problem now if you’ve never had a problem and that $50 is the one time you’ve ever had well yeah sure go for it and all you have to do is call the IRS and and I will have to say I’ve called them a couple times this last week and it could be an hour hour and a half before you get through to somebody but there is I had the I mean I hate to say this, but I had the nicest revenue officer the other day on the phone and she actually acted like she liked her job. She did not make me, and I mean, a lot of times when, because I’m a representative, you know, they make it a little harder sometimes. She’s, you know, she was all about resolution and about trying to figure out how to get it done and making sure that we had the tools to get everything done. It was a refreshing situation. I will be quite honest with you.

Dr. Friday:

[18:57] office in Tennessee is great. Um, you know, I have used them for gosh, 20 years. Um, and they have, you know, most of the time been able to deal and resolve the issues, but I was able to do something. So I’m going to say call, if you don’t like the person that you get on the phone with the IRS, they always say, hang up and try again. Cause the likeliness of you actually getting the same person twice is pretty rare. So this way you’d be able to at least see if what you have or where you’re going with it or whatever.

IRS Resolution and Asset ConsiderationsDr. Friday:

[19:24] So, um, but yeah, so if you have love letters and you’re not sure what to do, you can certainly come to us. I’m an enrolled agent licensed by the internal revenue service to do taxes and representation. I’ve been doing this for about 30 years here in Tennessee. And so if you need help or you’re just not too sure where to start, you know, sometimes people hear about all these ads on the radio and they’re like, oh, we can resolve all your issues for 10 on the dollar and all of this. And I’ll be honest, I’m probably the most truthful you’re going to get.

Dr. Friday:

[19:56] There’s a lot of people that think just because they don’t want to pay the IRS, they shouldn’t have to pay the IRS. It doesn’t work that way. It truly is based on your assets. How much money do you have in the bank? How much money? I have a case right now. The guy has four cars. He’s a single guy. The IRS values those cars and they come back and basically say, well, you got $60,000 worth of extra vehicles, you know, that you could sell. And, you know, in his case, he didn’t have a lot of others, but these cars, which are very nice cars, and he’s got them all paid off, you know, have become, well, the IRS is basically saying, hey, you purchased these four cars, but yet you couldn’t afford to pay us. So, you know, give us our share of those cars. So in essence, sell those cars or get loans because you’re going to owe us the equivalent of blue book value if you decide to make a deal with us. And that’s the kind of thing I like a lot of people don’t know about.

Dr. Friday:

[20:54] I mean, even your 401k and IRA, even though you, the IRS cannot force you to take the money out of those accounts. The IRS does look at it as if those monies are theirs because you put money aside in a retirement account when you had a balance due with the IRS. Most of the people that come into my office, even though they say they can’t afford to make payments to the IRS, most of them are making 401k payments on their paychecks. They’re having money come out and depositing that into their 401ks. And so it’s like, okay, that’s probably a bit of a problem, right? Because if you’re making payments to the IRS or into a retirement account and you’re not making payments to the IRS, they’re sitting there going, well, that money is ours. So we need you to take the equivalent of that and either take a loan against your 401k and pay us off, or you need to, you know, take the cash out of the 401k and pay the taxes and then give us our share. So that way we are not your loan officers because we don’t want to be, you know, and penalties and everything that goes with that are very healthy, much worse than if you just went to the bank.

Dr. Friday:

[22:10] And again, houses. I have a large number of people that come in my office and they have one, two, $300,000 worth of equity. They owe the IRS 50 grand. You can do all you want. I mean, there are certain things, certain criterias that the IRS may waive some of that on, being that you have no other money and that you’re 70 years old and your house is your retirement account, you may be able to argue some of that, maybe, really depending on your personal assets and things. But just want to make sure that you are in a good place, right?

Compliance and Lifestyle Choices in IRS NegotiationsDr. Friday:

[22:50] I mean, so reality needs to sink in. If you have your kids in private school and it’s not for medical or health reasons of some sort where you might be able to say, well, they’re special needs. They need to be in this school because it’s the only one and my doctor suggested it and it’s a healthy place for them or whatever. That’s a choice, right? You’re choosing to spend 12, 15, $20,000 a year for a private school. And yet you owe the government $50,000. Well, it doesn’t really make sense. They’re not going to give you credit for that. So, you know, you have to make these smart decisions. You have to understand the system. If you can understand the system, you then can understand how are you going to keep things going and making sure things are going to be the way you want them, right?

Dr. Friday:

[23:36] So when you’re looking to figure out how to get yourself back on track with the IRS, first thing is compliance. You need to be in compliance, which means you have to have at least filed the last seven to eight years of taxes. You need to make sure there are no, If you’re making quarterlies, again, which started this whole conversation, if you’re self-employed or you’re an individual that has multiple jobs and you’re not having enough taxes come out, you are going to need to either, if you’re a W-2 person, you just need to make an adjustment. Have the money coming out every week or every two weeks or once a month, whenever you’re getting paid, is a smarter idea than to have the IRS contact your employer and say, this person has to claim single and zero. That’s the highest and that’s what they can mandate. And they can mandate that. I’ve got a number of married people that right this second are claiming single and zero on their tax returns because the IRS has went to their employers and they’re having to do that, which means they’re creating a very healthy refund. And by doing that, they’re trying to make the things work for them. You know what I mean? So again, making sure that you understand how that works and what you’re going to do with it is so important because if you don’t understand what the IRS is looking at, you don’t understand the whole thing’s going to turn out. Then you end up turning around and saying, oh, wait, well, why aren’t they giving me credit for this?

Dr. Friday:

[25:03] And, you know, I had, again, I have a number of people that come in and they want to make a deal with the IRS. And they’re like, we’re living off credit cards. We barely have anything. But yet the balance on those credit cards, they still have 30 or 40,000 that they can charge. Guess what? The IRS says you charge that 30 or 40 and pay us. Then you can worry about how you’re going to make the payment to the credit card companies.

Dr. Friday:

[25:24] these are facts of how the system works and what you want to do with that system but um you know as an enrolled agent and what we do is we basically shield you know one we’re a shield between you and the irs but more importantly we’re a resolution right we’re trying to help you figure out what’s going to be the easiest way for you to get resolution is it going to be an offer and compromise partial payment plan a full payment plan non-collectible you know there is different for different people and not any one plan is going to work for everybody. So I need you to make sure that you understand. And before you go and pay somebody 500 or a thousand or $1,500, make sure you understand what they’re going to do for you.

Dr. Friday:

[26:11] I mean, I never understand. I mean, if anyone comes in, you guys will all know if you’ve ever used my services. One, we basically collect a small fee to pull transcripts to even see what you apply for. If, if, if you can’t have an offer in compromise and you’re not sure if you’re going to be able to stay with a payment plan, then there’s nothing I can do for you. I mean, there’s really only a handful of things. We can try to reduce penalties on something we can, you know, but all in all, the reason you’re trying to get your life back together, especially if you’ve got children and they need to go to college and all these different things and you cannot have this open, um, debt to the IRS. Cause sooner or later, I mean, I have people that have reached retirement and have levies against their social security, right? I mean, they’re taking money out of these people’s social security checks because they can, and that they haven’t had resolution. And this is the last straw for a lot of them. I mean, this is what, you know, and yes, there are hardship filings, but in some cases it’s not really a hardship. I mean, you know, So the government will find a way to try to find the way to pay your debt to them. And that’s the important part. So understanding how it goes and what you’re going to do with it and why you’re going to make it happen, that’s where it really comes into play. And I just want to make sure you can understand.

Announcer:

[27:31] Okay, so we’re going to be taking another break here. You can join the show live. We’re going to be going into our last break, I think. You can join the show live at 615-737-9986, 615-737-9986. We’re live here in studio. So if you want to join us, this is the Dr. Friday show and we’re going to be right back.

Estate Planning: Wills, Trusts, and Step-Up in BasisDr. Friday:

[27:55] Alrighty, we are back here live in studio and hopefully you guys are enjoying this wonderful Saturday. It is absolutely beautiful outside. I got a chance to go out and play with my bees. I have beehives now, so I’m enjoying having my first pool of honey. So we’ll see how that all goes. Kind of exciting when you have bees. And also a field of lavender, which is actually growing. So I’m win-win right this second. I think all that rain has really helped me at least. So we’ll see how it keeps going. And hopefully you guys are enjoying this weather and being able to think of different things to be able to do out there.

Dr. Friday:

[28:32] But when it comes to taxes and finance and all of that, the only other thing I wanted to bring up really, someone sent me a notice asking me if I knew anybody that did estate planning and I do not do that I’m not a financial planner and I’m not an attorney but Russ Cook is a very good estate attorney and right there in the Brentwood area and has handled my stuff for 30 plus years and you know one of the things I always loved about Russ is that he is a pretty down-to-earth guy and And he knows how to deal with pretty much all the uniqueness that goes with a lot of different estates.

Dr. Friday:

[29:11] Because one of the biggest things I always ask people when they come in, nothing to do with taxes, guys. I get it. But do you have a will? Do you have estate planning? If something were to happen, gosh forbid, and this does not have an age on it. I know a lot of times people think, oh, wait, I’m not old enough. I don’t really need, I don’t really have anything. But you’d be amazed. At least a will would be very. And if you have children, you’ve got to think of them because a lot of times, I mean, I think a lot of people realize this, but, you know, a lot of times people think, well, my mom will take care of them if something happens to us or this. But if that’s not in a will, if that is not in a legal document, your mom may not have the authority to take care of your children, even if that is your wish, because the courts may have a whole different plan. And that’s what’s going to win the battle is the legal language, you know.

Dr. Friday:

[30:05] And so, again, if you’re thinking, what can I get done this year and accomplish something, no matter your age, it should start out with a simple, it may just be a very simple will. You can do that on probably legal Zoom for almost nothing. And, again, I’m not an attorney. I’m not saying that that’s the best way. But as you get older and you have more assets, there are ways that you can help your children by doing it the right way.

Dr. Friday:

[30:31] And there’s some, I mean, I can’t tell you again. I had a case that just came in a little while ago, about four or five weeks ago. And the mother had signed over her house to her daughter because she wanted to make sure her daughter got it. And then mom ended up in a nursing home and then eventually passed away. And so then the daughter was thinking she was going to get a step up in basis, right? This house was, again, a very nice house, but mom was so afraid. So when mom quick claimed that house over to her daughter, she then eliminated what we call a step up in basis.

Dr. Friday:

[31:12] So now when mom did that, she basically said, I paid $200,000 for this home. I’m quick claiming it at that exact value to my daughter. And if you don’t know what that person paid, that value could be physically zero because you don’t have any documentation showing what the par value or the value of that home was at the purchase price. So unless you can find that, you could end up. And then she sold this home for like $800,000. And now she’s paying tax on $600,000 in this particular case. Where if mom had just set it up in a trust and then been able to just leave it to her daughter at the time of her passing, it would have been a zero tax. So we had almost a $200,000 tax bill go from 200 to zero by just understanding how taxes work and how you should be using it to better your tax situation.

Importance of a Financial Team and IRMAADr. Friday:

[32:12] And, you know, again, having a team of experts, a financial planner, a good estate attorney, a good tax attorney or a tax accountant, an EA like myself, then you will then have a team that will help you. Because sometimes estate planners will say, well, we need to do this. But sometimes that’s not always the best for taxes. And sometimes that’s fine. I know I deal with Hank Parrott a lot. A lot of you guys probably know him as well. He’s been on the station and things. But state and financial strategies, Hank Parrott, he is one that will often put together this plan. And so for a couple of years, we may end up paying decent taxes, doing conversions and things like that for the big picture of paying little to no taxes, because now all the monies are in Roths or less, and therefore they maintain being in like the 22% instead of the 30% tax bracket as they hit retirement.

Dr. Friday:

[33:07] Again, understanding how those brackets affect you. Also understanding what happens if right now you’re married, but if you lose one, because again, we often have a situation where somebody’s getting a pension, but that pension will not go, sometimes people elect to make it go to the last person, which would be the spouse that’s still living, or it ends with the person that had the pension. They just took the 100% pension for themselves. Now that person that’s still living doesn’t have the pension, loses a portion of the social security because you usually had two people getting social security. Now you’re getting one, even if it’s a step up. And so the cost of living hasn’t really changed. You still live in the same house, still have the same utilities, still have the same cost. But what you don’t have is the same income. So making sure that all that is done with a good estate planning and good attorneys that can help you understand what you want to do and how and making sure that if you’re selling and dealing things that your Irma is not going to be messed up because that’s what you pay in medical. So you end up with a lot of money that can go into Irma and then taking that out of the way and making sure you have that situation.

Dr. Friday:

[34:18] So there are so many little things you can think, oh, okay, I’m going to keep my tax down. And the next thing you know, you get hit with something for Irma, or I’m going to just pay everything and get it all into this one hit. And again, you can end up with something that will change on the other side of it. So making sure you understand your, your personal situation is the way it’s going to make it best.

Dr. Friday:

[34:42] All right, guys, we have about four minutes. Let’s see if we can get Karen on now, if you don’t mind. All right. Hey, Karen. What can I do for you?

Caller Question: Home Sale Capital Gains and Inheritance ClarificationCaller:

[34:50] Okay, my question is, if I own a house and I bought it at $200,000, but it’s now worth $600,000, and I go to sell it, and I have to pay a capital gains tax, when does that come in first and who made that legal? And is it legal? I think that’s just so ridiculous. You pay property tax? You pay marriage tax?

Dr. Friday:

[35:12] Well, I mean, yes, you do pay capital gains. Now, are you married or single, Karen?

Caller:

[35:17] I’m married.

Dr. Friday:

[35:19] Okay, so theoretically if you guys sell it, you brought it for $200,000, you’d have a $500,000 exclusion. So you could sell that house for $700,000 and pay zero tax.

Caller:

[35:30] Okay. So it’s only when it exceeds those numbers that you’ll pay capital gain.

Dr. Friday:

[35:33] So right now you guys would pay no tax.

Caller:

[35:37] Okay, and like you were saying, if we wanted to leave that to one of our children, because we’ve got a rental home and a regular house. Right. If we wanted to leave that to one of the kids, what were you talking about? Quit claiming it?

Dr. Friday:

[35:48] Do not do that. I said what you want to do is leave it in a trust or a will so they get what’s called a step-up in basis. A lot of people like to do quick claims, but quick claims eliminate step-up in basis.

Caller:

[36:01] Okay, what’s a step-up in basis? I don’t understand that.

Dr. Friday:

[36:03] That means that you pay $200, and let’s say when you die the house is worth $700, your children will inherit it at $700 and not pay any gains.

Caller:

[36:13] Okay, perfect. Got to understand. Okay. All right, well, thank you.

Dr. Friday:

[36:17] All right, bye. Thanks, Karen. Bye. Great questions, actually. That was great. And so, yeah. And so you have to think about that and especially rental properties, because a lot of us have already depreciated. I know I love my rentals, but it would be better for your children to inherit than you to sell. Not always a choice. But right now, under the current tax laws, better for kids to inherit property and allow that step up in basis so they don’t pay the tax and you don’t pay the tax because we all have, you know, capital gains built into all of our rentals. So we want to make sure that we don’t have a situation where we have the rentals that are going to be, you know, coming back at us to be able to make sure we know what we’re doing or whatever.

Closing Remarks and Contact InformationDr. Friday:

[37:04] All right. So, um, again, so if you have questions, you can certainly give us a call. I think we’re going to be at the end of the show here pretty much. So I don’t think we’ll be able to grab a second phone call, but, um, if you need help, you can always call my office on Monday morning at 6 1 5 3 6 7 0 8 1 9. 6 1 5 3 6 7 0 8 1 9.

Dr. Friday:

[37:30] And again, I’m an enrolled agent licensed by the Internal Revenue Service, so I’ve never, ever worked for the Internal Revenue Service. I am licensed. I’ve taken all their tests to represent you guys, my customers, in front of the IRS. And that’s really what I like doing. I mean, just to make sure that we have representation, making sure that you understand what your rights, as well as what your responsibilities are to dealing with the IRS, because that’s the important part, right? You need to make sure that you’re doing everything right so that you don’t have it come back at you and you’re like oh my gosh how i didn’t know that i thought i could do this and you know the internet is awesome but sometimes some of the things i’ve seen and heard out there it’s like where are these people getting their information you know some of it is just straight out wrong and some of it is more of a stretch um sometimes it could apply properly but other times maybe not quite so much.

Dr. Friday:

[38:21] So again if you want you need help you want to set up. Our consultations for first time visitors are always free because I want to make sure that A, I can help you and B, that the help I give you is what you need. So you can call the office Monday morning, 615-367-0819. You can also check us out on the web, drfriday.com. That’s D-R-F-R-I-D-A-Y.com. Or you can email me, Friday at drfriday.com. Again, Friday at drfriday.com. Hope you guys have a wonderful Saturday, beautiful day. And as we always say in Australia, cop you later.

View Details

Join Dr. Friday, your go-to financial counselor and tax consultant, in this May 17, 2025 episode. Dr. Friday addresses pressing IRS concerns, including “love letters” for late business filings, processing delays, and the crucial three-year limit for claiming refunds. She dives into strategies for handling back taxes, the realities of the Fresh Start program, and settling tax debts. Callers bring real-world scenarios, discussing Tennessee’s unique tax filing extension, RMDs while still working, capital gains on property sales, and smart IRA withdrawal strategies in retirement. Get practical advice on AMT, the importance of wills and trusts, 1031 exchanges, and making informed financial decisions.

Topics Covered: IRS “love letters” for late business tax filings (LLCs, S-corps) and first-time penalty abatement. * Current IRS processing delays and potential impacts of budget cuts. * The three-year statute of limitations for claiming tax refunds. * Consequences of filing multiple years of back taxes, especially regarding older refunds. * Strategies for dealing with IRS debt, including the Fresh Start program and Offer in Compromise realities. * Rules surrounding bankruptcy and its application to tax debt. * Tennessee’s special federal tax filing extension to November 3, 2025, due to storms, and its impact on individual returns and estimated payments. * Explanation of the Alternative Minimum Tax (AMT) and who it might affect. * The importance of having a will or trust for estate planning. * Caller question confirming the Tennessee tax filing deadline of November 3rd. * Discussion on making quarterly estimated tax payments, especially with the extended deadline. * Caller question about Required Minimum Distributions (RMDs) for a self-employed individual still working and contributing to retirement accounts. * Caller question regarding capital gains tax on the sale of an investment property, including calculating basis and tax rates. * Caller question on how much can be withdrawn from an IRA annually to minimize or avoid income tax in retirement. * Brief mention of 1031 like-kind exchanges for investment properties. * Considerations before using 401(k) funds to pay off a mortgage. * The importance of seeking tax advice before* making significant financial decisions. * Overview of various IRS penalties (failure to file, failure to pay, failure to make proper estimates).

FAQ about the Episode: Q: Is there a special tax filing extension for Tennessee residents mentioned? + A: Yes, Dr. Friday confirms a federal extension for Tennessee residents to file their 2024 individual taxes and make certain payments by November 3, 2025, due to severe storms. This also applies to 2025 Q1, Q2, and Q3 estimated payments. * Q: What is the time limit for claiming an old tax refund from the IRS? + A: Dr. Friday states that you generally have three years from the due date of the return (or the date filed, if later) to claim a refund. For example, 2019 refunds would likely be unclaimable by May 2025 unless specific circumstances apply. * Q: Can I really settle my tax debt with the IRS for “pennies on the dollar”? + A: Dr. Friday explains that while programs like Offer in Compromise exist, they have strict eligibility requirements based on your assets and income. It’s not a simple negotiation, and having significant assets (like home equity or retirement funds) can make qualifying difficult. * Q: What advice does Dr. Friday give about handling IRS problems? + A: She advises addressing IRS issues promptly, understanding the specific processes involved (like penalty abatement or the Fresh Start program), and being aware that resolutions can take time, especially with current IRS backlogs. She stresses seeking professional advice before* making major financial decisions that have tax implications.

Transcript[00:01] Announcer Intro

Announcer: No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes.

She’s the how-to girl.

It’s the Dr. Friday Show.

If you have a question for Dr. Friday, call her now, 737-WWTN.

That’s 737-9986.

So here’s your host, financial counselor and tax consultant, Dr. Friday.

[00:30] Dr. Friday: Show Introduction & IRS “Love Letters” for Businesses

Dr. Friday: G’day, I’m Dr. Friday and the doctor is in the house on this beautiful Saturday At least here in Tennessee, it sounds like it’s been pretty nasty in some of these areas So hopefully you guys are all staying safe, if you can hear us down that way I don’t know, have family down that way, so hopefully they’re staying safe So if you have questions, I know it’s not tax season But I have had a couple people sending over love letters from the Internal Revenue Service because the IRS extended, obviously, Tennessee due to storms and other kind of damages, but it actually went, in effect, April 2nd.

[01:12] Dr. Friday: March 15th Deadline for LLCs/S-Corps & First-Time Penalty Abatement

Dr. Friday: So if you have an LLC that is multi-membered or a sub-S corporation, then you are required to either file an extension and or file your return by March 15th. So, and if it’s the first time you’ve had this issue, you can normally call them and deal with it. And it looks like the love letters I’m seeing at least, it looks like that these people were like waiting until March 15th. I’ve had that many times. And a lot of times with our clients, if we have been doing you for a while, at least we usually try to file the extension because sometimes people think of April 15th as the deadline, right? because you think, well, hey, I’ve got to have all my taxes done by April 15th. Even franchise excises do April 15th. So, again, if you’ve received a letter saying that your taxes were late, and this would be most likely a business tax return, a 1065, 1120, then 1120S in most cases, then you might want to call the government because you can usually get that waived if this is the first time you’ve ever had this penalty.

[02:18] Dr. Friday: Common Reasons for Late Business Filings

Dr. Friday: If you’ve had it multiple times, then you know that the due date is March 15th. So I think a lot of times it’s just new people, first year, just got a business, started it, didn’t realize that they couldn’t file it at the same time they filed their own personal tax returns. So if you need help, give us a holler and we’ll be more than glad to help you out with that. It’s not a difficult process, but just needs a little extra work on it.

[02:42] Dr. Friday: IRS Staffing Cutbacks and Processing Delays

Dr. Friday: And sometimes I will say I did talk to a revenue officer this week, And I thought it was an interesting conversation only because he was saying that his particular division, he was having big cutbacks. Apparently, they reduced his division by 15 people, which was almost half of the staff that was there. So something that would normally take 60, 90 days, he told me on the phone this could take up to 400 days for them to resolve this issue. And I was a bit surprised. I would have thought that, but at this moment, I guess a lot of these different divisions within the IRS is cutting back, or maybe they’ve gotten cuts because of the budgets and things. So all I’m putting out there is if you have an issue with the IRS, I would definitely pursue it, talk to someone, see what you need to do. But once you get that answer, you may find out that that issue could take a year to resolve what normally would have taken maybe 90 to 120 days. So just putting that on the table if you’re in the midst of doing.

[03:50] Dr. Friday: Statute of Limitations for Claiming Tax Refunds (3-Year Rule)

Dr. Friday: Now, another thing, I’ve had a number of phone calls this week on two different cases that the people were trying to track refunds from 2019. One was actually the parents. She had filed them and did everything correct. Then they sent back saying that they needed a different signature because it hadn’t been signed properly. And then she had submitted that back, but that was like in 2020, 2021. And she was now finally circling back because life gets away from you sometimes. And she was finally circling back around trying to figure out what was going on. And I told her, I mean, basically, you only have three years to collect the money from the IRS, your refunds. You have three years. So if you are looking to try to collect your 2019, unless it’s been in the midst of an audit or some other reason that was held up and you have a legitimate cause, they’re most likely not going to give you that refund.

[04:55] Dr. Friday: Current Refundable Years and Filing Back Taxes

Dr. Friday: So just putting that out there that right now you’re looking at 21, 22, 23, basically, obviously 24. So usually if you had filed an extension, it would have went through October of this year for the year of 23. If you had filed it without an extension, then April would have been the end of 2021 for collecting your refund. So, you know, if you’re basically on a regular filing system, then you’ve got 22, 23, and 24 that you can easily get. Again, 21 is a possibility, but 19 or 20 would not be collectible at this point. That’s why a lot of times people will come in and they haven’t filed taxes for years, right? I mean, I have people that come in and they haven’t filed for 10, 15 years. And so to get them into compliance, theoretically, we have to at least go back six years, sometimes more than that. but at least six years to make sure everything is good and if the IRS hasn’t assessed, then et cetera. So out of those six years, if you have refunds in the earlier, let’s say 19, 20, and 21, you have refunds, but you owe for 22, 23, and 24, you’re not going to get those refunds from 19, 20, and 21, right? Because you didn’t file them in time. You weren’t within the code, but you’ll still owe for 22, 23, and 24.

[06:19] Dr. Friday: Lost COVID Stimulus Money and Timely Filing

Dr. Friday: So, you know, there is, and a lot of people, many people had refunds from 20 and 21 because of COVID and some of the stimulus money and things like that. That money is off the table now. So again, just trying to put out there, it’s kind of one of those deals where you got to make sure, I mean, I have a couple of people that truly come in pretty much every two to three years, right? They know that they’re getting refunds. They’re not in a big rush. They just don’t like to deal with it. And so they just basically wait. Then they come in, do all three years, and then they get their refunds. And, you know, as long as their timing is good, there’s no issue. So you just want to make sure, though, when dealing with all that, that you don’t wait too long. Because, again, if you haven’t filed for a number of years, some of those years you may have lost money, especially the stimulus money. Because sometimes people did not get the stimulus and they would have had to file to get it. And now you’ve left $1,400, $1,800, $2,400 on the table for an individual, which could have went towards paying off something else or even filing and paying off old tax bills. So, you know, it really just comes up to what you want to do.

[07:26] Dr. Friday: Dealing with IRS Debt, Offers in Compromise, and Fresh Start Program

Dr. Friday: But we can help you deal with IRS. We can help you deal with these tax issues. There is smart, you know, where they have the ability to restart your software and your calendar, I guess you would say. And you can renegotiate. I get calls every day on, oh, I’ve heard on the radio that I can settle for 10 cents on the dollar, or I want to make a deal with the government. I have $5,000. I can pay them today. Will they take that and pay off my taxes and everything? It doesn’t quite work that way, guys. There is a system. There is forms. You know, this is the government full of paperwork, right? You can’t just go in there and say, hey, I’ve got this much money and I want to give it to you. I want you to the rest of the taxes, even though I have a 401k, I have a house with a lot of equity in it. I have access to other money, be that through credit cards or loans, but I want to give you this cash and I just want you to make a deal with me. They’re not going to do it. And if you think when you call one of these other on the radio kind of things and you find out the reality is there is a system. And I mean, I talk to people all the time and it’s like, you’re not going to qualify for that 10 cents on the dollar.

[08:42] Dr. Friday: IRS View on Assets When Considering Debt Settlement

Dr. Friday: You have a house that’s fully paid off or mostly paid off. The government’s looking at that equity as the money you could have paid them, but you chose to pay off your house. If you’ve got money in a retirement plan or you’re still contributing money to a retirement plan, but yet not making payments to the government, they’re looking at that money as money you chose to put into retirement and not to pay the taxes. Those aren’t choices you really have. So they are going to collect one way or the other.

[09:15] Dr. Friday: Negotiating Payment Plans, Non-Collectible Status, and Bankruptcy Rules

Dr. Friday: Now, there are ways of negotiating and there are ways of payment plans or partial payment plans, even being non-collectible at a point. I mean, I have a number of people that right now it would be impossible due to things that have happened in their lives right now for them to make any kind of payment to the IRS. It doesn’t mean the IRS is going to stop collecting, but they have agreed that for this next period of time, they’re not going to have aggressive collections. They’re going to put a hold on collections and then let these people rebuild their lives to see if they can figure out. And of course, bankruptcy is on the table for some people, but you can’t just go in. I filed last year’s tax return and now I want to go ahead and file bankruptcy because I can’t afford to pay the government. Again, guys, there’s rules. The rule is you have to have 33 months of collections or of it being filed and worked by the government before they’ll even consider giving you a bankruptcy leverage on that money. So you’re looking at three years minimum, basically.

[10:20] Dr. Friday: Fresh Start Program is Not New; Process and Timelines

Dr. Friday: So understanding what your options are, not just going into, oh, well, this guy said I could do this or, you know, there’s this Fresh Start program. Oh, my gosh, it’s brand new. Well, it’s not. We’ve had Fresh Start out there for a number of years. It’s a great program. Don’t get me wrong. But it’s not something new. It’s not something some of these people have invented. It’s something that the IRS has had out there. It’s a way of people getting, quote, a fresh start. Sometimes things happen in life. Sometimes, you know, you ended up with a big tax bill because you didn’t know that you took the money out of your 401K and that they were going to charge you that kind of tax. or you used it to pay off medical bills, or whatever these things might be, bottom line is you still ended up with a tax bill to Uncle Sam that is unreasonably or almost impossible for you to pay back. We can help you with that. But understanding that this isn’t some sort of magic wand. There is a process. Most Fresh Start programs take eight months to two years to process.

[11:23] Dr. Friday: Impact of Life Changes (like Marriage) on Fresh Start Eligibility

Dr. Friday: So if you’re wanting to get married, I’ve had this twice so far, people are coming in because they just found out and they’ve already got plans, they’ve already got weddings. Yeah, you can’t just expect that the IRS is going to say, oh yeah, here, here’s your paperwork, let’s do this so you can go get married. One, they probably prefer you to get married because now you’re going to have a harder time meeting the fresh start. Even though the person you’re marrying may not be legally obligated to pay your taxes, they now are bringing money in the house that you were using to support yourself when you were single. Now more of your money could go to pay Uncle Sam. Therefore, the deal is not going to be the same if you’re married than if you’re a single person supporting yourself.

[12:06] Dr. Friday: Call-in Invitation

Dr. Friday: All right, guys. So if you want to join the show, you’ve got a question or you have some sort of situation you want to run through, The phone number here is 615-737-9986, 615-737-9986. Number here in the studio. We’re going to be right back with the Dr. Friday Show.

[12:32] Dr. Friday: Back from Break & Alternative Minimum Tax (AMT) Explanation

Dr. Friday: All righty. We are back here live in studio. You can join us if you want. 615-737-9986. 615-737-9986. During the break, someone texted me over a question, actually an email, over a question, and they were asking about the AMT tax. And a lot of times people don’t really understand the alternative minimum tax because it doesn’t really affect a large number of people. But bottom line is you can take someone that’s in the tax code. Let’s just say that you’re married filing separately or married filing jointly. Let’s do married filing jointly and you basically make over $240,000. And you’re like, well, that’s like what, 22% tax bracket. That’s not too bad Friday. And you then turn around and let’s see here. Married filing jointly. There we go. I haven’t got a cheat sheet here, guys. So if you’re really going to do $240,000, you would be basically barely into the 22%, 24%. You would be in the 24%. But with AMT tax, you’d be in the 28%.

[13:48] Dr. Friday: How AMT Works and What Triggers It

Dr. Friday: Because the alternative minimum tax is supposedly a way of making the playing field more level, meaning people that get a lot of money through capital gains, through earnings that aren’t necessarily earned through W-2 or 1099, right? So you have capital gains, dividends, interest. So if you have a person that makes a lot of those earnings, they basically say, wait a second, you’re probably trying to bypass the system. And so we’re going to hit you with AMT tax, which usually starts at about 26%. And then anything over like 244 married couple would be 28%, which is still two to 4% more than you would with ordinary income tax. So what triggers it a lot of times, like I said, the biggest thing that usually triggers it is capital gains.

[14:41] Dr. Friday: AMT Exemptions and Application to Trusts

Dr. Friday: But sometimes it can be interest or dividends that can trigger it. Those are the kinds of things that you have. There are exemptions. In 2025, the exemption for married filing jointly is the first $137,000. After that, you could trigger it. A single person over $88,000. Married filing separately, they basically split it in half, $68,000, $650,000. And AMT tax can be on a trust.

[15:09] Dr. Friday: Importance of Wills and Trusts for Estate Planning

Dr. Friday: I know a lot of us, and I personally enjoy or think it’s a smart move to have a trust when I pass away. I’d rather have a trust than a will. My opinion from what I’ve heard from other attorneys and people that deal with financial planning and stuff is that it’s so much easier to leave everything more organized in a trust than to have to go through probate and all of that that can take time and more money because it costs money to set up a trust. But when you pass away, it’s really doesn’t cost a ton. Well, I guess it depends on how complicated it is, but it doesn’t necessarily cost a ton to put together where if you have to go through probate, it can, depending on how big the estate and everything that could take a long time for it to go through. And it could cost a lot of money. So you can reduce someone’s estate pretty quickly if you want to consider that kind of situation. So again, just, um, keep in mind that, uh, you know, if you’re going to have something, if you, and when do you think I’m jumping around a little bit because I’m thinking out loud and that happens sometimes. But I’ve also had people when they come in the office and they’re fairly young, they’re in their twenties and thirties and they’re like, oh, I don’t need to have a trust. I don’t need to have a will. I have people in their fifties and sixties that don’t have wills or trust either. I’m just pointing that out. If you’re listening right now and you’re sitting there going, well, I don’t think I’m going to need to have something like this. I’m not an attorney guys. I’m thinking tax wise, but I can tell you that the state and the federal government have a plan for you, which you probably aren’t going to like if you do not have a will or trust. It’s that simple. Why do you want to have the government involved? Why not just sit down? And I mean, again, I’m not an attorney, so I’m thinking legal Zoom, probably easy, or go to a local place where you could probably have an attorney write up something fairly easily. But I just think you need to make sure you have that situation going.

[17:03] Dr. Friday: Taking Caller Keith – Tennessee Tax Filing Deadline Confirmation

Dr. Friday: Okay. I do see we have a caller. Keith is on the line. Let’s see if I can get Keith on here. Hey, Keith, what can I do for you?

Caller: Hey, Dr. Friday.

Dr. Friday: Hello.

Caller: Hello. I was told on the television that the actual date for people in the state of Tennessee, the last date to file legally, is November the 3rd. Is that true?

Dr. Friday: Correct. The federal government gave us an extension one time only, so don’t confuse this with any other years. But for individuals that had the due date of April 15th, theoretically, they now have until 11-3. And that also includes making your SEP or your IRA or paying your estimated estimates for first, second, and third quarter. So, yes, it’s true.

Oops, I lost him. I blew him away with my knowledge.

[18:00] Dr. Friday: Clarification on Business Return Deadlines vs. Individual Extension

Dr. Friday: So it is true, but I want to circle back to the people that did have tax returns that were due in March for business returns. Normally partnerships or sub-S corporations are both, I know for a fact, are due unless you have a fiscal year end, are due on March 15th. Those particular ones were not extended. And the state of Tennessee said they would only extend case by case. They are not doing any kind like the federal government basically just said, hey, we’re going to do all 90 some counties. We’re just going to make this because almost every county had had some sort of severe storm, tornado, hail, all kinds of different things that have happened last year in our weather. So basically they turned around and said, hey, we’re just going to do this. We’re just going to do this blanket.

[18:51] Dr. Friday: November 3rd Deadline Includes 2025 Estimated Payments

Dr. Friday: But 11-3 is good. And again, it’s not just for 2024, but for all of us that make quarterly estimated payments, the government said, hey, we’re going to extend that as well. So 2025 estimates. Now, I only suggest this to individuals that actually normally make the payments. And maybe you’re putting it in a high interest bearing account where you can make a few dollars. If you are a person that usually has a tough time getting that money together, just continue doing what you’ve always done. Pay the quarterlies on time. First one was April 15th. The next one’s June 15th. The next one after that, September and then January. Theoretically, any of you that have, like myself, that pay quarterlies, I can put that money in a high interest account, make money, and then on November 3rd, send all three quarters, send anything else so that I have everything paid on time. I will tell you, I’ve already told all my clients October 31st. Let’s not waste those three days. Let’s just make sure everything is done by that date so that we have everything accepted and filed and processed. So that is a great thing for anyone that’s listening.

[20:03] Dr. Friday: Using the Extension to Catch Up on Taxes and Estimates

Dr. Friday: It is true, and it is something that this would be the year to get together, right? This would be that one year where you’re like, oh, wow, what if I could pay it? What if I could file my 2024 and get my estimates together for 2025 and have it all paid by October 31st? this would be the year you didn’t get hit with all those penalties i mean seriously that’s the whole purpose of the estimates right is that you won’t have to get penalties now i had another person filed their taxes and they said why did i have to pay a penalty because they did not make their estimates in 2024 on time or make them at all so they were still penalized in 24 for not making proper estimates. That penalty still exists because they should have made them all before they gave us this extension. So again, keep in mind that this is not something that’s a blanket.

[20:57] Dr. Friday: Advice for Those Who Struggle with Saving for Taxes & IRA/HSA/SEP Contributions

Dr. Friday: And if you are a person that has a difficult time, because not everyone’s great with money, we all know that, go ahead and pay it like you always have. Go ahead and pay your taxes. I have people that’s calling me all the time. I’m like, well, you can wait. They’re like, no, I want 2024 off the table. I want it filed. I want it paid. I want it done Friday. And it’s like, that’s perfect. That’s your choice. Um, so do what you need to do and how you might want to do it, but make sure that you, um, are paying and have that money ready to pay, um, when you are ready to file this situation, because you do not want to be late, especially after all this, um, you want to be able to make sure you have 24 paid, 25 the first three quarters, as long as you’ve got all that by October. And like I said, you can even still make your IRA payments, which normally would have stopped on April 15th. Your, what is it? HSA, health savings account. And you can make your SEP payments all until that deadline. So this is the year to catch up, guys. I had a young lady that went ahead and made her IRA payment. And she’s like, I’m already paid up for 2025 Friday. And we haven’t filed a 24 yet. And I said, well, you know, we can, she goes, but I just paid it last week. I’m like, you can still use that one for 2024. And she could still put another seven or 8,000 or whatever it was into her IRA. So she was very excited because she’s working hard to try to build up some retirements and get that squared away.

[22:36] Dr. Friday: Call-in Invitation & Topics Like Selling Homes/Inheriting Property

Dr. Friday: All right. So if you’ve got questions, You can join the show, 615-737-9986, 615-737-9986 number here in the studio. And I realize it’s a beautiful Saturday and not a lot of people want to be out there just listening and have a lot of tax questions, especially in May. But if you are looking at a situation where you’re selling a home or you’re inheriting property, those are often sometimes can be confusing situations. Always better to ask before than after. Sometimes we can help you figure out what your tax liability is. I had a person that was fortunate enough. They were selling something and they were fortunate enough to be able to figure out how all that was going to work. But they were going to end up paying about $160 in capital gains tax. We talked a little bit about a 1031 exchange, and it wasn’t for them, and it’s not for everyone. I mean, at certain times of life or certain reasons, you may not want to get back into other real estate situations. It may be a lot easier to just wait and pay your taxes today, and then that way you can go do whatever you want whenever you want.

[23:43] Dr. Friday: Taking Caller Dan – RMDs and Contributions for Self-Employed Still Working

Dr. Friday: You know what? Let’s see if we can get Dan on real quick if you want, and then we can see if we can get to the end. Hey, Dan, what’s your question?

Caller: Hey, Brady. Question is, this year I turned 73, had to take my first RMD, required minimum distribution from my 401k and SEP, but I’m still working. Can I continue to contribute to it?

Dr. Friday: You can, and you’re not required to take it out of the 401k that you have at the work you’re still working at.

Caller: I’m self-employed.

Dr. Friday: Oh, well, there you go. Okay, life is good. Well, if you’re self-employed, you might want to check with your financial planner. Now, if you’ve got other 401ks, SEPs, or IRAs that were prior to the SEP that you have today, most likely it’s a SEP. But if you’re still working, I don’t believe the time clock goes in, to be quite honest. But you can definitely contribute, answer to your direct question. But you might want to find out if you actually have to take it out.

Caller: My understanding is that at 73, I have to take my first RMD.

Dr. Friday: Well, that’s because that’s what they say to everyone. but you’re still working in the business in which the SEP was set up for.

Caller: Well, when you say, one second, you say set up for, I’m self-employed. I have a SEP and I have a 401k. I’ve been mostly funding the 401k, but I’ve never, ever had a job. I’ve never, ever gotten a job.

Dr. Friday: You’re like me. You’ve never had a real job. Isn’t that great? Okay. Love it. So, yeah. Exactly. I need to. So, let’s just work with the idea that, yes, at 73, you’re going to have to take your RMD, but you can still contribute as long as you’re working you can as long as you have earnings you can still contribute under the current law

Caller: perfect all right cool yep thanks dan

Dr. Friday: all right we’re going to take the break and then when we get back we’ll get to steve who’s in murfreesboro if he can hold through this break we’ll be right back with the dr friday show

Announcer: Coming out to live, live, live, live

[25:36] Dr. Friday: Taking Caller Steve – Capital Gains on Selling an Investment Property

Dr. Friday: All righty, we are back here live in studio. We’re going right to the phone for Steve. Thanks for writing for the break. I appreciate that. What can I do for you, Steve?

Caller: Yes, that’s Friday. I am selling an investment house to a property. Had for 10 years. And on the basis, like when I bought it, including repair stuff, I had to do before I could rent it out. It was like maybe about $105,000 or $110,000. Estimated sale price now is about $380,000. So I’m thinking about $360,000 after commission and all the stuff, the expenses. I’m putting about $15,000 into the house to fix it up to get it ready to sell. Does that only factor into the annual tax as far as my income tax, or does that have any impact on the capital gains?

Dr. Friday: It would definitely have an impact on the capital gains because most likely that improvement is being done for the sale, which would be a reduction or an addition to your basis, however you want to think of it. So you would be adding that to that roughly $100,000, $510,000, that additional $15,000, along with any of the closing cost fees, which you kind of talked about from $380,000 to $360,000. So you’d be looking at still around, I don’t know, $250,000 profit in the taxable profit thereabouts. Not profit, but taxable income.

[26:59] Dr. Friday: Discussing 1031 Exchange with Steve & Capital Gains Tax Rates

Dr. Friday: are you wanting to get out of the real estate business or are you thinking of just potentially a 1031 where you wouldn’t have to pay tax

Caller: well i’ve thought about a 1031 but i think i’m just i have several other real houses and i think i’m just gonna not bother with you know replacing this with another one kind of you know so um but um so um if i’m in the tax bracket where my wife and I are, you know, like $70,000 a year. Is it 15% capital gains then?

Dr. Friday: So you’re going to pay 15% until you get up to $250,000. So you’re going to be over the, and that would include your total income. So you’re going to be over the $250,000 because you’ve got your earnings plus the capital gains, roughly estimating here. But let’s just say it’s $250,000 capital gains, another $70,000 for your earnings. So that’s going to put us at right around $320 total income. So for the first $250, it’s going to be 15%. For the remaining difference between the $250 and the $320, you’re going to be looking at $18.8 or a $3.8 tax.

Caller: Okay. Okay. And does the state have like a 1.5% tax as well on something?

Dr. Friday: No. We have no tax.

Caller: Oh, okay. There’s nothing else there. Okay. All right.

Dr. Friday: Small advantage to living in Tennessee.

Caller: Well, it’s actually a big advantage, but anyways. Yeah, okay. Okay, great. All right, I think that’s it. Thank you so much.

Dr. Friday: Hey, thanks for calling. I appreciate it, Steve.

Caller: Thanks. Sure. Okay, bye-bye.

Dr. Friday: Thanks, bye.

[28:32] Dr. Friday: Taking Caller William – IRA Withdrawals to Minimize Taxes in Retirement

Dr. Friday: Let’s go to William, see if we can figure out what I can do for him. Hey, Will, what’s happening?

Caller: Well, I’m retired. I’m just turning 74 years old. And then my wife, we got social security and a few pensions. I think our total income with Social Security and the pensions is about $48,800. And usually I take about $10,000 every year out of my IRA account. And my question is, how much could I take out of my IRA every year without having to pay taxes? I’m not having to pay the income tax right now because my income is not high enough yet.

Dr. Friday: Right, and you’re right on top of it. Too much, Al. Yeah, you’re right on top because basically the income between you and your wife, your standard deduction would be right around $34,000. So the first $34,000 would be zero. And then you only pay tax on 85% of your Social Security, so you get a little break there. so you’re like right on top of the 0% tax.

Caller: Yeah.

Dr. Friday: Anything you do above, which I still, you know, depending on your situation, I mean, theoretically, as long as your total income keeps under $100, you’d be in less than 12% tax bracket. But right now, you’re probably paying nothing or very little.

Caller: Right. That’s where I kind of want to keep it. And my question was, instead of getting $10,000 every year out of my IRA, say if I was to get $15,000 out, would I still be in the tax bracket where I wouldn’t have to pay any income tax?

Dr. Friday: How much of your income is Social Security out of that $48,800?

Caller: It would be $38,200.

Dr. Friday: That’s $32,000, so you have $32,000. That’s Social Security now. Right. Well, the reason I’m asking about the Social Security, William, is because you don’t pay tax on 100% of your Social Security. You only pay tax on 85% of it. So I was trying to get to your taxable portion. For simple math, we’re going to call it $32,500 out of your original number. That pretty much puts you at the $0 amount. And then you’re adding in your remaining, what, $12,000 with your pension?

Caller: And I get $10,000. 500 in pensions.

Dr. Friday: Okay. And then you’re taking another 10,000 out?

Caller: Yeah, that’s 48. And I pulled 10,000 out every year, so that puts me at 58.

Dr. Friday: Gotcha. All together. Yeah, so my math wasn’t coming through quite. Okay, so we have 32, which puts you to zero, no tax on Social Security yet. But then with the other 20,000 coming out, you’re now being taxed at still about less than probably 30% of your Social Security is coming out. But you are actually, I don’t think you could take out more than 10. I mean, with the simple math without really putting it into a tax offer. But the simple math is you’re right on top of that maybe 1,000 or 2,000 more. But I don’t think you could take out 15 without having to start paying taxes.

Caller: That’s right. Okay.

Dr. Friday: I think your math is pretty darn close.

Caller: Yeah. I think you’ve done good keeping yourself in that zero.

Caller: Okay. Yeah. I’m tired of paying taxes. I’m alive.

Dr. Friday: Don’t blame you, buddy. You’ve paid in. Yeah, you’re 74, you said, so I’m pretty sure you’ve paid your share. But good to be able to keep the math going that way. But, yeah, good call, though. Good question.

Caller: Thank you. Okay, thank you, ma’am.

[32:25] Dr. Friday: Analyzing William’s Tax Strategy and Inheritance Considerations

Dr. Friday: I like it when people think about how they can actually reduce taxes, right? I mean, when you have a W-2, you don’t have that flexibility. Or when you have certain amounts of fixed income, you don’t really have that flexibility. But in his case, being able that their Social Security is really their biggest dollar amount. And Social Security only becomes taxable when you have other earnings. So he’s basically trying to play the game with how much can I get of other earnings, $10,500 from his pension. And then how much additional can I take out? Because at some point, you’re taking out a dollar for Social Security, basically for a dollar that you take out of your IRA. and keeping it all below the standard deduction because that’s the only way he stays at zero. But you have to admit, it’s a fun game. And if you have the ability to live off that income at this point, he’s retired, so he’s paid off everything, and he’s able to do that, it’s a great way of doing it.

[33:23] Dr. Friday: Roth Conversions and Stock Portfolios for Heirs

Dr. Friday: The only thing I would probably put into that conversation or thought would be is if you have a healthy IRA and you might have family members that will be inheriting, and most of yours is probably in a traditional IRA, you might want to consider taking out a little extra, moving it into an after-tax stock account, because if and when you pass away, you and your wife, whoever inherits, and a lot of one doesn’t want to think about that sometimes, but whenever you inherit that money, the next person is going to have to pay tax, and if they’re at the 22% and you were at the 8% or 6%, you would have been saving a lot of tax dollars in converting this either to a raw or converting it into a stock portfolio because either way it would be pretty much tax-free to the next person that’s inheriting and you would be doing it at a much lower tax bracket than potentially the person that is going to inherit. But again, not knowing anything on that, it would really suggest the game you want to play when you have a certain amount to play with. But otherwise, I like the game William’s playing.

[34:31] Dr. Friday: Call-in Invitation & Recap of 1031 Exchanges

Dr. Friday: All right. So let’s see here. We’ve got a few minutes still left of the show. So if you want to join the show, you can. 615-737-9986. 615-737-9986. We’re going to take your calls talking about taxes, talking about best ways we can save money, like William. He’s doing a great job in saving money. Also, the gentleman had called in before him, Stephen, and he was talking about selling a piece of real estate. It sounded like it was a rental property. And I was asking him about a 1031. And I know I talk a lot about it, but if you’re a new listener, you may not have known what I was talking about. A 1031 is what’s called a like-kind exchange. And so if you want to or if you have the ability to, you can always buy a property. In his case, he’d have to go spend $380,000, and then he can then not have to, he can re-put the money that he sold this house for into a new house or multiple houses. You can buy up to three houses, but right now the way the dollar and the real estate market, I don’t think you get more than one house for that nowadays, maybe two.

[35:47] Dr. Friday: Real Estate Investment Strategies and Debt Management

Dr. Friday: But anyway, so it’s something to think about that, you know, if you want to stay in the game, but it sounds like he already has multiple properties and that he was going to use that money to possibly pay off or to do things with other properties, which being a person that owns a multiple number of real estate, I know how that feels. And at some point here, I’m thinking, well, maybe I just need to consolidate and get everything kind of paid off. I always joke around because one of my favorite clients, he’s a guy that has, I think he’s close to 300, at least 300 probably rentals. And his game has always been take the money out, rent them out, let someone else pay the mortgage. And it’s a great game. And it’s done very well for him and very well for me. But you get to a certain age and then you’re sitting there going, well, wouldn’t it be easier not to have any debt? know and you’re getting to a point where you’re like okay maybe uh maybe in the next 10 years i’m gonna you know pay everything off i have no intention of ever retiring guys i don’t need to and i don’t want to but

[36:47] Dr. Friday: Caution Against Using 401k to Pay Off Mortgage

Dr. Friday: um but sometimes it’s nice not to have quite so many things going on in one’s life so um i understand when people now the one thing i don’t understand if you’re listening and you one of these people i don’t understand taking money out of your 401k and paying off your whole mortgage. Now I get it. You’re getting close to, I mean, many times I have people walk in and they’re getting close to retirement and they’re like, Hey, I just don’t want to have the mortgage, but you’re going to pay a big chunk of money to uncle Sam that could be controlled and paid less over time. The money’s still in the IRA and that’s the concern. I get it. You, you know, the way the market is, sometimes your IRA is up, sometimes your IRA is down and you’re concerned that if something happens to the market, you will lose a ton of money and you won’t have your mortgage paid off.

[37:37] Dr. Friday: Considering Tax Implications of Financial Decisions (Rosie the Dane Interjects)

Dr. Friday: As you guys know, Rosie is in the office because she’s apparently sharing her opinions. Sorry, that’s my Dane, my great Dane here. But anyways, so just I think that there are ways of putting your money in safe places. I am not a financial. I’m not an attorney. I do taxes. And I just think if you don’t have to pay taxes today, and, you know, that may be a good idea. But I’ve also worked with a lot of financial planners that are like, let’s pay today because it’s lower. And then let’s deal with the capital gains and things later. So I just want to put out that you have to figure out what’s going to be best for you. How’s the easiest way to go? You know, all of that’s going to be a matter of opinion. But you just want to make sure you thought it all through, I guess, what I’m really saying.

[38:25] Dr. Friday: The Importance of Thinking “What If” Before Financial Moves

Dr. Friday: I just want to make sure that this whole show and many shows like it are really out there, I think, for many people to just think, right? What if? What if I did this? What if I did that? Maybe this person has an idea that I haven’t thought about yet. What if I tried this or that, right? This is what I’m saying. My goal in life would be to have someone think, what if, before, because I can’t tell you. This is my 30th year in business here in Tennessee. And over the years, I’ve had many, many unique people walk in and have some really unique questions. And, you know, sometimes it’s like, well, I’ve done this. Well, if you’ve already done it, I can’t help you because tax law doesn’t work backwards. Very few things in life, especially in the world of taxes, can you go backwards and change something? It has to be done prior to. So if you’re thinking about doing something, it is always best to get advice prior to. And I can think of many things in life that that would be a good idea on. But you really do. You want to make sure that you have this information and you have it at your fingertips. So when you’re making a decision and, you know, some of these decisions, I don’t want to say they’re always life changing. Let’s see. Buying a house, selling a house at the time might feel like the biggest decision you have ever made. But over time, you’ll find out that that is not going to be your biggest decision in life.

[39:49] Dr. Friday: Self-Employment vs. Traditional Employment and Accessing Information

Dr. Friday: changing jobs. Sometimes it’s a good decision, sometimes not. But again, I have been very, very lucky where I’ve been able to be self-employed. And that makes for a good life. But, you know, it’s not for everyone. I have siblings that have tried self-employment and it has not worked out very well for them. They are much better off in a position where they have a certain job, a certain structure. It’s not for everyone, just as working in corporate America isn’t for all of us. It’s the same kind of situation you have on both sides. But what I do want to make sure is that we have the information and that you’re able to get to that information. So if you need help making these decisions, at least as far as tax questions, you can give my office a call. We’re in Monday through Friday. then you can always call us and we’d be more than glad to try to help you figure out what we need to do and or what you need to do and if there’s anything we can do to help guide you in the right direction, right? Just making sure everything is working that way.

[40:54] Dr. Friday: Recap of Tennessee Tax Extension and Maximizing It

Dr. Friday: If you’re making these decisions and you’re not sure, then you need to at least have the first guess. So I wanted to run through again just because right now with such a unique year, right? We never, in the 30 years I’ve been doing this, even with COVID and all of that, we’ve never had just the state of Tennessee. And I think there’s actually three states that fall under this, but in the state of Tennessee, where we had a federal extension, they gave us, you know, all these extra months until November 3rd to file your taxes. So put some thought in, how can I maximize that, making sure that you’ve paid your estimates?

[41:30] Dr. Friday: The Mandate for Quarterly Estimated Payments

Dr. Friday: I have people that basically, again, it’s a personal choice, but it isn’t really a choice. As far as I’m concerned, the IRS is a mandate that says if you are self-employed or you’re retired, you have earnings of over, if you owe the IRS more than $500 in a given year, you are required to pay quarterlies. These quarterlies would be coming up April, June, September, and January. Every year we have to do those. And that isn’t just a choice. A lot of times people will come in and say, well, I don’t really want that. That’s not a choice I want to make. It’s not a choice. You will pay a penalty if you do not do this.

[42:10] Dr. Friday: Penalties for Underpayment of Estimated Taxes

Dr. Friday: Now, sometimes people get lucky because they have jobs. And so the W-2s have enough money come out where the self-employed side doesn’t affect or if you have a farm or maybe taking out certain monies. But this last year, I have noticed a number of people that the year before they did not get a penalty. This year they did because their earnings went up this year, which means you have to pay 110% or at least 100% of the money you owe to IRS before they’re going to waive any penalties, meaning you don’t owe the IRS. And if that isn’t the case, then you have to consider right now interest for the IRS, I think it’s like 12%. Penalties are usually 5% per month, up to 25%.

[42:53] Dr. Friday: Compounding IRS Penalties and Interest

Dr. Friday: There are a few. The one that I was talking about making estimated payments is 0.5% per month. So that one’s not as bad as many. But when you consider you’ve got failure to file, failure to pay, failure to make proper estimates, all these can add up where it seems like you’ve got 20, 25, 30% going out. I mean, after a year, it’s easily 30% to 40% increased your bill. So if you owe $10,000, now you owe $14,000 or thereabouts. And if you wait over the total year or two-year period, I mean, I have people that 2020, 2021, their bills have practically doubled. So they owe $10,000, now they owe $20,000 with interest and all the penalties and everything.

[43:41] Dr. Friday: Penalty Abatement Considerations

Dr. Friday: Now, sometimes we can get some of those penalties waived. That’s not an impossibility, but if you’ve already had penalties waived, you’re not going to get them. If the penalty is $50 or $100, you probably aren’t going to waste your one-time get-out-of-jail card for free thing, basically, to do it. So there are times when you’re going to pull that and times when you’re just going to have to buy it and pay it. So, again, it’s really just up to you what you want to do and how you want to do it.

[44:12] Dr. Friday: Break Announcement

Dr. Friday: Oh, we’ve got another break. Take a break. This is Dr. Friday Show. We’ll be right back.

Announcer: Your Money Coach with Dr. Friday will return in a moment.

[44:24] Dr. Friday: Contact Information

Dr. Friday: All righty. We are back here. We’re going to have just a few minutes since I over-talked that last one. So let’s go to my contact information. If you want to reach us, you can at 615-367-0819. That’s the direct number to the office, 615-367-0819. You can also email. Nowadays, it’s a lot easier than tax season. The email is Friday, just like the day of the week, F-R-I-D-A-Y at drfriday.com, Friday at drfriday.com. If you have questions, if you need to set up an appointment, just call us. It’s the easiest way. We can set you up on the calendar, Make sure we’ve got everything going for you. A lot of times we can answer the question over the phone, so it’s not a big deal. Just want to make sure that we’ve got everything taken care of.

[45:16] Dr. Friday: Offering Tax Filing Assistance and Enrolled Agent Services

Dr. Friday: If you haven’t filed your taxes for 2024, we can try to help you get that filed as well. I know we’ve got a big time clock, but time flies and we’re having fun. It will not take very long for us to do that. So again, if you want to reach us at the office, it’s really easy. Pick up the phone, 615-367-0819, 615-367-0819. Also, you can email friday at drfriday.com. Or if you have no idea who I am or what I do or that I’m an enrolled agent, which means I’m licensed by the Internal Revenue Service to do taxes and representation. It’s exactly what I do every day. So, you know, bottom line is I’m kind of a shield between you and the IRS ways to help you get your tax situation resolved, ways to help make things easier and move things forward for you.

[46:11] Dr. Friday: Closing Remarks

Dr. Friday: I’ve been doing this for almost 30 years right here in the Brentwood. Basically my office is in Brentwood, but I cover most of the state. But if you have questions or you just want to get our initial consultations are always free. So again, 615-367-0819. I hope you guys enjoy this Saturday. It’s a beautiful day outside. And just take some time. Enjoy the family. I know Memorial Day is coming up next week. So we’re going to, as we always say in Australia, cop you later.

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Welcome to the Dr. Friday Show from April 26, 2025! While she might not have a medical degree, Dr. Friday is here to diagnose and treat your financial and tax ailments. In this episode, Dr. Friday dives into the significant Tennessee-wide disaster tax relief extension announced by the IRS, clarifying who qualifies and how it differs from state relief. She also tackles common issues like dealing with multi-year tax debt, the implications of tax problems on marriage and home buying, understanding the difference between a hobby and a business, and takes listener calls on Social Security income rules and self-employment tax. Get ready for practical advice on navigating IRS complexities and planning for the future.

Topics Covered:* Federal Disaster Tax Relief for Tennessee: + All Tennessee counties qualify for IRS disaster tax relief due to various events (tornadoes, storms, flooding) over the past year. + Federal filing and payment deadlines (including quarterly estimates and payroll taxes) originally due around April 15th are extended to November 3, 2025. + This extension applies universally within TN, regardless of direct impact from the disasters. + Unlike normal extensions, the payment deadline is also extended without penalty for federal taxes. + This extension also applies to 2024 IRA contributions (usually due April 15th). SEP contributions are also extended. * State Tax Relief Distinction: + Tennessee state tax deadlines (Franchise & Excise, business tax, sales tax) are not automatically extended for everyone. + State relief is granted on a case-by-case basis only for those directly affected by the disasters. * Addressing IRS Tax Debt: + Importance of resolving past-due taxes, especially when facing life events like marriage or buying property. + Filing “Married Filing Separately” might be advisable if a spouse has pre-existing tax debt.IRS collection actions: liens (especially payroll) and potential wage garnishment (up to 100%). + High cost of ignoring IRS debt due to penalties (failure to file, pay, estimate, understatement – up to 25% each) and interest (mentioned ~12%). + Offer in Compromise (OIC): Possible but often not “pennies on the dollar,” especially with assets like home equity, multiple cars, or recreational vehicles (campers). + IRS may expect taxpayers to borrow against or liquidate assets to pay tax debt. * Hobby vs. Business Income: + Discussion using Dr. Friday’s beekeeping as an example. + Hobby expenses are only deductible up to hobby income (no losses allowed). + A true business requires intent and activity level aimed at profit. * Social Security & Income: + Caller question about interest income impacting SSDI/early retirement earnings limits. + Clarification: Passive income (interest, retirement distributions) counts for taxability of SS benefits but generally not towards the earned income limit that reduces early retirement benefits. + Proactive step: Requesting federal tax withholding from Social Security benefits (requires filling out Form W-4V, likely in person). + Potential impact of large income events (like stock sales) on Medicare premiums via IRMA (Income Related Monthly Adjustment Amount). * Self-Employment and Early Social Security: + Caller question about structuring a mowing business when one spouse is collecting early Social Security (under Full Retirement Age) and the other is past FRA. + Advice: Structure business under the spouse past FRA. Pay the spouse under FRA as a 1099 contractor, limiting their earnings to stay below the annual limit. + Note: The earnings limit is prorated in the first year of collecting benefits. * Self-Employment Tax Basics: + Caller question about SE tax calculation for a sole proprietor LLC. + Clarification: You pay SE tax (Social Security & Medicare) on business profits. Half of the SE tax paid is deductible as an adjustment to income on Form 1040. * Tax Planning for 2025 and Beyond: + Uncertainty surrounding the expiration of current tax laws at the end of 2025. + Potential impact on tax brackets, estate tax, etc. + Importance of planning (e.g., Roth conversions, asset sales) considering potential future tax rate changes. * Inheritance and Donations: + Importance of proper valuation and documentation for inherited assets, especially when donating non-cash items. + Large non-cash donations (>$5,000) generally require a qualified appraisal for tax deductions.Obtaining appraisals for inherited real estate is crucial for establishing basis. * General Tax Advice & Services: + Importance of filing estimates correctly (based on prior year, four equal payments) to avoid penalties. + Recommendation to use full-service payroll providers (Gusto, ADP, Intuit) to avoid payroll tax issues, which can carry personal liability. + Offer of services for tax preparation, back taxes, IRS representation, bookkeeping, and business setup.

Episode FAQ:General Tax Relief & Filing Q: What is the major federal tax relief mentioned for Tennessee residents?*

+ **A:** Due to various disasters (tornadoes, storms, flooding), the IRS granted disaster tax relief to all counties in Tennessee. This extends the deadline for filing various 2024 federal tax returns and making tax payments (including income tax, estimated tax, and payroll tax) originally due between April 14, 2025, and November 3, 2025, to **November 3, 2025**.

• Q: Do I need to have been personally affected by a disaster to qualify for this federal extension?

  • A: No, the federal relief applies to everyone residing in Tennessee, regardless of whether they were directly impacted by the storms or floods.

  • Q: Does this federal extension also apply to Tennessee state taxes (like Franchise & Excise, business license, sales tax)?

  • A: No, the State of Tennessee is handling relief on a case-by-case basis. You must have been directly affected by the disaster and contact the TN Department of Revenue to request relief for state tax obligations. If you weren’t affected, state deadlines remain unchanged.

  • Q: Can I delay paying the federal taxes I owe until November 3, 2025, without penalty?

  • A: Yes, for this specific disaster relief situation, the extension to November 3, 2025, applies to both filing and payment for qualifying federal taxes, without the usual late payment penalties accruing before that date.

  • Q: Did this extension also affect the deadline for 2024 IRA contributions?

  • A: Yes, uniquely, this federal extension pushed the deadline to make 2024 contributions to Traditional and Roth IRAs to November 3, 2025. (SEP IRA contributions are typically extended with filing extensions anyway).

Dealing with IRS Issues Q: What are common reasons people seek help with past-due taxes?*

+ **A:** Dr. Friday mentioned seeing clients needing to resolve multiple years of unfiled taxes, often prompted by life events like getting married, buying a house, or discovering a spouse’s existing tax issues.

• Q: What happens if I ignore IRS tax debt?

  • A: Ignoring IRS debt is risky. The IRS can charge significant penalties (for failure to file, failure to pay, failure to make estimated payments, understatement of income – each potentially up to 25%) plus high interest (currently around 12%). They can easily place liens on paychecks and potentially on assets like homes (though taking a primary residence is less common).

  • Q: Can the IRS take my house if I owe taxes?

  • A: While they can put a lien on property, the IRS usually doesn’t seize a primary residence, especially if not all owners on the deed owe taxes. However, they view equity in a home as funds potentially available to pay the tax debt, especially if you paid the mortgage instead of the IRS.

  • Q: How does owning assets affect settling tax debt with the IRS?

  • A: Having significant assets (like home equity, large 401ks, valuable vehicles beyond basic needs, recreational vehicles like campers) makes it harder to get a “pennies on the dollar” settlement. The IRS expects you to use available equity or assets to pay the debt. Their definition of what you can “afford” may differ significantly from yours.

  • Q: What if I sell an asset to family to avoid the IRS?

  • A: This is generally a bad idea. You must prove the sale was for fair market value, and the family member had the legitimate means to purchase it. Otherwise, the IRS can view it as attempting to hide assets, leading to potentially worse legal problems.

Social Security & Income Q: Does passive income like CD interest count against the Social Security earnings limit if I retire early?*

+ **A:** No. The Social Security earnings limit for those receiving benefits before full retirement age applies only to earned income (from working, like wages or self-employment). Passive income like interest, dividends, or retirement distributions does not count towards this limit.

• Q: Can passive income like interest make my Social Security benefits taxable?

  • A: Yes. While passive income doesn’t affect the earnings limit, it does contribute to your overall income calculation (provisional income) which determines if, and how much of, your Social Security benefits are subject to federal income tax.

  • Q: Can I have federal income tax withheld from my Social Security check?

  • A: Yes. You can request this by filling out a specific form (likely Form W-4V). According to a caller, this may require making an appointment and visiting a local Social Security office to sign the form.

  • Q: My spouse and I own a business. I’m starting Social Security before my full retirement age, but my spouse is past theirs. How can we handle the income?

  • A: Dr. Friday suggested structuring the business so it’s solely owned by the spouse who is past full retirement age (and thus has no earnings limit). That spouse can then pay the early-retiring spouse as a contractor (1099) or employee, carefully managing the payments to keep their earned income below the annual Social Security earnings limit.

  • Q: Is the Social Security earnings limit prorated in the first year I start receiving benefits?

  • A: Yes, Dr. Friday indicated the earnings limit is prorated for the portion of the year after you begin receiving benefits. You should confirm the exact calculation with the Social Security Administration.

Business & Self-Employment Q: What’s the tax difference between a hobby and a business?*

+ **A:** With a hobby, you can only deduct expenses up to the amount of income generated by the hobby; you cannot claim a loss. With a business, you can deduct all ordinary and necessary expenses, potentially resulting in a loss that can offset other income (subject to various rules).

• Q: Is self-employment tax (Social Security & Medicare for self-employed) deductible?

  • A: Yes, one-half of the self-employment tax you pay is deductible. However, it’s an “above-the-line” deduction on the front of your Form 1040 (an adjustment to income), not a business expense deducted directly against your business profit on Schedule C.

Inheritance & Donations Q: I inherited a lot of personal items (like furniture, tools, etc.) and want to donate them. Do I need an appraisal for a tax deduction?*

+ **A:** Yes, if the value of the donated items is significant. Tax law requires a qualified appraisal for non-cash donations exceeding certain thresholds (e.g., over $5,000 total, or over $500 for certain “like-kind” items). Simply estimating thrift store value yourself is likely insufficient for large donations and could be disallowed by the IRS.

• Q: Do I need an appraisal for an inherited house?

  • A: It’s highly recommended. An appraisal at the time of inheritance establishes your “basis” (usually the fair market value at the date of death). This is crucial for calculating capital gains or losses if you later sell the property.

Payroll Taxes Q: Why does Dr. Friday recommend using a full-service payroll provider?*

+ **A:** Handling payroll taxes correctly (withholding, depositing, filing quarterly reports) is critical and complex. Failure to pay payroll taxes can lead to severe consequences, including the Trust Fund Recovery Penalty, where the IRS can hold business owners or responsible individuals personally liable for the unpaid taxes. Full-service providers (like ADP, Gusto, Intuit Payroll) handle these obligations automatically, reducing the risk of costly errors.

Transcript:[00:00] Announcer: Show IntroductionAnnouncerNo, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Dr. Friday Show. If you have a question for Dr. Friday, call her now, 737-WWTN. That’s 737-9986. So here’s your host, financial counselor and tax consultant, Dr. Friday.

[00:27] Dr. Friday: Opening Remarks and Tennessee Disaster Tax Relief (Federal)Dr. FridayG’day, I’m Dr. Friday and the doctor is in the house. We are here in studio today. So if you want to join the show, you can at 615-737-9986, 615-737-9986. Taking your calls. Probably the biggest news that we have right now going on in our world is the fact that all of Tennessee qualified for a disaster tax relief that happened on the 14th of November. And they extended it all the way out to November 3rd, 2025. It was a pretty, I’m sorry, April 14th, they happened and it extends out to November 3rd. And so anybody that actually usually makes quarterlies, it even qualifies for payroll taxes or filing your taxes. They’ve extended the time we had to pay those. So in theory, I have a large number of clients that had chose to hold off filing taxes. So that way they could make sure that they can make money on the money. Everybody qualifies. You did not have to be a tornado victim or any of that kind of situation.

[01:46] Dr. Friday: State vs. Federal Relief and Reasons for ExtensionDr. FridaySo again, one of those situations where it came pretty late. It wasn’t something that a lot of us had. Now, this does not extend towards the state. Tennessee, if you have franchise excise, if you have business license, if you have sales tax, they are doing it case by case. So if you truly are a victim of these different situations that have happened in the last year, then yes, you need to let Tennessee Department of Revenue know, and then they will work with you on the filing and delaying and all of that. But if you were not affected, but the federal law is allowing everybody, the state is saying, no, you must have filed on time or we’re charging penalties due to that. So again, if you’ve got questions on this, it’s kind of a big deal because normally they don’t do a statewide in some of these situations. And this has been a quite a big extension. And they’re doing it because we’ve actually had, you know, tornadoes. We’ve had straight line storms. We’ve had flooding in many parts of our state. And so they decided to do all counties to cover that situation. I mean, not a mile from my home did people get affected by the floods. It just, I was fortunate enough not to be affected. So all the counties have some issues that they’re trying to help and protect.

[03:09] Dr. Friday: Implications and Opportunities of the Federal ExtensionDr. FridayAnd it’s giving everyone a window. So this is the year you think about it. This is the year you really want to consider getting everything done right. Maybe making those payments. Even if you know, a lot of times I have people that will file extensions knowing that they owe money. And their idea is, well, I’ll just extend it. Now keep in mind, normally extensions do not extend the money due. If you owe money, if you don’t have it paid on or before April 15th, then the penalties and stuff keep going even if you have a legitimate extension. That is not the case this time. But maybe this will be the year that you really could sit down and say, hey, you know what? I could pay this and get my estimates together and try to get everything paid in by November 3rd. So that way you don’t get hit with all those additional penalties that normally you would have a lot of penalties if you waited until, well, for one, normally our extensions only go to October 15th. So November 3rd is past our normal extension period.

[04:08] Dr. Friday: Tax Season Observations and Common IssuesDr. FridaySo all great news. Other than that, obviously tax season was a crazy year this year. It seemed like there was just a lot of great people coming in our office. But we seem to be dealing with a lot of people that have multiple year situations. I think maybe finally people are like, it’s time to get my tax situation in line. Maybe you’re getting married. I’ve got two people that want to get married, but they don’t really want to go into the marriage before they have the tax issue taken care of. Or you have married somebody and now you find out that that individual has tax issues. So do you really want to be filing with that person? Because you could theoretically lose your refund. Now there are ways of preserving your share of the refund, but it may be smarter to file married filing separately than tying yourself to someone that does have existing tax issues.

[05:00] Dr. Friday: Tax Issues Impacting Life Events (Home Buying, Liens)Dr. FridayYou might want to also consider if you’re thinking about buying a house together and that person has an existing tax issue. Is it really a smart idea to have a piece of real estate the IRS can put a lien against? Now, I keep telling people that they can’t take your house per se, especially if it’s your primary residence. It’s not something that the IRS usually does. But what they can do is take and put a lien. But if it’s not, if both people that has a name on that property do not have tax issues, then they have a difficult time putting a lien against the property. But they will find ways putting a lien against your payroll. That’s easy. You go right to your employer and say, hey, put a lien against this person. We want to, you know, we want to take a portion or I’ve had them take the entire paycheck. Because if you don’t have a payment plan set up, they’ll set up one for you, which is basically taking 100% of your paycheck.

[05:50] Dr. Friday: Consequences of Ignoring IRS DebtDr. FridaySo ignoring or just not doing anything is not really the best plan. It may have worked for you so far. I have people that say, hey, I haven’t done anything with the IRS for 20 years. And I’ve never had a problem with them. And that’s great. I’m glad that works for you. I can’t say it works for a lot of us. If I have a bill from the IRS because they’ve charged an additional penalty, I’m either going to respond to that letter with a response that, you know, either there’s a waiver or there wasn’t a penalty, or I’m going to pay that bill because I do not want the IRS as my loan officer. It’s never pretty. There are penalties. Right now, I think the interest is like 12%. Penalties are up to 25%. And they can do that on two or three different things. Failure to pay on time, failure to make proper estimates, understatement of income. All of these have penalties that you can be assessed. And those penalties are each up to 25%. So next thing you know, you can have 100% of whatever you owe the IRS. You know, so you might have owed five, but by the time they’re done, you owe 10. That’s a lot of money to have to eat.

[06:56] Dr. Friday: Risks of Inaction and Life ImpactsDr. FridaySo you do want to make sure you’re not just ignoring. I get it. You know, if they’re not bothering you, you think, well, let sleeping dogs lie. I’ve heard it. And again, it may work for some of you, but some of us, you know, maybe you want to buy a house. Maybe you have kids that want to have FAFSA. Or you want to get married and you don’t want to have this hanging over your head as a potential problem. Number one reason for divorce is finances. So it’s one of those situations where you’re sitting there thinking, do I really want to have to worry about this? Or is it something that we can get resolution on and move forward?

[07:33] Dr. Friday: Resolving IRS Debt with Assets (Home Equity)Dr. FridayI mean, sometimes resolution can be fairly straightforward. I’ll be honest with you. You don’t own a house. You don’t have a big 401k. You don’t have a lot of assets. Those are the ones you hear that often make a better deal. If you have a home and the assets has money in it, you have to look at that from the IRS standpoint. You made payments on a mortgage, but chose not to pay them. So they look at that equity as theirs because of the fact that you made those payments. You built up that equity only because you did not pay your IRS bill. And so they’re saying that equity is up to at least what you owe us is ours. So you should take and borrow that and pay that to someone other than us. And that is their two cents. There is some arguments and debates that can be done on that. But mostly you have to look at the picture in a big picture. I know a lot of people I have, they’re like, well, this is all we have. We’ve worked our whole life and all we have is the house and we paid it off. And that’s great. But then you have $45,000 due to Uncle Sam and you’ve got a paid off home. You’re not going to get a good deal from the IRS. You know, I mean, if you’re in your late 60s or early 70s and maybe that’s all you have is your house. And, you know, you’re going to have to do a reverse mortgage or you’re going to have to downside and sell it because that’s you may be able to make a deal showing that that is your only source of retirement. But let’s be honest, most people, that is not the case. And so you’re going to have to figure out a way to either borrow to pay Uncle Sam or make a payment plan to pay Uncle Sam. That’s your choices. And sometimes they don’t really give you a choice. They’re like, you’ve had eight years. You’ve only got a couple more years left. We’re going to put a lien against the house. And then it’s much more difficult to borrow. They will subordinate a loan. If you’re going to do that, they will go in and they’ll subordinate. So that way, the mortgage company will give you a mortgage and then they’ll pay the cash out directly to the IRS to get that lien removed. And, you know, and you’re fine.

[09:36] Dr. Friday: IRS Perspective on Affordability and AssetsDr. FridayBut just don’t think that because all you have or right now you don’t think you can afford it. But what you consider affording something and what they consider affording something are not the same story. I just want to put that out there. A lot of times people are like, well, all we do is we work all day. We each have a car. Our kids have cars. We have to pay insurance. We have health insurance. We have a home. And, you know, we don’t have anything left over every single month. And the problem is, in some cases, they may look at the value of the cars. They may say that every household for a husband and wife, even though you have children, theoretically, there’s only two cars needed for a household. If the child is over the age of 21 or, you know, they’re not your dependent any longer. That’s one thing. But in most cases, they are dependents. So the IRS could turn around and say the value of this car is what you can afford to pay us. If you sold that car, you could pay us because that’s a third car and it’s not needed in the household. Now, again, there are always two sides to all of these conversations. But I want to make sure you’re thinking if we’re going to be making a true deal. I mean, I know there’s a bunch of people on the radio that says, oh, we can make a deal with the IRS for 10 cents on the dollar. And we’ve done it in our office. But that doesn’t mean that the majority of the people walking in my office are getting that kind of deal, to be quite honest with you. Most of them, it’s a little bit more. Sometimes it’s 50. Sometimes it’s 60%. But, you know, it’s a little bit better than some.

[11:07] Dr. Friday: Lifestyle Choices vs. IRS Debt and Hiding AssetsDr. FridayBut on that same subject, you have to keep in mind that what you have, a portion of the reason you have it, is because you’ve made choices not to pay the IRS and therefore use that disposable income to either pay or buy something else. And now that other thing, I had a person that has a camper. And they’re like, well, this is the only thing we have. But you have a house and a camper. A camper is considered a second home. They are going to make you sell that camper. And they’re like, well, what if we just sell it to my brother? You sell it within the family. You’re going to have to prove that you paid the fair market value and that you have the ability to do that. Because otherwise, you’re not going to actually get the – they could turn around and basically say that you were trying to hide money from the government. And then that can get into actual worse legal issues if that’s the case.

[12:02] Dr. Friday: Break Transition and Upcoming Tax Law ChangesDr. FridayAll right. We’re getting ready to take our first break. If you want to join the show, you can. 615-737-9986. 615-737-9986 is the number here in the studio. Maybe you’ve inherited or maybe you’ve got some questions for 2025. We all know that the current tax law will expire at the end of this year. But right now, we don’t really know what. It has not been renewed. That’s all we know. So we’ll be right back with the Dr. Friday Show. All righty.

[12:36] Dr. Friday: Return from Break, Personal Anecdote (Beekeeping)Dr. FridayWe are back here live in studio on this beautiful Saturday. A little overcast actually, but it’s not raining, so I’ll take it. I was out there playing with my beehives. Many of you guys know I’ve got bees now, so I’m kind of excited about it. Just getting the supers put on. So a little late possibly to getting a full run of honey, but this is our first year. So we’ll figure it out as we go. Hopefully any of you guys are out there that know about bees. I can always use any help.

[13:03] Dr. Friday: Taxes and Beekeeping – Business vs. HobbyDr. FridaySo back to taxes, which is a good tax deduction because bees, if I can produce honey, then I’ll have a little business on the side and be able to enjoy my business and make some money, hopefully, on the side. But if you’re into, just keep in mind there’s a difference between a business and a hobby. I will tell you, I honestly consider bees a hobby for me. So that means that I basically will not show, I cannot show a loss. I can only write off expenses up to the cost of whatever it costs for me to sell something. And who knows if they’ll ever sell anything. But there is a big discussion and a big line in which people have, when it talks the difference between a hobby and a business. We’ve got a gentleman that lives down the block from us, his name’s Craig, and he’s got probably 30 hives. He’s in business. And he works a lot with dealing with the military. He does a lot with helping people get started. He’s an awesome guy. But again, there is a difference in my world. It would really not be a true business. It’d definitely be a hobby, a list at this point. Way too busy doing what I do for a living to make sure that works for you or whatever.

[14:20] Dr. Friday: Call-in Information and Introducing Caller MikeDr. FridaySo if there’s any direct questions, you can join the show at 615-737-9986. 615-737-9986. So we got Mike in Lawrenceburg. Mike, what’s happening, my friend?

[14:38] Caller: Question on CD Interest, Loans, and SSDI Income LimitsCallerWell, I’ve got a little problem, but it’s no big deal. But if you put all your money into a CD and you borrow against the CD, all the interest, does that loan still count toward income?

[14:51] Dr. Friday: Clarifying Taxable Income vs. SSDI Earnings LimitDr. FridayYes. So as far as I know, the way that would work is you’ve got, let’s just, I’m going to throw a number. Let’s say you’ve got 100 grand in a CD and they’re paying you four grand that year in interest, just throwing numbers out. And then you’ve taken a loan against that CD. You’re going to have to pay tax on the three or four grand they gave you in interest. And then potentially you could write off the interest against that loan. It would depend on what the loan was for. Was it for your primary home? Was it for a business? Or if it was for something personal, like a tractor, unless you’re not in business, then it would not be tax deductible.CallerRight now I’ve got, I’ve grown SSDI. And the interest on everything I’ve together puts me over my income. And I was just trying to get, throw a curve ball on it and see if there’s another way around it.Dr. FridayWell, SSI. So you’re on early social security.CallerYes, ma’am. I’m a hundred percent.Dr. FridayOkay. Well, interest is not considered earnings. Is it?CallerIt counts toward income.Dr. FridayDoes it? I mean, it counts towards income. But I guess I was thinking that my definition, when I spoke to someone over at social security, because I had a guy that he had, he had taken some money out of his IRA and they said that did not affect the early social security. It’s only earnings. Interest is passive. You don’t do anything. You put money in a bank and it does its job. You have no influence on how it’s going to do what it does. So as far as I know, and you can double check this unless somebody’s listening and that would be great if you know the answer. But my understanding for early social security, that 20,000 or whatever that you have to earn, that’s only through earnings, either be self-employed or W-2. It’s not considered other income or investments. So I think you’d be okay.

[16:46] Caller: Clarification – Issue is Taxability of Social Security BenefitsCallerRight now, it brings in between my other retirement income, because I’ve got a military retirement too that’s taxable, but it still puts me under by 20,000. But when you add in the interest that on my, what I’ve got now, I did it. I didn’t this year. I had to put it in this year because this thing got over, but it, I did it cause it was taxable. That’s what it asked.Dr. FridayRight. I mean, you have to, I mean, for the income tax purposes, I totally agree with you. It is taxable income. But for the SSI calculation for early social security, your retirement and the interest would not come into play. They would not penalize you for, for having money over the dollar amount. Now it may make your social security taxable, you know, on your personal social security. That may be what you’re talking about.CallerYes. That may be the case because both of them. I’ve already called, I called social security and I wouldn’t go ahead and have them tax my income.Dr. FridayAh.CallerMe having to pay that extra money.Dr. FridayYeah. That was smart. That was smart. I think.CallerRight now it’s not taxable income. And now. Right. With all my money and income, it’s put me over. So this year I had to call them to get them to go ahead and tax it. That way I ain’t got to worry about it no more. We’re still in hope that Donald Trump will pull it off and not, and change that law where social security, no matter how much money you make, is not taxable.

[18:13] Dr. Friday: Process for Withholding Tax from Social SecurityDr. FridayIt’s, it should not be taxable in my opinion, but you’re right. At this current tax code, you are a hundred percent correct. And what you did, I try to tell people all the time, how hard was it to get them to start taking tax out of your social security? Was it difficult?CallerNo. Phone call. Well, that’s all it was.Dr. FridayOkay. Cause I, I’ve had a number of people and I’m like, you need to start having social security withholding taxes. And they’re like, well, I won’t be able to make time to go down there. They make me come to the office so it can be done over the phone.CallerYeah. No, no. All right. I lied. I called them over the phone. They said, okay, you got to come to the office and sign a phone. Cause you got to fill out a W2.Dr. FridayOkay. Okay.CallerJust like you would a job or anything else. That’s all it is. They want you to do your W2. And I filed married and zero or a single married and single with a hire. And that way I’m guaranteed a little money back every year or at least even.Dr. FridayYeah. Well, that was smart, but you do actually have to go in and complete that W4 form or whatever. And then they will start taking out with all these.CallerYou got to fill out just for taxes. You got to sign something.Dr. FridayYeah. Well, that makes sense.CallerI’ve got an office here in Lawrenceburg. I mean, I got, I called them. I went in that same week. And I signed it left. I was in and out in less than 30 minutes.Dr. FridayOkay. Good. So it’s not overly complicated for some people, but they would have to make some time to walk in an office, local office.CallerYou just have to call, make an appointment. You go to the local office, you’re in and out. Cause it’s appointment only. Their doors are locked 90% of the time.Dr. FridayAh, gotcha. See, I didn’t know that. Thanks, Mike. I appreciate you letting us know that.CallerAll right. Thank you. Bye.Dr. FridayThanks, sir. Bye. All right.

[19:47] Dr. Friday: Importance of Planning for Social Security Taxability and IRMAADr. FridayUh, because yes, I think a number of people, unfortunately do not, uh, think about social security being taxable because in some cases, like Mike’s case earlier, he’s like, well, it wasn’t taxable until this year. I get it. Every time things change, um, it becomes, uh, more and more apt to be taxed. Um, and then you have to also worry about as if you, it, in Mike’s case, this is not likely a problem, but in the big picture, it, let’s say you sell a piece of money. You sell a bunch of stock, um, and you’re trying to pay off a mortgage or do something. I’ve had people do this and then they turn around and guess what? You end up making your Irma taxable or increase, increase your Irma. I should say. And Irma is what they use to do your Medicare. It’s a means testing for Medicare. So all I’m saying is in one of those situations, you need to, to, to be, Mike was doing the right thing. You need to be a little proactive. Um, if you think something’s changing, like in his case, uh, you know, if he’s got interest income, that’s higher now than it was in the past or whatever, and added to all of his additional other income, he may end up with a situation where he needs to consider doing what he did. And, you know, a lot of people like, well, social security shouldn’t be taxed. I hear it. But right now under the current tax law, it could be taxed. So you either going to have to have the money come out of your bank account because you owe money or you have it come out every social security check. Totally up to you. I suggest, um, I mean, if, if, if the amount of money you owe is two, three, $400 at the end of the year, I’m happy with that. It’s a free loan from the government, but you know, you really have to be careful because if you owe five, six or seven, there could be a penalty and no one wants to pay extra money on top of what we already have. Right. It just doesn’t make sense.

[21:34] Dr. Friday: Estimated Tax Payments – Rules and PenaltiesDr. FridaySo, um, just be careful when you’re calculating and now’s a good time. Look at last year’s taxes. Did you owe money last year? If you did maybe consider changing something now. So that way at the end of this next year, you will not owe, or it’s very little amount. Again, I don’t care if it’s a couple hundred dollars, but if it’s a couple thousand dollars, that means you gave more money to the government because there was most likely a penalty that was assessed with it. And that’s what we really want to avoid. We don’t want to pay penalties. We don’t want to give the government a dollar more than we need to. And they don’t really, I mean, they would much prefer us all paying and keep in mind, if you are a self-employed individual and you are required to make four equal payments based on the prior year, every year I have people that’s like, well, I made some payments, but they weren’t equal and they weren’t four. Um, sometimes people make two or three payments and then they don’t make the last one because they don’t think they owe, but then they ended up owing or something like that. Or they make it based on the income they’re earning currently this year. That’s not the way estimated tax payments are done. Um, you have to base it on the prior year. So the prior year says, Hey, you owed $5,000. You need to make, you know, four equal payments. That’s going to make that balance out. If you don’t, there is a penalty for not making proper estimated penalties payments, excuse me. And that will be up to 25%. Uh, so 5% per month for the next, uh, you know, each time. And of course every quarter it adds up. And so, you know, it adds up pretty quickly.

[23:08] Dr. Friday: Reminder on Federal vs. State Extension RulesDr. FridayAnd, you know, the whole idea is holding onto your money. I totally hear that. I don’t, I mean, you know, right now, many people, like I said before, this is the first year, but many of us are holding off. I’m making our quarterlies holding it off. I’m paying the taxes because we know that we can pay them, but if there’s no penalty, then why not delay it? Uh, but if for some reason you’re delaying it because of the state, don’t do that. Tennessee is not allowing us to delay our F and E, our business tax, our sales tax, any other tax due to the state of Tennessee. Um, unless you are truly affected by the storms or the disaster, then of course you will qualify. It’s only the individuals that were not directly affected. That’s going to be a problem.

[23:50] Dr. Friday: Break Transition and Contact InformationDr. FridayAll right. We’re going to take a quick break here. Again, the number here in the studio is 615-737-9986, 615-737-9986. Here is a number here in the studio. Um, and you can also, um, just email Friday at drfriday.com. If you don’t want to come live, either way, we’ll get your questions on here and we’ll be right back with the Dr. Friday show.

[24:16] Dr. Friday: Return from Break, Finishing 2024 Taxes and Looking to 2025Dr. FridayWe’re back here live in studio. I was so excited. Apparently try to jump in early. Um, we are talking about taxes, talking about 2024, still working on completing a lot of those. Also with 2025 guys, we’re almost in the first month, a day of may we’ve already finished the first quarter. Remember if you’re a payroll person or anything like that, um, we have quarterly reports do make sure all those are done by the end of the month. Other than that, we’re moving nicely ahead into the 2025.

[24:45] Dr. Friday: Uncertainty of Tax Law Extension and Planning ImplicationsDr. FridayNo big changes right this second on taxes. We are looking forward to, um, the extension. We’re hoping, um, as far as the, the current tax code being extended past the last day of this year, because that could make some big decisions, um, on, you know, maybe people are doing conversions, um, or maybe you’re thinking about selling some stock to pay off something. Do you do that in the 2025 year before potentially the tax brackets change? Especially if it’s short-term, uh, capital gains, because, uh, we would go from what? 12% to 15, 22 to 25, 24 to 28, et cetera, et cetera. Um, and, uh, the overall brackets would go up about two and a half percent. I think 39 and a half is the top right now. It’s like 27 and a half or 37 and a half. So again, one of those decisions that it’s going to be hard. I’m really hoping that he takes on. And I realized there’s a lot of things happening in government. Um, my world is very small. I’m looking for tax changes only. He’s worried about, uh, budgets and all the other things that go along with it. But it would be great to see something come along with, uh, the new tax code to just give us that idea.

[26:03] Dr. Friday: Potential Tax Law Changes and Planning (Conversions, Estate Tax)Dr. FridayAre we going to have some extra time to keep doing some of these conversions at the lower tax rate to keep, uh, cause I know there’s a number of people that are working on, um, you know, either retiring and wanting more money into the Roth. Um, what, what will be, and, you know, also, you know, the death taxes, a lot of those things, uh, the inheritance tax, um, the estate tax, all of those different things will be changing potentially, uh, at the end of 2025. So we’re waiting to see how that’s going to play out and, you know, how much do we need to be pushing it for 2025 versus 2026. If we have another four years or another six years to, to make the difference, that’s all we’re trying to find out is what, what is the difference? What can we do?

[26:50] Dr. Friday: Maximizing 2025 and the IRA/SEP Contribution ExtensionDr. FridayAnd, um, you know, so until then we’re really just trying to maximize the 2025 year and with the changes, with the large extension that we got for 2024, there’s just, I mean, keep in mind, they even extended the money you could put into your IRA, right? So before April 15th, you had to pay your money into an IRA or you couldn’t put it in for the past year, right? So April 15th, I could have done for 2024, even though it was April 25th, 2025 with this extension from the federal government, they’ve allowed us to push all the way till November, our dollar amount that we can put into our IRAs as long as, as well as our SEPs. SEPs are always extended with the extension, but IRAs are not. So there’s all these little things you might think about. Well, I didn’t really have the money I didn’t really want to have, but maybe you could maximize, put a little extra into an IRA this year that you normally want because of the fact that you’ve got this nice big window, um, you know, to do it. So, I mean, these are the kinds of things you and your tax person, um, are going to be thinking about. What can we do to maximize the 2024 year to make a difference versus what we might not have done if we only had till April 15th, uh, to do it, or if we only had till October 15th to maximize it. What is our options?

[28:14] Dr. Friday: Caution on Delaying Payments and Using the IRS as a Loan OfficerDr. FridayUm, I will say if you’re a person that is pushing or delaying and using that money to maximize, maybe put in a CD or something to grow some money, that’s perfectly fine. But be prepared to pay that money and any estimates that are required for the 2025 year, as well as paying off your 24, never make the IRS your loan officer unless it’s no choice at all, because let’s be honest, their interest rates, their penalties, they have done what they have to do to make sure you are not looking at them as a potential person. That’s going to give them a loan. Right. And I get that again, they, they, uh, I mean, you’ve got billions of people. You can only imagine how many different, um, excuses and how many different ways people file and so many different things.

[29:01] Dr. Friday: Complexity of Tax Law and IRS Appeals Anecdote (Donations)Dr. FridayI would not want their job. I would not want to have to try to keep tax law, um, perfectly straight. Um, uh, and dealing with the IRS, like we do, um, we don’t normally go very much in the tax court. Uh, in fact, I’ve never been actually in tax court, but what we can do is actually go to, um, uh, basically a pre-tax where the attorney will call, uh, that represents the IRS and they, that’s called appeals. And, um, and they will, and I only done probably 10 of these cases in the last 15 years. And I was on one the other day and I will say that, uh, this particular lawyer was, um, very good. Uh, not only not making us feel like we didn’t know every answer, but to explain everything. So, um, again, it’s not easy to deal with the IRS, but it’s no different than anything else. And making sure that you have all of your information together. Um, sometimes you think you, you know, that, that you have a really good logical reason behind, but unless there has been some direct tax court, this one we’re dealing with, it’s kind of interesting. The person’s, uh, father died and he was a hoarder. And so they ended up with trailers of things that they gave to Goodwill and Salvation Army. He took pictures. He went on to the Goodwill site and Salvation Army sites and put in the, uh, values if they were considered good or whatever. Um, and, um, the mistake made, he put in what he thought, uh, it would have been the value that he would have paid for it. And of course he didn’t pay for it. It was inherited. So, um, all of that, but that being said, um, it still came into the fact that he, he claimed there was like $80,000 at their, at the thrift store value of all these things. I mean, it was thousands of items. I mean, but, you know, but tax law specifically says you have to have an appraisal if you have more than, uh, you know, $5,000 of like kind, um, or actually, or $500 of like kind items. But basically when it gets that an appraisal should have been made, he didn’t know that he was using it just like he had done all of his own Goodwill stuff for years, thinking that there’s the same process.

[31:15] Dr. Friday: Lessons Learned – Importance of Appraisals and Expert AdviceDr. FridaySo again, it’s not something that you always run into, but it’s interesting sometimes with some of these cases because it’s not always black and white. I mean, there are some confusing tax laws in with the taxes and the IRS often expects an ordinary individual to be able to know this information. And that’s where it gets, um, you know, the ability to question that authority. How well is it marketed? Do you really know that if you, you have, you know, four dressers and they add up to this dollar amount that I have to have an appraisal. I will tell you, I’ve been working in this case for almost two years. I have now had a number of people that have had inheritance with, they’re going to give a lot of stuff away to either keep it locked down and say, Hey, you’re giving it all away. But it’s, if you want to get an appraisal, you can probably, you know, put more in there without an appraisal. You know, you’re, you’re locked into a couple thousand dollars, um, of, of what it is and still document it because, you know, they could kick it out, but, um, you, you don’t know that until you’ve run into it. So there’s always interesting things. And sometimes what you think is right is not always right. So if you don’t know the answer to some of those things, you really do need to take the time to go to an expert and make sure that they would have, cause I mean, to be quite honest, I think if he had went to have someone do his taxes, they probably would have never allowed $80,000 worth of thrift store or thrift valued items. I just don’t, I know I wouldn’t have not without an appraisal. Um, no matter how many truckloads or trailer loads there was, it’s just a lot, uh, to do. And it would have been better if he had hired almost an auction company and had a huge garage sale where they would have handled it all and been able to give, um, some sort of evaluations for it. If it was really worth 80 grand at thrift store value, then unfortunately. The few thousand he may have had to pay, uh, to them would have been valuable at the end. But, you know, again, lesson learned understanding it.

[33:15] Dr. Friday: Advice for Estates and Inherited Property (Appraisals)Dr. FridayBut if you are working with an estate and you think that, Hey, you know what? My, my dad had three houses and they were full of, of junk. You know what people would call junk and moving on, then you need to call an expert out, have them do the appraisals and then do that. It’s the same thing. If you inherit a house, right? A lot of times people are like, well, um, my, I don’t, I don’t know. I say, what, what’s your basis? How much did you inherit it at? And they’re always like, well, I, I don’t know if we sold it for this much, but of course that was a year later. Right. I mean, depending on the market, especially back in like 2021, um, where the value of the house was getting inflated big time, you, you need to have an appraisal, an outside party that either can give you, and it depends on the value of the home, at least like kind. But in many cases, I suggest an actual appraisal on the house and the household things. If it’s something that’s going to be being used to give away or, or, you know, donate it or something like that. Because if you don’t, then you’re going to end up with a whole situation where you could end up losing out on tax deductions because somebody just didn’t want to take that extra step. So if you’re the executor of an estate, if you’re dealing with this kind of thing, that would be the answer you want to go with.

[34:34] Dr. Friday: Final Break Transition and DisclaimerDr. FridayAll right. We’re going to get ready to take our last break here. If you’ve been waiting to join the show, now would be a good time to pick up the phone. 615-737-9986. And I totally understand. It is a beautiful Saturday outside. I was out on my tractor myself. It was a good day to be outside playing in the trees and just trying to get things cleaned up and ready for planting. But Hey, if you’ve got a tax question, maybe you’ve inherited something, maybe you’ve got a friend that hasn’t filed taxes and you’re just trying to figure out what’s the next step. Um, you can always call the office on Monday, but you can also join the show again. 615-737-9986. That’s the number here in the studio. And that’s the number that we can use to try to help you give you a rough idea. Again, I just want to say that most of the advice we give on this show is really just outlines, right? It, you need to double check this information with your own personal. Everyone’s taxes are different. Everyone’s situation is different. So don’t just take this at face value. Take this as a, as a outline that you can use to hopefully reduce your taxes or protect yourself in case there is a tax situation. Any way you look at it, I just want you to be knowledgeable. So you have the information you need. So you don’t end up having to go through an audit and then not have the documentation that you need. Again, if you want to join the show, 615-737-9986 number here in the studio, we’re going to take a quick break. When we get back from that break, we’ll get to your phone calls. This is the Dr. Friday show. We’ll be right back.

[36:06] Dr. Friday: Return from Break, Introducing Caller MikeDr. FridayAll righty. We are back here live in studio and we’ve been fortunate enough for Mike to hold through that. So let’s hit Mike and see if we can get his question. Hey, Mike, what can I do for you?

[36:21] Caller: Question on Managing Business Income with Early Social SecurityCallerHey, can you hear me? All right.Dr. FridayYes, sir.CallerAll right. I am 65. I’m about to retire from teaching. My wife is 67 and we’re just about 67, but she’s reached her full retirement age. We, we have a mowing business together. I’m not sure how to get around making too much for mowing. I’m just not sure. Can I sell her the business and let her earn as much as she wants and she pays me a stipend, a salary or something. So I don’t go over my amount because I’m about to start collecting social security or I can wait. It doesn’t matter.

[37:10] Dr. Friday: Advice on Structuring Business for Social Security Earnings LimitDr. FridayWell, I mean, obviously waiting would make life easier. You can make all the money you want and not have to worry about what you’re talking about as the early social security, um, which is what 67. Is that her, is she at full social security at 67?CallerShe just received her first check.Dr. FridayOkay. And she’s not on early though, right? She’s on her, her actual, um, social security is 60.CallerOkay.Dr. FridayUm, so yeah, the best answer to that would be is put the business in her name. Um, and then she could 10 99 you for your, you know, hourly pay or whatever she’s going to do. And then that way your pay will be based on only what you’re earning. All the profits can then stay in the business and she’ll pick up on her schedule. See, you would have a separate schedule. See with your earnings. Um, probably no real write-offs because you know, you’re using your own, your family car and everything else. Right. I mean, I’m just saying all that would probably run through the business. It’s a, it’s a mowing business. So, yeah. So, but the mower and all that would be owned by your wife in theory, because she’s the business owner, unless she’s, you know, but either way I would, yes, I would just have it set up where she’s basically paying you for so much per an hour to do the work. Um, I mean, she could theoretically put you on payroll. Um, thinking that’s probably, um, a lot considering we’re only looking at a potentially a year, year and a half before you’ll be on full social security. But, um, you know, since it’s within the family, it’s really not a big deal.CallerYeah. Here’s the thing. We’ve been filing jointly with the business mixed in there.Dr. FridaySo whose name is the business been on both of yours when you do it? Is the schedule C in both names or just yours?CallerYeah. Our, my, our last name long care.Dr. FridayOkay. But on the top of it, do you have, do you know, cause you have a choice. You can either market with husband and wife, both run the business, or usually it’s like the wife or just the husband. So in this case you would have a schedule C for the 1099 and then she would have the full business running under her name solely. You wouldn’t have a joint schedule C, but you’d have independent ones, but still on the combined tax return.CallerDoing this. I just want to be legal. I mean, I pay taxes on everything, everything. I am not going to short the government. Uh, they’ll never come back on me. So, uh, but I just want to make sure I’m doing the right thing. I know it’s allowed. It has to be allowed. I want to use the tax laws to the fullest extent. So I thought, man, I just need to call it Dr. Friday. That’s all.Dr. FridayYeah. It is allowed. It’s just a matter of setting it up where she’s tracking, you know, your wages. Just like if you were a subcontractor to anyone else and your job would be is to not work above the 20,000, whatever you can make.CallerYeah. We’ll set it up that way. Yeah. Yeah.

[40:12] Caller: Question on Prorated Earnings Limit in First Year of SSCallerBut here’s the thing. Now, now I’m going to start collecting in when I turn 65 in June. I’ll just. Okay. I’m retired from teaching. I’ll like turn 65 in June. Is it, um, what I make the rest of the year or is that 20,000 or is it pro rated or what?

[40:31] Dr. Friday: Confirming Prorated Limit and Closing Remarks with CallerDr. FridayIt is pro rated. Um, my understanding is it should only be based on the percentage that you have there because obviously prior to that, you were not on the social security. When you sign up, you might want to ask them how they calculate it. I don’t know exactly Mike, but I do know it’s pro rated.CallerThere you go. All right. All right. I hear you sporadically every week because I, I’m jumping in and out. In fact, I’m about ready to go do a lawn now, but I just thought, man, I need to call her. She probably would know the answer. My accountant hasn’t called me back in a week. So I know, I know it’s a busy time, but I just thought, man, I just need to call her. You said call in right now. So I did. So I just, I just think my foot dropped up and ready to go, but I thought I need to talk to her, but that clear results a lot. So I’ve got about a month to do it. So thank you so much.Dr. FridayNo problem. Thanks for listening.CallerMan, I’m excited. All right. Okay. Bye.Dr. FridayThanks. Let’s hit a Leland and Gallatin real quick. Hey Leland.

[41:26] Caller: Question about Self-Employment Tax Deduction for LLCCallerThis is my Leland. Hey. Hi. I’m calling about social security tax. Here’s the example. Lady X, she is the sole proprietor of her LLC and she has to pay her social security payroll tax and match the tax. So my question is, I’m sorry.

[41:52] Dr. Friday: Explaining Self-Employment Tax Deduction (Form 1040 Adjustment)Dr. FridayNot really, because the first half, the first half of it becomes a deduction on the front of the 1040 and then she pays the match. So she gets credit for half of the social security tax as a deduction.CallerOkay. Okay. Okay. Okay. Real quick. Real quick. Uh-huh. When her accountant does the payroll, does the amount of social security that is taxed, is that taken off? Is that sheltered, in other words? Is it like a tax deduction against the LLC itself?Dr. FridayYes. Not really. So basically you have the profit of the LLC, for the example, let’s say she made $20,000. She’s going to get a credit for the 7.65% on the front of the 1040 and then on page two, she’s going to pay on the 15.25% or whatever it works out to mean on the backside. But it really never comes out of the business itself. It’s truly an additional tax.

[43:02] Caller: Confirming Understanding of SE TaxCallerOkay. So you actually pay income tax on the payroll tax.Dr. FridayExactly. That’s why I keep saying people should not have to pay tax again when they take out social security. We pay it going in.CallerOkay. Thank you, Dr. Friday. You answered my question.Dr. FridayThank you.CallerThanks.Dr. FridayGreat question.

[43:24] Dr. Friday: Show Wrap-Up and Tax Services OfferedDr. FridayAll right, guys. We’re getting down to the end of the show. So let’s just recap here really quick. So if you need help doing taxes, obviously it’s what I do all the time. We are now calmed down a little bit. So if you need an appointment, you can give us a call at the office 615-367-0819. That’s the direct line to the office 615-367-0819. We can get you on the calendar, see if we need to get something filed for you, get you caught up, see if we need to do some back years taxes, get a pile of attorneys so we can pull transcripts. There are ways for us to help you. If you don’t have your tax documents, there are ways to help. If your tax documents are wrong, there are forms that can be filed. We’ve had a couple this year where W-2s did not seem to be correct. I had one where she seems to have two W-2s for the same business, but they’re completely different. So one seemed to be like before they switched to ADP and then ADP came into play, but we don’t seem to know how that’s working. They’re both under the same federal ID number. So it’s very confusing sometimes. So we can help you though, try to figure out what’s the best way to get it resolved, at least in the best of the IRS is concerned.

[44:41] Dr. Friday: Accounting and Payroll Services RecommendationsDr. FridayAlso, if you need to, you know, get your business started, we can also help you with accounting. My brother runs the bookkeeping division on ours. We’re certified QuickBooks advisors. So we can help do accounting as well, help you get started. So that way, you know, what’s easier for us is if you’re using us for taxes, it’s great if you can actually have the accounting set up. So that way we don’t have to worry about going back a whole year and trying to recreate something. We do usually suggest using online QuickBooks nowadays. Desktop is pretty much gone. So it’s easier for people to go that direction. And also use full payroll services. There is one called Gusto. We don’t get paid by doing any referrals. Gusto, of course, ADP, we use all for all of our clients. So we were definitely advocates of ADP. And then, of course, there’s, you know, Intuit if you’re using QuickBooks. But whichever one you decide to do, it is so much easier if you use full service. Okay.

[45:38] Dr. Friday: Importance of Payroll Tax Compliance and Potential ConsequencesDr. FridaySo that just means that they will take the taxes out every week, every month. They’ll make sure the payroll, quarterly, state unemployment, federal unemployment are all filed. Because if you don’t make those payments, then you’re in my office and we’re trying to deal with OICs or trying to pay back hundreds of thousands of dollars sometimes in back payroll because they don’t give you the same kind of credits or penalties or even worse, failure to pay payroll taxes. And they can come directly against the owners of the business or whoever was responsible. I had a situation where a bookkeeper was making the call and therefore they tried to come against her for not making the payroll taxes, but yet paying the rents.

[46:19] Dr. Friday: Final Contact Information and Sign-OffDr. FridaySo again, 615-367-0819 is the number in the office. 615-367-0819 or Friday at drfriday.com. That is Friday at drfriday.com. Or you can check us out on the web, drfriday.com. As we’d love to say, call you later.

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In this one-minute moment, on Tax Day itself (April 15th), Dr. Friday gives last-minute advice: file an extension immediately and make a payment if you haven’t filed.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Today, April the 15th, is Tax Day, which means I’m pulling my hair out. It’s going crazy. And you, if you haven’t already filed, think ‘extension’. You can go to IRS.gov, and you will find extensions available to be e-filed there. You can call our office at 615-367-0819. We will do our best to assist you in filing an extension. It is vital to at least have that done. If you haven’t filed taxes for a number of years or if you’re just waiting for one document, any of those things, now’s the time: think extension. Also, make a payment today, even if you don’t know how much you owe.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, with the tax deadline looming (April 15th), Dr. Friday advises on filing an extension and making a payment to avoid penalties.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

And it’s April the 14th, which means we have less than 24 hours to file your taxes. If you haven’t actually finished your taxes, you’re pondering, you’re delaying, again, make sure you have filed an extension. It will eliminate one of the penalties: the failure-to-file penalty. And then if you have the money, but you just haven’t had the ability to finish the taxes, make a payment. Go ahead and send it. Go to IRS.gov. Click on the little button that says ‘Pay’. You can do ACH or credit card. They do charge you a 3% or 2.5% or 2.5% fee. But make the payment. That way, then, all you’re having to do is the documentation. You need help? 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, as the tax season deadline approaches, Dr. Friday addresses common reasons people need to file past-due tax returns, like FAFSA requirements or marriage.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I’m Dr. Friday with Dr. Friday Tax and Financial Firm. We are almost at the end of the 2024 tax season. And if you haven’t filed your taxes, or maybe you haven’t filed for a number of years, and you’re sitting there going, “I have a child that’s getting ready to go to college and they need FAFSA,” or “I’m just wanting to get married, and I don’t want to bring my tax issues into my relationship.” These are things we can help you with. We can fix you. We can fix the situation that will fix that situation. So if you need help, give us a call 615-367-0819. Or just check us out on the web at drfriday.com or email me at friday@drfriday.com.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday discusses the IRS Personal Identification Number (PIN) required for e-filing if you’ve opted for identity protection or been flagged.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Personal PIN number: The IRS will give it to you because you’ve either been thought of as having identity theft or you’ve opted in because you’re trying to protect your identity. Nothing wrong with that. But so far, we have about six people that have not provided that number, and so we cannot e-file, which means we cannot file tax returns for those individuals. We don’t have any way of getting it. The IRS will only give it to you. So, my suggestion would be: sign up for IRS.me and get that information if you haven’t already received it in the mail. Again, it’s your personal PIN number – it’s six digits. Call us if you need help, 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday emphasizes the importance of reviewing and adjusting your W-4 form to ensure correct tax withholding throughout the year.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I keep pushing: Make sure you’re looking at your W-4. That is what we use when we’re preparing payroll. So, if you have a balance due in 2024 because you didn’t have enough money come out, then let’s adjust it for ’25. It’s a lot easier to pay 50, 100, 150 per paycheck than thousands of dollars the next year, and sometimes interest and penalties. It’s not worth it. Sit down and take a look. If you had a big refund, the same conversation: make an adjustment. Let’s not give a loan to the IRS. As long as you don’t have to make any payments or you don’t owe any penalties, keep the money in your pocket. 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday encourages aspiring entrepreneurs starting businesses in 2025 but stresses the importance of consulting with legal, tax, and financial professionals for proper setup, asset protection, and succession planning.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Starting a new business in 2025? I think it’s an awesome idea. I love entrepreneurs. It amazes me sometimes on the things people come up with and create to make a new business.

But let’s make sure that you’ve also consulted with a good attorney, a good tax person, maybe even your financial planner, making sure that it is set up in a way to protect your assets. So if something does go wrong, you don’t lose things you didn’t want to lose.

And also make sure that you have succession planning. For all those that have built very good businesses, without that, sometimes things can go awry for the people that you love.

So, if you need help with any of it, give us a call: 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday issues a crucial reminder as tax day approaches: filing an extension gives you more time to file your return, but not more time to pay taxes owed. Pay by April 15th to avoid penalties.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

And tax day is just around the corner. If you have not filed your taxes, you do not have a tax appointment… Now, when you file an extension, please listen carefully: it does not extend the money you owe.

So, if your tax person says, ‘Hey, we’re going to file an extension. It’s going to make it much better. It’s a lot easier’—from our standpoint, sometimes it’s a great idea. But if you know you’re going to owe $15,000 or $20,000, pay that now. Pay it before April 15th. Otherwise, you’re looking at penalties and interest, which cost a lot.

615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday clarifies that everyday clothing worn for work (like jeans or casual shoes) is generally not tax-deductible unless it functions specifically as a uniform, possibly bearing a company logo.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Self-employed individuals: sometimes I think you guys sit around and think about what ridiculous tax deduction can I write off. ‘My blue jeans are a tax deduction because I wear them for work.’ ‘I have really nice Uggs that I wear every day to work, so those are going to be a tax deduction.’

Keep in mind, people, anything that can be worn on the streets—which is a lot, if you think about it—is not a tax deduction; it is not a uniform; it is not an outfit. What you do have is if you have your logo on something, then you may be able to consider that maybe a uniform.

You need help? You need to call us: 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday encourages sole proprietors and family partners to formally pay their working children, highlighting potential tax advantages like tax-free income up to the standard deduction and IRA contributions.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

And I am shocked when I see where parents have children—they’re 15, 16, 17 years old—working for them because they’re sole proprietors or their family-held partners, and they’re not paying them. They basically don’t; the kids come in, they do the work, they’re working on the website, they’re doing the bookkeeping, they’re helping answer phones, but they’re not paying them.

You can pay a child $13,000 a year and pay zero tax because the standard deduction is zero [for them on that income, assuming no other income]. Put another seven or eight [thousand], depending on their age, into an IRA, and you can save that too. Teach them how to work and to be paid. It’s going to give them a better start in life.

You need help? 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday highlights that costs for parents in assisted living or long-term care facilities can often qualify as a significant medical expense deduction, necessitating itemization.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

And it’s for all those adults that maybe have parents that are in long-term care situations. One of the things I have noticed this year is that many people are missing the whole point that in long-term care, when a parent has to be in assisted living, that is considered a medical deduction.

Many times, people are having to take quite a bit of money—$7,000, $9,000 a month—to keep their parents in those facilities. A large chunk of that could be considered a medical expense, so therefore, itemizing is a must.

So, if you need help understanding how that could be a way of putting more money in your parents’ pocket, give us a call: 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday shares an April Fools’ Day joke about taxes being cancelled before reminding listeners that the April 15th tax deadline is real and requires action: either filing or getting an extension.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

And I’ve got something hot off the lines. They have passed the law that says no one has to file taxes this year. That’s right, no one. And I also have a bridge in Arizona for sale and a few other things—if you really want to believe that.

April Fools! That’s right. I am just teasing. I don’t want anyone to come back and say, ‘Hey, Dr. Friday says I don’t need to file taxes.’ That is a joke, but today is April Fools’ Day.

But in reality, you only have a few more days left before tax day, April 15th. So, make sure that you have either filed an extension or filed your taxes.

And if you have questions or need help, give us a call: 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday emphasizes the need for self-employed individuals to meticulously track business mileage (at 67 cents per mile) using logs or apps and document trip purposes to withstand IRS scrutiny.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

If you are a self-employed individual and you use your vehicle for work, remember: 67 cents per mile. That’s only good if you’re tracking the miles. Looking up and telling your tax person, ‘Well, I think I put about 20,000 miles on my car,’ is never going to stand up in any kind of scrutiny.

You need to have something like Mileage IQ, some sort of paper book that you keep in the car. You need to have a purpose. Why did you go to this location? I went for tax preparation. Why was it this, and why was that? Who did you meet? What was the purpose?

You need that information because if you ever get audited, I will tell you, that will be one of the top things they audit.

615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday stresses that making estimated tax payments is mandatory to avoid penalties, warning against trying to out-earn the IRS penalty rates by holding onto the funds.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Making estimated tax payments, people, are not a choice. Sure, you can choose not to do it, but there is a penalty. Who wants to pay the IRS more money just because you have to hold on to it? You better be earning 6 to 8 percent, or you’re going to be paying more in penalties than you’re earning on the money.

I’ve had more than one person say, ‘I can do better than the IRS,’ but the IRS is the one penalizing you. Take the money out of the bank, pay the IRS so that the money in your bank is your money. Keeping the IRS out of your bank is so much easier than having to deal with penalties and interest.

Need help understanding that? Give us a call at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday advises against delaying tax filing even if you owe money, emphasizing that filing on time prevents additional penalties and interest; payment plans can be set up later.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

We are winding down on tax season. So, if you are deciding maybe you don’t want to file your tax because you just found out that maybe you owe $20,000, or $5,000, or $2,000—it doesn’t make a difference depending on your own budget, but it’s a lot of money. And you’re thinking, ‘Well, if I don’t file the taxes, the IRS won’t know; therefore, I’m going to be able to stretch this out a little longer.’

And I can’t say that’s not true. But the fact is: file your taxes on time, then figure out how you’re going to make a payment plan. Pushing it down the line is only going to add more penalties, more interest, possibly failure-to-file penalties.

If you need help, 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday discusses the upcoming 2025 change where merchant fee income over $600 will require business tax reporting, urging online sellers to track costs now.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Okay, so if you’re a person that is working and selling small things—maybe on eBay or one of those types of sites—and you have merchant fees, remember: 2025, it will be going to $600, what they threatened to do back in 2022. They’re finally implementing that.

It is important to understand that if your merchant fees are over $600 for the entire year, you’re going to start having to report this as a business. So, think now about cost of goods, expenses. You can’t always show losses. So, what are you in business for?

615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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This episode dives into the various types of trusts available for estate planning. Dr. Friday reviews A.B. trusts, living trusts, insurance trusts, charitable remainder trusts, and even disability trusts to help you plan for the future.

Transcript – Edited for Readability:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Let’s talk a little bit about trust, different types of trust. You have a typical, you know, A.B. Trust, living trust, an insurance trust, a charitable remainder trust. All these are great. There’s also a disability trust. One of my nieces is on the spectrum. And we’ve set one up probably almost 10 years ago, in which many of us have also set up a life insurance policy. So if something happens to us, it will go into the trust. And then that way, she will always have money even when we’re not here. Think about things like that. Sometimes it’s a better way of setting it up than putting cold cash and hoping that it will grow. You need help with that again. Talk to a good estate attorney, but you can call or go to drfriday.com.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of The Dr. Friday Radio Show, Dr. Friday dives into the heart of tax season with critical updates, valuable guidance for filers, and answers to real listener questions. She covers everything from business tipping practices and tax bracket planning to BOIR confusion and capital gains insights—plus what to watch out for when trying to “save” on taxes with big purchases. Whether you’re a business owner, parent paying college tuition, or navigating retirement, there’s something here for you.

Topics Covered Tipping & Payroll Compliance + TN Dept. of Labor’s rules on tip handling by employers. + Federal law mandates tips belong solely to employees. + Risks for businesses using tips to supplement payroll. * Filing Head of Household + When you can claim it (e.g., adult children, elderly parents). + Income thresholds and care requirements. * Earned Income Credit Restrictions + Not available for those over 65 or under 22 (with exceptions). * College Tuition & Tax Credits + Why higher-income families often miss out on education credits. + American Opportunity & Lifetime Learning Credit phaseouts. + Challenges with student loans and aid eligibility. * Do You Need to File? + Elderly individuals and filing thresholds. + How to calculate whether Social Security income is taxable. * BOIR (Beneficial Ownership Information Report) Update + Correction issued: Most U.S. small businesses no longer need to file under the Corporate Transparency Act. * 2025 Gifting Limits + Increased to $19,000 per person without gift tax implications. * Capital Gains Tax Brackets + Yes, 0% capital gains tax exists—but income limits apply. + Breakdown of thresholds for individuals, married couples, and trusts. + How the 3.8% Medicare surtax can sneak in. * The Myth of ‘Buying to Save on Taxes’ + Why spending $100,000 to save $16,000 in taxes isn’t wise unless the purchase is truly needed for business. * Deadlines and Extensions + S-Corp and Partnership tax deadlines passed (March 15). + April 15 personal tax deadline approaching. + Benefits of filing an extension—even if you still file on time. * Live Callers’ Questions* + Can I claim my 28-year-old son as head of household? + Widowed caller unsure if she needs to file taxes. + What can higher-income parents do to lower taxable income while paying for college? + Donating a valuable historical item and using it to offset a Roth conversion.

Transcript00:00-00:07No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes.00:07-00:10She’s the how-to girl. It’s the Doctor Friday Show.00:10-00:22If you have a question for Doctor Friday, call her now, 737-WWTN. That’s 737-9986.00:22-00:27So here’s your host, financial counselor and tax consultant, Doctor Friday.00:27-00:34G’day, I’m Doctor Friday and the Doctor is in the house.00:34-00:36It is actually a gorgeous Saturday outside.00:36-00:40I stuck my head out a little bit, been working on taxes all morning.00:40-00:43I bet some of you have been working on your taxes, I am sure.00:43-00:51So if you’ve got questions concerning about how to file taxes, maybe you’ve run into something on your tax return and you weren’t sure how it works.00:51-01:00I’ve had some really interesting different situations coming up from, obviously the biggest is most people going, oh my gosh, I actually owe money.01:00-01:03And they weren’t prepared for it.01:03-01:05Sometimes it has to do with capital gains.01:05-01:11Normally it’s my self-employed, my business owners that come into play.01:11-01:15And I will say I had a really interesting phone call last night with an individual.01:15-01:22They’re not clients, but they were an individual that the Tennessee Department of Labor had come into their store.01:22-01:26And this is a store that does accept tips.01:26-01:30Well, their system does, even though the employees aren’t really paid based on tips.01:30-01:37But anyways, it’s really unique conversation because the state of Tennessee actually follows the federal tax laws.01:37-01:41They don’t really have their own on tipping in different situations like that.01:41-01:44And maybe a lot of you guys knew this.01:44-01:49I don’t get into payroll issues very often, especially nowadays.01:49-01:56We use an outside ADP does most of our payroll for our office and the people that we handle payroll for our bookkeeping.01:56-02:05But what was interesting is it says specifically that an employer cannot keep any of that money even to make payroll.02:05-02:21And, you know, it was an interesting approach because we were working when we were having this conversation, we were working under the idea that prior to COVID, you know, she was distributing tips every day and then putting them into the employees and then having a report.02:21-02:28But, of course, with tips, they don’t actually have enough withholding sometimes to cover that, the tips for the year.02:28-02:33So that a lot of the kids and these are all under 18 year olds and they were running into tax issues.02:33-02:47So instead, after and trying to keep people in and after COVID, they were building up a concept that, hey, you know what we’re going to do is we’re going to move you from the, you know, $12 situation to like $20.02:48-02:54And that way then we’ll just apply the tips across the board and everybody will have a higher wage.02:54-03:13But if that is your thoughts, if you are a person that has a business where you’re thinking as an employer, you could use those funds to help make the payroll in essence, even if you’re paying more money, because nowadays, I mean, people are making $20 an hour to flip burgers.03:13-03:16So it is illegal just to put that out there.03:16-03:22It is illegal for an employer to do anything but to distribute those funds to the employees.03:22-03:26And and I didn’t I didn’t realize that.03:26-03:30I think I thought that the money, as long as it was being paid to the employees, don’t get me wrong.03:30-03:37And in most cases, you have one employee, like if I go to the restaurant, I have a waiter in which I’m tipping that waiter.03:37-03:39And that’s pretty straightforward.03:39-03:43The business that I’m talking about does not have that kind of situation.03:43-03:45Nobody is serving.03:45-03:46Nobody is delivering.03:46-03:51It’s really just now, you know, nowadays, I mean, my sister and I joke around.03:51-03:58You can go to a gas station or a place that has packaged food and on the register it has.03:58-04:00Do you want a tip?04:00-04:12You know, and even though no one’s done anything besides pre make a sandwich, which what you thought you were paying for at the time, it now turns into you have to you know, they’re asking you for tips.04:12-04:17So if you are in the business side of that and the tips are something you need to really.04:17-04:30Think twice about how those tips are being paid out to the employees, because even if the employees are making more than two dollars and 13 cents that their wages, it says tips.04:30-04:35And according to the Federal Department of Labor, tips are solely for the employees.04:36-04:39And no matter how you apply it, that’s where they come out.04:39-04:46So I think they probably need to revisit that, because now there’s just everywhere you go, they ask for a tip.04:46-04:47Everything asked for a tip.04:47-04:50And it’s going to change.04:50-04:54I think we should call it more business appreciation, maybe, or something.04:54-04:55So it’s not tied to the employees.04:55-05:01But if anyone has that had that situation, then it’s something you need to be thinking about.05:01-05:03Get a head start on.05:03-05:09I know it doesn’t deal directly with everyday tax issues, but it is a issue of that being said.05:09-05:11So I just want to make sure it was fresh in my brain.05:11-05:20Something I didn’t hadn’t really put much thought to or anything else, how exactly it would work or, you know, how tips are being spent.05:20-05:23So if you want to join the show, maybe you’ve inherited property.05:23-05:26Maybe you know someone hasn’t filed taxes in the last 10 years.05:26-05:31Maybe you have some sort of situation where you’re like, I’m not sure if my taxes are going correctly.05:31-05:36615-737-9986 is the number right here in the studio.05:36-05:39Some of you brave people can pick up the phone and give us a call.05:39-05:46615-737-9986 is the number here in the studio.05:46-05:51So that way we can take your calls, making sure that we hopefully at least lead you in the right direction.05:52-05:55I will say that this is actually our 17th season on the radio.05:55-06:00So thank you for being listeners and participating with the show.06:00-06:04Really do appreciate it because sometimes you just feel like you might be talking to yourself.06:04-06:08And obviously it’s great to know there’s other people.06:08-06:14Let’s talk a little bit about your taxes are high this year in 2024 filing.06:14-06:15So what do you do?06:15-06:22What can you do that might bring your taxes down for the tax year of 2025 filed in 2026?06:22-06:26And of course, one of the first things everyone’s going to think about is a retirement, right?06:26-06:37You got a retirement source, either that being an IRA, a traditional, a 401k, a health savings account, any of those kind of things are going to be tax deferred.06:37-06:44Therefore, you’re going to end up with a situation where you can actually reduce your taxes today.06:44-06:49But we’re going to talk a little more about are we really wanting to reduce our taxes today?06:49-06:55I mean, really, when it comes down to it, is there an advantage to reducing your taxes today?06:55-06:59If taxes most likely, I mean, we don’t have any guarantee they’re going to stay low.06:59-07:01We don’t know if they’re going to go up.07:01-07:07At the moment, we do know the current tax law we’re working under will expire on December 31st of this year.07:07-07:09And everything will go up.07:09-07:13I know many people think that that’s somehow going to make the rich keeps richer.07:13-07:23But if you don’t like your tax numbers today, wait until January of next year, and you’ll see that you’ve went up three or six percent, depending on what your tax bracket is.07:23-07:24All right.07:24-07:27Let’s see if we can hit Rick in Hendersonville.07:27-07:28Something to do with his son.07:28-07:30Hey, Rick, what can I do for you, babe?07:30-07:32Oh, yes.07:32-07:34I was wondering if you could answer a quick question.07:34-07:36I have a 28-year-old son.07:36-07:41He’s lived with me about six months and one day out of the year.07:41-07:43Can I claim head of household on him?07:43-07:50You can if he is not making more than the standard deduction, which is $14,000.07:50-07:54If he’s making more than that, then theoretically he’s able to take care of himself.07:54-07:58I’m not going to claim that because I know how expensive it is to live.07:58-08:00But that’s what the code says.08:00-08:04So if he’s going to college or unable to work, then yes.08:04-08:08If he’s able to support himself and he’s just living with you, then the answer is no.08:08-08:10Okay.08:10-08:12That sounds good.08:12-08:13Well, thank you very much.08:13-08:13I appreciate you.08:13-08:15Rick, thanks for calling.08:15-08:16I appreciate it, too.08:16-08:23And that was really a good question because what I think some people forget is sometimes they’re taking care of their parents.08:23-08:27Let’s say their mom’s living with them or father or whatever.08:27-08:33And even though they’re getting Social Security, it may be a small pension.08:33-08:37Social Security is not considered income for the purpose of this conversation.08:37-08:44So if they’re only getting Social Security and they’re living in your house, you may be able to do head of household.08:44-08:52Even though the dependent care is really only about $500, sometimes not enough to make a huge difference, the head of household can make a big difference.08:52-09:00So being able to claim head of household and get the $500 and you’re still caring for that parent because you’re providing them more than 50% of their care.09:00-09:01There’s a roof over their head.09:01-09:02You’ve got the insurance.09:02-09:03You’ve got the utilities.09:03-09:05All the things it takes, the food.09:05-09:08And they may be contributing a little bit to their own care.09:08-09:16But many times that money stays for them to basically take care of their medical and other things that they need to have.09:16-09:21So, again, if you are taking care of someone, age really doesn’t come into play.09:21-09:27So really more about the 50% care that you have.09:27-09:28Sorry, guys.09:28-09:29My girl’s wanting to join the show.09:29-09:31So I guess we’ll have her on.09:31-09:32Come here, Rosie.09:32-09:35We’ll be able to do and make that happen.09:36-09:47Anyway, so if you have that situation where you have an older person that is living or obviously minor children or anything else.09:48-09:53I’m trying to do things with that situation.09:53-09:54Then just keep that in mind.09:54-10:00Because even being able to just claim them as a dependent, which married people, you know, you won’t have that.10:00-10:08But if you’re a single person and you are taking care of a loved one or a minor child or any of that, there is some advantages to that as well.10:08-10:15So just putting that out there that you might want to think about the head of household standing.10:15-10:17And it really comes to 50% of their care.10:17-10:22So theoretically, if they’re making more than the standard deduction, you pretty much already have them.10:22-10:24They’re going to claim themselves.10:24-10:27But again, that’s not always the case.10:27-10:35I mean, if they are unable to take care of themselves in other ways or maybe have grandbabies that are living in the house, any of that kind of thing.10:36-10:38Also, I did think it was interesting.10:38-10:43I have a number of grandparents that have taken care of their children.10:43-10:49And we were always trying to figure out, and I suppose I should always know this, but I learned this a few years ago.10:49-10:55And I had another case this year where a 70-year-old woman, grandma, was taking care of her kids.10:55-10:59And she’s like, why don’t I get any of the money everyone always talks about?10:59-11:04Well, one thing you need to understand is that if you’re over age 65, you don’t get earned income credit.11:04-11:10Just like if you’re under 22, you really don’t unless you have certain circumstances.11:10-11:11All right.11:11-11:12Let’s go to Gallatin.11:12-11:13Is it Kenan?11:13-11:16It’s Kenyon Friday.11:16-11:17Kenyon.11:17-11:18Ah.11:18-11:19What can I do for you, sweetie?11:19-11:25Hey, so I want to talk about college tuition.11:25-11:31And is there any loopholes for people like me to, like my daughter started college this year.11:32-11:37And I’ve got to write a check for $18,000, you know, next month.11:37-11:42And it’s, I know the difference tax brackets.11:42-11:48So what, is there any, I mean, it’s an expense.11:48-11:51I don’t understand why if you make a certain dollar amount, you can’t deduct that.11:52-12:04And what, what Kenyon is bringing up is the fact that basically after the $175,000, if you’re single, like $80,000, they start eliminating basically the college credit.12:05-12:14And so if you’re making as a couple more than basically $175,000, you’re not going to, to get any credit for the fact that you’ve just paid $18,000.12:14-12:19I don’t really have an excellent answer for you other than that’s the way that they’ve wrote it.12:19-12:24And the only other way is obviously at some point, there’s still not a lot of advantage.12:24-12:27But at this point, it’s too late in your situation.12:27-12:32If someone’s listening and they have young children, you might want to think about the 529 plan.12:32-12:35And, you know, again, even those have certain limitations.12:35-12:40But at least you wouldn’t have to worry about the college credit.12:40-12:43The money has grown tax-free and you can use it for college.12:43-12:54But in his case, if you’re making too much money, it’s kind of like if you’ve got rental properties and you have losses and you make more than a single person makes more than $125,000.12:54-12:56We can’t take those losses.12:56-12:57Same thing.12:57-13:02They just like to, supposedly they say they’re making the level playing field, Kenyon.13:02-13:08But to be honest, it’s just a matter that they basically tax the rich higher than they tax the poor sometimes.13:09-13:14Well, and it’s really punishing the successful because not only that, my daughter, she’s 18.13:14-13:15She’s in school.13:15-13:20And her financial, she can’t get any financial aid.13:20-13:29Her student loans, if she gets a student loan, she can only take out $6,000 every three quarters.13:29-13:32So $2,000 a quarter she can take out.13:32-13:35And they won’t defer the interest on the loan.13:35-13:37She has to start paying interest immediately.13:37-13:45So it’s like, why would you even get a loan if you’re paying for three or four years on a loan that you don’t make any payments on until after you graduate?13:46-13:55I actually saw a video, Kenyon, that basically said that the child emancipated itself so that way they didn’t get penalized for the fact that their parents had been successful.13:55-13:58I’m not saying that’s the way to go.13:58-14:06But I’m just saying that was the only way that she could find a way of getting out just because her parents, they’re penalizing your children because of you.14:07-14:12And again, no one says the world is fair, but I thought it was an interesting approach.14:12-14:14But don’t have a good answer for you, my friend.14:14-14:15Sorry.14:15-14:16Yeah.14:16-14:17All right.14:17-14:18Well, maybe there’ll be some blue poles in the future.14:18-14:19Yeah.14:19-14:20We can see.14:20-14:20We’ll keep it.14:20-14:22You got it, buddy.14:22-14:22All right.14:22-14:24We’re going to take a quick break here.14:24-14:25When we get back, you can join the show.14:25-14:28615-737-9986.14:28-14:29We’ll be right back.14:29-14:35All right.14:35-14:37We’re back live in studio here.14:37-14:43And we are going to go right to the phone lines and then we’re going to talk about a deadline that just passed yesterday.14:43-14:44I want to make sure everyone met.14:44-14:47Teresa, hey, what can I do for you in Milton, Tennessee?14:47-14:49I’m not sure if I know where that is.14:49-14:51Oh, it’s based in Murfreesboro.14:51-14:52Okay.14:52-14:53Well, there you go.14:53-14:55It’s out there towards Rutherford County someplace.14:55-14:56Yes.14:56-14:56Yes.14:56-14:58I am widowed.14:58-14:59I’m 73.14:59-15:01I live by myself.15:01-15:06And I am getting antsy.15:06-15:11I haven’t filed income tax since my husband passed 10 years ago.15:11-15:11Okay.15:11-15:13Because I didn’t think I made enough.15:13-15:17But this year, I’m just scared.15:17-15:18Do I need to file?15:18-15:20Well, kidney, tell me.15:20-15:21It’s a great question.15:21-15:25But obviously, you’re getting Social Security, I’m guessing, at 73.15:25-15:25Correct?15:25-15:27Yes.15:27-15:31Do you have an annual amount or monthly amount just to get me in the ballpark?15:31-15:35About $2,100 a month.15:35-15:37I’m drawing off my husband also.15:38-15:44And then I have his little bit of pension and then my little bit of pension.15:44-15:49And all total, it’s right at $32,000.15:50-15:54And $21,000 of that being Social Security, though, right?15:54-15:56$21,000 a month.15:56-15:56Yeah.15:56-15:57Right.15:57-16:03But I mean, I’m sorry, $25,000 being the annual for Social Security.16:03-16:04Yeah.16:04-16:04Yeah.16:04-16:07And then you said the total was $32,000?16:07-16:08Yeah.16:08-16:09Right at $32,000.16:09-16:10Not his hair over.16:10-16:11Right.16:11-16:17So roughly another $8,000 you’re getting from pensions or whatever.16:17-16:19Your pension and his pension a year.16:19-16:20Right.16:20-16:24So that would be $1,21,000 minus $16,000.16:24-16:24Get in the $4,000.16:24-16:28The moment you should be absolutely fine for not filing.16:28-16:29Okay.16:29-16:31That’s what I was scared.16:31-16:41I know every year when the Social Security goes up a tad and I’m just thinking, I don’t know what the limit is before I would have to file.16:41-16:46Well, they take half of your Social Security and then they add everything up.16:46-16:48And as long as it’s under $25,000, you’re pretty good.16:48-16:51Right now, it looks like you’re close to about $21,000.16:51-16:57So because it’s about $13,000 for the half of Social Security roughly and another eight in pension.16:57-17:00So that came out to about $21,000.17:00-17:03So you’re getting close, but not yet would you have to worry about it.17:03-17:04That’s great.17:04-17:08So if I live by myself, how would I even file?17:08-17:10Would that be head of household or how?17:10-17:11It would be single.17:11-17:12It would be single.17:12-17:12Single.17:12-17:13Yes, ma’am.17:13-17:14Okay.17:14-17:15Thank you so much.17:15-17:16Thanks for listening.17:16-17:16Okay.17:16-17:17All right.17:17-17:19Great question, actually.17:19-17:22And I do know it is getting, she brings up an awesome point.17:22-17:38And that is that as the Social Security goes up, because I’ve had some people where when they were married and then before they lose one of their spouses, they were not having to file because the combination wasn’t high enough between the two Social Securities and maybe a small pension.17:38-17:46But when it goes to the single filing and they get the higher Social Security plus the pension, it does kick some of them into having to file.17:46-17:49So you are going to want to double check your numbers, make sure.17:49-17:55And I will say AARP does offer free taxes.17:56-18:06And if you at all question that, I would say go to one of those and just see if we’re, you know, at least that way you’ll know, hey, I have plenty of room.18:06-18:07I’m fine.18:07-18:11I, you know, last thing you want to do is not file because you think that you didn’t have to worry about it.18:11-18:12Okay.18:12-18:15So before the last break, I said I had something I wanted to cover.18:15-18:20We’ve talked about BOI, business owners information reporting.18:20-18:22They canceled it.18:22-18:25And then we’ve been telling you that they have reinstated it.18:25-18:28Yesterday was the last day.18:28-18:34That was the mandated deadline for you to actually file your BOI information.18:35-18:43And it is very important because, again, civil penalty up to $592 per day for each report is late.18:43-18:50Criminal penalty up to $10,000 in fines and imprisonment for up to two years.18:50-18:51This is what they’re saying.18:51-19:00The beneficial ownership situation is business beneficial ownership information report.19:00-19:09Anyone that has a state charter says, according to this, says you need to go online and file this.19:09-19:10It is a free filing.19:10-19:14You do need to have a copy of your driver’s license.19:14-19:21Um, and I would, even though it’s a day late, if you have not yet filed it, I would suggest filing it.19:21-19:26It’s only one day late versus being, you know, two, five, 10, whatever.19:26-19:28I don’t know.19:28-19:40Um, I have heard some conversation saying that they’re, that they’re not going to be able to charge the penalty, but heck, I thought it was going to get kicked out of court when they did it because of the privacy issue that they had, but it, it went right through.19:40-19:42So they won that court case.19:42-19:49So, um, the penalty for not filing or, you know, or for doing things will be absolutely criminal.19:49-19:51They’re, they’re saying it’s criminal.19:51-19:56And the reason for this report for all of you are sitting there going, this is nothing I need to worry about.19:56-20:05They’re trying to make sure that there are no foreign investors in our businesses that we’re not disclosing.20:05-20:10Uh, one of the questions is, you know, is there any foreign investors, blah, blah, blah.20:10-20:22Um, it seems like to me, if it’s a single member LLC and we are the person filing it on our own personal tax return, that that would not be, um, a problem.20:22-20:29Uh, but it’s, is, is seemed to be a situation where we did have issues with that.20:29-20:36And, you know, just, just making sure, you know, that you understand that this is still out there.20:36-20:42Um, and, uh, you know, that there is penalties for you if it does not get filed.20:42-20:45So, um, you need to just do it.20:45-20:49You need to find, there are companies you can have that will do it for you.20:49-21:04You just need to make sure that you have filed to the best of your ability, uh, these reports and, uh, and make sure you have, uh, everything that you need, um, you know, to, to do this, this situation again, it’s B O I R.21:04-21:09I know that the one website is B I O B O I R.org.21:09-21:10Okay.21:10-21:16That was just something I wanted to put out there because I know we’ve been back and forth about it and we’re not too sure what we have.21:16-21:18Uh, 2025 is here upon us.21:18-21:25And for any of you that do do the gifting, uh, for your children, it is up to 19,000 this year.21:25-21:36Um, so, and this is family and non-family members without having to pay any gift tax if it applies or using up any of your available, excludable amount.21:36-21:4119,000 before you have to report anything.21:41-21:50Um, the estate and gift tax is 13 million, 990 per person, 27 million, 980 for a married couple generation.21:50-22:02And the state, uh, state taxes will start at about 40%.22:02-22:07So, um, definitely something you don’t want to have to deal with.22:07-22:10So, um, I guess most of us will never have to worry about that.22:10-22:16Um, when the gentleman called, uh, Kenyon called earlier, he was talking about his child going to college.22:16-22:22I was trying to find this, but I didn’t, but married finally jointly, the American opportunity credit, which is what we were talking about.22:22-22:29And also the lifetime, this is where you can get up to $2,500 or lifetime is $2,000.22:29-22:34Um, the maximum married couple can make is 180,000.22:34-22:38The maximum that a single filer can make is 90,000.22:38-22:41Um, so very, um, good.22:41-22:45And that those numbers run for both of those, anything above that is excluded.22:45-22:58Um, so, you know, again, just making sure that if you do have kids in college, student loan interest also, you know, a married couple that makes more than 200,000 will not be able to take any of their student loan interest.22:58-23:03And you can take up to 2,500 single person up to, um, a hundred thousand.23:03-23:11So again, one of those situations where it’s pretty much fair, um, where everything goes, uh, in the right direction as far as what we have.23:11-23:16Um, so we’re going to be dealing with also depreciation, accelerated depreciation.23:16-23:24Um, right now we are down to, I believe it is 60% unless he exceeds that or changes it.23:24-23:30So, um, if you buy a big truck and you’re trying to reduce your taxes and you’re like, oh wow, I can write this whole thing off 2025.23:30-23:32You’re going to get 60% of it.23:32-23:35So you might want to think, is it really the best investment?23:35-23:39I mean, if it’s a good investment, cause your business needs it totally do it.23:39-23:49If you’re thinking you’re just doing it to save tax dollars, when I get back from this break, we’ll talk a little bit about how spending a hundred thousand dollars may not save you a hundred thousand in taxes.23:49-23:50In fact, most likely won’t.23:51-23:59Um, but if you want, you can join the show 615-737-9986, 615-737-9986.23:59-24:03And we’re going to be, um, coming back talking more about taxes.24:03-24:09So if you know someone that hasn’t filed taxes or maybe you were doing your taxes and you found out that you weren’t able to save as much as you thought you would.24:09-24:13Um, or maybe you’re just questioning some sort of tax deduction that you heard about.24:13-24:17This is the show 615-737-9986.24:17-24:18We’ll be right back.24:18-24:21All righty.24:21-24:28We are back here live in studio and Mike, if you’re still listening, no, you don’t need to do your BOIR.24:28-24:32Um, I will get back with you in just a minute.24:32-24:39I just found out from Donna, who is also one of my best friends and thinking that she’s a listener.24:39-24:41She, uh, came back.24:41-24:42I knew it went to court.24:42-24:45I did not know Donna that they have a March 2nd.24:45-24:59They announced it is issuing the interim final, final ruling that removes the requirement of us companies and us persons to report the BOI to FinCEN under the corporate transparency act.24:59-25:02So I am being corrected, which is perfect.25:02-25:04I am happy about being corrected.25:04-25:07Anytime I can make sure, um, I am right.25:08-25:14I just kept getting, uh, the, the, um, the notices on my, uh, reports.25:14-25:22So I being tax season, maybe did not read as well as, uh, you, um, you’re funny, Mike.25:23-25:25Uh, anyways, that we have the situation.25:25-25:40So, um, I just want to back up here really quick and just say, after I did all of that about the BOIR reporting business owners information act on March 2nd, they came out and they changed.25:40-25:41They announced that U.S.25:41-25:42They announced that U.S.25:42-25:43And U.S.25:43-25:48Persons do not need to report under the transparency act.25:48-25:51So, um, so take a deep breath because this is great news to me.25:51-26:03I, um, will honestly say, um, I was a bit concerned because I thought that, uh, I’m sure that I knew a number of people that probably hadn’t, including my boy.26:03-26:08And I just, um, I just thought we, we needed to get it done.26:08-26:09So thank you, Donna.26:09-26:13Um, if, uh, if it’s perfect information.26:13-26:19So I just wanted to make sure that that was great news, uh, that we put out there to, to keep everything going there.26:19-26:26So we’re all so crazily done at, as it is at the moment, but, um, at least we’ve got that information.26:26-26:28That was a relaxing situation.26:28-26:31So, um, let’s get back to taxes.26:31-26:31Okay.26:31-26:36So something I’m probably more of an expert at, but I did want anyone to end up with those fines.26:36-26:41Cause I knew they’d be in my office at some point saying, oh, we need to get this waved.26:41-26:46And I’m not too sure I could have done that, uh, uh, on this situation.26:46-26:48So wonderful, wonderful situation.26:48-26:59I am happy that Donna was listening because I’m sure we have people, um, to that, that just, uh, we’re going to be including some of my clients.26:59-27:00I’m sure that would have been freaking out.27:00-27:02All right.27:02-27:03So I just got a text.27:03-27:08Someone saying if they sell something, is there truly a 0% capital gains?27:08-27:09And the answer is yes.27:09-27:13The problem is it has to be a fairly small sale.27:13-27:24So, um, a single person, and this is going to include all of your income, uh, all your taxable income, 0 to 48,000, uh, 350.27:24-27:26And this is in 2025.27:26-27:34And then married jointly, um, 0 to 96,700 head of household, 0 to 64,750.27:34-27:42So, um, and one of the things you do want to be careful on is there is a 0% capital gains for a trust or an estate.27:42-27:45And many times we always say we want to sell things.27:45-27:52Um, but as trusted estate, they only have a 0% capital gains rate to 3250, 3250.27:52-28:01Uh, then it jumps into 15 and many of you guys, which 15 goes all the way up to $533,400 for a single.28:01-28:03And here’s the marriage penalty, right?28:03-28:07For a joint married finally jointly, 600,050.28:07-28:12That’s only a roughly 66,000, $67,000 difference.28:12-28:22Um, and in there, what they don’t tell you about is why whenever I’m doing estimates for people is the additional 3.8.28:22-28:27I think they call it a Medicare tax, but basically it’s only done on investment income.28:27-28:36Um, so you have that 3.8 that kicks in after a single person has more than 200,000 in income.28:36-28:49And if you have capital gains and a married couple, if you have more than 250,000, again, the marriage penalty, uh, both of them are working very hard to, to make sure both of those.28:49-28:57So if you happen to sell something and you’re like, Hey, it’s under 500,000, um, my income and everything, I’m only got 15%.28:57-28:59When you get ready to do your taxes.28:59-29:11And if it is over 250, if you’re married and under 500 or 600,000, you will end up with some of that being taxed at really 18.8 or additional 3.8 tax.29:11-29:16So making sure that, you know, the percentages, because then it goes to 20%.29:16-29:27And theoretically, if you have something that you’re making a couple million dollars or even $800,000 capital gains, you’re looking at 23.8% on that.29:27-29:29So again, the numbers make sense.29:29-29:30You need to make sure.29:30-29:34And again, you know, I have so many people say, well, I’m not going to file.29:34-29:36I’m not going to pay the taxes.29:36-29:39So I’m not going to sell because I don’t want to pay the tax.29:39-29:42Um, taxes are still fairly reasonable.29:42-29:44If you really think about it.29:44-29:48I mean, most average people are, are 25,000 or 25% or less.29:48-29:49So you’re keeping 75.29:49-29:51Uncle Sam’s getting a quarter of it.29:51-29:54It’s not perfect, but it is, you know, a situation.29:54-30:02And in many cases, people are able to keep their income where it’s 15% of capital gains or even 12% ordinary income rates.30:02-30:05So, um, again, one of those things.30:05-30:16Now, if you are a person that wants to go and spend money because you think you’re going to save on taxes, I started that conversation before the last break and I thought I’d finish it now.30:16-30:23So if you go out and buy yourself a hundred thousand dollar, beautiful truck, let’s call it a Ram because that’s what I like to drive.30:23-30:30Beautiful Ram, big truck, over 6,000 pounds, able to haul something in case you’re, you need that.30:30-30:41Because let’s be honest, if you’re a real estate professional and you’re really just showing houses, having a 6,000 or bigger vehicle, 6,000 pound or bigger vehicle, it doesn’t really make sense.30:41-30:46I mean, you know, the IRS is going to question why did you buy yourself a huge vehicle?30:46-30:52Um, and, and then not, you know, my big 3,500 Ram, there would be questions on why would you need that?30:52-31:02Now, if you’re a construction guy or a handyman or, you know, many jobs where you might need that truck bed or a trailer to be hauled, sure, go for it.31:02-31:05But under the current tax law, you’re going to get 60%.31:05-31:09So first you’re only going to get 60,000 in the first year of that.31:09-31:16And depending on what your tax bracket is, but let’s assume you’re self-employed because it’s really the only way you could depreciate it.31:16-31:22Um, you’re going to have a minimum of about 20% ordinary income tax and self-employment tax.31:22-31:28So on 60,000, you’re going to save basically $12,000 in taxes.31:28-31:33Um, not, not petty cash, but it is something you have to question.31:33-31:38You spent a hundred thousand where, and you were able to get 12,000 in the first year.31:38-31:42And then the next few years you might save another four or $5,000.31:42-31:47Um, you know, so you have to spend a hundred thousand to save $16,000 in taxes.31:47-31:49Just doesn’t make sense to me.31:49-31:58Now, if you need that truck, if that truck is the difference between you making it, or you’re a truck driver and you’re hauling things and you need that because that’s how you make your living.31:58-31:59That’s where the money’s at.31:59-32:00Well, absolutely.32:00-32:05There’s no question by the truck, by the dozers, by whatever it is that needs to be done.32:05-32:11That makes either the job easier or you’re able to build money because of the fact that you can bill more because of the vehicle you have.32:11-32:19So, but many people come in my office and they’re like, well, I was told I could go out and buy myself a big, um, Mercedes.32:19-32:21Or a big, uh, land cruiser or whatever.32:21-32:28And I could write that all off and, you know, it’s $150,000 vehicle and I’m going to, you know, deduct.32:28-32:34And again, if, if it applies in the right situation, I’m not going to say some people can’t do that.32:34-32:46But in a majority of people, I’ve had more than one where they are, um, they own a, um, hotel or they own a, um, restaurant or I don’t know, just, you know, something.32:46-32:50And they’re not using this vehicle to pay people back and forth to something.32:50-32:55They are just using it for their own private use to go back and forth to these locations.32:55-32:58And maybe they have multiple, maybe they have many franchises, whatever.32:59-33:03Um, you have to really be able to, to justify the concept of it.33:03-33:08Don’t just think that because you want a big vehicle, you can do it.33:08-33:17You want to make sure that it is something that you can, uh, actually justify because I can’t tell you how many I’ve had that do that same thing.33:17-33:24Um, on, you know, doing that situation, uh, with all those different situations we have.33:24-33:32Uh, but if you can write it off, great, but don’t go spend a hundred thousand to save $16,000 in taxes.33:32-33:34It just doesn’t make a lot of sense.33:34-33:45You might not just pay the 16 and keep the other 82 in my pocket, um, or spend it, you know, go buy myself a truck for 40 grand and, and save what I can and the rest of it in my pocket.33:45-33:51Uh, because that’s not even taking into account that potentially, is it a 100% use for business?33:51-33:54Is there interest on this loan or are you paying cash?33:54-34:00Um, all of those little situations come in and out and I just want to make sure we’re all on the same page.34:00-34:01Um, all right.34:01-34:05So we’re getting ready to get, uh, take our last break here coming up in just a minute or two.34:05-34:09So I do want to make sure that we have covered my mistake.34:09-34:11We do not have to worry about BOIR.34:11-34:12Wonderful.34:13-34:19I will high five for that because it’s just something else I didn’t need to worry about in the middle of what I call my crazy season.34:19-34:22Um, taxes obviously are due.34:22-34:30If you, if you had an LLC, um, that’s as a partnership or you have a sub S corporation, those were due on the 15th, unless an extension was filed.34:31-34:38So, um, again, making sure you have those really important to make sure that that is going to come to play and do that.34:38-34:43So if you haven’t filed them or an extension wasn’t filed, you will be paying a late fee.34:44-34:51Um, so, you know, again, just making sure that you have your appointments and then come April 15th, which is only a few more weeks away.34:51-34:57We also have another extension being required or you need to file the taxes.34:57-35:12Um, so I, again, not knowing each and every one of you listening, but if you’re not sure if you’re going to be able to get it done, if you’re still waiting for a tax document, possibly a K one or something from an estate or another business, you might just want to go ahead and file that extension.35:12-35:22So that way, then you don’t have to worry about what’s going to be coming and you can take a deep breath and, or maybe you’re, you know, having health issues or something else and you just don’t want to have to deal with it.35:22-35:29So, um, again, just making sure that we’re all on the same page because now’s, uh, now’s a good time as any.35:29-35:32And even if, you know, I have people, it’s like, well, I don’t need an extension.35:32-35:38I don’t need, you know, filing the extension is not going to have any deprimental situations.35:38-35:39Why are you right?35:39-35:48I mean, there’s, it’s really no reason you shouldn’t because even if you file the taxes on April 15th or prior to that, having that extension just gives you that little extra.35:48-35:49What if something does happen?35:49-35:54What if you, um, you know, you’re unable to file either because of one reason or another.35:54-35:57Now you can take a deep breath and say, Hey, I already have my extension.35:57-35:57Right?35:57-36:06So again, just put that out there that it’s not a bad thing to file an extension and then follow up with filing the taxes, even if it’s all done before April 15th.36:06-36:07All right.36:07-36:08So we’re going to take our last break.36:08-36:09You can join us here.36:09-36:12615-737-9986.36:12-36:13We’ll be right back.36:13-36:18All righty.36:18-36:19We are back with the last part of the show.36:19-36:25So if you’ve been thinking of a tax question or a situation you’ve been wanting to share, feel free to give us a call.36:25-36:29615-737-9986.36:29-36:32Let’s go to James and see if he has anything I can help him with.36:32-36:33Hey, James.36:36-36:37Dr. Friday.36:37-36:42I gave a thanks for taking my call, by the way.36:42-36:43Sure.36:43-37:00I gave a original portrait of President Polk to a to Moray County.37:00-37:00Okay.37:01-37:05And I had it appraised correctly by an appraiser.37:05-37:08I had all of that done.37:08-37:10That’s all signed, sealed, and delivered.37:10-37:11Good.37:11-37:16And it’s just, you know, I mean, I think it’s a significant amount of money.37:16-37:18It’s about $10,000.37:18-37:19Yep.37:19-37:29So my question is, would this be a good time to take that deduction and transfer?37:29-37:42And I’m trying to get some money out of my traditional IRA accounts because I got way too much money in traditional IRA accounts and not enough in Roth IRA accounts.37:42-37:43Right.37:43-37:50And use that money to get it over into my Roth IRA accounts.37:50-37:52It’s a good question.37:52-37:54Is that a strategy that’ll work?37:54-37:56I don’t know if it will.37:56-37:58So first, I’m not a financial planner.37:58-37:59I just want to put that out there.37:59-38:00You’re making the choice on that.38:00-38:05But from the tax aspect of what you’re talking about, are you married or single, James?38:05-38:06Married.38:07-38:07Okay.38:07-38:09So here’s my concern.38:09-38:12You have to have more than $30,000 to itemize.38:12-38:17And you’ve got $10,000 of it in this gift.38:17-38:20Would you have enough of other?38:20-38:22I’ll have 30.38:22-38:24You will have over 30.38:24-38:25Okay.38:25-38:29Because you have to have over 30 to even make a dollar difference in your conversion.38:29-38:30So that’s all I’m saying.38:30-38:32So you need to go through.38:32-38:37And if this is the year you’re going to definitely itemize, you might want to pay your property tax twice.38:37-38:43If you have property taxes, because we can maximize that department and then pay up all your charities.38:43-38:45Impossible medical.38:45-38:48Anyways, I would maximize my itemizing.38:48-39:06And then depending on what that number comes up to, because let’s say you get up to 40, then you would have an additional $8,000, $9,000, depending on your age, of convertible and maybe putting you in a lower tax bracket.39:06-39:18So in my opinion, it would be a perfect time to sit down with, if you do your taxes yourself or with your financial, because they need to know that number and keep you in that 12 or 22%.39:18-39:20I don’t, again, don’t know you, James.39:20-39:24So you can do that conversion because it would be a good time.39:24-39:32If you’re going to itemize, it’s definitely going to give you some extra free money that you would normally not have if you didn’t give these large contributions.39:32-39:35Right.39:35-39:36I like your thought.39:36-39:37Okay.39:37-39:39Well, that’s what I thought.39:39-39:40Yeah.39:40-39:49So that’s why I was thinking this would be a good time to use that to try to get some of that money transferred over and not have to pay.39:49-39:50Right.39:50-39:51You know.39:51-39:52I like your thought.39:52-39:53I mean, why not do it if we can?39:53-39:56I mean, it’s a perfect, it’s a perfect plan.39:56-40:07I just think you need to sit down and see how much you’re going to be able to maximize on it and then be able to look at your conversions and see what tax bracket can I stay in to do what you want to do.40:07-40:13I mean, a large number of people and the tax rates this year in 2025 are still what we know.40:13-40:19Again, we don’t know what next year is going to bring, which could be a higher conversion rate if you wait till next year to do this.40:19-40:22So I think this year would be the year to do it right now.40:22-40:28It has to be done in this year because the gift was made in this year.40:28-40:28Okay.40:28-40:29Okay.40:29-40:30You’ve already made the gift.40:30-40:30Got it.40:30-40:33I wasn’t sure if you had had the appraisal or whatever.40:33-40:34Cool.40:34-40:37All of that’s already been done.40:37-40:38The gift has been made.40:38-40:42You know, all the appraisals have been done.40:42-40:51The county has given me the piece of paper that says, thank you for the gift.40:51-40:53This is what it was worth.40:53-40:57You know, everybody’s signed all the paperwork that has to be signed.40:57-41:00So it’s in this year.41:00-41:10So that was why I was wondering if, so it’s actually going to be, Oh, something just going to be in 2025.41:10-41:11Right.41:11-41:13You’re talking 2025.41:13-41:13So yes.41:13-41:18So you, you’re going to be doing all of this in the year we’re in currently.41:19-41:22So you just need to maximize everything else at this point.41:22-41:23It won’t be in the year we’re filing.41:23-41:26It won’t be in the year that we’re living.41:26-41:26Got it.41:26-41:27If that makes sense.41:27-41:27Got it.41:27-41:28Got it.41:28-41:29Yeah.41:29-41:29Sorry.41:29-41:31I get confused about tax years.41:31-41:32Trust me.41:32-41:35I’m always, I’m always a year behind most people.41:35-41:37So yes, not a problem at all.41:37-41:38All right.41:38-41:40We’ve got one more quick call before the break.41:40-41:41But James, thank you for calling.41:41-41:42I appreciate it.41:42-41:43All right.41:43-41:43Thank you.41:43-41:44Appreciate it.41:44-41:45You do.41:45-41:46Hey.41:46-41:46All right.41:46-41:48We’ve got a Douglas on the line.41:48-41:51Let’s see if we can get him to join real quick.41:51-41:51So we don’t have much time.41:51-41:53Hey, Douglas, what can I do for you?41:54-41:56I’ll keep it very short.41:56-41:59Missing documents for my deceased father.41:59-42:03He has pension and social security documents.42:03-42:05Those are missing recommendations.42:05-42:13You have two options or well, one main one would be since you have power of attorney, because I’m assuming you said deceased.42:13-42:15So you have the power of attorney.42:15-42:22You can go and file a 2848 and obtain copies of his transcripts.42:22-42:24That would be a first option.42:24-42:29Or you can hire a tax person like myself, where we can use your power of attorney to do that.42:29-42:35The other option would be to call directly to those, which I’m assuming you’ve already thought of Douglas.42:35-42:36So I’m probably repeating what you thought.42:36-42:48But the option two would be to call those areas of wherever he’s getting his pension or whatever, and ask them to re-send or fax or email you a copy of those documents.42:48-42:52Because unfortunately, some of them get step up in bases like social security and stuff.42:52-42:56So we can’t really use 23 numbers in 24.42:56-43:00And what gets deposited is after Medicare and stuff.43:00-43:03So not knowing him, it would be hard to get the exact numbers.43:03-43:04Okay.43:04-43:06I will be talking to you.43:06-43:07I appreciate it.43:07-43:07No problem.43:07-43:09Thanks, Douglas, for calling.43:09-43:09Appreciate it.43:09-43:10All right.43:10-43:12We’re going to get ready to wind down the show here.43:12-43:16It is, I am Dr. Friday, an enrolled agent.43:16-43:18Been doing this now for about 30 years.43:18-43:19I am licensed.43:19-43:22When you see EA, it means enrolled agent.43:22-43:27And it means that we are licensed to do representation and tax preparation by the Internal Revenue Service.43:27-43:30We do not work for the Internal Revenue Service.43:30-43:32We actually work for you.43:32-43:42Our goal is to actually be representing you in front of the IRS as a shield, a way of making things a little better and helping you understand what is your options.43:42-43:43What can you do?43:43-43:45What should I be doing next?43:45-43:48So that is what I’ve been doing and many others.43:48-43:56So if you’re looking for someone that needs to do taxes and if my calendar is full, I am pretty sure I can give you some other people that we can resume.43:56-44:00We actually have a new guy in our office after 30 years.44:00-44:03I now have a second EA working for me.44:03-44:05And Chris is awesome.44:05-44:11Chris Woodard, he’s been doing this for 20, 30 years himself and is working out wonderfully.44:11-44:18It’s, uh, is always, um, I mean, we enjoy taxes, which is nice to be with someone that actually enjoys doing taxes.44:18-44:21So he’s a little bit crazy like I am.44:21-44:25So if you need an appointment, you know, we have some here in our office.44:25-44:28You can also go to, um, drfriday.com.44:28-44:30That’s the webpage, drfriday.com.44:30-44:32Um, look on the schedule.44:32-44:41You can either pull up a time or you can call the, the phone number on Monday, 615-367-0819.44:41-44:46615-367-0819 is the direct number.44:46-44:49You can also email us at fridayatdrfriday.com.44:49-44:53I will tell you at this point, we are running probably a little behind on responding.44:53-44:55Um, we’re doing our best.44:55-45:03I will try to get caught up over the weekend, but until then, um, you can, um, obviously email fridayatdrfriday.com.45:03-45:13If you need help doing taxes or just getting an extension filed, um, again, making a phone call or sending us something, we’ll help you do that to, uh, just keep you.45:13-45:18And then after tax season, we can get you back into compliance, make sure everything is going the way you want.45:18-45:30Um, it is so important to file your taxes because people don’t realize if you want to have your children in college, if they, if you want to buy a house, if you know, a lot of those things do require us filing taxes.45:30-45:36And sometimes people find out that they haven’t filed for a number of years and they really don’t even have a major tax issue.45:36-45:43And then you have some that, you know, 20, uh, 10 years ago they filed and they owed a big child amount and they still owe it.45:43-45:45But how long has it been in collections?45:45-45:46What do you have to do?45:46-45:49You know, the IRS has a particular pecking order.45:49-45:51There is rules they have to follow.45:51-45:53Sometimes it doesn’t feel like it.45:53-46:00And I will even say that, you know, the left and right hand, the collections and the audit or resolution areas don’t communicate.46:00-46:14I ran into that here in Tennessee, a Tennessee department of revenue dealing with an auditor, um, on a, on a resolution situation yet collections starts levying and leaning up someone’s bank account because of the, uh, situation.46:14-46:16I thought we were copying people.46:16-46:20I thought everything was being done, but collections like, well, we didn’t get a cancellation.46:21-46:29And so anyways, if you need help, 615-367-0819 is the direct number in the office.46:29-46:36615-367-0819 or Friday at drfriday.com.

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In this episode, Dr. Friday discusses how transferring assets to your grandchildren can trigger generation-skipping tax (GST) and explains why setting up trusts through your children is the smart move to avoid a steep 40% tax.

Transcript – Edited for Readability:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Something to talk about. Transferring to your grandchildren may be a subject of generation skipping tax. We do have GST tax, and that is 40%. So if you decide to skip a generation and you say, hey, I really want to leave everything to my grandchildren, even though your children are still alive, the government says, wait, you’re trying to spread it out further. So we’re going to tax you on that if you do certain things. Your best bet is to set it in trust, put it to your children, keep the trust to have certain regulations so the grandchildren can still inherit. There are ways, but talk to a good estate attorney.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday clarifies that while most inherited life insurance proceeds are tax-free, cashing in a whole life policy can result in taxable gains due to accumulated growth.

Transcript – Formatted for readability:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I was asked a question last week about life insurance: Is it always tax-free? And the answer is no. It’s not always tax-free. One of the main things to consider with life insurance is that if you cash in your own policy—particularly whole life—sometimes people reach a point where they no longer need it. If you do cash it in, the gain on the amount paid is taxable income because it’s considered growth, much like investing in a stock or savings bond. So, keep in mind that if you inherit a policy or receive life insurance proceeds after someone passes away, 99% of the time, that money is tax-free.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains the rules for gift taxes in 2024, including the $18,000 annual exclusion and the $13 million lifetime limit, clarifying who is responsible for taxes.

Transcript – Formatted for readability:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Gifting friends and/or family—$18,000 in 2024 is the annual exclusion. Anything over that, you need to file a gift tax return. But remember, lifetime gifting is $13 million, so you have a little wiggle room to understand how much to give. You do not have to give it to a family member; you can give it to someone on the street—it doesn’t make a difference. The person giving the money is responsible for any taxes that could be due, while the person receiving the money will not pay taxes. Important to understand.

If you need help understanding how to file a gift tax return or any of that, call 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday breaks down estate tax thresholds under the latest law and offers planning tips using trusts and gifting to avoid a steep 40% tax rate.

Transcript – Formatted for readability:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Estate tax. Most of us are not going to really worry about estate tax because, under the newest tax law, the exemption is $13,610 for an individual and $27,220 for a married couple. That’s quite a bit to exceed. And then if you do exceed that, the tax would be 40%, which is pretty steep when you think about it. So, making sure you have a good tax plan by setting up a trust—an A, B trust if you happen to have a large estate—and considering gifting money away is advisable. I mean, I’m sure anyone with a good tax planner will help figure out a charity trust and all those—they’ll put more money in your hot pocket. You need help; call 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains the urgency of taking your IRA required minimum distributions on time to avoid a steep 50% penalty—even if it’s for an inherited IRA.

Transcript – Formatted for Readability:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

IRA required minimum distributions. If you did not already take your 20-24, I want to let you know you’re late. They can assess a 50% penalty on whatever you did not take out. So if you’re only taking out $5,000, the penalty could be $2,500. There are ways to request a waiver, and the IRS has been pretty lenient on that. So, make sure you do that, and ensure you’re set up to take it. And this is not just for people over the age of 73 on RMDs but also if you inherited an IRA and are required to take the money out. So, very important.

If you need help, give us a call.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday emphasizes the importance of filing your tax return extension by March 16 to avoid steep penalties for businesses, partnerships, and LLCs.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

March 16th is a big deadline for people with businesses, sub-s corporations, partnerships, and LLCs that are treated as partnerships or sub-ses. It’s important because today is the deadline. If you have not filed the return, you need to check with your tax person to make sure an extension has been filed. Those penalties can be very expensive—I’ve seen penalties reach tens of thousands based on the number of partners. It is very important to make sure you file the extension to save money. It’s a pretty easy thing to do. If you don’t have anyone to help you, give us a call today at 615-367-0819, and someone on the other end will help you.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday explains the income limits for taking early Social Security in 2024 and the penalties for exceeding them.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Social Security—so in 2024, if you decide you want to take out early Social Security, which means you’re 62 and older but not at your full retirement age, you can earn up to $22,320. If you make more than that, you’ll have to pay back $1 for every $2 over. And if you earn more than $59,000, you have to pay back $1 for every $3 over.

So bottom line—if you’re going to work, make sure your income stays low enough. Otherwise, you might want to think twice about getting onto early Social Security.

Need help? Call 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Welcome to the Dr. Friday Radio Show recap for March 8, 2025! Dr. Friday, a financial counselor and tax consultant, discussed crucial tax topics, business regulations, and answered live caller questions. If you’re navigating tax season or dealing with financial concerns, this episode provided valuable insights and updates to keep you informed and compliant.

Key Topics Covered:

• Beneficial Ownership Information (BOI) Filing:
  • Deadline approaching (March 21, 2025) for businesses registered with the state.
  • Applies to LLCs, S-corps, C-corps, partnerships, and other entities.
  • Failure to file results in penalties of $592 per day.
  • BOI is required for transparency in ownership to prevent money laundering.
• Tax Filing & Extensions:
  • Corporate tax returns (Forms 1065, 1120S) due March 15, 2025.
  • Importance of filing an extension to avoid penalties.
  • Individual tax deadline and when to consider filing an extension.
• Handling Missing Tax Documents:
  • What to do if you haven’t received all necessary forms.
  • The importance of estimating income to avoid penalties.
• Job Changes & Tax Implications:
  • W-4 form adjustments when switching jobs.
  • Checking the right boxes to prevent under-withholding.
  • Married couples and how incorrect W-4s can lead to unexpected tax bills.
• Gifting & Tax Consequences:
  • Gift tax exemption limits ($18,000 per person in 2025).
  • Gifting real estate and how the recipient’s cost basis is determined.
  • Potential tax liabilities when selling gifted property.
• Charitable Contributions & Deductions:
  • Standard deduction vs. itemizing for tax benefits.
  • How to maximize tax savings through direct IRA charitable contributions.
  • Donating vehicles: necessary documentation and valuation.
• Capital Gains & Roth Conversions:
  • Long-term capital gains tax brackets.
  • Strategic Roth conversions to minimize tax burden.
  • Tax-efficient ways to manage stock and investment assets.
• Upcoming Tax Code Changes in 2026:
  • Expiration of the current tax brackets.
  • Potential increases across income levels.
  • Implications for long-term tax planning.

Transcript

00:00-00:04She’s not a medical doctor, but she can sure cure your tax problems or your financial woes.00:04-00:08She’s the how-to girl. It’s the Dr. Friday Show.00:08-00:19If you have a question for Dr. Friday, call her now, 737-WWTN. That’s 737-9986.00:19-00:24So here’s your host, financial counselor and tax consultant, Dr. Friday.00:28-00:32Hey, I’m Dr. Friday and the doctor is in the house.00:32-00:39And we’ll be able to take your calls live today at 615-737-9986.00:39-00:46615-737-9986 is the number here in the studio.00:46-00:48So if you’d like to reach us, you can give us a call.00:48-00:51We’re working on taxes ourselves here in the office.00:51-00:58So if you have a question on preparing your tax return, maybe you’re dealing with something else, as far as maybe something came up in 2025.00:58-01:07Usually we have a lot of people that are either selling homes or inheriting property, and they’re not always sure how that’s going to affect the taxes.01:07-01:09Maybe you’re working on a conversion.01:09-01:15All of those come into play, to be quite honest, as we get going here in the real world.01:15-01:24So if you have a question on that, don’t hesitate to give us a call here at 615-737-9986.01:24-01:28615-737-9986.01:28-01:30We’ll take your calls, taking things.01:30-01:33I do want to start out the day or at least start.01:33-01:35We may have probably covered this a couple different times.01:35-01:38Beneficial ownership information, BOI.01:39-01:41We talked a lot about this last year.01:41-01:50And then we said, wait, you didn’t have to do anything with it because, you know, it came back and they said, oh, we’re going to take it to court and we’re not going to be dealing with this.01:50-01:52And then boom, guess what?01:52-01:53They’re dealing with it.01:53-02:17So this is something that’s very important that you need to make sure that if you are any entity that’s registered with the state, so that would be single member LLCs, sub-S corporations, C corporations, partnerships, any of them that are registered with the state, the BOI is filed through the foreign banking.02:17-02:19That’s what it has to do with FinCEN.02:20-02:35And the purpose is to be able to share your business information with the government, basically, to make sure that foreign investors or anyone is in there, that that is being provided to them, basically for money laundering.02:35-02:48It says the purpose behind this is to prevent money laundering and other federal crimes, improve corporate accountability, and asset law enforcement in investigation, and assist lawyers, laws in investigation.02:48-02:49Sorry.02:49-02:52That’s what they’re basically saying to us.02:52-02:53So I’m just passing.02:53-03:03The most important part of this is we did talk before about how the penalty, it does say that the penalty will be $500 a day if you don’t comply.03:03-03:10So this was as of February 27th, this new update you have until March 21st, 2025.03:11-03:19And now they’re saying, I’m sorry, the results of the penalty will be $592 per a day if you do not comply.03:19-03:22So again, this isn’t something we want to play with.03:22-03:24It’s not a tax situation.03:24-03:31So don’t think that your tax person’s really going to be dealing directly with that for you because it’s nothing to do with actually taxes.03:31-03:39You have to upload your driver’s license and or passport for all members that own more than, I believe, 10%.03:39-03:43So very, very important meeting that deadline.03:43-03:51If you have started a new business, let’s say the first day of January, then you need to be doing it within 90 days.03:51-03:56So again, you need to make sure this is something that you are on top of.03:56-04:05If you have someone that’s helping you with setting up a company or dealing with that, it does need to be dealt with on the level of what you have.04:05-04:08So again, corporations, LLC, similar entities.04:08-04:16This basically includes registration before January 1st, 2024, which was submitted by January 1st, 2025.04:16-04:23Entities registered on or after January 1st, 2024 only had 30 days of this registration.04:23-04:27All owners that are 25% or more.04:27-04:27Okay.04:27-04:28So we got that straight now.04:28-04:3425% or more beneficials as an individual who meets one or more of the following.04:34-04:41They are controlling exercise, substantial control of a company, or they own 25% or more.04:41-04:42There is an exemption.04:42-04:46Over 5 million is an annual revenue.04:46-04:48So if you have more than 5 million, you’re exempt.04:49-04:53More than 20 full-time employees in the U.S. operating under the United States.04:53-04:59Publicly traded companies are some of the excludable situations.04:59-05:08So again, if you have a larger company, more than 20 full-time employees, you are meeting and complying through probably labor laws.05:08-05:10So you’re probably meeting that expectation.05:10-05:13So hopefully that will help you because I want to make sure.05:13-05:15I mean, that’s going to be, what, another week or so away.05:15-05:22And if we don’t do it, and then if you’ve started a new company as of the 1st of 2024, you need to be doing it now.05:22-05:31I have not yet seen any kind of penalty letters or anything, to be quite honest with you at this point.05:31-05:37But I think in the big picture, it’s just a matter of time before those will start coming in.05:37-05:41I think they’ve had a few starts and stops on doing it.05:41-05:47And you can go right on to the B-O-I-R dot gov.05:47-05:50It’s basically the fitness and website that you can do.05:50-05:50And it’s free.05:50-05:53There are some websites you can do and they’ll pay and help you with it.05:53-05:57But I do suggest not to ignore that if you’re a business owner.05:57-05:59So if you’ve got a question, that’s great.05:59-06:01We can deal with that as you go.06:01-06:07Again, the phone number here in the studio, 615-737-9986.06:07-06:11615-737-9986.06:11-06:15Taking your calls, talking about my favorite subject, which is taxes.06:15-06:19So if you have something you want to deal with or do, that’s perfect.06:19-06:22Send those over or just text or email.06:22-06:27We’re also looking at those to make sure we have everything going on.06:27-06:29There is some basic questions.06:29-06:37I mean, obviously, I’m going to tell you right now, if you haven’t received all of your tax documents, I have a person that says, what if I haven’t received everything yet?06:37-06:41I would say at this point, you might want to consider an extension.06:41-06:42You don’t have to.06:42-06:44You still have about 30 days before.06:44-06:53But in my opinion, again, it’s not so much that you don’t have the ability to file on time.06:53-06:59My bigger concern is either rushing through and making sure you’ve got it versus just taking the time.06:59-07:06That being said, I am an avid believer that you do need to make sure that you have filed some taxes.07:06-07:13So if you already know with what you have, even if you’re missing something and you make an educated guess and you say, hey, I’ve got another $20,000.07:13-07:17Maybe I haven’t received my stock portfolio or something because of some delay.07:17-07:20Then you can turn around and say, OK, that’s great.07:20-07:23So let me go ahead and estimate if I have this.07:23-07:25This is what I think is going to be due.07:25-07:28And then that will be a lot easier for us to deal with.07:28-07:31So just just putting that out there.07:31-07:35Always better to preempt, especially this close to making your first quarter estimate.07:35-07:37If you have to make them anyways.07:37-07:51In my world, I mean, if I almost always try to overpay because I need to roll that into the next year anyways, and I’m estimating because I haven’t finished the 2024, for example, my first quarterly estimate is April of 2025.07:51-07:55Well, if I haven’t finished 24, I’m really using 23’s number to estimate.07:55-08:04So if I’ve overpaid, assuming that I’ve made more money this year than I did the year before, then I need to go ahead and just add more to it to just keep it rolling.08:04-08:07So that’s that’s the important part of that conversation.08:08-08:11I know a lot of times I’m not a big fan and you guys all know this.08:11-08:13I’m not a fan of receiving huge refunds.08:13-08:14I’m not.08:14-08:15It’s not necessary.08:15-08:23I have sometimes people that will get 10, $12,000 every year because they just they just want to make sure that they have overpaid.08:23-08:25And sometime in the past, they underpaid.08:25-08:27And when they did that, it became a problem.08:27-08:32So it’s just important that they basically feel like that.08:32-08:40But in my opinion, I much rather make sure I pay 110% of the year before and then let the money grow, put it in a CD or savings.08:40-08:41Maybe you will owe that money.08:41-08:45But, you know, it you know, why give it in advance?08:45-08:46They’re not paying you interest.08:46-08:49There’s no advantage to any of that.08:49-08:52So just just my personal opinion.08:52-08:54There’s no reason for us to do that.08:54-08:56So that’s my two cents.08:56-08:57I’m going to move on now.08:57-09:01Next thing where I’ll talk about a little bit is getting your tax forms together again.09:01-09:05If you have the best way to know if you’ve got everything is look at the year before.09:05-09:06Right.09:06-09:07That’s at least our first thing.09:07-09:11And then if you know, I changed jobs this year.09:11-09:13Oh, let’s talk about changing jobs.09:13-09:15Two or three of my clients.09:15-09:18Thank goodness they changed jobs up, you know, went to a better job.09:18-09:19That’s wonderful.09:19-09:33But almost every single one of them, in fact, every single one of them have owed money this year, because whenever you change jobs on the W-4 form, when you fill it out, it says, do you have does your spouse have a job?09:33-09:34Something like this.09:34-09:35I’m paraphrasing.09:35-09:38But does your spouse have a job or do you have a second job?09:38-09:50If you don’t check that box when you’ve come from one job going to another job, it is going to take too little of taxes out because it starts the tax code all over again.09:51-09:53Thank you for one of my clients.09:53-10:06We were doing a bit of a study on it and we figured out that that was very, very important to make sure that box was checked because when we didn’t check it, it became a lot.10:06-10:08He had a lot less coming out of his or a lot.10:08-10:10Yeah, he was paying a lot less out of his check.10:10-10:22So we figured out that that’s where the problem was, because when you’ve already earned maybe 40, 50 grand or 100 grand at one company and now you’re starting halfway through the year at another company, the last thing you want to do is restart the tax code.10:22-10:35That’s going to be a problem because, you know, they’re going to basically take half the taxes out and then I’m going to wave on and have to tell you, unfortunately, you owe Uncle Sam and that’s never something you want to hear.10:35-10:39I’m just saying no one ever lines up and says, yay, Friday, that’s so awesome.10:39-10:40No, never.10:41-10:44So just putting that out there, making sure we’re on the same page.10:44-11:07And then, of course, we have the situation with making sure that if you are starting a job and you’re married, you know, and you guys are making more than 150 combined, you may want to either go to box four on the W4 and have some extra withholding coming out to compensate for the fact that, again, especially with that box not checked, we found this on a married couple.11:07-11:10Both of them make around $95,000, $100,000.11:10-11:15And this year, for some reason, a lot of people updated their W4s, right?11:15-11:18Because you’re supposed to do it every year, but some employers don’t.11:18-11:19But they did.11:19-11:29And so they went in, they checked single or married, excuse me, and then they put in, maybe they have each, maybe they have one child, but they each put in that $2,000 because they’re married with one child, right?11:29-11:37Again, if you’re married with one child, both of you should not be claiming that child because, well, there’s only one child.11:37-11:47And the other side of that is if you’re married and you don’t check that box, that’s telling the government that you are supporting a spouse and a child.11:47-11:49And in most cases, both of you are working.11:49-11:50You’re not supporting each other.11:50-11:58So either go single so you have the more money coming out, especially if you’re running into tax issues, always better to always go single and zero.11:58-12:01I had a client say, I can’t claim single because I’m married.12:01-12:03The tax code doesn’t have anything to do.12:03-12:05That’s how much money’s coming out.12:05-12:09Or go to box four and figure out, hey, I was short $3,000.12:09-12:17Multiply that by the number of paychecks you have left and have that extra money coming out because you do not want to have to deal with that later, right?12:17-12:20Okay, we’re getting ready for our first break.12:20-12:25So when we come back, we can get to your phone call, 615-737-9986.12:25-12:29615-737-9986.12:29-12:30We’ll be right back.12:37-12:38All righty.12:38-12:40We are back live in studio.12:40-12:42You can reach me here live.12:42-12:46615-737-9986.12:46-12:51615-737-9986 is the number here.12:51-12:57And again, if you have any questions, maybe you’re dealing with taxes now or taxes for 2025.12:57-12:59Both are good ones to deal with.12:59-13:03So feel free to just let me know if I can help on that.13:03-13:08We have been working a lot on, obviously, corporations are due on 315.13:08-13:09That’s next week.13:09-13:20So if you have not filed your corporation yet or your 1065, 1120, 1120s or 1120s can be actually April.13:20-13:23So 1120s and 1065s are the main ones.13:24-13:28And if you haven’t filed those, you need to make sure you filed an extension because they’re due next week.13:28-13:31And then we can circle back around and take care of them.13:31-13:38But again, extensions or file your business tax returns that don’t fall on your personal return by next week.13:38-13:40We have Brandon in Murfreesboro.13:40-13:41Let’s get him on the line, please.13:41-13:43Hi.13:43-13:44How are you doing, Dr. Friday?13:44-13:45I’m doing great.13:47-13:48What can I do for you, Swinny?13:48-13:52My question was, we plan on getting my 15-year-old son a car this year.13:52-14:02And I was wondering, do I need to, or is there any advantage, I guess, to claiming that on my taxes?14:02-14:04Or should I just buy him a car?14:06-14:17Well, you might be able to claim, depending if you’re itemizing, the additional sales tax that you pay will be something that you can actually use if you itemize.14:17-14:20Otherwise, there’s no place on the tax return to put it.14:20-14:21Okay.14:21-14:26I guess I was wondering about, like, as far as, like, gifting, you know.14:26-14:27Good question.14:27-14:29Now, for the children, we don’t really get into that.14:29-14:33But theoretically, the parents can give him a $36,000.14:33-14:37So, if the car is worth more than that, I need to move into your house.14:37-14:38No, I’m just joking.14:38-14:45Brandon, but, yeah, if the car is more than $36,000, in theory, but is it going to be titled to your child’s name?14:45-14:47Or is it still going to be titled to your guys’ name?14:47-14:47Just curious.14:47-14:52I mean, I guess it’d have to be titled under my name since he’s underage.14:52-14:53That’s what I was thinking.14:53-14:55At least at this point.14:55-14:56So that’s just for adults.14:56-14:56Yeah.14:57-14:58Giving to adult children.14:58-15:03And you’ll cover it with your insurance and everything until he gets to the age where he can switch it over.15:03-15:06At that point, you could gift it to him without a problem.15:06-15:13But if the car does have a street value more than $36,000, then you would actually just need to do a gift tax return.15:13-15:16It wouldn’t really cost anything, but you do need to do that.15:16-15:16Okay?15:16-15:18Right.15:18-15:18All righty.15:18-15:19Thank you.15:19-15:20Hey, great question.15:20-15:20Thanks, Brandon.15:20-15:21All right.15:21-15:29So if you have a question, I like it when people are preempting their thoughts because that way we can make sure we’re hopefully working in the right direction.15:29-15:31Not always, but sometimes.15:31-15:35Sometimes we’re not always working in the exact same position that we would normally.15:35-15:41But if you have a question or you have something you want to deal with, give me a heads up and I will try my best.15:41-15:48If I don’t know the answer, I will definitely get someone that is an expert in that section and try to help you out to do what we need to do.15:49-16:04So if there is any kind of situation where maybe you have sold some property and you don’t know the basis, the IRS has, they have kind of come up with their own concept on this.16:04-16:06I shouldn’t say their own concept.16:06-16:07It’s black and white.16:07-16:12If you don’t know how much was paid for the, if you inherited it, then there’s a step up in basis, right?16:12-16:13That’s pretty easy.16:13-16:19You can get someone to give you a value of the property at the time of the passing of the individual you inherited from.16:19-16:30But I have run into a number of situations where the grandparents or the parents have just signed title over to a child, a grandchild.16:30-16:39In doing that, keep in mind that you need to know how much was paid for that property at the time.16:44-16:49Otherwise, you know, you will have a situation where they’re basically to say your basis is zero.16:49-16:58So if grandma has a piece of property and she brought it 40 years ago and maybe they brought it for $5,000 and now she’s, uh, she gifted it to you.16:58-17:01And now you’ve either sold it or built onto it.17:01-17:03Your value would only be the 5,000.17:03-17:07It is not the step up in value that people get when you inherit.17:07-17:10There’s a big misconception out there on that.17:10-17:15So a lot of times people think, well, um, she just signed it over to me and it was valued at 500,000.17:15-17:17So that’s my value.17:17-17:20No, that is not your value because you did not inherit.17:20-17:21She gifted it to you.17:21-17:33So very important to understand that, to be quite honest, because I’ve had a couple of cases where people were under this, this concept that they didn’t think they were have to pay any tax on something that they were gifted.17:34-17:41So again, um, very important to understand how that works and where you’re going to get it because gifting is never the best idea.17:41-17:42I mean, sure.17:42-17:47When mom and dad buy a car and then maybe when you, you turn 21, they gift it over to you.17:47-17:50That that’s a pretty straightforward and that’s street value.17:50-17:52And it’s, it’s not the same thing at all.17:52-17:55Um, but when you’re actually talking about, well, I shouldn’t say that.17:55-18:05I mean, if it’s a Maserati or something that’s collectible, then there would be a situation under the same situation, whatever the parents paid for that at the time they paid for it would be the value.18:05-18:12And if it’s appreciated, there are cars that do, um, then you would, and you sell it, you would have a taxable situation.18:12-18:17Um, but up until that time, basically in most cases, that’s not a big difference.18:17-18:28So I just want to make sure we’re all on the same page when it comes to, if somebody gives you something, um, and you have a value to it and you turn around and sell that thing.18:28-18:32And it’s worth a lot more than what they paid for it.18:32-18:34Not what they gifted it or whatever, what they paid for it.18:34-18:37Then you need to make sure you’ve got that covered.18:37-18:52So, um, cause again, I’ve got to, I just saying that because I’ve got a number of cases that have come in the door, uh, recently that have basically been where they thought they were paying zero tax until, well, until they woke up and realized that’s not the way this works.18:52-18:54So, um, okay.18:54-18:55You can join the show.18:55-18:58615-737-9986.18:58-19:02615-737-9986.19:02-19:03Have had a couple of people.19:03-19:07Cause they’re not sure exactly what’s going to happen, um, in the stock market.19:07-19:11And guys, we’ve been doing this show for over 15 years and we’ve had ups, downs.19:11-19:18Um, and we all know that, you know, yes, sometimes things that happen in politics do affect the stock market for small period of time.19:18-19:22Um, I, I don’t think, and I’m not a financial planner.19:22-19:24Let me throw this out there right now.19:24-19:26I’m not a financial planner.19:26-19:35I do taxes, but I think you need to talk to a financial planner before you decide that you’re going to just take all this money and, and take it out of your retirement or something.19:35-19:37Cause you’re afraid of losing it.19:37-19:38You don’t have to take it out.19:38-19:47You could put it into, I suppose, savings bonds or a money market, something where maybe it’s at least getting interest, but you’re not cashing it out.19:47-19:49Because I do think that that’s a problem.19:49-19:53Um, because now you’re causing yourself a huge tax situation.19:53-19:57In my opinion, again, guys, um, that you don’t need to have.19:57-19:58I get it.19:58-20:02Nobody wants to have a mortgage when they’re thinking about retirement, for example.20:02-20:08But if your mortgage interest is 3% and you’re averaging 4% or 5%, why not have a mortgage?20:08-20:12Because you’re earning money on that money.20:12-20:15So you’re, you know, making 5% and I’m giving someone else three.20:15-20:17I’m still making 1% to 2% on someone else’s money.20:17-20:21If I took it all out and paid off the mortgage, I wouldn’t be making that 1% to 2%, right?20:21-20:26So it’s important to understand how that works and what you want to do with it.20:26-20:27That’s all I’m saying.20:27-20:30Don’t just jump to the conclusion and don’t, don’t run scared.20:30-20:32Talk to a financial person.20:32-20:39Um, I will also say that, um, a lot of people I talk to, cause I often talk to individuals that we, uh, deal with things.20:39-20:43You’re not really preparing for the estate planning, right?20:43-20:47I mean, you do need to make sure that you’re dealing with that as well.20:47-20:54Um, but let’s, before we hit the break, let’s go ahead and get Alan on from Franklin just so he doesn’t have to wait through the break.20:54-20:54Hey, Alan.20:54-21:00Uh, I want to ask you about some, a couple of gifting questions.21:00-21:00Sure.21:01-21:10Uh, if I understand it right, I can gift $18,000 to my children.21:10-21:11Anyone.21:11-21:12Okay.21:12-21:13Anyone.21:13-21:16And they don’t have a, they don’t have a tax burden on that.21:16-21:19They don’t always, no matter how much is gifted.21:19-21:20Alan, that’s a great question.21:20-21:23I didn’t say that, but it’s the giver that always pays the tax.21:23-21:31So if I’m going to give you 18,000, I would have had to pay the tax or will have to pay the tax, uh, before, but the receiver never pays.21:31-21:32Okay.21:32-21:33Okay.21:33-21:35All right.21:35-21:45If I gift my children real estate, uh, and later they sell it and, you know, probably would someday.21:45-21:48What happens then about taxes?21:48-21:52Then you’re gifting it at whatever you paid for it.21:52-21:58So you’re gifting it at, let’s just say you paid today, $200,000.21:58-22:03So you’re gifting the value of that to them at the value of yours.22:03-22:11And then when they sell it, they’re going to pay tax on the difference between what you gifted the value at and what it was for.22:11-22:20And that’s why I don’t like quick claims because a lot of times people will quick claim something for a dollar, even though they have more invested in that property when they quick claim it.22:20-22:25We’ve had cases where the IRS has only allowed the people a dollar for that quick claim.22:25-22:48Uh, so again, I would, yeah, I would always, if quick claiming is something anyone’s thinking of, if you have 200,000 invested, the reason people do it is because the title of the, was at the county clerk’s office where you register, they’ll, you’ll have to pay a tax on it at whatever dollar amount you, I know that because I do some quick claiming with properties.22:48-22:52When I buy them from the individual, I’d rather pay that $600.22:52-22:54It’s never very much, you know, a few dollars.22:54-23:00And then that way you’ve preserved your investments to your child or whoever you’re gifting it to.23:00-23:08It’s worth the few pennies versus the dollar that quick claims it, unless you’ve got a HUD or something that could prove how much you paid for it.23:08-23:11You probably could back it up that way, but people lose documents.23:11-23:13Okay.23:13-23:17I have quick claimed some property before myself.23:17-23:20So I need to remember that.23:20-23:21Yes.23:21-23:26And if, I mean, and if the property is still with that person, you’ve quick claimed it.23:26-23:35I might suggest if you have any kind of additional paperwork you can provide to them, you know, later the, they’re going to need that possibly.23:35-23:43I mean, obviously they may be able to get away with it and not, but I, while you’re still here and have the evidence, it would be a lot easier on them as my two cents on that.23:43-23:45Okay.23:45-23:46All right.23:46-23:47All right.23:47-23:48Okay.23:48-23:49Thank you.23:49-23:50Thank you very much.23:50-23:51Thank you, sir.23:51-23:52I appreciate the call very much.23:52-23:57All right, guys, we’re going to get ready to take our last, our last break, our second break.23:57-23:58We’re only halfway through the show.23:58-23:59Look at me.23:59-24:04And if you have a question, great question from Alan and from our prior caller.24:04-24:08615-737-9986 is the number here in the studio.24:08-24:12615-737-9986.24:12-24:15And when we get back from this break, we’ll take some of your phone calls.24:15-24:20We’re also going to talk about some of the upcoming things that will be changing in 2025, potentially.24:22-24:29Assuming that, keep in mind, the tax law we’re operating under today is set to expire on December 31st.24:29-24:32Kind of important question or information we have there.24:32-24:35So just want to make sure we’re all on the same page.24:35-24:35All right.24:35-24:38We’re going to get ready to take our second break.24:38-24:40You can give us a call back here in the studio.24:40-24:43615-737-9986.24:43-24:44We’ll be right back.24:49-24:50All right.24:50-24:52We are back live in studio.24:52-24:54Is there anyone on line one?24:54-24:55I don’t think so.24:55-24:56I think it’s just lit up.24:56-25:03You can reach us here in studio at 615-737-9986.25:03-25:07615-737-9986.25:07-25:10Again, talking about taxes.25:10-25:25If the 2025 tax season, or what I’m considering 2025, the tax season ends, when we file in 2026, that will be the end of the tax code we know today.25:25-25:30It expires as of December 31st, 2025.25:30-25:39We will then go back up to 10%, 15%, 25%, 28%, 33%, and 25.25:39-25:45The highest bracket will be now 39.7, where right now it’s 37.25:45-25:48So we’re going to go up every class.25:48-25:51So they always say these are really helping the rich, and that’s baloney.25:51-26:02But anyways, it’s going to hurt the middle class the most because the individuals that are now in the 0% to 12% will be 3% higher because you’re all being 15.26:02-26:05And then people in the 22 will actually have to be 25.26:05-26:13So that’s like a 6% increase on the normal individual people that were between 25 and then another two more for 28.26:13-26:14All right.26:14-26:17I see my boy is typing away, and this is so awesome.26:17-26:18Let’s go to the line.26:18-26:22It looks like Susan in Hendersonville will be first, and then we’ll go to Chris.26:22-26:23Hey, Susan, how can I help you?26:24-26:25Yes, ma’am.26:25-26:29I’ve heard two different opinions on this, and I want to find out the right one.26:29-26:33What it amounts to, I use the short form.26:33-26:35I have someone do it for me through the computer.26:35-26:44But this past year, I’ve made sizable donations to nonprofits through my choice.26:44-26:49And also, I donated a car to one of these organizations that was valued at $5,000.26:49-26:53My donations probably come to a couple thousand.26:53-27:08I was told by someone that even though I do the non-itemizing, that I can count that off even though I get the standard deduction of whatever it is, $14,000 or whatever.27:08-27:10I’ve been told, yes, I can.27:10-27:11No, I can’t.27:11-27:12What is the right answer?27:12-27:14The answer is no.27:14-27:22You have to exceed the $14,600 or if you’re over age 65, another $1,500 above that, which is like $16,100.27:22-27:33And if you don’t have, and again, this would be made up of your sales tax, your property tax, mortgage interest, charitable contribution, and possible medical.27:33-27:38If all of that exceeds the $14,600, sure, the charity will work.27:38-27:48Also, you have to understand on the car, if they did not sell that car yet, or if they haven’t given you a sheet of paper, we can no longer just use blue book.27:48-27:54We have to have a letter from the nonprofit you gave it to saying this is what they received for that vehicle.27:54-27:56If they haven’t sold it yet, you cannot claim it.27:57-28:01We can’t put it on the books unless you have a secondary letter saying this is the value.28:01-28:01Maybe you do.28:01-28:04I’m doing that more for the whole listening audience.28:04-28:13Giving a car away is no longer quite as simple as it used to be where we could just take blue book value, put it in there, and show that we gave it to some organization.28:16-28:16Excuse me.28:16-28:18They’re not selling this car.28:18-28:21I’m giving it to the views in the organization.28:21-28:22They’re not going to sell it.28:22-28:28And they have to make sure they sent you a letter saying the organization has valued this car at this dollar amount.28:28-28:31Otherwise, what you say the value is doesn’t hold.28:31-28:33They have to give it to you on a letter.28:33-28:35Okay.28:35-28:36I do have that.28:37-28:37Okay.28:37-28:37Perfect.28:37-28:39So, yeah.28:39-28:48So, if you’ve got $5,000 plus another, so you’ve got like $7,000 or $8,000 in charity, so you still need another $7,000 almost to itemize.28:48-28:52So, do you have a mortgage and property tax?28:52-28:53No mortgage?28:53-28:53Yes, no.28:53-29:02My home is paid for, but I do have property taxes in the county and the city, which comes to about $2,000.29:02-29:03All right.29:03-29:05So, that gets us to $10,000.29:05-29:09And then you will have some sales tax depending on your income and or what you can put in.29:09-29:17Even if we say it’s another $2,000, I don’t believe you’re going to be hitting itemizing because we have to be $14,600.29:17-29:19And if you’re over $65,000, $16,000.29:19-29:24But, in other words, if I don’t itemize, I cannot count these donations.29:24-29:25You don’t get to deduct it.29:25-29:26No.29:26-29:28Okay.29:28-29:29Okay.29:29-29:32Well, I just wanted to make sure that I was being told the truth.29:32-29:33Sure.29:33-29:34Thank you so much, man.29:34-29:35I’m glad you asked that question.29:35-29:36Thank you so much.29:36-29:37All right.29:37-29:38That was a great question.29:38-29:40And I will add a little caveat to that.29:40-29:48If you are a person that is 70 and a half and older, you do have a IRA.29:49-29:59I know you’re going to say, hey, I don’t have to take my required minimum distributions till 73, but you can start at 70 and a half out of your IRA.29:59-30:03You can take a qualified charitable deduction.30:04-30:06Take the money basically out of your IRA.30:06-30:07And you don’t do this.30:07-30:09You do this through the custodial.30:09-30:16You’ll tell them, hey, I want to give this to St. Andrews or whoever you might want to give the money to, whatever qualified nonprofit.30:17-30:18They’ll give you a check.30:18-30:22And then that is a dollar for dollar deduction.30:22-30:24You do have to report it.30:24-30:26You have to put it on there and it has to track through.30:26-30:27You need to get a letter again.30:28-30:33Normally, we can get that directly from the custodian saying this.30:33-30:36And then normally, we’ll get one from the organization as well.30:36-30:50But again, just that is the only people that can write off charity that if it’s done correctly, right through the custodial and out of your RMD, then you can write it off and you do not need to itemize.30:50-30:52This will be something outside of that.30:52-30:59Otherwise, you can only itemize charity in the year of 2024 at that time.30:59-31:09Now, again, back in 20 and 21, we all know there was like a $300 or a $600, depending on the year, where we are a love above the line standard deduction.31:09-31:11But that is not on the books any longer.31:11-31:14So you won’t have that as an option.31:14-31:20So anyway, so hopefully that will help anyone that is thinking about giving.31:20-31:25And like I said, nothing wrong with giving a car or anything else.31:25-31:29Cars are a little tricky, like I said, because you do have to.31:29-31:30It sounds like she did it 100% correct.31:30-31:38But you do have to get a letter from the organization basically saying what the car was valued at if they were not going to be selling the car.31:38-31:41Then that was an important thing.31:41-31:42I will also say something.31:42-31:52I had a conversation with one of my clients and we got into talking about charity and how they’ve always given quite a bit of money charity.31:52-31:57And I’m asking them because they’ve got also a large amount of stock.31:57-32:07And I said, have you ever thought about giving the stock to your church that you normally give and let them sell it?32:07-32:10And that way you would get the sale price as a deduction.32:10-32:14Yet you don’t have to pay the capital gains on that stock.32:14-32:18Same thing as if you have a piece of land that you want to sell.32:18-32:21And maybe you would then turn around and give that money to a charity anyways.32:21-32:24Give the land to the charity.32:24-32:26Let the land be sold through the charity.32:26-32:33You would get the value of the current, not what you pay, but what it’s worth on your tax return as a charitable deduction.32:34-32:37They then would have it and you would not have to pay the capital gains.32:37-32:41There are some of those kinds of things out there available for us.32:41-32:46But, you know, again, not always is that ever marketed very often.32:46-33:00So just want to make sure that you have that information on your books just so you can, you know, I mean, if you have something and especially when you’re looking at your estate planning or other situations.33:00-33:09Again, another thing, if you have a trust and you guys know, I believe we were going to talk before the last break about having a will or trust.33:09-33:10I’m not an attorney.33:10-33:11I’m not an estate planner.33:11-33:13I am a tax person.33:13-33:22But all of that feeds back through my world because whatever you do, a lot of times, either the people inheriting or the estate itself will have to deal with some tax issues.33:22-33:25And there are ways of making it less painful.33:25-33:40One thing would be is instead of having a trust inherit your IRA, which has limitations, especially under the current tax law where a trust has to distribute within five years, at least an individual can roll it into an inherited IRA.33:40-33:41And they’ve got 10 years.33:41-33:47So if you’ve got four or five people that are inheriting, split the IRA up between them directly through the custodial.33:47-33:51So at time of death, paid on death, I believe is what they call it.33:51-33:53Have the IRA split to them.33:53-34:01That person can individually decide if they want to cash it out all at one time or if they want to do that over a period of time.34:01-34:08Because otherwise, it’s going to be taxed at a higher rate through the trust and also limited time to do things.34:08-34:20So if you have an estate situation, you want to go over all of that with a good estate attorney, a good financial planner, and your tax person.34:20-34:25Make sure they’re all on the same page so that you can make sure that you have what you need when you need it.34:25-34:31And let’s be honest, once we’re not here, it’s not probably going to make a huge difference on all that.34:31-34:36But it is going to affect the people you really worked hard to put the money in their pocket.34:36-34:37You worked hard for them to inherit it.34:37-34:44And then you turn around and find out that it was, well, just not as good on that situation as we would have liked.34:44-34:47So we just want to follow up on that.34:47-34:50Make sure we have all of those in the right place.34:50-34:57If you’ve got questions, again, you can join the show, 615-737-9986.34:57-35:01615-737-9986.35:01-35:05Taking your calls, talking about my favorite subject.35:05-35:08What’s going to happen at the end of 2025?35:08-35:11How is that going to potentially affect us?35:11-35:14The potential sunset of the current tax rolls?35:14-35:17And what do we need to probably be considering?35:17-35:19And we’ll be talking more and more about that.35:19-35:23And then also the BOI, the business owner’s information.35:23-35:26I’m going to be pushing that hard since we only have about a week.35:26-35:36And also if you have a corporation or a 1065 that has a March 15th filing deadline, make sure an extension has been filed.35:36-35:42I know our staff, we’ve been working on them and we’re going to be finishing all of the ones we usually file here.35:42-35:43What that’s going to be.35:43-35:46But make sure, confirm, make sure you’ve got an extension filed.35:47-35:51The penalties can be quite heavy for not filing an extension.35:51-35:54And you just want to make sure that that’s going to be available.35:54-35:57We’re going to be ready to take our last break here for the show.35:57-36:01So if you’ve been waiting, you’re like, oh my gosh, I want to really have a question.36:01-36:05But I didn’t know if it’s, you know, for one, there is really no silly questions.36:05-36:06There’s no stupid questions.36:07-36:09We’re all trying to figure out how to do things in life.36:09-36:17And, you know, I’ve been lucky enough to be doing this for about 30 years as an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.36:17-36:19So that’s what I do.36:19-36:24But you don’t want me fixing your kitchen sink or probably doing anything along with the mechanical side of things.36:24-36:32So if you have a question that maybe I can help with, that’s what this show is here for, to get people thinking and also just to kind of preempt.36:32-36:37And then you can go get the advice from your personal tax person, see how it applies to you.36:37-36:39But at least make you think about how it’s going to work.36:39-36:43So that way you don’t go do something and then have to go backwards.36:43-36:45Because most of the time in taxes, you can’t go backwards.36:46-36:46All right.36:46-36:50So if you want to join the show, 615-737-9986.36:50-36:53We’ll be right back with the Dr. Friday Show.36:53-36:59All righty.36:59-37:01We’re back here live in studio.37:01-37:08And we will take any calls at 615-737-9986.37:08-37:14615-737-9986.37:14-37:17Taking your calls, talking about all the good things.37:17-37:24And then if we have any, if you want to, you can also email Friday at drfriday.com.37:24-37:27Or you can check us out on the web at drfriday.com.37:27-37:30So that way we make sure that we have everything the way we should.37:30-37:43And again, if you have tax questions or maybe you’re working on what you need to get your taxes done, then, you know, hopefully if you have a question doing that, I’ll be more than glad to at least lead you in the right direction.37:44-37:47Help you figure out what that’s going to be or where we’re going to be at.37:47-37:59So that way we can, you know, just make sure everything is moving around the way you want it to and that you’re not going to get yourself into any kind of situation or what kind of tax documents you might need to make it work good for you.37:59-38:06So if you have any questions, again, you can call the studio at 615-737-9986.38:06-38:08And it looks like we got Brian on the line.38:08-38:10Let’s get Brian to join the show.38:10-38:12Hey, Brian, what can I do for you?38:12-38:13Hello, hello.38:13-38:15Last year, I did not have to file.38:15-38:23This year, I have made the same amount of money from the same sources, maybe a couple hundred dollars more.38:23-38:26Has there been any rule changes where I would have to file?38:26-38:27No.38:27-38:34In fact, there would have been probably an increase in your standard deduction, which is what we use partly to figure out if you have to file or not.38:34-38:38So if it’s only a couple hundred increase, then I think we had a $600 adjustment.38:38-38:41So most likely no change at all, Brian.38:42-38:42Wonderful.38:42-38:43Great news.38:43-38:44Thank you very much.38:44-38:45No problem, sweetie.38:45-38:46Thanks.38:46-38:48So, and that’s always nice.38:48-38:54It doesn’t happen too often in most of our lives, but it’s always nice when we can actually say that we don’t have to file anymore.38:54-39:01Again, not something I expect that many of us will have, but when it happens, it’s a nice thing to have happen.39:02-39:10And, you know, again, way to figure that out is taking half of your social security, adding that to your other income.39:10-39:15And if everything, if that half plus that adds up to less than $25,000, you’re pretty safe for a single person.39:15-39:26But you should always double check that with a tax person just to make sure, you know, nothing’s changed or what you think is income and what the government has maybe submitted is a little different.39:26-39:40I’ve had a couple of times when people have thought they weren’t going to have to file, but then they didn’t realize that they had some capital gains and the capital gains may have been zero tax, but without reporting the basis, the government didn’t know what it was.39:40-39:53So, or if you have a home sale, and even though you might not qualify for having to pay taxes, you may need to file those taxes to make sure it works, you know, so that the government doesn’t come back and say, hey, you have a home sale and you didn’t tell us about it.39:53-39:57So, you know, that is, you know, on you.39:57-39:59And so you’ve got to prove this to us or whatever.39:59-40:06So just making sure that we have the right information and everything is going to be there and moving forward.40:06-40:18So if you do have someone that maybe hasn’t filed taxes in the last number of years, or maybe you’re getting a lot of love letters, you know, it’s very important to deal with those, right?40:18-40:22I mean, you don’t want to just be throwing them in a drawer or using them as fire status.40:22-40:23At some point.40:23-40:30And the funny thing is, at some point when you are down and you let’s say you you’re sitting there going, I’m barely making it.40:30-40:34I can’t even keep the doors hardly, you know, or the roof over my head or anything like that.40:35-40:40You need to make sure that you’re dealing with those letters because sometimes there are deals.40:40-40:44There are there are abilities out there to make a deal with the government.40:44-40:46I will tell you this, though.40:46-40:55When you’re hearing on this station and other stations something to do with, you know, basically, you know, 15 cents on the dollar or 10 cents on the dollar.40:55-40:59Those are for individuals that don’t really have a lot of assets.40:59-41:00They don’t own a home.41:00-41:01They don’t have a 401k.41:01-41:02They don’t have a savings account.41:02-41:04Then, yes, those deals can be made.41:04-41:08But if you have those, there is deals, but sometimes not quite straightforward.41:08-41:08All right.41:08-41:09We only got a few minutes.41:09-41:10Mike in Nashville.41:10-41:11Let’s get you on the line.41:11-41:13Hopefully I can help you out.41:14-41:15Hey, Mike.41:15-41:15I’ve got a question.41:15-41:18Yes, I’ve got a question for you.41:18-41:22Right now, I’m doing some Roth conversions every year.41:22-41:23Yeah.41:23-41:23Yep.41:23-41:26And I’m about I’m 67.41:26-41:31So I’m planning on doing Roth conversions for several years.41:31-41:31Sure.41:31-41:44But the question I’ve got is, would it be beneficial for me, say, every three or four years to take my long term capital?41:44-41:45I’m going to do the Roth conversion.41:45-41:45I’m going to do the Roth conversion.41:45-41:46I’m going to do the Roth conversion.41:46-41:49I’m going to do the Roth conversion.41:49-41:55So that’s probably a financial planning question.41:55-41:56I know what you’re thinking, though.41:56-41:59I’m going to cut just really quick just because for other listeners.41:59-42:05He’s thinking that long term capital gains, for one, you might not actually have any taxable income if you can do it right.42:05-42:06Is that what you’re thinking, Mike?42:06-42:07Yes.42:08-42:16OK, because long term capital gains rates, if he’s single, as long as he keeps his income under about fifty five thousand and married under about one hundred and ten.42:16-42:17And that’s estimate.42:17-42:18There is no capital gain.42:18-42:24So I think if he harvests that and then turns that back into an after tax investment.42:24-42:29But the problem is the nice thing about the Roth, Mike, is it grows tax free.42:29-42:30You may never even need it.42:30-42:37And then someone inherits it tax free where the capital gains does get a step up in basis when you pass away.42:37-42:41But if you harvest it now, you’re going to have to reinvest it into stock anyways.42:41-42:42Most likely.42:42-42:48Again, I’m not a financial planner, but it will always require you to cash out to pay taxes.42:48-42:49Right.42:49-42:52You can’t get it to grow tax free like you will with your Roth.42:52-42:53That’s my answer, I think.42:53-42:55OK.42:55-42:56Does that make sense?42:56-42:56All right.42:56-42:57Kind of.42:57-42:57Yeah, it does.42:57-42:58Thank you.42:58-42:59OK, thanks, Mike.42:59-43:00I appreciate that question.43:00-43:04Probably double check a little of that with your financial planner.43:04-43:10But that’s my the nice thing about having it in a after tax stock account.43:10-43:12In my opinion, it will keep growing.43:12-43:18You could take a little out every year at the lower tax bracket, potentially not knowing Mike’s situation.43:18-43:25And then if for something happens to him, whoever inherits that account will get a step up in basis in the stock.43:25-43:27So they’ll never pay the capital gains.43:27-43:35So in essence, if you have money in an after tax and a non-qualified and it’s growing, people inherit almost tax free.43:35-43:37And most things unless it’s an annuity or something.43:37-43:45And then you also have the Roth that people are growing and they will inherit that at tax free and it keeps growing tax free.43:45-43:50So sounds like he’s making some good plans to grow and move things that direction.43:50-43:51All right.43:51-43:55So hopefully that answers most of your question on this beautiful Saturday.43:55-44:09Again, let’s just remind people, if you’re a business owner and you have an LLC or a corporation, even single members, if you are registered with the state, you are required to file the business owner’s information on FinCEN.44:09-44:11That’s F-I-N-C-E-N.44:11-44:21You can also Google B-O-I-R, I believe is what most of them business owners, business owners, informational reporting.44:21-44:25And you want to do that because the penalties are ridiculous.44:25-44:33So if you’ve got a company, you started in 2024 and you haven’t done it, you need to do it ASAP because they pretty much want it done all the time.44:33-44:38If you’ve had an older company, you have until pretty much March 21st, I think, to get it done.44:38-44:40Both very, very important.44:40-44:46If you want to get some help with taxes or you need some assistance in answering some questions, we’ll do our best.44:46-44:59We’ll do our best to get to those as fast as we can.44:59-45:02I will tell you the next 30 days are a bit crazy in this office.45:03-45:12If you need more assistance, you can certainly call our office Monday through Friday at 615-367-0819.45:12-45:17615-367-0819.45:17-45:21If you need an appointment, you can go to drfriday.com, click on appointments.45:21-45:23I’m sure Chris probably has some openings.45:23-45:29He’s great and he’s also an enrolled agent, so he can certainly help you with your taxes.45:29-45:31And we’d love the opportunity to get you on our books.45:31-45:39Again, at drfriday.com, click the calendar or schedule, and you can make an appointment at that time.45:39-45:46If you have questions that you, you know, again, emails are probably going to take us a little longer to get to than normal.45:46-45:51You can also give our office a call and see if we can’t give you a heads up.45:51-45:56Again, that phone number is 615-367-0819.45:56-46:02I am an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.46:02-46:06So if you haven’t filed taxes in a number of years, we’re the people that can help you.46:06-46:09If you owe money to the IRS, we deal with that.46:09-46:12Or if you just need help filing taxes, that’s what we do.46:12-46:19That’s the difference between us and many CPAs or attorneys is that we are basically only doing taxes.46:19-46:20It’s that simple.46:20-46:22We don’t have to worry about anything else, just taxes.46:22-46:26So again, 615-367-0819.46:26-46:28I hope you guys have an awesome Saturday.46:28-46:29Cop.46:29-46:30You later.

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In this one-minute moment, Dr. Friday highlights retirement savings options for self-employed individuals, including SEP IRAs and their contribution limits.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

For all my entrepreneurs—individuals who don’t have retirement plans but have income through self-employment—remember, you still have what’s called a self-employment plan, or SEP, that you can contribute to. They’re beautiful things as well. And sometimes, you can put in up to, I don’t know, $50,000 a year, depending on your overall income. It is based on your income.

So, if you’re looking for ways to reduce your taxable income and prepare for retirement, you might want to consider it. The problem with most entrepreneurs is that they often think it’s better to reinvest money in their business rather than invest in their retirement.

But if you need help, call 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday explains how taxpayers can still maximize their IRA contributions for 2024, covering traditional and Roth IRA options and the impact of employer plans.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

One of the few things we can do still right now for the year of 2024 is possibly maximizing our IRAs. Now keep in mind, this would be most likely a traditional IRA from the tax standpoint because a Roth does not reduce your taxes. But it also matters on if you have an employer program. how much money you’ve made, if your wife works or doesn’t work, all of that comes into place. So not everybody can contribute to an IRA or contribute to a Roth IRA. There are backdoor Roth IRAs. There are backdoor IRAs. You need to talk to a financial planner before you make those decisions. If you want to help with taxes, 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains the tax implications of different business structures, including LLCs, sole proprietorships, and C corporations.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Planning for a new business or changing your business entity? First, I’d say check with an attorney. But for tax purposes, you should talk to your tax professional. There are advantages to being an LLC, just as there are to being a sole proprietorship. Many people jumped into C corporations because the tax rate dropped to 21%, but there are limitations and double taxation risks. If you don’t understand how to properly take money in and out of a business, you might end up paying more in taxes than expected.

Need help understanding your business entity and tax obligations? Call 615-367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains how a 1031 exchange allows real estate investors to defer capital gains taxes by reinvesting in a similar property.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

1031 exchange—you need to put that term in your brain, especially if you’re in real estate and looking to buy and sell properties. Instead of paying taxes every time you sell with a markup, consider a 1031 exchange. This isn’t for everyone, and you cannot use it for your primary home—that’s very important. But for investment properties, you can reinvest the proceeds into a like-kind property and defer your capital gains tax. This can be a powerful tool for real estate investors looking to grow their portfolio while reducing tax liabilities.

Need help? Call 615-367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains the tax differences between professional real estate investors and casual investors, highlighting the 750-hour rule.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Real estate investments—I love investing in real estate personally. But am I a professional real estate investor? No. I don’t spend more than 750 hours a year on real estate because I have a full-time job. It’s very hard to justify professional status. There are advantages if you qualify. If you have a lot of rental properties, manage them yourself, and can document your hours, you may be able to take more losses than a casual investor. It’s very important to understand the difference between being a professional real estate investor and a passive investor for tax purposes.

Need help? Give us a call at 615-367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains how to deal with IRS debt, emphasizing the importance of filing taxes before negotiating payment plans or offers in compromise.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I am Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. We have been in business almost 30 years, and I specialize in representation and taxes. That’s what I do. So if you have IRS issues and are trying to figure out how to reduce what you owe or get out of debt, you need to be in compliance first. You cannot make a deal with the IRS unless your taxes have been filed—even if they’ve assessed you a balance. Once you’re in compliance, we can help you with an offer in compromise or a payment plan and guide you in the best direction.

Just go to drfriday.com for more information. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains the importance of Schedule B for investors, covering capital gains, interest, and the tax benefits of qualified dividends.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Schedule B’s—very important papers for us investors, right? Because it tells us about our capital gains, our wash sales, our interest, and whether our dividends are qualified or ordinary. What’s the difference between qualified dividends and ordinary income, you ask? Well, it’s pretty straightforward, but it’s important. Ordinary income is taxed at ordinary income rates, while qualified dividends are taxed at capital gains rates. If you’re in the higher tax brackets, you might like that qualified rate. You may be in the 24%, 28%, or 30% tax bracket, but you may only pay 15% or less on qualified dividends.

Need help? Give us a call. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday explains how capital gains tax works, why your total income matters, and the hidden tax rate many forget about.

Transcript:

G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Capital gains tax. A lot of people come in asking me, “Hey, if I sell this, what happens?” Remember, capital gains tax isn’t a separate tax—it’s based on your overall income.

Let’s say you make $100,000, and then you sell something for a $150,000 gain. If you’re single, $50,000 of that gain is going to be taxed at 18.8%—not 15%.

Even though the tax code says anything between $47,000 and $518,000 falls in the 15% bracket, many forget about the net investment income tax of 3.8%. Don’t forget that part!

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday explains why tax planning for next year should start now. Learn how adjusting withholdings and contributions early can save you money and prevent surprises.

Transcript:

G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Year-end tax planning—now, you might be thinking, “Why is she talking about this at the beginning of March? We haven’t even finished our 2024 tax return!”

Because now is exactly when you should be thinking about it. If you need to make a change—adjust federal withholdings, contribute more to your 401(k), or decide whether to save or withdraw money—this is the time to plan.

Starting early gives you a full year to make adjustments. If you wait six or seven months, you’ll only have a few months to fix things, and chances are you’ll still owe taxes.

Now’s the time to think ahead to 2025 while filing your 2024 return.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday explains how you can qualify for up to $7,500 in tax credits when purchasing a new electric vehicle—or $4,000 for a used one. Learn the key requirements and how to claim your credit.

Transcript:

G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Qualified plug-in electric car credit. You may qualify for a credit of up to $7,500 under IRS code 30D if you buy a new electric vehicle. Or now, they even have one for $4,000 if you buy a used EV.

Now remember, it has to be used primarily in the United States, and it has to be for your own use—not for resale. Also, you’ll need the VIN number and the date of purchase to ensure it’s a qualified vehicle.

But if you’re someone who’s been considering an all-electric car, this could be a great tax deduction. If you need help with this or any other tax questions, call 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday breaks down the tax implications of cryptocurrency. Learn why tracking transactions is crucial and how the IRS treats crypto like any other investment.

Transcript:

G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Cryptocurrency. Oh boy, over Christmas, my sister-in-law got big into crypto. Nothing wrong with that—just not sure she totally understands the tax implications.

Remember, crypto is just like any other investment or stock. They’re going to tax you, and tracking it is key. So often, my crypto people think, “Okay, I take U.S. dollars, turn it into Bitcoin, then from Bitcoin, I went to Ethereum or whatever, and now there’s no paper trail.”

That’s not true. If you ever bring it back to U.S. currency, all of those transactions become taxable. You’re not hiding, and if you want to sleep well at night, you better track it—that’s all I can say.

If you need help, call 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday explains how managing the timing of your income can impact your taxes. Learn how accelerating or deferring income can be a strategic tax move, especially for self-employed individuals.

Transcript:

G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Managing receipts of income. When considering how to best manage your taxes, keep in mind that deductions are only part of the story. Income is also a major factor.

For example, if you expect to have a higher tax break next year, you may want to think about accelerating income in your current year. That really only works, to be quite honest, when we’re talking about self-employed individuals.

Sometimes, you can have someone say, “Hey, can you send me a check in December so I can pick it up for next year instead of having it all come in the next year?” That is doable sometimes. Most of the time, we don’t have control over what income comes in.

If you need help, call 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Join Dr. Friday, trusted financial counselor and tax consultant, as she dives into this week’s hottest tax topics! From IRS refund delays to capital gains on property sales, Dr. Friday answers listener questions and shares valuable tax-saving tips. Whether you’re wondering about earned income credits, qualified charitable deductions, or how to handle debt forgiveness on your taxes, this episode is packed with insights to help you navigate tax season 2025 with confidence.

Topics Covered:

• IRS Refund Delays: Why some refunds, especially those with earned income credits, are held up and what to do if you’re waiting.
• Claiming Dependents: Legal issues when biological parents wrongfully claim children on tax returns and how grandparents can file correctly.
• Mileage Rate Updates: Business miles are 67 cents per mile in 2024 and 70 cents per mile in 2025—key deductions for self-employed individuals.
• IRA Contributions: The deadline to contribute to traditional and Roth IRAs is April 15, 2025—how it can lower your tax bill.
• Qualified Charitable Distributions (QCDs): How retirees over 70½ years old can donate pre-tax from their IRA to save money.
• S-Corp Vehicle Transfer: Steps to legally transfer a company-owned vehicle to personal ownership and avoid IRS red flags.
• Medical & Charitable Deductions: When out-of-pocket medical expenses and donations are worth itemizing vs. taking the standard deduction.
• Debt Forgiveness & Taxes: How canceled credit card debt counts as taxable income and what options exist for reducing the impact.
• Missing W-2 Forms: What to do if an employer goes out of business and fails to issue a W-2.
• Real Estate Capital Gains: Why most homeowners don’t owe taxes when selling their primary residence under $500,000 in gains.
• Business Owners Information (BOI) Act: Important March 21st deadline for LLCs and corporations to file required information.

Transcript

00:01-00:07No, no, no. She’s not a medical doctor, but she can sure cure your tax problems or your financial woes.00:08-00:10She’s the how-to girl. It’s the Dr. Friday Show.00:14-00:22If you have a question for Dr. Friday, call her now. 737-WWTN. That’s 737-9986.00:23-00:27So here’s your host, financial counselor and tax consultant, Dr. Friday.00:30-00:33G’day, I’m Dr. Friday and the doctor is in the house.00:33-00:35I am here live in studio.00:35-00:42So if you’re working on your taxes, just like I am for some of my clients, then this might be the perfect time to ask a question.00:42-00:44If you have any questions, you want to join the show.00:45-00:46737-9986.00:47-00:50737-9986 is the phone number here in studio.00:51-00:53And we’re talking about taxes, right?00:53-00:57There’s not been a ton of tax changes from 23 to 24.00:58-01:00Probably one of the biggest is the mileage.01:00-01:02Obviously, every year we get an adjustment.01:02-01:04In the last few years, it’s went up.01:04-01:11Who knows what the next year, but it’s going to be 70 cents in 25, 67 in 24 for business miles.01:12-01:15And it’s a little less for charity and also medical.01:15-01:28But mainly what you want to make sure and what I’m finding is I have had, obviously we’ve been doing taxes now and tax season open, basically e-file open in January, end of January, 27th, I think.01:29-01:32And I had a couple of people calling me.01:32-01:39I will say our office doesn’t do a lot of taxes where it comes to child earned income credits.01:39-01:44But I had a client that had been waiting and we filed it on the first day of tax season.01:45-01:48And she contacted the IRS because it’s been more than 21 days now.01:48-02:01And she was told that they don’t actually release forms of individuals that have earned income credit with child credit mix until after the 17th of February.02:01-02:08So for anyone that may have earned income credit and you’re waiting and you’re like, where’s my refund?02:09-02:25Well, I will tell you, your refund is waiting, apparently, because they are trying to make sure, and I can’t say I am an advocate for it, they’re trying to make sure that the children reported on the tax return are the children that are allowed to be formed on that tax return.02:25-02:48So sometimes people will claim their girlfriend’s children that live with them. They’ll claim, you know, children of their own, even though they’re not supporting those children. I have two cases right now. I know myself, and I’m sure other tax people have the same situation where, in my case, grandparents have legally taken or adopted the children, and they’re raising them.02:48-02:58But yet the biological mother and or father, one of each in my case, are claiming them still on the tax returns, which is completely and totally illegal.02:59-03:03But, you know, they’re getting away with it because a lot of times it’s first in.03:04-03:08And in many cases, my clients are waiting for tax documents and things.03:08-03:22And if all you have is a small W-2 and you have two or three children that are, you know, not doing anything, then, you know, you basically say, oh, I can get $3,000, $4,000 per child, right?03:23-03:29So, I mean, the system isn’t perfect, that’s for sure, but they are trying to improve upon that.03:29-03:37So if you have a question, maybe you are raising children and someone else is claiming the tax credit, there are recourses.03:37-03:42We have to go directly to the IRS and we have to file specific documents.03:43-03:47And I have found that actually uploading a lot of those documents are also good.03:47-03:58Along with the tax return, we are getting better and better at that, showing that these children are legally the person I’m filing for, not the person that had been claiming them in the past.03:59-04:05So you just want to make sure that you are getting the credits because that’s a lot of money.04:05-04:17Especially if you’re after the age of 65, if you’re a person that has children, I should say your grandparent possibly or your own, and you’re raising them and you would normally qualify for earned income credit.04:17-04:1865 is as old as you can be.04:18-04:26You have to be 24 old or you have to be younger than 65 to qualify for earned income credit.04:26-04:34That’s another thing that I had someone come in and she was 72 and she just started taking the children in and she’s like, well, I should qualify for this, this and this.04:35-04:41And unfortunately, she did not qualify for the earned income credit, even though her income was low enough.04:41-04:42It didn’t qualify because of her age.04:43-04:46So again, some things are not perfect in tax law.04:46-04:46We all know that.04:47-04:51And it’s something that’s going to continuously be something we have to correct or deal with.04:51-05:18But meanwhile, when we’re working on all the things we’re trying to work on, we just want to make sure that we have the proper documents to do what we want to do. And if you need help with your taxes, all you have to do is pick up the phone. You can call us live here in the studio at 615-737-998-661-537-9986. Taking your calls, talking about all of my absolute favorite subjects.05:18-06:31Remember, you can still contribute. I had a little text come in real quick and they’re like, can I still put money in my IRA? And the answer is yes. You have until April 15th to contribute to either a Roth or a traditional IRA. Obviously a traditional IRA would reduce your taxes where Roth you pay taxes today and then it grows tax free. Always a really good idea to make sure you’re visiting that information because sometimes yesterday I was working with one of my clients and he had a balance due originally of like $4,000 or $5,000. And he’s like, well, we qualify for putting in some money. And we maximized both him and his wife. It was $16,000 they put in, but they saved $3,600 in tax. That’s a nice savings by putting almost 20, more than 20% of your money into an IRA and instantly saving that much money. That’s a great investment. So people look at it and sometimes it’s not that good. Sometimes a person put in, you know, say, well, I’ll put in 8,000 or 7,000 if you’re under the age of 50 and, um, you know, they maybe save $500.06:32-06:42Now again, not like it’s, it’s an insane growth no matter how much you put in. And I’m not a financial planner and I am not advising people to do Roth IRAs or IRAs or anything in the financial side.06:42-08:04The only time we look at doing anything with IRAs, usually in my office with exception of helping people figure out the tax liability for conversions and things is traditional IRAs, because, well, a SEP or a traditional IRA, we still can contribute money into as self-employed individuals or an individual that has worked or had earnings. So it’s a way of saving tax dollars, right? And you want to make sure you’re always visiting that information, even if you don’t decide to do it that year. Sometimes it’s better some years, and some years you’ve got your money tied up in other things and you can’t break up with $16,000 or whatever that is. And sometimes it’s more or less depending on how much you have. And I also want to bring up QCDs. Every year, it amazes me how many people, even my own clients or new clients that are coming in. And I know for almost 15 years, I’ve been talking about them here on the radio. For a few years, we didn’t have it as a permanent situation. A QCD is a qualified charitable deduction. It’s only available for people over the age of 70 and a half, which at the time that they came in, that was the age that you had to take required minimum distributions. When they changed the age up to 73, they did not change the age of qualified charitable deductions. So you can take an RMD at the age of 70 and a half and give it to a charity.08:04-08:19The advantage is once you’re at that age, and let’s say you do $5,000 a year to your church, Right now, you’re writing a check or putting cash into the tithing, and it’s not deductible, most likely, because the standard deduction is so high.08:20-08:25But in the case of the QCD, you don’t itemize.08:26-08:29It comes right off of your 1099-AW.08:29-08:31It’s a deduction, and it’s a dollar for a dollar.08:32-08:37So if you gave $5,000 and you took out $10,000 for your RMD, then you’d only pay tax on $5,000.08:37-08:42So this is a wonderful advantage for individuals doing that kind of situation.08:43-08:45All right, let’s go to Brad in Murfreesboro.08:46-08:47Hit him before we have to take our first break.08:47-08:49Brad, what can I do for you, sweetie?08:51-08:52Hi, Dr. Friday.08:52-08:59I’ve got an S corporation, and I’ve got a vehicle that the corporation owns, and I’d like to transfer it to me personally.09:00-09:06And so my two questions are, what would the journal entries be to make that happen if I don’t want to actually write a check?09:06-09:12And two, how do I determine the fair market valuation?09:13-09:14What will the IRS accept?09:14-09:21IRS would accept you taking it to CarMax or someplace like that and get a fair value for it.09:22-09:25That would be what somebody else would pay for it is what you need to pay for it.09:26-09:37So you can use the blue book values, but a lot of times people would take the very lowest, and sometimes it didn’t hold up because it was like in prime condition and they claimed it was in like the worst condition.09:38-09:42So my suggestion is CarMax or one of those.09:42-09:44There’s a couple other ones out there that you can use.09:44-09:47And you can do a lot of that over the computer now.09:47-09:49You don’t have to physically drive it in someplace.09:49-09:51I think you can get estimates.09:51-09:55Get something that someone else, then the journal entry would be obviously assets sold.09:57-09:58Recapture, depreciation, reset.09:59-10:07So you zero out the asset, recapture the depreciation, and the difference would be either a gain or loss on that piece of equipment.10:08-10:17And then you can either offset it as money the company already owes you from, you know, pass-through for this current year.10:17-10:23So instead of doing a shareholder’s distribution, and I don’t know you, so I’m assuming, or whatever.10:23-10:28Or you can write a check and then obviously turn around and pay yourself back.10:29-10:31If there’s loans or anything on the book, I would just take it against the loan.10:32-10:38If there is no loans left on the books, and again, I don’t know your financial, then the offset would be shareholders’ dividends.10:40-10:41Okay.10:41-10:42All right.10:42-10:52So I recapture it for the full value, the full purchase value, and then sell it and then whatever the difference is is the law.10:52-10:54You put the full value in.10:55-10:59I always put something as an other income account.10:59-11:04I just make an other income account in my journals, and then I zero out the total asset.11:05-11:14I zero out the recaptured depreciation because we’ve got to recapture it, and then I offset that with what the value was, and then the difference of those three is what your profit is.11:15-11:17Fantastic. Thank you so much.11:17-11:19No problem. Thanks for the call. I appreciate it.11:20-11:22All right. That was a good question.11:22-11:24I haven’t had one of those for a while like that.11:24-11:35So I’m thinking a little bit, and I actually want to give Brad a good thumbs up because so often I’ve looked at people’s books and people have just transferred the asset out of the books.11:35-11:36They basically just zero it out.11:37-11:39So they don’t, you know, I didn’t get anything for it.11:39-11:42We washed it off and therefore there’s no gain.11:42-11:43There’s no value.11:43-11:56But if audited, Brad is doing the correct thing, which means, especially if you want to put it into your own name, you own it, it would be too hard for the IRS to see that you own it.11:57-12:00And therefore, you know, you’ve eliminated the recapture.12:00-12:09I mean, in most cases, if this was an over 6,000-pound vehicle, you have already accelerated depreciation.12:09-12:11So, it basically on the books probably is a zero value.12:11-12:19So whatever the value on the street is what he’s going to pay capital gains on, which is what the step that a lot of people try to ignore because they don’t want to pay that.12:20-12:21But he’s doing it the right way.12:22-12:26It’s always sometimes easy to take the shortcut until you really want to get reconciled with the IRS.12:27-12:27We don’t want to do that.12:28-12:29All right, we’re going to take our first break.12:29-12:30If you want to join the show, you can.12:31-12:34615-737-9986.12:34-12:37And we’ll be right back with the Dr. Friday Show.12:38-12:42All righty, we are back here live in studio.12:42-12:45I wish I could hear that music. I don’t hear it anymore.12:45-12:47All right, we’re going to go right to the phone.12:47-12:48We’ve got Gary in Nashville.12:49-12:50Hey, Gary, what can I do for you?12:51-13:10I was just trying to figure out whether it’s a waste of time to add up all my out-of-pocket medical expenses, which probably add up to maybe $3,000 and charitable contributions that might be about that same amount or a little more maybe.13:11-13:16And trying to figure out if it’s just wasting time to add all that up or do I just take the standard deduction?13:17-13:18Are you single or married?13:20-13:20Married.13:21-13:21Okay.13:21-13:28I’m going to say because if you’re, well, $29,200 if you’re under the age of 65.13:28-13:34If you’re older than 65, then you’re going to add another like $3,000.13:35-13:37So it’s going to be over $30,000.13:37-13:47And the numbers you’re giving me, even if you could maximize property tax and sales tax, you’re still at maybe $16,000, you know, like three for medical, three for charity.13:47-13:50And we know we don’t get medical dollar for dollar.13:50-13:56So I would say it’s going to probably be, my personal opinion, you’re probably going to be just taking the standard deduction.13:58-14:02Okay. Well, I didn’t want to sit down and go through all that junk if I didn’t need to.14:03-14:06I hear you. That’s a lot more work than people like to think.14:06-14:11I know. I have a lot of people that would save all their receipts and do all of that.14:11-14:12And there’s nothing wrong with that.14:12-14:15But at the end, we weren’t able to use it under the current tax code.14:15-14:21So, yeah, I don’t think unless you’re my opinion, unless you’re medical is probably 15, 20,000.14:21-14:25And hopefully it’s not. But I’m just saying then you’ll get, you know, maybe a big chunk there.14:25-14:31and then your charity as well being more like $10,000, then I would say you might be chasing the ability to itemize.14:31-14:34Otherwise, I don’t think you, you know, take the standard.14:34-14:35You don’t have to spend all the money and you’re good.14:37-14:37You got to.14:37-14:38I appreciate that.14:39-14:39No worries.14:39-14:40Thanks for listening, sir.14:43-14:44Okay.14:44-14:45All right.14:45-14:48So we’ve got, if you want to join the show, you can.14:48-15:42615-737-9986 615-737-9986 taking your calls, talking about my favorite subject, which is taxes, and then we’re talking about different things. Again, if you want to really try to, this year, if your goal is to maybe catch up on retirement, a lot of times people are always looking for different ways to save money. Now, there is a difference. If you’re making $400,000 on a W-2, you’re going to max out your 401k, hopefully, just as a normal, but sometimes people don’t. But your best bet is either, in most cases, is to also look at your tax bracket. So even though you’re an individual and maybe you’re making $50,000 or $60,000 or your married couple making less than $120,000, you know, it may be better to think of a Roth.15:42-15:44Again, I’m not giving financial advice.15:44-15:47I’m talking on the tax aspects, right?15:47-15:51Because on the tax side, you are in the 12% tax bracket.15:51-15:53Pay tax today on all of your money.15:53-15:55Invest it and let it grow tax-free.15:56-15:57Seems like a no-brainer.15:57-16:04The difficult becomes is when you’re in that 22, 24% tax bracket, do we do a Roth just so we don’t have to deal with the IRS?16:04-16:06Or do we go ahead and invest?16:06-16:08That’s when you need to have a really good tax person.16:09-16:12I mean, a good financial advisor along with a good tax person.16:12-16:15because my game is usually instant gratification.16:16-16:23You know, I mean, what’s going to be a way that we can do some tax planning in the next year or two, but we don’t know tax law five, 10 years out.16:23-16:26We know what we hope it is, but let’s be honest, it changes every year.16:26-16:33Unlike a financial planner who may do a five or 10 year plan, you can plan taxes, but it won’t always stay the same.16:33-16:39So sometimes you really do have to be smart enough to make sure you have a backup plan or whatever on that.16:40-16:44So let’s hit Frank while you just got him on the line there for me, and then you’ll let you get line two.16:45-16:46Hey, Frank, what can I do for you, sweetheart?16:47-16:49Yes, ma’am, I have a question for you.16:50-16:51I work for an employer.16:51-16:56The employer shut down in October, and none of the employees have gotten their W-2s, and we don’t know what to do.16:57-17:05I can access my last paycheck and see all the information, but I don’t have the employer identification number to do anything with it.17:05-17:17So you can make a W, basically says in the tax software we have at least, we can make up a W-2 based on the fact that we don’t have that, but you won’t be able to e-file.17:17-17:32Your second best bet is to go get, I don’t know if you have access, but one of you, just see if any one of you can go into the irs.me and see if they’ve uploaded your W-2.17:32-17:35That’s where we usually get when we’re working for multiple years.17:35-17:36We can get that information.17:36-17:38It sounds like maybe you’ve already tried that, Frank.17:39-17:46Well, I don’t have her EIN, but my tax software will usually look it up if it’s in the online database because I use TaxAct.17:47-17:49And I don’t have an EIN to look it up with.17:50-17:53Yeah, so you’re going to have to use your final paycheck stub.17:54-17:57And you’re going to have to click that it’s, you know, it’s a paper filing.17:57-18:00You don’t have any, you don’t have the EIN number.18:01-18:03Can you get the EIN number?18:03-18:10Have you tried using, I hate to say this, AI or Google or one of those and saying, can you look, you know, the address, you know, the name of the company.18:11-18:15EIN numbers are not necessarily like social security numbers.18:15-18:20So I don’t know if you’ve done a search to see if an EIN number shows up.18:20-18:21Just looking to see.18:22-18:25I have, but I haven’t had any luck because I don’t exactly know where to look.18:25-18:27I’ve even tried the Tennessee state site.18:28-18:29Yeah, it won’t be on the state.18:29-18:31It’s going to be on the federal site.18:32-18:36And I don’t know if you have anyone since you use it.18:36-18:39E-Verify is what you’re going to be wanting to use to do it.18:40-18:45So you might be able to go into E-Verify and see if you can find that information.18:45-18:46But I’ll be honest.18:46-18:48Normally, you have to have a license for that.18:49-18:52And two, most of the time, we’re just verifying a number we already have.18:52-18:54And 90, you know, 99% of the time.18:54-18:56So I’m not helping you much on that, Frank.18:56-19:01So I would check your own, just pull your own transcripts just to make sure it’s not under there.19:02-19:05Not, then you’re okay because at least you’ve got your final paycheck stub.19:06-19:11And if they closed at that time, I hate to say this, but they may not have finished out the year.19:12-19:19They may not have even filed a social security, which is sad because there’s some huge penalties assessed when you issue W-2s, but that’s not our problem.19:19-19:23But yeah, anyways, let me know what you figure out.19:23-19:27But yes, you’ll have to do a paper filing and you’ll have to use your pay stub.19:28-19:29Well, thank you so much for your time.19:29-19:30You have an awesome day.19:31-19:32Hey, you too, sir.19:32-19:32Good luck.19:33-19:33All right.19:33-19:36Let’s hit Adam in Murfreesboro.19:37-19:38Adam, my boy, what’s happening?19:40-19:41How are you?19:41-19:42Thank you for your help.19:42-19:42I am good.19:43-19:43No problem.19:43-19:45What can I do for you, my friend?19:45-19:46Love some advice.19:47-19:47Question.19:48-19:54So starting in COVID, you know, ran up some cards, credit cards, making ends meet like people had to do.19:55-19:56I had a family member move in.19:56-19:58My mom was a hip, several hip surgeries.19:59-19:59So I had some medical.20:00-20:03And then also had some ID theft.20:03-20:11And so about a year or so ago, I did some debt consolidation, you know, entered in that, paid it all off now.20:12-20:15And then, but this tax season, all of a sudden I received like three different things.20:15-20:21You know, credit card looks like WGs or something, you know, where, you know, it’s the debt forgiveness amount.20:22-20:24Now, does that count as regular income?20:25-20:26That’s what I’m being told.20:26-20:27It does.20:27-20:39I really wish the one thing that these negotiation companies, and sometimes I’ve been told by people, they’re being told that they will not turn them in to the IRS.20:39-20:51But the bottom line is what the IRS looks at is you spent $50,000, you only paid back $25,000, so the other $25,000 is income that you earned because you used it for lifestyle that was provided.20:52-20:55We all agree with this, Adam, but that’s the way the argument goes.20:56-21:13So, yeah, so you have to take the 1099 that they give you and it becomes now, depending on your situation, if your debt is higher than your basic income or your assets, or if it was secured, any of it was secured against your home, which I don’t think in your case it was.21:14-21:14No, no, no.21:14-21:17It was just credit cards and stuff or medical.21:18-21:18Yeah, yeah.21:18-21:24So you can try to see if you qualify for forgiveness on it.21:24-21:30But I will tell you, 99% of the time, I mean, I have not successfully had it.21:30-21:32So you can try it.21:32-21:37But they basically just ask you how much is your mortgage, what’s your mortgage value, what’s your home, what do you have in the bank.21:37-21:42And if you are insolvent is the word they like to use, which doesn’t really mean the same thing to us.21:43-21:44It just means that your debts are higher than your income.21:45-21:47Then you might be able to qualify.21:47-21:49Otherwise, yeah, it’s a very misconception.21:50-21:51You tried to do everything right.21:51-21:52Hey, I didn’t want to go bankrupt.21:52-21:53So I tried to make a deal.21:54-21:57Most of it was just interest and stuff that you didn’t pay back probably.21:57-22:00But yes, it comes down to it.22:01-22:02It really does.22:02-22:03It hurts.22:03-22:03Yep.22:04-22:05Well, yeah.22:05-22:07And I just thought I was going to break even this year.22:07-22:11So now, you know, I don’t know, it’s $3,500 or something.22:11-22:11I owe.22:12-22:12So I’m just trying to debate.22:13-22:16I just want to pay it off or get on some sort of plan with the IRS.22:16-22:16I hate to do that.22:17-22:19I may just take a bite and pay it all off.22:19-22:27Well, I mean, if at all possible, because the interest in penalties is going to be more than 25% if you can’t pay them.22:27-22:28I mean, they’re more than well.22:28-22:33But it does hurt because the whole point was, you know, I mean, it’s just, yeah.22:33-22:34Anyways, yes, I totally hear you.22:34-22:37IRS is worse loan officer than it would have been a credit card.22:37-22:38You know, I’m just saying.22:39-22:44But they don’t split those up over a couple of years or anything like that.22:44-22:45They just drop them all at the same time.22:46-22:47Well, apparently yours did.22:47-22:50I mean, depending on how the negotiating, I guess, goes.22:50-22:52And again, I’m totally winging that.22:53-22:56But it sounds like you basically negotiated everything came up at the same time.22:56-22:59And therefore, they just said, hey, you closed the deal.22:59-23:03It would have been nice for them to figure out how to spread it at least over every year.23:03-23:04You’re picking up one.23:05-23:06But yeah.23:07-23:07Okay.23:07-23:08Live and learn.23:08-23:09Thank you for your help.23:09-23:09Yeah.23:09-23:10You got it, sweetheart.23:10-23:11Thanks.23:12-23:12All right.23:13-23:14Let’s go ahead and lease it really quick.23:14-23:15And then we’ll get to the break.23:15-23:17Kaylees, what can I do for you?23:17-23:18Don’t you have to wait.23:18-23:19Hey, Dr. Friday.23:19-23:25Along the same lines as the last caller, my husband passed away in 2024.23:27-23:35And he had a credit card that was only in his name that had some medical debt and other things on it.23:36-23:44And when I called the credit card company to tell them that he had passed away, of course, they canceled the card and forgave the debt.23:45-23:48It was a little over $6,000.23:50-23:57In your case, you have a different option because you theoretically are not responsible for your husband.23:57-24:01Therefore, you can file married filing separately.24:02-24:03It may not be beneficial.24:03-24:07It may be having a married filing situation is better for you.24:08-24:12But a married filing separately, in essence, your husband files his own return.24:12-24:24and you would file your own both married filing separately and then see if you owe any money or if you’re not required to file. I don’t know your situation, but that would be your option.24:25-24:45In the other gentleman’s case, I don’t think that was the case, but since your husband is deceased, I’m sorry for your loss, but you’re not really responsible for his credit card debt, which is why they forgave it. And then, you know, but obviously when filing jointly, you are now picking up any income and or expenses he had if he do it.24:45-24:45Right.24:46-24:52So married filing separately would be a way for you possibly to avoid paying tax on that, but it could hurt you.24:52-24:52Yeah.24:53-25:03And if I claim this, it’s going to also put me over on the estimate that I had did for that health mark, the market exchange thing for my health insurance.25:04-25:05Right.25:05-25:09Was your husband on Medicare or both of you in there on the market?25:10-25:15Just, well, after, you know, we lost, I lost insurance after he died.25:15-25:17It just ended and I had nothing.25:19-25:25Again, that may be a reason for you to look at married filing separately because then none of that will show up.25:26-25:26Okay.25:26-25:29Do you get the same standard deduction in that case?25:29-25:32You would get what a single person gets, not a married person.25:33-25:33That’s what I’m saying.25:33-25:38The penalty comes one way or the other, but the penalty on the marketplace can be fairly healthy sometimes.25:38-25:42So I would have someone compare and compare in both ways and see which way is the best for you.25:43-25:44Okay.25:44-25:45All right.25:45-25:45Can’t hurt.25:45-25:46Okay.25:46-25:46Thanks for your help.25:47-25:47Thank you, sweetheart.25:48-25:48All right.25:48-25:49We’re going to take our second break.25:50-25:51If you want to join the show, you can.25:53-25:55615-737-9986.25:56-25:57615-737-9986.25:58-25:59We’ll be right back.26:05-26:06All righty.26:06-26:09We are back here live in studio.26:09-26:11And if you need to join us, you can.26:11-26:15615-737-998-6615.26:18-26:19737-9986.26:20-26:24I did want to bring back BOI, Business Owners Informational Act.26:24-26:26It has passed the courts.26:26-26:32And anyone that did not file for their BOI, it was extended, I believe, until March.26:33-26:34We’ll find out the exact.26:34-26:36But they did pass that recently.26:36-26:40So Business Owners Information Act is back in play.26:41-26:43They did say that they were going to require it.26:44-26:46I really wish they would still give us a little bit more information.26:47-27:01And this is, again, for anyone that has a ownership in an LLC, if it may be a corporation, anything that’s been, they say, registered with the state.27:02-27:09So, in most cases, in our cases, corporations, LLCs, all of those in Tennessee are registered with the state.27:09-27:12So, even single-member LLCs would be required.27:13-27:20We did do, I think, all of our clients back before because at one point there was a due date of December 31st.27:20-27:22It then was taken to court.27:22-27:29And then it was, in my understanding, extended out knowing more about it.27:29-27:34So we will get some more information so that you don’t get hit.27:34-27:51Because at one point, to be quite honest with you, they’re saying, if you didn’t file this by December 31st on companies, then they were going to end up charging you $500 a day for being outside of the filing period or whatever.27:52-27:52Here we go.27:52-27:53It says to avoid it.27:54-27:57Now they have extended out till March, March 21st.27:58-27:59So that’s only like a month away.28:00-28:04So again, there is a BOI are e-filing portals.28:04-28:05You can use it.28:05-28:06You can do it yourself.28:06-28:07It’s not that complicated.28:08-28:12It is something that does need to be done, but they did move it to March 21st.28:12-28:24So if you did not do your BOI because you didn’t like the idea, maybe you just weren’t wanting to have to provide a copy of your driver’s license to or passport to the government.28:25-28:26You’re going to want to do that.28:26-28:27I just want to bring that back.28:27-28:53want to start talking about that again. Also, we are less than 30 days, more like, yeah, 25 days, something like that, until corporate tax returns and LLCs. March 15th is the deadline on partnerships and corporations, and many LLCs are partnerships. So remember, those are due March 15th. And so if you haven’t got all your information together, you haven’t filed it, you’re not sure if it’s going to Make it.28:54-28:55File the extension.28:55-28:57It’s well worth it.28:57-29:06Every year we get people that come in and they’ve got a $900 to $6,000 depending on the number of partners or members in the company or LLC.29:07-29:14And they charge you like $200 a partner or $300 a partner for up to like four months or whatever months you’re late.29:14-29:16So they can add up a lot.29:16-29:22So you do want to make sure that that is being filed and that you’re doing it the proper way.29:22-29:25So that way you don’t end up late if you’re in the process.29:25-29:35I know this weekend we’re kicking out a large number of business returns to try to get the first batch out so that people can really make sure that they’ve dealt with their situation.29:35-29:37And that, you know, because then they can do their personal.29:37-29:42Most people can’t do anything because they’re waiting for the K-1 to go through the business return.29:42-29:44So, all right, let’s go quickly back to the phones.29:45-29:46We got Bruce from White House.29:47-29:49Bruce sold some property, I think.29:49-29:49Let’s see.29:49-29:50Hey, Bruce.29:51-29:51Hey.29:52-30:00Yeah, I recently sold some property, six acres I’ve had since the early 70s.30:01-30:05And what I did, I wound up financing most of it.30:06-30:09I got a $50,000 down payment.30:10-30:19And so I noticed when I filed the closing, they had a 1099 set up for the $50,000.30:20-30:22Right, 1099S most likely.30:22-30:24for the sale of it.30:24-30:40But you’re going to do a tote the note on your tax return, meaning let’s just, you don’t tell me, I’m just going to say you sold the property for $100, he put 50% down and he’s going to pay you the other 50% over a number of years or even just one year.30:41-30:43Hopefully there’s some interest involved.30:44-30:53And so what you’re going to do is as he makes his principal and interest payments, you’re going to track that and then every year you’ll pay capital gains on that percentage.30:54-31:00So I’m going to assume that you did not pay a lot in the 70s for this six acres.31:00-31:03I’m guessing, but I’m assuming you didn’t have a lot of basis in it.31:04-31:06$6,000 for six acres.31:07-31:07Okay.31:07-31:08I had a feeling.31:09-31:17So most of the money you’re making is going to be capital gains, but you’ll only pay capital gains as you actually receive the money.31:17-31:27So this first year, you know, so basically you’re going to take whatever your basis is divided by the percentage of whatever the total sale and you’re going to take that.31:27-31:31So 50,000, let’s say 3,000 of basis went into it, half of it.31:31-31:35So you are paid tax on 47,000 this first year.31:35-31:37The other 50, depending on how long.31:37-31:39And again, I’m just using a number for your example.31:40-31:48You know, as he pays it, a percentage of that whopping $6,000 will be added in, but most of it’s all going to be capital gains, to be honest.31:48-31:54So you just need to figure out your capital gains, and then interest will be taxed as well at the same time.31:56-31:57Does that help a little bit?31:58-31:58Thank you.31:58-32:08A little bit, but I thought if you had property for so long, that there was a different formula for contributing to capital gains.32:08-32:08You would love that.32:08-32:29the only time it changes is if you inherited the property. So if this was your parents’ property and they died five, 10 years ago and you then inherited it, you would get the value at the time of their death. We call this step up in basis. But since you purchased this property in the 70s and you brought it for 6,000, there is no additional step up, unfortunately.32:31-33:11Okay. All right. Thank you. Thanks, bud. All right. That was not probably what Bruce wanted to hear, but I’m sorry. All right. So we have a few more minutes here before the last break. So if you have questions, you can join us 615-737-9986, 615-737-9986, taking your calls, talking about all the important things. So we covered, let’s see here on the BOIs, we covered the extensions coming up. If you already know that you’re not going to make the April 15th file that extension, And let me clarify, when you file an extension, you are not extending the money due.33:12-33:17Oh my goodness, I can’t tell you how many people, you know, they thought, well, why am I paying a penalty?33:17-33:22Because I filed and paid at the time, which was in July or August when they filed the taxes.33:22-33:29And I’m always surprised when people think that because all of us would extend our taxes to the last day that we didn’t have to pay.33:29-33:33We won’t do it in April unless that was the date the government said you do this or there’s penalties.33:34-33:38So filing an extension is only filing an extension for paperwork.33:38-33:39That’s it.33:39-33:39Paperwork.33:39-33:40Nothing else.33:40-33:44If you owe money, you need to even go start making payments.33:44-33:46You need to start doing something.33:46-33:50But either way, you need to make sure that you are covering the amount.33:50-33:52If you can’t pay it all, guess what?33:52-33:53Pay a percentage.33:53-33:54Pay a little bit of it.33:54-34:01That way you can go ahead and make sure you have what you need on that and go on that type of situation.34:01-34:04So they’ll make it work better for you.34:04-34:04You know what?34:04-34:05Let’s get Kim.34:05-34:06That’s a fairly easy question.34:06-34:08Let me see if I can get her on.34:08-34:09I only have about a minute and a half before the break.34:10-34:10I can do it.34:10-34:12Hey, Kim, my friend, tell me what your question is.34:14-34:16Hey, so we just sold our house.34:16-34:19We sold it for $429,000.34:19-34:24We made $200,000 in equity, but we bought a house for $450,000.34:24-34:28So because we bought up, do we still pay capital gains?34:29-34:31I have good news for you, but not for the reasons you think.34:32-34:43Okay, so the new tax law that came into place almost 15 years ago was, the old one was you had 48 or two years to reinvest the money into another home equal or higher.34:43-34:45So you would have been perfect at that time.34:45-34:51The new law that we work under now is that, you said we, so it sounds like you’re married?34:52-34:52Right.34:53-34:53Okay, good.34:54-35:01So a married couple can sell a home for $500,000 plus whatever they paid for the home without paying tax.35:01-35:02So you are spot on.35:03-35:05You sold the house for $429,000.35:05-35:07No matter what you made in capital gains, you’re not paying tax.35:08-35:09Okay, awesome.35:09-35:09Thank you.35:10-35:10That’s the answer.35:11-35:11Okay, girl.35:11-35:11Thanks.35:13-35:14All right.35:14-35:17We’re going to get ready to take our last break before we go into this.35:18-35:22So if you’re waiting to make a phone call or you’re thinking, oh, I’ve got a question.35:22-35:34First, don’t think there’s ever any silly or dumb or whatever the proper word is question because when people are listening, I think the people that call are probably the bravest people because most of us probably wouldn’t call a radio show anyways.35:34-35:39But when you’re asking a question, a lot of times other people are also curious on the answer to that question.35:40-35:41I’ve been doing this for 15 years.35:41-35:45I have so many people that say, oh, when that caller called in about this, I was just wondering about that.35:46-35:48So you’re kind of the voice for other people.35:48-35:53So feel free to give us a call and ask the question because there’s probably someone else that would wish you would ask it.35:53-35:58The phone number here in the studio, 615-737-9986.35:58-36:01615-737-9986.36:01-36:03We’ll be right back with the Dr. Friday Show.36:08-36:09The show’s up.36:09-36:10We’re going to show you the news.36:11-36:145-7-7-9-9-8-6.36:14-36:16And it looks like we have been busy.36:16-36:21So let’s go ahead and hit Brandon in Murfreesboro and see if I can help him first.36:22-36:23Hey, Brandon, what can I do for you?36:24-36:24Hi, Debbie.36:24-36:25What can I do?36:26-36:27So I have a question.36:28-36:35My wife closed out a business that she was running as a small business like two years ago.36:35-36:42And our CPA at the time said that we had a $91,000 loss we could claim, $3,000 a year.36:43-36:48And I was just wondering, do we need to show that on every year’s tax return?36:48-36:55Because I was instructed this year that we didn’t need it and so not to use it.36:56-36:59No, you need to show it and you need to take it every year.36:59-37:02It basically runs for 20 years if you need it or not.37:02-37:05But you’re going to take that $3,000 no matter what.37:05-37:06And it’s automatic.37:06-37:10So someone needs to continuously have that fed into the return.37:10-37:14Every year there’s a form that will say this is what your remaining balance is.37:14-37:17Roll that over to the 24, 25, et cetera, et cetera.37:18-37:18Right.37:18-37:19That’s what I thought.37:19-37:23And I tried to explain it to, you know, I was getting my taxes done this year.37:23-37:26And they said that, no, it’ll just sit there until you need it.37:27-37:28No.37:28-37:29We wish that.37:29-37:31But for one, likeliness is no one’s going to remember.37:32-37:39Two, the government wants a perpetual, even if you have an NOL, a lost carry for whatever, always has to go from year to year.37:39-37:51So that person needs to revisit the prior year because there should be a capital gain loss sheet involved that that person put in there, and they can just use those numbers to move it forward into the next year, et cetera, et cetera, et cetera.37:52-37:52Right.37:53-37:53Okay.37:53-37:59Yeah, I thought I heard you say that one day about a loss on a property that you sold.37:59-38:01So I figured it would be the same for a business.38:01-38:02You got it, my friend.38:02-38:03Yes, sir.38:03-38:03All right.38:04-38:05We’re going to go ahead and hit.38:05-38:06Thanks, buddy.38:06-38:07Let’s hit Steve in Columbia.38:09-38:10Hey, Steve.38:10-38:15Your caller earlier that was wanting to know his employee ID number?38:15-38:16Yes, sir.38:16-38:20Isn’t that at the top of his W-2s for former years?38:20-38:21Yeah, I had a feeling.38:21-38:23I didn’t ask, but that was a good question, Steve.38:24-38:29But I’m thinking that this is a new company they work for, so they didn’t have it a prior year W-2.38:30-38:31Oh, okay, yeah.38:31-38:33I was wondering why you didn’t ask that.38:33-38:35I was working on the idea.38:35-38:37If he had it from last year, he would have known it.38:39-39:09well yeah you may have made the assumption that he didn’t think to look at that though that was what i was thinking you’re right no you’re right steve i thought about it after i had gotten off so you were on the right track i did not i thought well he probably already knows he had it from last year if he would have asked that question so i was working outside of that box but you’re actually correct he may have it from last year and not even think about it well i’m the champion of the incredibly obvious and sometimes it seems wrong Well, thank you for the call.39:09-39:10I have another question.39:11-39:13Can I get another quick question about sales tax?39:13-39:14No, we’re good.39:14-39:14Go for it.39:15-39:15Okay.39:16-39:21Is there any way that you can tell when a sales tax was enacted?39:22-39:30Like when did they start charging sales tax on labor on repairs for automobiles?39:31-39:34That actually has been going for a long time.39:34-39:36Car lots haven’t always done it.39:36-39:41A lot of times people would only do, because services for a long time in the state of Tennessee were not taxed.39:42-39:45So people would try to run stuff under service versus the parts and repairs.39:46-39:53But to be honest with you, at least for the last 30 years I’ve been here, sales tax on used car or on car repair has been a part of the books.39:55-40:00I was about to say, I was just looking it up and it looks like it’s only been in sales force for 25 years.40:00-40:01Okay, there you go.40:02-40:05It’s probably been that long, but I’m getting old.40:05-40:08And we always first tax on repairs on labor.40:09-40:09Yeah.40:10-40:11But it was $4,000.40:12-40:12Gotcha.40:13-40:14You got it, my friend.40:14-40:15Thank you for the info.40:15-40:16Appreciate you.40:16-40:20Let’s hit Alan real quick so we can get him before the end.40:20-40:21Hey, Alan, what can I do for you?40:22-40:23Yeah, thanks for taking my call.40:24-40:28I was mentioning there’s a very couple of houses under $4,000.40:29-40:31They don’t have to do taxes on it?40:31-40:31Uh-huh.40:32-40:44Okay, now what if you sell a house and you buy one for $150 and you have remaining money and you want to just put that in the house and get three taxes on that?40:44-40:45You don’t have to buy a house at all.40:46-40:51So when they sold that house and they made $429,000, they could have moved into an apartment and paid rent.40:52-40:54You do not have to re-spend it into real estate.40:55-40:56That sounds better than a lottery.40:57-40:58Exactly, it does.40:58-41:01Real estate is a good investment for most.41:01-41:03I’m sure people are listening and saying, well, I went upside down.41:03-41:07But most people in Tennessee, our homes are appreciating, not depreciating.41:07-41:16So, yeah, so if you sell your current home and you don’t want to go spend all that money, because it sounds like they only spent $200 or they went and spent more, didn’t they?41:16-41:19But anyway, yes, you don’t have to spend it, right?41:19-41:21That sounds like the Canadian lottery.41:24-41:26I don’t want to.41:28-41:33Also, I wondered if – I’ll talk to you later in time on that.41:34-41:35I don’t want to hold up your show.41:35-41:36No problem.41:36-41:37Okay.41:37-41:37Thank you very much.41:37-41:38Okay, bye.41:38-41:38Thanks, Alan.41:38-41:39I appreciate you.41:39-41:39Okay.41:40-41:40All right.41:40-41:41Thanks for the phone call, guys.41:41-41:43I really do appreciate it.41:43-41:46It makes the show so much more entertaining than me trying to figure out what you guys want to hear.41:47-41:49So we’re getting ready to wind down the show.41:49-41:50We’ve got a few more minutes here.41:51-41:56So, again, I want to make sure that you’re thinking extensions if you’re not going to make taxes.41:57-41:58they have given file taxes in a number of years.41:59-42:03I’m thinking that you probably want to go ahead and file extension this year.42:03-42:05Let’s make this the year that you catch up all your back taxes.42:05-42:15You might be pleasantly surprised on how many years we have to file and how much money you owe because a lot of times you’re thinking, oh, this is what I bought, and no, it isn’t.42:15-42:18Sometimes you may only have to go back five, six, seven years.42:18-42:24Some years, I mean, basically compliance is six years, but sometimes you have to go back further because the IRS has already assessed you.42:25-42:26So some of those information has come out.42:27-42:29But you just need to make sure you understand that.42:29-42:30Make this the year you file.42:30-42:33And if you’ve always been filing your taxes, obviously you know the game.42:33-42:35And you know you need to get all the documents.42:36-42:38I will say again, make sure you have all your documents.42:38-42:41We have a number of paperwork sitting here.42:41-42:48They’re waiting for this and waiting for that because we didn’t quite get everything we needed on there to make sure we have it.42:50-42:52So, you know, let’s get Rachel on the line real quick.42:52-42:55And that way we don’t have to worry about anything else.42:55-42:59Rachel’s got a question out of, I think she’s driving.42:59-43:00Hey, Rachel, what do you have?43:01-43:01Hi.43:02-43:11So my husband last year got overpaid about $5,000 over, I guess, a two-day period.43:11-43:15They asked us to pay it back, and we did, about $5,000.43:16-43:23I’m wondering, do we, and on the W-2 that we received, it didn’t take off that $5,000.43:24-43:25They need to amend it.43:25-43:28We need to get an amended W-2.43:28-43:30You need to get an amended W-2.43:30-43:33If he got overpaid and it was all paid in the same year, did it all happen in 24?43:35-43:36Yes, it did.43:36-43:44Okay, then yes, they need to amend the W-2 because they’re not giving him credit for the money, you know, he paid back or whatever.43:44-43:48So, yeah, you need to call them before you file your taxes.43:49-43:49Okay, awesome.43:49-43:50Thank you so much.43:50-43:51Thanks.43:51-43:51Appreciate you.43:52-43:52All righty.43:52-43:54That was another quick answer.43:54-43:55We’ve got some unique ones today.43:56-43:56I like that.43:56-43:58Thinking a little bit outside the box.43:58-43:58That’s good.43:59-43:59Okay.43:59-44:02So, if you do need help with taxes, obviously, it’s what we do.44:02-44:04We do all tax returns from unemployed.44:06-44:07You probably don’t have to worry about taxes.44:07-44:11From the individual to companies, businesses, nonprofits.44:12-44:13We do them all.44:13-44:15We’ve been at it for almost 30 years.44:15-44:26So if you need to get an appointment, you can go to our website, drfriday.com, and click on the schedule, and Chris or Dr. Friday, either one of us, and we can help you get your taxes done.44:27-44:40And then if you need to have a question answered, you can give us a call Monday morning at 615-367-0819, 615-367-0819.44:40-44:42Or you can always email.44:42-44:44I’m doing my best to keep up with it.44:44-44:46It’s Friday at drfriday.com.44:47-44:50Again, Friday, like the day of the week, at drfriday.com.44:51-44:54And for all you new listeners, yes, that is my first name, Friday.44:55-44:58I go by Dr. Friday, but Friday is my first name.44:59-45:01So not to confuse you.45:01-45:03And a lot of people are like, who is Friday?45:03-45:04Who is this person?45:04-45:07For all you long-time listeners, you already know who the crazy lady is.45:07-45:11And if you’re not sure who I am, again, go to the website, drfriday.com.45:12-45:14We’re here, been here for a while.45:14-45:15We can help you with tax issues.45:15-45:16I’m an EA.45:16-45:25I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation, which just basically means all I do is taxes, guys.45:25-45:34So if you’ve got questions, if you’re just trying to make sure you’ve got your taxes right, or if you’re looking for someone that can help you tax plan along with doing your taxes, give us a chance.45:35-45:42So again, you can make an appointment online or you can call us at 615-367-0819.45:43-45:44Texting to that number as well.45:45-45:51Sometimes that’s the fastest way to get to us or make the appointment right through the online scheduler.45:51-45:52Those are the both the same ways.45:53-45:55Hope you guys are enjoying this Saturday.45:55-45:57It’s a little bit on the nippy side for myself.45:57-46:00But as you guys have seen, the dogs have slept through the entire show.46:00-46:01You haven’t heard them chitchatting.46:01-46:03And I know a lot of you guys listen for it.46:03-46:11so we got them nice and cozy so hopefully you guys have a wonderful Saturday and as we say in Australia, cop ya later!

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In this episode, Dr. Friday discusses how small business owners can lower their taxable income by paying their children for legitimate work. Learn how this strategy can benefit your family’s finances.

Transcript:

G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Lower your taxable income by shifting income to other family members. That works great, especially for self-employed or small business owners. You may have children who are 14, 15, 16, or 17, who are really working for you.

Instead of just paying household expenses through yourself, think about paying those kids. It’s a great lesson for them and a smart tax move for you. Also, consider calculating the value of benefits for educational deductions.

Another tip: if you put something on a credit card, according to tax law, that’s a deduction—not when you pay it, but when you charge it. If you need help and want to talk to someone, just go to drfriday.com.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday explains the tax consequences of selling your home, including home exclusions, rental conversions, and potential deductions.

Transcript:

G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Selling your home. So nowadays, it’s not quite as simple. Most people live in their home. As long as you’ve lived in it two out of the last five years, you can qualify for a home exclusion.

But a lot of times, people will turn those homes into rentals, or they’ll rent part of the house out and live in the other. And when they’re doing that, they’re appreciating or turning that part of the home into an investment. And in doing so, there can be pros and cons.

One of the pros is that we can’t take a loss if you happen to sell your primary home at a negative dollar amount. But if it’s a business, if it’s a rental, we can take that loss. So it’s important to understand if you’re making money or losing money. If you need help, just go to drfriday.com.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday breaks down the home office deduction. Find out if you qualify, what expenses you can deduct, and why W-2 employees working from home may not be eligible.

Transcript:

G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Home office space. So again, I want to say if you are a W-2 individual and you’re working from home, that is a benefit. It is not a tax deduction. I know you’re going to say that you’re spending your own electricity and you’re having to take up space, and you have heating and air conditioning. The IRS has pretty much come back and said, yeah, but you’re not putting wear and tear on your car, and you’re not paying for any more petrol. So it’s a give or take on that one.

But if you are self-employed or an individual that has the ability, a home office is a great deduction—if you know how to account for it. So make sure, if you need help, call 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday discusses the tax implications of divorce. Learn how to navigate financial pitfalls, minimize taxes, and avoid unexpected liabilities before finalizing your divorce.

Transcript:

G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Taxes and divorce. I can’t tell you how many meetings I take on this particular subject. Sometimes I actually am fortunate enough to have both people getting divorced in the office, and we’re really able to do serious tax planning because there are ways that you can save money when you’re divorcing, and there are ways that you can make that other partner pay big if that is your dream.

But either way it looks, you do need to consider—if you’re in the process of getting divorced or getting married—sit down. Talk about the finances. Talk about the taxes. Again, how many people even ask the person they’re marrying if they’re up to date on their tax returns? If not, you could end up paying that person’s tax bill.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday shares a tax-savvy way for parents to help their working teens save for the future. Learn how contributing to a traditional or Roth IRA can provide long-term financial benefits and tax advantages.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I want to put the caveat first that I am not a financial planner. I look for ways to save tax dollars. But one way is, let’s say you have a 15-year-old child that’s doing babysitting or working, and maybe they even work for your company as a partner in a partnership or sole proprietorship, and they’re making that $7,000 to $10,000.

One thing they could do is open up a traditional IRA, and that $7,000 would be tax-deferred, or $8,000. And then the other side of that would be, let’s say they put it into a Roth. They would defer all of that growth for the next, what, 60 years? That sounds like a wonderful tax plan for your kids.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains phase-out thresholds for tax credits like child tax credits, adoption credits, and education deductions. She highlights how marriage can impact eligibility.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Some things have what we call a phase-out. For example, the child tax credit—it starts at about $200,000 for a single person and about $400,000 for a married couple. Adoption credit? Pretty much $252,000 for a single, and guess what? The same exact number for a married couple. So there’s the marriage penalty for you. Interest on education? $80,000 for a single, $165,000 for a married couple. You get where I’m going here. In most cases, the limit doubles for married couples, but not always. Educational savings bonds? Again, another marriage penalty. You need to understand these dollar amounts—otherwise, you won’t be able to take the tax credit.

Need help? Call 615-367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains depreciation rules, including accelerated depreciation and recapture. She highlights mandatory depreciation for rental property owners.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Let’s think about depreciation, especially for business owners or renters. There are a lot of different things that can be depreciated. And the thing is, do you want to accelerate? We still have accelerated depreciation. You need to understand how that will affect you in the long run for recapture of depreciation. Also, keep in mind that you don’t have a choice with rental properties—you have to depreciate. It is not an “Oh, I might want to or not.” Tax law says it’s a mandate. So understanding what you have to do to stay in compliance, how you might be able to reduce it now for less recapture later—these are important things to know.

Understanding taxes is what I do, so call me if you need help. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday discusses how marriage can impact your taxes, including penalties on capital gains, child tax credits, and educational savings. She highlights why understanding these tax rules is important before making financial decisions.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Happy Valentine’s Day! And for some of you, maybe even an anniversary. That being said, let’s think a little bit about getting married and how the tax law doesn’t necessarily reward individuals who are married. There are a lot of marriage penalties. Look at capital gains—if I’m single, I have $200,000. If I’m married, I only get $250,000. Also, keep in mind child tax credits if your income is too high. So when you’re thinking about Valentine’s, your sweetheart, and being smart about your money, consider what kind of tax advantage it may be to stay single or file as head of household.

If you need help, call 615-367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains tax requirements for household employees, including the need to file a Schedule H and pay Social Security and Medicare taxes for workers earning over $2,700 per year.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Domestic helpers. Now, a lot of times people think that, well, they don’t really have to do much. Someone comes to my house, I’ll give them a 1099 at the end of the year and make a payment. But keep in mind, if you’re paying somebody basically as an employee and it’s over $2,700 per year, they really do need to file a Schedule H. Schedule H is where you report your household employees. You actually need to pay their Social Security and Medicare, just like an employer would. It’s important to understand—just because someone is working in your house, that’s still a job for them, and therefore, they are still your employee.

If you don’t understand that or need help, give us a call at 615-367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday clarifies that estimated tax payments are not optional but required to avoid penalties. She explains how failure to pay on time results in monthly penalties from the IRS.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Let’s talk about estimated tax payments. So often people come in and think it’s some sort of voluntary thing that all of us are doing—as if we would voluntarily want to pay money before we had to pay it! That’s not the case. We don’t want to pay penalties. There is an exact penalty for failure to make estimated tax payments. So you make a choice: You can pay 0.5% every month that you forget to do it or choose not to, or you can pay it on time. I kind of like to get the IRS out of my bank as soon as possible, so I make my payments. But people make that choice. Just understand there’s a penalty for not doing it.

Need help? Call 615-367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday reminds taxpayers enrolled in the health care marketplace to obtain their 1095-A form. She also discusses the importance of the IRS-issued IPN number for certain individuals.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

If you still participate in the health care marketplace, do not forget to get the 1095-A form—that is necessary for us to prepare your taxes. We so often have individuals that forget two major things. One, the 1095-A from the marketplace because you don’t really think about it since you have an insurance card or whatever, and it’s there. The other is the IPN number that the government will give to individuals who are already listed at risk. If you don’t have those, we can’t file your taxes, and they will be wrong.

You need help? Give us a call at 615-367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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On this episode of the Dr. Friday Radio Show, Dr. Friday tackles key tax season concerns, from handling 1099 discrepancies to adoption tax credits. She also answers listener questions about property tax freezes, Social Security taxation, and dealing with IRS notices. Tune in for expert tax tips and real-world scenarios to keep you informed and prepared this tax season.

Topics Covered:

• Tax Season Prep: Ensuring you have all your W-2s, 1099s, and other necessary documents before filing.
• 1099 Income Mismatches: What to do when a 1099 doesn’t match what you received in the bank.
• Adoption Tax Credit: Eligibility and how to claim up to $16,810 in 2024 for adoption expenses.
• Dependent Care Tax Considerations: Qualifying conditions for claiming an elderly parent or adult child.
• Property Sale and Taxes: How escrow delays affect when you owe taxes on home sale proceeds.
• Head of Household Filing Status: Who qualifies and how it can increase deductions.
• IRS Notices & Disputed 1099s: Steps to take when the IRS claims you owe taxes for income you never received.
• Medical Reimbursement & HSAs: Reporting rules for HSA distributions and tax-free employer medical stipends.
• Social Security & Taxes: Income limits before Social Security becomes taxable and filing requirements.
• Property Tax Freeze for Seniors: How homeowners on limited income may qualify for property tax relief.
• Extensions & Tax Payments: Why filing an extension doesn’t delay your tax payment deadline.

Transcript00:00-00:03G’day, I’m Dr. Friday and the doctor is in the house.00:04-00:09And if you want to join our show on this beautiful Saturday right before the Super Bowl, you certainly can.00:09-00:14You can join us at 615-737-9986.00:15-00:19615-737-9986.00:19-00:23Taking your calls. Talking about my favorite subject, which is taxes, which is what I’m working on all weekend.00:24-00:29But it’s also the time to think about what you’re going to be needing to organize, right?00:29-00:34It’s time for you to think, okay, so have I received all of my W-2s?00:35-00:36Did you work any part-time jobs?00:36-00:41Did someone send you a 1099, but it doesn’t match what you actually put in the bank.00:41-00:46Sometimes that happens, you know, sometimes depending on when they paid you.00:46-00:51I had a situation where one of my clients said, well, I didn’t get the check until January 4th,00:51-00:53but they mailed it and it was posted.00:53-00:57I mean, theoretically, it was dated December 21 or something like that, 21st.00:58-01:02So the 1099 was higher than they expected.01:03-01:03And that’s fine.01:04-01:06They wrote the check at the time that they received it,01:06-01:10and you’re cashing it at the time that you’re going to pay it.01:10-01:12Now, here’s the biggest problem.01:12-01:17If that is your only payment, and the IRS gets a check for more,01:17-01:21and you report less, you need to put explanation in there why.01:22-01:25The 1099, there is a way of doing that, but you want to explain it,01:25-01:28because otherwise the IRS is going to think you understated your income01:28-01:30based on what somebody had reported.01:30-01:32So it’s important that you address it.01:32-01:34You don’t just let it slide and then you turn around01:35-01:38and you’re like, oh, wow, what do I need to do on this01:39-01:39or whatever.01:39-01:43You need to make sure that you have all that information01:44-01:48because again, the IRS is going to match that information01:49-01:51and if you don’t have it,01:52-01:54you’re going to end up with a nice little love letter01:54-01:56that they say, turn around and say,01:56-01:57hey, you owe more money.01:58-02:00All right, let’s go to Steve in Nashville.02:01-02:03Hey, buddy.02:03-02:04What can I do for you?02:05-02:08Our daughter passed on 23.02:08-02:11When we adopted the four-year-old last year,02:12-02:17you had a commercial on saying that we could take a tax credit for the02:17-02:18expenses.02:19-02:21So I can just write that whole thing off.02:22-02:22Right.02:22-02:24Well, you get up to a certain dollar amount.02:24-02:28I think the credit in 2024 is $16,810.02:33-02:34I’m assuming if you spent more than that,02:35-02:37you would have a possibility that some of that might have to roll over.02:38-02:41If you spent less than that, you’ll pay in whatever you paid.02:42-02:42Okay.02:42-02:44And then my daughter was on disability,02:44-02:48and they were given my granddaughter Social Security.02:48-02:49She was getting a small check from that,02:49-02:52and then she’s continued to get in that check.02:53-02:54survivor benefit or something.02:54-02:55But is that,02:55-02:57they just send us a 1099 SSN.02:58-03:00Do we count that as part of our income?03:00-03:01Right, and you don’t need to report that.03:02-03:03That is not income for you.03:04-03:04It is a benefit.03:05-03:07Therefore, if that person was working03:08-03:09or if there was a situation,03:09-03:11but on a minor child,03:12-03:13that is not taxable income.03:14-03:16So I don’t have to put it on our return at all?03:17-03:17No, sir.03:18-03:20Okay, thank you very much.03:20-03:21No problem.03:21-03:22Thanks for doing what you’re doing.03:22-03:27All right. Talk to you later. All right. That’s great. And there is adoptions credits for everyone03:28-03:33that, you know, I mean, it’s a wonderful thing to do. But there is an adoption credit. Like I said,03:33-03:41in 2024, you can get federal income tax up to 16, 8, 10. That’s the qualified expenses. And it is a03:41-03:46credit, right? We like credits. Credit means refundable, where a deduction means that they03:46-03:52will reduce your income. And for some years, they were actually deductions versus credits.03:53-03:58So they have brought it up. I think it was like $14,000 in 2021, and it’s come up from there. So03:59-04:05if you’re adopting a child, then you can use that because it’s not an inexpensive thing to do.04:06-04:10So again, if you’ve got tax questions, maybe you have a situation like that, or maybe even have a04:10-04:17situation where you have a similar situation would be a grown parent that maybe lives in the house with04:17-04:26you or you’re paying more than 50% of their care to stay in an extended care or older person home,04:26-04:32whatever. I can’t think of the proper term. Sorry, guys. And you’re helping to pay because maybe they04:32-04:38don’t have enough to do that. Then that person could qualify to be your dependent. You do have to04:38-04:44meet that 50% of care. So if they’re living in your house, it’s a little easier, especially if04:44-04:48all they have is social security, because you think about your, your roof or your, your, your04:49-04:55mortgage or rent. So you have utilities, you have food, you, you know, all those things adding up.04:55-04:58And if they’re, you know, if there’s only two of you and that person, most of their money might be04:59-05:05going to medical or, or just basic care, then sometimes it would add up to being a benefit.05:06-05:08And I will generate that.05:09-05:13The benefit is if you’re a single person and you have a parent or someone that lives, you05:13-05:17would be able to qualify for head of household, which would give you a better standard deduction.05:18-05:20The actual credit is $500.05:21-05:24The standard deduction would go up by another five or so thousand.05:24-05:26So that would help a little bit.05:26-05:29But I mean, it’s not a huge tax credit.05:29-05:30It is better than nothing.05:31-05:34And therefore, always don’t want to leave anything on the table.05:34-05:43But sometimes I had a situation where a father called and his daughter and her children had moved in with him.05:43-05:50And she was making $35,000 or $25,000 a year.05:50-05:52And he was helping to support the whole thing.05:52-05:54And he wouldn’t know if he could deduct them.05:54-06:01And I basically said it wouldn’t be beneficial because theoretically the mother is covering 50% of the care of the children.06:01-06:04and she is working, taking care of herself.06:05-06:07So when we did the math, it worked out.06:07-06:09Basically, she was providing most of the care.06:09-06:13I mean, it is costing him more than it was before she moved in.06:13-06:14No question.06:14-06:20But that being the fact, he didn’t really meet the 50% care and moving from there.06:20-06:23So it is important to look at the whole picture.06:23-06:27And a lot of times people are looking for just another way of putting more money.06:27-06:32If you have a child that’s under the age of 16, then the child credit is $2,000.06:33-06:36But anyone that is 17 and older, it’s going to be only $500.06:37-06:42But again, if it’s just you and you have your mom or dad living with you and they’re living06:42-06:47in your house, then it would be a good thing to think about possibly because that would qualify06:47-06:49you as head of household.06:49-06:55So again, just making sure you understand the qualifications because you can’t just take your06:55-06:59girlfriend’s child and say, Hey, that child’s living with me, even though the girlfriend may06:59-07:06be still living with you. Um, and now you qualify, you don’t qualify if that person is actually the07:06-07:12parent and they are actually doing what they need to do to cover their care. Um, IRS is really funny07:13-07:18about making sure and they’re doing better and better on that particular situation. All right.07:18-07:22Uh, let’s go to Devin, Devin and Franklin. Let’s see if I can help Deb out. Hey, Deb.07:23-07:32So, hey, I’ve got a question about a house that I sold last year with one of my ex-fiance.07:34-07:43It went into escrow with the courts since it’s under a partition, you know, I guess a legal lawsuit, whatever.07:44-07:52Do I end up paying taxes from when it was sold or from when the money gets dispersed from escrow?07:52-07:58well that’s a great question so I’m assuming it’s being held up in court07:58-08:04somehow Devin yeah we’re gonna go on over the ends and out of who gets how much08:04-08:12money or you know right yeah well I mean I guess it still comes down to the the08:12-08:15answer to that is not black and white and I hate to say that because at this08:16-08:22point is it a 50/50 did they send you a 1098 s where the where the property was08:22-08:27or did that have you received anything on the sale of that property at this point08:28-08:33um so no i haven’t received anything from the sale like on the sale of the property from the uh08:34-08:38i guess the brokerage company you know whoever dealing with that paper was um08:40-08:45because i mean basically i would say that in in honesty at the time of sale you were responsible but08:45-08:51there is this clause where it’s basically saying that you didn’t have access to the funds uh because08:51-08:57it was held up in a court case happens more times in estate situations that I know. I mean,08:57-09:02I don’t deal with a lot of divorce or separation or whatever this would be called. Um, so I can’t09:02-09:09say I’m an expert, but my, my first thought would be is that you would only have to file it when they09:09-09:16actually settled the case, assuming, but again, you know, if it’s an estate and money goes into the09:16-09:21estate first. This money was actually held in yours and your ex’s name. And then they took it09:21-09:27into the courts because of this, of settling the estate of some sort. Right. And I’m, um,09:28-09:33so I would double check. I mean, personally, Devin, if I were you, I would contact my lawyer and ask09:33-09:37him, do I need to be paying tax? Cause I would be leaning towards the fact that you need to pay tax09:38-09:43on it, but that may be wrong under this unique situation. Normally we sell a house, you know,09:43-09:50we get the money, it closes in 30 days, it’s kind of black and white. I will honestly say that’s09:50-09:57probably outside my expertise. So I would double check with your attorney first, because you never09:57-10:01got the money in your pocket. It wasn’t like it went to the IRS and paid off a debt. You know what10:01-10:06I’m saying? Because in those cases, we do have to pay tax first, even though we didn’t get the money,10:06-10:11the money was paid to pay off a debt. In your case, it sounds like the court is holding all the10:11-10:18money in an escrow. In an escrow, you are not liable until you receive it. So I just wonder how10:18-10:24the brokerage house handled it because at the time you and your ex had to sign paper saying that you10:24-10:30were selling it in your name. It didn’t go into that escrow. So I would just confirm it with my10:30-10:35attorney before I finished it out just to make sure you didn’t have the IRS changing your tax10:35-10:39return because they found out about the home sale and you were thinking, well, hey, I never got the10:39-10:41money so I shouldn’t have to pay tax on it yet.10:43-10:43Yeah.10:44-10:45And then I guess my10:46-10:47second question would be10:48-10:49like with a sale of the house10:49-10:51like the proceeds, I know there’s10:52-10:54you know some ways of reinvesting10:54-10:55that into another property10:56-10:57and kind of, I don’t want to say10:57-10:59Is this your primary home, Devin, while you10:59-11:00guys were living in it?11:01-11:03Yeah, it was. How long did you11:03-11:04guys live in that house?11:07-11:07A little over11:07-11:09a year and a half. Okay.11:09-11:14but due to the fact that you got divorced or separated or I don’t, I mean, I know you weren’t11:14-11:21married since you was, but that there was a, um, a dispute, uh, I don’t know the proper term,11:21-11:26sorry, Devin. Um, then I mean, you may have reasonable cause for the reason to move out of11:26-11:31that house. Um, so therefore you might still be able to take a portion of the exclusion,11:32-11:37the 250,000 that you’re entitled to. And then your, your ex would be also entitled to how much did11:37-11:44you guys make on the gain of the house? So I’m going to, I’ll end up walking away with about 55,00011:44-11:52profit from, you know, when we bought it to when we sold it. Okay. So you, you sold it for about 110.11:52-11:57Well, I don’t know if it’s 50, 50, but so the, when you say profit, that’s it, you brought it11:57-12:02for 300 and you sold it for 400 kind of situation, right? Just making sure we’re on the same page.12:03-12:04Yep, correct.12:04-12:05Okay. All right.12:05-12:08So you might want to talk to whoever does your taxes,12:08-12:12because I think due to this situation and the fact that it’s not in your control,12:13-12:18you might meet, there are some exclusions under the $250,000 home exclusion.12:18-12:21You might qualify and therefore not have to pay tax on that.12:22-12:23Oh, that would be nice.12:23-12:27Yeah. So you need to find out a little bit more and then you can,12:28-12:28that would be great.12:28-12:32Yes. And to be able to eat up part of your exclusion on it.12:32-12:36So they do it by day due to the situation that you had to sell the house.12:36-12:39It wasn’t that you wanted to.12:39-12:40It was a situation you had to.12:41-12:42A lot of times that happens with divorce.12:43-12:44I’m kind of putting this in the same category.12:45-12:48And in divorce, if it happens, they do have an exclusion for it.12:48-12:50So that might be something to look into, all right?12:51-12:52Okay, perfect.12:52-12:59I guess I’ll talk to the lawyer, and then I might need to call you back and get on the schedule to have you do a exclusion tax.13:00-13:00Thank you.13:00-13:01I appreciate it, Devin.13:01-13:02All right, we’re going to take a quick break.13:03-13:04Devin and I cooked me over a little bit.13:04-13:09So if you have a phone call, you can call us at 615-737-9986.13:09-13:10We’ll be right back.13:12-13:15All righty, we are back here live in the studio.13:15-13:16This is Dr. Friday.13:16-13:20I’m an enrolled agent licensed by the Internal Revenue Service to view taxes and representation.13:21-13:26And let’s go right to Greg in Nashville and see if I can help him out.13:26-13:27Hey, Greg.13:28-13:29Hey, Dr. Friday.13:29-13:36The wife and I received notice from the IRS that they were adjusting our 2003 income taxes13:37-13:48to receiving a 1099 for a collections notice from a company that we don’t think we ever had any dealings with.13:49-13:53On the notice, it had the company name, the account number.13:54-13:55We’ve talked to that company.13:55-13:58They say they see no record of us ever having an account.13:59-14:03We’ve looked at our credit reports, never had an account on the credit report with them.14:04-14:05What’s my next step?14:05-14:08I would actually go ahead and open up a case.14:08-14:12It’s called a 911 with a local tax advocator’s office.14:13-14:18The tax advocator is, they are the, I mean, they’re actually a great office.14:18-14:19They do.14:19-14:21But I would put all that together, Greg.14:21-14:23I would actually pull up a copy.14:23-14:25I mean, you can black out your social security numbers.14:26-14:31I would have a copy of your Expedia or whatever,14:32-14:34your report for what you have in credit.14:34-14:37I would see if you can actually get a name,14:37-14:41a number, a person at the place that you called and spoke with.14:41-14:43They may not put anything on paper.14:43-14:46It’d be great if they could send a letter or something just saying,14:46-14:48hey, according to this, we have no record of this person.14:49-14:53I would put together a little case and then have them saying,14:53-14:54hey, this is not us.14:55-14:59This is probably someone that has stole an ID or maybe it’s a typo.15:01-15:03But, you know, you don’t want to pay tax on it.15:03-15:04It’s that simple.15:04-15:06So I would go.15:06-15:09I mean, you could try to send a letter directly to the IRS.15:09-15:11I have found that they do not read my nail.15:12-15:13That’s why I go to the tax advocator.15:14-15:20And all you have to do, if you look up tax advocate, I’m saying that word wrong.15:21-15:22But do you know what I’m saying, Greg?15:22-15:23Because I am spilling it.15:23-15:26I’m still not getting it to come out of my mouth the proper way.15:27-15:28Advocates.15:28-15:28Advocate off.15:29-15:31Anyways, and the form is called a 911.15:31-15:32Easy to remember.15:32-15:36If you Google 911 tax advocate, it will bring it up.15:36-15:38It basically just says, what do you want us to do?15:39-15:40What have you already done?15:40-15:47I would send a letter to the IRS, just to the address you received that love letter from.15:47-15:51Respond and just say, this is not our information.15:51-15:58maybe just in a simple form, here’s what we’ve done. And just so they can’t say you didn’t respond15:58-16:02and they immediately turn it directly into collections. Because right now it’s basically16:03-16:06just saying, hey, we think you’re in the wrong place and we’re going to adjust your taxes if we16:07-16:12don’t hear from you. Right? I think that’s what the letter you have right now. It doesn’t say that16:12-16:16they’re in collections. It says that they want to change your tax return because of information16:16-16:23received from someone else, right? Yeah, correct. Yeah. So I would go both ways. I would respond to16:23-16:27the letter so they have it. And I always, always, if you have a, sometimes they’ll give you a link16:28-16:33that you can upload documents with that letter or a fax number. If they don’t have either of those,16:34-16:39send priority with a tracking, something that just says, I did my duty. I would immediately,16:39-16:46within about 30 to 45 days, the tax advocate office will actually contact you, a human. And then16:46-16:51They’ll look at your case and then they’ll go into the actual IRS files, which you and16:51-16:57I have no control over and contact someone over there and they’ll be able to move behind16:57-16:59the scenes much better.16:59-17:04And then they usually will say, hey, I’ll call you back in about 25 days or 30 days and I’m17:04-17:06going to do this, this and this and we’ll wait and see what the response.17:07-17:12They can also put a hold on your account so that no one does anything nasty like levy or17:13-17:13do something silly.17:14-17:16And then that would be the answer.17:17-17:20As far as if I were to take the case, that would be the direction I would go with it.17:21-17:22Okay.17:22-17:23Thank you very much.17:23-17:24No problem.17:24-17:24Good luck.17:25-17:25All right.17:25-17:27That was a great question.17:27-17:30And we, I mean, I can’t tell you how many times I get some of those letters.17:31-17:35And normally it’s not, I mean, people always think, well, I got to change because I did17:35-17:35something wrong.17:36-17:38It is not always because you’ve done something wrong.17:38-17:40Sometimes it’s just like this.17:40-17:50I’ve had several two cases last year that when they sold a home, both the closing and the selling agents both posted the 1099.17:50-17:55So it looked like they had two home sales exact same day, exact same dollar amount.17:56-18:02But since two of them sent it, the government’s saying, hey, you sold two homes at the same day at the same dollar amount.18:03-18:05Therefore, you didn’t pay enough in taxes.18:05-18:07Now, finally got some of that taken care of.18:07-18:10But it takes a while and it can be very stressful.18:10-18:24So just take a deep breath. Tax advocate office in Tennessee, the Nashville office, I can’t say enough about them. We probably always have two, three cases going with them at any given point.18:25-18:32Because after I’ve exhausted sending things to the IRS, trying to respond to the letters,18:32-18:39sending it certified, trying to upload or fax or call, you know, after a period of time,18:40-18:41I had one, I think it’s 2021.18:42-18:46We just resolved the issue last week.18:47-18:48Finally, and it was through the tax advocate office.18:49-18:51She finally got everything handled for us.18:51-18:55And sometimes it’s not so much that the IRS has dropped the ball, to be quite honest.18:55-18:57We’re sending documents.18:57-18:59It just doesn’t seem like the same person is in there.19:00-19:04So a lot of times things just get kicked back, but you don’t get any love letters telling you19:04-19:05why it’s gotten kicked back.19:05-19:09All you get is a collection letter saying you still owe $22,000 or whatever.19:10-19:12And you don’t know you don’t owe that money.19:12-19:14And that’s where it gets a bit frustrating.19:14-19:20So I’m sure the advocate office is not going to be overly excited that I’m totally saying19:20-19:20that’s the way.19:21-19:26But if you’ve exhausted calling the IRS and saying, hey, here’s my situation, if you’ve19:27-19:31already done all that, you still have a situation where the IRS is just not really listening,19:32-19:35this is when the tax advocate office is there for you.19:36-19:42They are basically a resolution office, as far as I think of them, a resolution office19:42-19:43within the IRS.19:43-19:45But they don’t necessarily, they’re not the IRS.19:46-19:51They’re there to help us do resolution, which if anyone’s listening that deals with the IRS,19:52-19:54I think we could have more resolution officers.19:54-19:55That would be awesome.19:56-20:01You know, instead of hiring 80,000 people to collect, it might be nice to see if we can20:01-20:07actually have a few more people in resolution first, because, I mean, I probably have half20:07-20:11million dollars worth of supposed taxes due with different clients.20:11-20:15And in most of those cases, zero is due or very little.20:15-20:20people are making payments on what we know is due, but the rest of it is not. So it’s just one of20:21-20:25those things, just getting that information into the right hand so the people can actually do the20:26-20:33right situation. I mean, and one, they mailed a check, 70 some thousand dollars for the 2023.20:35-20:41It accidentally got sent in with the year 2024. So, hey, the IRS didn’t make a mistake. We didn’t20:41-20:43and label the proper information on it.20:44-20:47So we sent a copy of the check along with the first collection letter,20:48-20:53and this was probably, well, back in like June, July of 2024.20:54-20:56And so sure enough, they turn back around,20:57-21:00and another 30 days later, they send another letter saying,21:00-21:02nope, we still have this much money due.21:03-21:05And we’re saying, wait, we’ve already paid this.21:05-21:05We’ve already paid this.21:05-21:08So finally, just again, another one last week,21:08-21:10we had some success on that day.21:10-21:12the taxpayer and myself got on the phone.21:12-21:14We were within 30 minutes,21:14-21:18had someone on the phone that actually could help us.21:18-21:19And she looked in there and sure enough,21:19-21:21she saw the money sitting in 202421:22-21:24that needed to be moved back, right?21:24-21:24The money was there.21:25-21:27Then of course, it eliminated $15,00021:28-21:29worth of penalties and interest21:29-21:31because the money was there on time.21:32-21:35And the resolution was done.21:35-21:37It was how long it took five minutes21:38-21:39for someone to look in the account,21:39-21:40see the money was there,21:40-21:47moving to the proper time, but we were working with paper and e-filing or uploading and faxing21:47-21:52this information for a good year almost, but it was finally resolved. So just don’t get up,21:53-22:00give up and don’t get so excited or discouraged about it that you let it go that way. So just,22:00-22:07just putting that out there. All right. So if you want to join the show, you can at 615-737-9986,22:07-22:16615-737-9986. For any of you that may just be catching the show, I am Dr. Friday. I’m an22:16-22:22enrolled agent, been doing taxes and resolution work for just about 30 years here in the Nashville22:22-22:28area. We’re actually in Britwood. And if you have love letters or you know some family members that22:28-22:38maybe haven’t filed taxes. The sad part is 2020 was, if you don’t file 2020, 21, 22, 2020, 21,22:38-22:4422, yeah, so 2020 is pretty much off the books. So you have 21, 22, and 23. 21 will fall off come22:44-22:52April pretty much. And so if you haven’t filed during the time that you needed to file 19 and22:52-22:5820 and 21 were big years for government giving out some money, if you don’t get those filed,22:58-23:03very quickly. You’re going to lose those funds. It’s not refundable. Now, that doesn’t mean that23:03-23:10it can’t apply against existing funds that you owe the IRS for that year. So in 2020, let’s say you23:11-23:18owe $5,000 and you have monies that they should have given you for that, then that applies, but23:18-23:23it won’t get refunded. So I had a client that came in and we had filed a number of years and he lost23:23-23:29400 and some dollars because it was after the time period. So it’s very important to file your taxes23:29-23:34within those three years, especially a lot of people just don’t realize that they have refunds.23:34-23:38And come on, we don’t want to leave money on the table, people. The government’s not going to do a23:38-23:41good job with it. You’d be better off with it. All right, we’re going to take our second break.23:42-23:51If you want to join the show, you can 615-737-9986. We’ll be right back. We are back here live in23:51-24:02studio and again you can join us by phone at 615-737-9986 615-737-9986 talking about taxes24:03-24:09preparing for taxes thinking about things we might need to do if we’re doing don’t wait to the last24:09-24:14minute and i will say you know if you’re in a very complicated or crazy year that you might be having24:15-24:21think about doing an extension now i want to start this early this year because sometimes people aren’t24:21-24:27hearing. When I say an extension, there’s nothing wrong. I love extensions. They make life so that we24:27-24:33don’t rush through and get something done in taxes just to get them done, but it doesn’t extend the24:33-24:40money. So if you think you’re going to owe $5,000 because you’ve worked up the basic numbers and24:41-24:46everything’s not in and there could be some give or take, you need to make sure by the time you file24:46-24:53your extension and or april 15th that you have paid that five thousand dollars if you have it if24:53-24:57you don’t then there’s nothing you can do about it and we’ll have to set up a payment plan and deal24:57-25:03with the penalties and interest that come with that but if you have the money just because we’re25:03-25:08filing an extension does not mean you do not have to pay everybody would do it then right i mean why25:08-25:14would we not all wait till october if we didn’t have to pay um by april 15th so again always good25:14-25:20to think about that and making sure that you’re actually, you know, taking that into account. If25:20-25:25your tax person says, hey, we’re going to file an extension, that’s fine. That’s great. But make25:25-25:32sure they’re telling you how much you should be paying in estimates to cover that situation,25:32-25:36right? Because that’s the important part of that conversation, just to make sure you have that.25:37-25:40All right, let’s head to the phone lines. Bill was good enough to give us a call. Hey,25:40-25:47Bill, what can I do for you? Yes, I have a question about medical reimbursement. So I got a25:48-26:01form. The account is from my employer, and I got a tax form saying that I reimburse medical expenses26:02-26:11of 200 plus dollars and i do my own savings account is this an hsa yes okay easy enough26:11-26:16when you do your own taxes you’re going to go in there and you’re going to put in i think it’s a 109926:16-26:21essay i’m winging this a little bit i think it says on it yeah that’s the form that i received26:21-26:26so you put that in there make sure when you’re filling that out in whatever tax software that26:26-26:33you check that that is used totally for medical reimbursement and that it’s an HSA. At least in my26:33-26:38tax software, that’s the two things we have to check. If you don’t, they’re going to think that26:38-26:44you got 200 and some dollars as just money, right? They’re going to tax you on it. So make sure when26:44-26:49you’re in your tax software, they should ask you, what was it used for? And you’re going to say for26:49-26:56medical or if you’re over the age of 65 and then the other one says hsa so i’m old-fashioned and i26:56-27:05do it through the forms and i there’s like an 88 56 or something that says i got 200 but it’s27:06-27:13reimbursed for doing medical expense so there’s a couple lines down is deduct the 200 that i got27:13-27:21So that 88.56 zeros out, which goes to schedule one, I believe it is, which has a zero on it.27:21-27:23And that’s the only number on that schedule.27:24-27:25And then that zero goes to the 10.27:27-27:32Well, it ends on the schedule one, basically, because there’s no place to carry it forward at that point.27:33-27:34But you are correct.27:35-27:36It is going to carry over.27:37-27:40And then so you’re going to take the 8.8.27:40-27:42Was it the 8.8.8?27:42-27:438867 or whatever.27:44-27:45Yeah, 8867, I think.27:46-27:47No, 8889.27:47-27:48That’s what mine goes to it.27:48-27:518889, and it’s all going to be zeros, right?27:51-27:56Because now you may contribute to a health savings account.27:56-27:57I don’t know.27:57-28:00On your W-2, you’d have a code W, if that’s the case.28:01-28:06So it will actually require you to file the 8889,28:06-28:10and you’ll be self-individual or family,28:11-28:12because that tells how much you can put in.28:12-28:16But bottom line is all of that’s going to be zero.28:16-28:24If it’s done incorrectly, you’re going to end up with a schedule one where on box, I’m28:24-28:32cheating here and using a computer, on box 8Z, it would actually have a number like 20028:32-28:34and some dollars, whatever that number was.28:35-28:35Okay.28:35-28:39So that’s like my first question is the reimbursement.28:39-28:46So the bigger question is that I’m retired and I have a medical stipend.28:47-28:47Okay.28:47-29:02And the company puts money in and when Social Security takes money out of my premiums for Medicare and for my supplemental, I get reimbursed for that.29:03-29:06Well, that’s a couple thousand dollars, but I don’t have any forms on that.29:07-29:08So is that taxable?29:08-29:09It is not.29:09-29:10I think you’re, is it medical?29:11-29:13I mean, is this military?29:14-29:14No.29:15-29:15Or no.29:15-29:15Okay.29:16-29:20I don’t believe that is going to show up on any of the taxable situation.29:20-29:23It’s just a benefit that you’ve signed up for.29:24-29:24Yes.29:25-29:27There’s no place for it to actually show up.29:28-29:35But because they sent me a form for the $200, I have to fill out all these forms that zero out.29:35-29:37But on the bigger money, I don’t have to worry about.29:38-29:39Unfortunately, that’s correct.29:39-29:41It’s just the type of program.29:41-29:47And the 1099 SA people supposedly could go use for anything other than medical.29:47-29:48I don’t have any idea.29:48-29:51The other one is directly a medical reimbursement.29:51-29:53It’s tied directly to medical.29:53-29:58You and I would say the HSA is as well, because I’ve never been able to go buy my dinner with29:58-29:59an HSA card.29:59-30:02But theoretically, it supposedly can be.30:02-30:04Yeah, you can’t use the card unless it’s medical.30:05-30:05I know.30:05-30:06I agree.30:06-30:06All right.30:07-30:08Okay.30:08-30:09Well, you’ve given me good peace of mind.30:09-30:11I appreciate your feedback.30:11-30:12No problem.30:12-30:13Thanks for calling, buddy.30:13-30:14I appreciate it.30:15-30:15All right.30:15-30:17So if you want to join the show, you can.30:17-30:20It’s 615-737-9986.30:21-30:25615-737-9986.30:25-30:31I know I deal with a lot of military individuals, and sometimes they have certain benefits that30:31-30:32will come to them.30:32-30:35That’s why I wasn’t too sure exactly what Bill had.30:36-30:42But, you know, if you’re a disabled vet or any kind of military, none of that is, thank goodness, it should not be.30:42-30:44But none of it is taxable.30:45-30:49So, you know, I think it shouldn’t be.30:49-30:58Anyway, so if you join the show, 615-737-9986, 615-737-9986.31:00-31:02Not to me, people are doing things by hand nowadays.31:02-31:10I will give Bill credit for that if he’s actually printing out the forms and actually having to fill them out that way.31:10-31:11I would say it’s a great practice.31:11-31:16My father had me do that when I first started learning to do taxes, and that was 30-plus years ago.31:16-31:21As soon as I figured out that there was actually software to do it, I was not going back.31:22-31:28But it does help you understand how some of that rolls over from one form to the next and how it affects the taxes.31:29-31:31So it’s a great practice.31:31-31:35I would honestly say if you have teenagers and you wanted to actually teach them so they31:35-31:39understood how to, how taxes work, because I’ll be quite honest with you.31:40-31:46Sometimes it is funny where I have a lot of, you know, 20 ish individuals that have never31:46-31:47filed their own taxes.31:48-31:50And most of the time it’s only a W2.31:50-31:56Now given as we start getting more involved in investments and businesses, that’s a little31:56-31:56different.31:56-32:00You really don’t want to probably file your own taxes because you might be leaving money32:00-32:06on the table if you didn’t know what you’re doing. But you would have a single W-2. The only32:07-32:15problem I want to tell you is if you’re a college kid or a high school child and you are getting W-2s,32:15-32:21great, no worries. But be careful because if your parents are still able to claim you because you32:21-32:28made $6,000 and they still have more than 50% of your support, be careful if you’re filing your own32:29-32:36taxes because I have every year at least four or five situations where the child, the young32:36-32:39adult, whatever the proper term is, has already filed their taxes.32:39-32:40The parents, we file them.32:40-32:43We get kicked out because the kids already filed.32:43-32:44Therefore, we lose the deduction.32:45-32:47In some cases, we’ve lost the college credit.32:48-32:49Not always, but sometimes.32:49-32:54So again, very important to be able to make sure if you’re filing your own taxes, and I32:54-32:57am an advocate because a lot of you can file for free.32:57-33:06If you go to irs.gov, click on free taxes, but make sure you check that box that says you can be claimed as a dependent by somebody else.33:06-33:10It’s right there on the first page of your, your forms.33:10-33:12It’s make sure you check that box.33:12-33:16Cause if you don’t, you’re going to mess up your parents and them filing their taxes possibly.33:17-33:20And I realize you want to have your refund as soon as possible.33:20-33:26If you qualify for one, if you are a high school or college kid, and if you’re not sure if you should even file,33:26-33:33if you’re looking at your w2 and box two says federal withholdings if there is any money in there33:33-33:37and you’ve made less than let’s just say ten thousand dollars you’re likely to get all of that33:38-33:43money back um so again depending on certain circumstances but 90 of you would get whatever’s33:44-33:50in box two back so it’s important that if you don’t have anything in box two no sense in really33:50-33:55filing a tax return because you’re not going to get a refund all right let’s go really quick to33:55-33:59Terry in Nashville and see if we can get his question before the next break. Hey, Terry, what33:59-34:08can I do for you? Yes. What’s my limit on where I have to file taxes? What is the limit? I mean,34:08-34:17are you on social security only? That and some interest, you know, from like money market.34:18-34:25Okay. So can I ask ballpark? I mean, let me tell you this. Is it less than $10,000 that you have34:25-34:38from the other other incomes um or more it’s right on it it’s okay so you basically if you’re34:38-34:43single your standard deduction is around fourteen thousand dollars so whatever that standard deduction34:43-34:48is pretty much you could have an interest then after that you’re going to end up having some of34:48-34:55your social security being taxed so theoretically um an answer to that i mean again it really34:55-35:02If you’re making $40,000 in Social Security plus this $14,000, you would need to file taxes if you’re single.35:03-35:05If you’re married, you would not.35:07-35:13I got $30,000 in Social Security.35:13-35:17Then I got, say, around $10,000 in different things.35:17-35:24Okay, so if you’re around 15, or I mean, 15 is 50%, so the provisional tax code takes35:24-35:3050% of your Social Security, which is 15 plus the 10, puts you at 25, you would be still35:30-35:32at the zero tax situation.35:33-35:34You’d be just on it.35:34-35:38So if you ended up with 11 or 12 in interest, you need to file.35:40-35:40Okay.35:41-35:4210 or under, I’m okay.35:43-35:4410 or under, you’re great.35:45-35:45Okay.35:45-35:46All right.35:46-35:47Thank you very much.35:47-35:51No problem. Thanks for calling, guys. All right. We’re going to go ahead and head into our last35:51-36:01break. If you want to join the show, you can at 615-737-9986. We’ll be right back with the Dr.36:01-36:07Friday show. All righty. We are back. Last part of the show. So if you’ve been thinking about a36:07-36:13question and you haven’t thought about calling, you might want to pick up the phone. 615-737-9986.36:14-36:191-5-7-3-7-9-9-8-6 is the number here in the studio.36:20-36:23And again, right now we’re, what, it’s February the 8th?36:24-36:27So we are full-fledged into tax season.36:27-36:28Time to start thinking.36:28-36:33Now, I will tell you, if you have investments with Merle Lynch,36:33-36:37TD Ameritrade, whatever might be out there, Charles Schwab,36:39-36:40don’t just file yet.36:41-36:43Because I know many of you may have your statements,36:43-36:49But I can tell you from experience, half the time we get corrected returns in the next week or two.36:50-36:55I would wait almost to the end of February before I actually hit the sin button.36:56-37:02Or you may expect that you will have to amend a tax return, depending on what the changes are.37:02-37:04Sometimes they’re not enough to make a difference.37:04-37:06Sometimes they’re big enough where you have to do it.37:07-37:11So just important to make sure that you get that done and corrected.37:12-37:18Other than that, just double check to make sure you do have all of the information that37:18-37:19you wanted to have.37:19-37:25Make sure that you have what you need to be doing what you’re doing and that you have all37:25-37:25the documents.37:25-37:28Don’t rush just because you see that there’s a refund.37:29-37:33I started with one just the other day and then he kept coming back and he said, oh, I forgot37:34-37:36I took some money out of a retirement account.37:36-37:37My daughter got married.37:37-37:38Oh, I got this.37:38-37:42And we started out with basically a small refund, ended up with $4,000 due.37:43-37:47So again, nothing wrong with, oh yeah, I forgot this, you know, add those in.37:47-37:52You want to be the one doing that, not having the IRS come back with the change notice.37:52-37:55That is never enjoyable as far as I’m concerned.37:55-38:00So just make sure that you, you know, do what you need to do, how you’re going to do it and,38:00-38:01you know, make it work.38:02-38:05If you have questions and you need some help, that’s what we’re here for.38:05-38:07I am Dr. Friday Tax and Financial Firm.38:07-38:17You can either Google or you can give us a call at 615-367-0819, 615-367-0819 is the38:18-38:18number here in the studio.38:19-38:25You can also email friday at drfriday.com or you can go to our website.38:25-38:26Our calendar is in there.38:27-38:28There’s also a tax organizer.38:28-38:32So if you’d like to, and you don’t have to use our service, it’s something to help people38:32-38:33get started.38:33-38:36If you don’t have one, it may be something you can download and that way you’ll get an38:36-38:40idea of maybe what you may have forgotten. Maybe you didn’t think about something. That’s the whole38:41-38:45purpose of a good tax organizer is one to help you organize, but really also to help you think38:45-38:51about things you might not have put in if you were just taking a stack of papers and doing it. So,38:51-38:56uh, very important to make sure that, uh, is there. So again, you can go to drfriday.com,38:57-39:02book an appointment. Uh, Chris is an enrolled agent. He’s new to the firm. He is also working39:02-39:07in the office. So if you don’t see an opening for me, Chris is great. And he can also handle your,39:07-39:14your taxes. And he’s got as many years, if not more than I have an experience and also an enrolled39:14-39:19agent. So very important, but his calendar or mine, I’m obviously Dr. Friday. So either of us can help39:20-39:24you get your taxes done and also help you understand what maybe some movements moving forward.39:25-39:29You know, that’s what tax planning is all about. Not just throwing numbers on a tax return, but also39:29-39:34determining what the next year is going to be or what your plans are. I’m going to be retiring soon.39:34-39:39I’m going to be doing this soon. You know, what does that really mean and how does that actually39:39-39:44going to work for us? So, um, you know, just have somebody, you know, that you can ask those39:44-39:49questions because I know I’ve had more than one that has ended up in my office after, you know,39:49-39:54using other services and the people might be good at putting numbers on a tax return. Um, I don’t39:54-39:59think that probably takes a whole bunch of talent, but they don’t ask a lot of questions. They don’t39:59-40:04go into was your plans to do a conversion or have you thought you have an NOL so maybe you should40:04-40:09think about cleaning up this or I’m not a financial planner and I want to put that out there right now40:09-40:14I don’t do financial planning I can tell you what a Roth or a traditional IRA or a SEP might save you40:14-40:20in tax dollars I will not be able to tell you where to invest or what to do with it I can help you save40:20-40:25tax dollars all right we got enough time for Alan hey Alan if you want to join the show we can uh40:25-40:30see what we have. What can I do for you, boss? Yeah, thanks for taking my call. Yeah, I just40:30-40:37wondered if you’re on Social Security and you own your home, but you’re not making a whole lot a40:37-40:44year. Is there any forms that you can turn in to do with your property or anything like that to40:44-40:48get some type of refund? Some counties, yeah, that’s a great question. And I know one of my40:49-40:55regular clients, she called the other day and she’s always just a little bit too much. But40:55-41:03dollars in Davidson County. I’m sure, Williams, where you can freeze your property tax. And I don’t41:03-41:08know the form, to be honest, but I would go to the property tax collectors and call them and say,41:08-41:14hey, do you have any kind of, normally I think you have to be usually over the age of 65 or legally41:14-41:19disabled, and then you have to own the house, obviously. And then I think all of your income,41:19-41:25and they take 100% of Social Security, also tax-free savings bonds, things that may not be on41:25-41:32tax return, but still income to you. Um, and they add all that up to get you qualified. Um, so,41:33-41:38um, yes. What County do you live in, Alan? Uh, where, where, where, where you can see County.41:40-41:45Yeah. So you would go down to the, uh, the old school down there in Franklin is where the property41:46-41:50property tax assessor is. And, uh, or you can get them on the phone. You don’t have to go there41:51-41:54personally. Uh, but I would give them a call Monday and just see if they have anything that41:54-42:00will help freeze the property tax. I’m 99% sure they do. I just don’t know what the dollar amount42:00-42:06is that they use, how low it is, you know? Yeah. Okay. Yeah. I was also wondering, do we need to42:06-42:13file income tax form when you’re on social security? No, great question. If you only have social security,42:13-42:18you’re not required to file taxes. All right. Well, thanks for taking my call.42:19-42:24Sure. Thanks for calling. I appreciate you, Alan. So that’s a great question. And I do know now is42:24-42:30the time, if you are a person that might qualify for the property tax, again, I have one client every42:30-42:37year. We try to do it. Some years we get fortunate, but most of the years not. But it is now. I think42:37-42:42you need to start thinking about that now. I think we actually pay our property taxes at the end of42:42-42:47this month. If you haven’t got them on escrow, pretty sure they’re due at the end of the month.42:48-42:53So, you know, you want to go in and see if you’re, if you have them froze or not. Also, if you are a42:53-43:00single member LLC or a multi-member LLC that has residential rentals only in your LLC, which a lot43:00-43:07of us do, you want to make sure you go to your 10 tap and qualify for the exclusion for residential43:07-43:13rentals so that you don’t have to pay F&E tax. So if you haven’t done that already, you need to do43:13-43:17that. So that way you, you know, you don’t have to file F&E and you don’t have to pay whatever43:17-43:24the dollar amount, but this is only for residential rentals. If you’ve got commercial or farm or any of43:24-43:29the others, it doesn’t apply in the same way. There are some farm ones as well. Commercial rentals do43:29-43:34not fall and you have to file franchise excise. So again, all these questions, all these different43:35-43:41things, we are winding down the show. Another wonderful, beautiful Saturday, actually. I got a43:41-43:46chance to go out with, I’m going to call him a beekeeper. I’m getting into bees. Some of you guys43:46-43:53may be into them as well. And I had one of my first true upfront experience with beehives and43:53-44:00how they’re actually maintained and done. And Craig was awesome. And he works with Heroes for Hives,44:01-44:06which is working along with the military. So you’ll probably hear more about that as I find out more44:06-44:11about that. But it sounds like a wonderful, anything that works with, as far as I’m concerned,44:11-44:15bees and that kind of thing, I like to learn more about it. So if you guys know more about it,44:16-44:19You can also share them with me as we learn about bees here.44:19-44:23I know nothing to do with taxes, but you know, sometimes you got to get out of that tax window,44:24-44:26just get your brain refreshed so you can go back in and enjoy it.44:26-44:27So, okay.44:27-44:28So we’re getting down.44:28-44:35If you want to call my office Monday morning, you can at 615-737-9986.44:36-44:42615-737-9986 is the direct number to my office.44:42-44:47Again, you can go to drfriday.com, make a tax appointment, set up a tax consult.44:48-44:49We do do Zoom meetings as well.44:50-44:53I prefer face-to-face, just my generation, I suppose.44:53-44:56But we do phone calls or Zooms as well, and you can choose that.44:56-45:00Also, you can email friday at drfriday.com.45:01-45:04We’ll do our best to get to those questions as fast as I can.45:04-45:07During this time of the year, I will tell you I’m often running days behind.45:08-45:11But one of us will get to it and do something as soon as we can.45:12-45:16So again, that’s Friday at drfriday.com.45:16-45:20My suggestion when it comes to the taxes, get yourself a manila envelope.45:20-45:25Start putting everything or a basket or something where you can label, check off,45:25-45:28make sure you’ve received this year’s information.45:28-45:32I had a couple of people that thought they had this year’s and it was actually 2023 documents.45:32-45:36So check the year on your documents to make sure you have the proper year45:36-45:41and then everything else will fall in place and you’ll be able to get your taxes done relatively fast45:41-45:44once you have all of your documents and everything in play.45:45-45:47If you need help, again, back taxes,45:47-45:49doing individual or business tax returns,45:50-45:51that’s what we specialize in.45:51-45:54Phone number 615-367-0819.45:54-45:55Hope you enjoy this Saturday.45:56-45:57Hope you enjoy the Super Bowl.45:57-45:58Cop you later.

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Dr. Friday explains the benefits of 529 savings plans, including the ability to contribute five years’ worth of gifting at once. She highlights how these funds can grow tax-free for future educational expenses.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

A 529 plan. That is something that I find is great if you happen to have a fairly big family or some very nice grandparents. One of the laws that they’ve passed is that you can actually give up to five years’ worth of gifting into a 529 in one year. So, for example, if it’s $17,000—this year’s actually $18,000—but let’s say they want to give five years’ worth or $85,000. They could do it all at once, not worry about the gifting laws, and put it into that 529 to grow for later, for where your children are going to go to school. Very important. These funds can even be used for secondary or even preschool if necessary.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains various education-related tax benefits, including student loan interest deductions, employee tuition assistance, and tax-free scholarships. She highlights income limits and how 529 plans can help families save for education.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Educational-related tax benefits. Let’s talk about student loan interest. If you make less than $90,000 as an individual, less than $185,000, you will be able to take up to $2,500 of interest. Employee tuition assistance—$5,200 is tax-deferred. If you have scholarships, some of that can be non-taxable and some can be used for tuition and fees. Make sure you’re maximizing these benefits, especially if you have kids in college. It’s expensive! So if you need help understanding what you can deduct and how a 529 plan can help, give us a call at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains what qualifies as a legitimate business expense and highlights common misconceptions. She warns against claiming personal trips as business expenses without proper justification, as the IRS scrutinizes such deductions.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Business expenses. What really is a business expense? Probably the biggest thing that people think about for a trade or business is something that it takes for you to actually do your business. So I have sometimes people that will say they’re real estate agents, and then they say that they’ve taken four trips to other states or other countries to possibly look at real estate, but yet they don’t actually own or have even licenses in those states. Keep in mind, the government isn’t quite that gullible, right? So make sure that it’s a necessary expense, not just something you want to take as a family vacation.

You need help? Give us a call at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday breaks down what counts as taxable income and clears up common misconceptions. She emphasizes the importance of reporting all income sources, including business earnings, rental income, interest, royalties, dividends, and alimony (if applicable under pre-2019 rules). Dr. Friday also warns against misinterpreting new tax laws regarding alimony.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

What is income? I mean, what do we really have to report? What can we just say, “Ah, that’s not really income, so Uncle Sam does not need to know about it?” One would be, of course, the simple things—gross income from your business or W-2s. How about rental income, interest, royalties, dividends, and alimony if it happened before 2019?

I’ve had a number of people come in after hearing that alimony is no longer taxable, so they stopped reporting it—even though they’ve been divorced for 20 years. This is a new law that only affects recent cases, so make sure you’re reporting all your income.

If you need help, go to drfriday.com.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Welcome to another episode of the Dr. Friday Radio Show, where tax expert and financial consultant Dr. Friday breaks down the latest tax updates, answers listener questions, and helps you navigate the ever-changing world of taxation. With the 2024 tax season officially underway, this episode covers key topics such as capital gains taxes, IRS resolutions, filing deadlines, tax credits, and more. Whether you’re filing back taxes, dealing with IRS collections, or simply looking for ways to save on your return, Dr. Friday has you covered. Tune in and take control of your financial future!

Topics Covered in This Episode: Tariffs and Their Impact: Discussion on upcoming tariffs, their potential effect on inflation, and whether they could lead to more U.S. jobs. * 2024 Tax Season Updates: E-filing for tax years 2022, 2023, and 2024 is now open, with key deadlines to keep in mind. * IRS Resolution Issues: The need for more resolution officers to improve IRS collections and reduce unnecessary enforcement actions. * Filing Deadlines & Standard Deductions: Important changes to tax deadlines, standard deduction increases, and tax credit adjustments. * Earned Income Credit Age Restrictions: Explanation of eligibility limits for taxpayers under 25 and over 65. * 1099-K Reporting Thresholds: New $5,000 threshold for 2024, with a planned reduction to $600 in the future. * Capital Gains Tax Concerns: A listener’s question about estimated taxes on a $350,000 capital gain and how it affects Medicare premiums. * Surviving Spouse Tax Filing: How widows/widowers should plan their income to stay within favorable tax brackets. * Electric Vehicle Tax Credits: Updates on tax credits for new and used EVs, including how they can be transferred to a dealer. * Health Insurance Marketplace Issues: Risks of underreporting income and surprise repayment obligations. * Home Sale Tax Implications: How long-term homeowners can exclude up to $500,000 in gains from taxes. * IRA Withdrawals & Tax Consequences:* A caller’s question about missing the 60-day rollover deadline and its tax impact.

Transcript00:00-00:02Paid for by Dr. Friday Tax and Financial Firm.00:03-00:09For tax services, planning, business, and IRS negotiation, visit drfriday.com.00:11-00:12No, no, no.00:12-00:17She’s not a medical doctor, but she can sure cure your tax problems or your financial woes.00:17-00:18She’s the how-to girl.00:19-00:20It’s the Dr. Friday Show.00:24-00:26If you have a question for Dr. Friday, call her now.00:26-00:28737-WWTN.00:29-00:31That’s 737-9986.00:33-00:37So here’s your host, financial counselor and tax consultant, Dr. Friday.00:39-00:46G’day, I’m Dr. Friday and this is the Dr. Friday show where we talk about taxes, which is one of my favorite subjects.00:46-00:56If you’ve got any questions, maybe you’re working on your own taxes or you’re trying to get together all your documentations and maybe something came in and you’re not too sure exactly how that should work.00:56-00:57This is the show.00:57-00:58You can ask a question.00:58-01:02If I don’t have the answer, if we need to do it off the mic, we can do that as well.01:02-01:07Easiest way to get on the show is 615-737-9986.01:07-01:11615-737-9986.01:12-01:17You can also email friday at drfriday.com.01:17-01:19Friday at drfriday.com.01:20-02:10We’re going to start the show off with someone asking me if, and it really doesn’t, in my opinion, has not a lot to do with taxes, more about maybe tax news, the tariffs that go into effect. How is that going to affect, you know, the individual? And to be quite honest, I don’t think anyone really knows. There’s already been tariffs. Many people have a tariff that, you know, 10% to now it’s going to be 25. So $25 on every hundred dollars. It would lead to us to believe that we’re going to have a higher cost, more inflation. That would be the initial guess. Um, if you’re listening to, um, some of the, uh, individuals, they will say that, uh, it opens up the forum for more U.S. jobs, more U.S. product. Therefore they’ll be able to come in at a lower price. We’ll be buying more U.S.02:10-02:31products versus products from other countries. Not sure. Um, it’s too early in the game to find out If that is what actually happens, that is what I know Donald Trump is hoping that if we can level the playing fields, then the U.S. companies can compete, which will create more U.S. jobs and then create a better lifestyle.02:31-02:36So we will find out. But that’s my answer on the tariffs. Not a whole bunch I can do on that.02:36-02:44What we can talk about, which is a lot more interesting as far as I’m concerned, something we can control, our 2024 tax season.02:44-02:45And yes, it has officially started.02:45-02:51We started sending them out on the 27th of January, getting people’s tax returns e-filed.02:51-02:54That also opened up the 22 and 23.02:55-02:59So if you’re filing back taxes, you now can actually file 22, 23, and 24.03:00-03:01They allow us usually three years.03:01-03:07The rest of the years have to be mailed in and dealing with that issue.03:07-03:11I did have an interesting conversation with a person from the Internal Revenue Service.03:12-03:19We were talking about basically what could be changed, what kind of situations can we look forward to.03:19-03:23And I know a lot of people prefer that the IRS be abolished.03:23-03:24Not really going to happen.03:24-03:27It’s a collection company, a very big collection company.03:27-03:38But even if individuals no longer pay income tax, there are still a lot of other taxations that would still need the Internal Revenue Service to be dealing with.03:40-03:41Same thing with the state.03:41-03:48The state of Tennessee doesn’t have an income tax, but they still have franchise excise, business, use tax, sales tax, many other taxes.03:48-03:51So there is still always a need for that kind of situation.03:52-04:07So having more, as far as with the total revenue service, my conversation led to having more resolution officers than we have in collections, because I think a large number of things that are in collections are not always due.04:08-04:43So having something that is more manageable, meaning, so first we actually get a letter saying, here’s the issue, then give us somebody, a human, that we can actually deal with, and then take that to the next level. And once we’ve went through resolution, go to collection. So then their collections are actually viable, because they’ve actually had the opportunity to see if this person really owed the money, instead of just having a computer. And that’s what most of the collection starts out with, spitting out a letter every 14, 20, 30, whatever the periods are, doesn’t really help.04:43-04:57So when you’re dealing with resolution, as I do a lot, one of the biggest frustrations we have is that even with the phone numbers we have to go to the IRS, if somebody’s in collections, you still have to basically go through collections.04:58-05:00And it means you’re not dealing with the same individual.05:00-05:12So if you’re doing something, sometimes it can take hours first to get somebody on the phone to getting someone that can actually help with the resolution and then even having to wait and hope that their manager or somebody can call you back.05:12-05:26So yeah, we need to have, even though people don’t want to hear this, my suggestion was hiring more revenue agents that could actually deal with resolution in that way then or moving some of them over, whichever, we’ll see.05:26-05:29We may have some extra people in the government that have lost their jobs.05:29-05:37So maybe they can move them over to the Internal Revenue Service where they may be able to actually do something that will help all of us.05:38-05:38All right.05:38-05:45So the deadline for the taxes are April 15th this year, which is important because some years they are not.05:47-05:49Sometimes we have other situations.05:49-05:53We did have an increase on the standard deduction.05:53-05:54Every year we get that.05:55-06:00We have the child tax credit, which, of course, a lot of people may not know this.06:00-06:07If you’re age 25 or younger, so 24, 23, you cannot get earned income credits.06:08-06:11Just to let you know this, you don’t even qualify, I believe.06:12-06:12Oh, no.06:12-06:21And then for any individual that may have their grandchildren and you’re 65 and older, you cannot qualify for the earned income credit.06:22-06:30So if your income is very low and you have children that you’re trying to support, sometimes it helps to have earned income.06:30-06:33especially for low income, but that isn’t going to work.06:33-06:39If so, again, 25 or under 65 and older do not qualify for the earned income.06:39-06:42I had a situation where someone had come in, they asked about it.06:43-06:44They’re like, why didn’t I get earned income?06:44-06:52They had gotten it the year before they had turned 65 and they did not realize that there was an age limit on that.06:52-06:59So I think it’s important to understand those so you can make things a little bit easier for you and at least less shocking.06:59-07:05Because you’re used to getting $2,000, $3,000, $4,000 back, and then boom, they’re not getting anything back.07:05-07:06They think something’s wrong.07:06-07:10Nothing’s changed on your side, yet your age made the difference.07:10-07:12So very, very important.07:13-07:231099Ks are coming out, which basically just means that there are a number of individuals where you may be getting those.07:23-07:25It’s going to be $5,000 or more.07:26-07:27That’s what you’re going to be looking at.07:27-07:29And a 1099K comes from the merchants.07:29-07:37services like Square, PayPal, wherever you might actually have a merchant service coming through.07:37-07:39So either way you look at that’s an important thing.07:40-07:46So you probably may get those and don’t ignore them because sometimes people will say, well, it’s not really income, so I’m not going to report it.07:47-07:51If it’s on a 1099k, even if it is not income, you need to deal with it.07:52-07:53You need to at least report it.07:53-08:16You can make the adjustments based on what might’ve been gifts or something else that was there, but it is on that form. Therefore, you need to answer for that to make sure you have what you need and where it’s going. So if you want to join the show, 615-737-9986, 615-737-9986.08:16-08:55Just got an email. Someone says, I haven’t received my W-2s. I was told I was supposed to receive them by the end of January. The answer is you are supposed to, but theoretically, the tax law says that employers supposed to have in the mail by January 31st. So you would have to give them enough time to get it. If they dropped it in the mail yesterday, um, it may not go out depending on, uh, how the mail moves from the business offices, uh, Monday or Tuesday, I would assume that you would have them assuming that your employer is local. Otherwise it could take them a whole week to get it to you. So, um, I had another one asked me, is there something I can do? Can I Sue them for not getting me my information like this.08:56-09:00So first thing I want to point out is that you should have a final pay stub.09:02-09:07That would be good because you were probably given one, assuming you were given one every time.09:08-09:15And if you weren’t, well, then that’s something, if you’re not receiving pay stubs, something you should be doing something right now with it.09:15-09:15Okay.09:15-09:19You should be basically turning around and saying, Hey, I need a pay stub every week.09:20-09:27And then that way, the final pay stub, if you do not have that information, you have the stub.09:27-09:31Now, the thing the stub doesn’t often give us is like the federal ID number of that employer.09:32-09:34So we need to deal with that.09:34-09:40So, hey, let’s hit Danny so that way people don’t have to just keep hearing me talk and we’ll get another voice on the radio.09:40-09:41Can we hit Danny on the line?09:42-09:43Thank you so much.09:43-09:43Hey, Danny.09:44-09:45Hey.09:46-09:47Hey, thanks for calling.09:48-09:48No worries.09:48-10:05I have a capital gain from 24, about $350,000, and I wanted to see about what I’m looking at in the taxes on that.10:05-10:06That’s one thing.10:06-10:07I’ve got a couple of questions.10:08-10:09Well, can I ask you on that one?10:09-10:16When you say a capital gain is $350,000, that is not what you put in the bank necessarily, but that is your actual capital gains, right?10:16-10:19I mean, you purchased something, so has the cost come out?10:19-10:21That is what we have left after the cost.10:22-10:23Yeah, that’s right.10:23-10:26That’s the profit, about $350.10:27-10:31And can you just give me a lowdown, roughly what your other income is, Danny?10:31-10:34Do you have either pension, Social Security, a real job?10:35-10:36Where do you stand?10:37-10:46Other than that, I have Social Security and I have some interest income, and all that’s going to be around 45.10:47-10:48Single or married?10:49-10:50Married.10:51-10:52And does that include her income as well?10:53-10:54The 45?10:54-10:55Okay.10:55-10:55Yeah.10:57-10:57Okay.10:57-11:00So what is your second question while I do some quick math?11:03-11:05I’m going to try to remember it now.11:06-11:06Oh, yeah.11:07-11:16Do you think there’s going to be any changes since we have a new administration before I have to file this?11:18-11:18I do not.11:19-11:19That’s a great question.11:20-11:21I’ve had that asked quite a bit.11:21-11:27And I do not think he’s totally, his tax laws expire at the end of this given year.11:27-11:34I think he’s going to make any adjustments or anything he does, even if he can lower taxes or maintain the tax law.11:34-11:36I don’t think it’s going to happen until 2025.11:36-11:43I don’t believe he’s going to backdate anything into 2024 is my opinion.11:44-11:44Yeah.11:44-11:48So, all right.11:48-11:49So let’s take a look here.11:49-11:57We have with your income, the total income combined, roughly just using some rough numbers here, 395 adding the 45 in.11:57-12:03We all know social security isn’t 100% tax, but for the sake of our conversation and the radio, we’re going to go with the full number.12:04-12:11The first 250 on the capital gains is going to be 15%.12:12-12:18And then the remaining 100,000 is going to be at 18.8.12:21-12:26The 45 is going to almost be washed out with your standard deduction.12:27-12:33So there will be some ordinary income that will hit you roughly at $10,000.12:33-12:37assuming you and your wife are both over the age of 65.12:38-12:42Don’t know if you are or not, but I’m making an assumption since you said Social Security.12:43-12:47So you’re looking at maybe another $2,000 of ordinary.12:48-12:55So you’re looking at $3,750, $3,750.12:56-12:58And then on the other $100,000, $18,800.12:59-13:04So ballpark, you’re looking at about $56,000.13:05-13:09I’ll just call it $60,000 just to be on the safe side for all of the tax.13:10-13:11How’d that come up with your estimate?13:12-13:13I have a feeling you probably already estimated yourself.13:16-13:20Well, I’d count half, and I was coming up with a little less.13:21-13:21Yeah.13:21-13:27I might be on the high side, but I figure I’d rather give you the high number, and then you say, yes, I saved money.13:27-13:32Then it goes to 60 and then you’re under and you’re like, oh, darn, I wish I had set aside more.13:33-13:36So, yeah, I probably I will definitely say I’m on the high side.13:36-13:40But yeah, for simple math, I think that will get you in the right ballpark.13:41-13:45And then when you get ready to do your taxes, because, again, Social Security isn’t taxed 100 percent.13:46-13:48And I kind of threw that all in at one time.13:49-13:54Yeah. That reminded me of another question on my Social Security.13:55-13:59If, uh, what’s it going to do to my social security?14:01-14:02Social security will do nothing.14:02-14:04Medicare is what it’s going to mess up.14:05-14:08Um, yeah, I knew that.14:09-14:11I was just making sure other listeners, I knew where you were going, Danny.14:12-14:15Um, so Irma is what they call it.14:15-14:17Irma is going to come and it’s going to bite you.14:18-14:22Um, it’s going to probably go up by a couple hundred dollars a month.14:22-15:50um and for for 12 months basically so file now and then next year file early and then that that way they base it on the the taxes so that when you file now by the time they get it in the system and make the adjustment it’ll be a few months down then you’ll get a sweet little letter saying oh based on your income you owe us more money we’re going to start taking that out and then for 12 months that’s going to happen uh but i would say it’s going to hit you and your wife most likely well once before we had this uh capital gain like this it was wasn’t this much but uh the way it worked that time after i filed i found out i made the the gain they didn’t do anything until the january of the next year like if i do the same this time maybe i know it seems the same distance and you’re you’re you’re going to be over because i think you can make about 220 you and your wife i’m saying you know before you hit the next um bump up but at what you’re at which is at least 353 whatever it’s going to be after your standard deduction um but it may they may wait to the following year i’m not exactly sure all i remember is when my clients call and they basically say oh yeah um they you know this happened so i’m glad you brought that up irma can be extremely uh painful when you have these situations.15:52-15:52Yeah.15:53-15:56The last time they waited till the next year.15:57-15:57Okay.15:57-16:00Well, I do appreciate your help.16:00-16:00Thanks.16:01-16:01All right.16:01-16:01Thanks, Danny.16:02-16:02All right.16:02-16:03We’re going to have to take a quick break.16:03-16:06When we come back, Rita, if you can hold through the break, I’d appreciate it.16:07-16:08This is the Dr. Friday show.16:08-16:08We’ll be right back.16:11-16:11All righty.16:11-16:13We are back live here in studio.16:14-16:15Let’s get Rita on the line.16:16-16:18You can get enough to hold through that time.16:18-16:19Hey, Rita, what’s happening?16:20-16:21Hey there.16:21-16:25In January of 24, my husband sadly passed away.16:25-16:30And so I’m filing jointly this year, which I understand all that.16:30-16:34So this next year for the year of 2025, I’ll have to file as single.16:35-16:48And it looks as though that the schedule, if you make $48,475, that’s the maximum that I can make and still get a 12% tax bracket.16:48-16:53With filing jointly, it’s a very large range for 12%.16:53-16:57And I live on mutual funds and Social Security only.16:57-17:05So my question is, should I this year try to just take less money so it won’t go over the 48, 475?17:06-17:10Well, the 48, 475 is after the standard deduction.17:10-17:13So first I want you to add in the standard deduction.17:14-17:19So when they’re looking at it, they’re already taking out, which is what, 14, I don’t know how old you are.17:19-17:25So it’s like 14,000 something if you’re under 65 and it’s like 15 something if you’re over.17:25-17:27And I should know that number.17:27-17:29I just don’t have it as my cheat sheet right here, right this second.17:30-17:31So let’s just take it safe.17:31-17:33You can add $14,000 to that.17:34-17:38And then on Social Security, only 85% of that is taxable.17:40-17:45So if you’re making, you know, $10,000, only $8,500 of it would be taxable.17:45-17:47So you might want to add that back.17:47-17:48Whoops, did I lose, Rita?17:49-17:49I think I did.17:51-17:55So that would be the two situations that I would look at.17:55-17:58Could you start over, please? You got cut off.17:59-18:00Are you still there, Rita?18:01-18:02I am now. Start over, please.18:03-18:04I am so sorry. I looked down.18:04-18:12Okay. So I said the first thing you want to do is you want to add back in the standard deduction for the year of 2024.18:13-18:21So that way that would be $14,600 if you’re under 65 and an additional $1,500 if you’re over 65.18:22-18:29Okay, hold on. I’m 81, so you’re telling me that I can deduct $19,000 instead of $30,000.18:30-19:00So $16,000, you can deduct $16,100. I’m sorry, let me clarify this. You said $48,475 was what a single person can earn. I want you to add $16,100 to that when you’re looking at your numbers. That the numbers for the tax code, they’re backing out the 0% tax. So the 0% is the standard deduction.19:00-19:06Okay. So technically I could make 32,000 and still be in the 12%.19:07-20:06Well, you can make 64,000 and still be in the 12%. Yes. That’s where I want to go. And then on top of that, you also look at your social security. So if you’re making $10,000 in social security, only 8,500 of that is taxable. So you have 15% of that social security. When you’re, when you’re looking at the total number, 15% of that is not taxed. They can only tax 85%. So I’m just giving you a little with mutual funds and interest. Sometimes things go up or down, but I’m just saying you’re probably closer to 65, 70, depending on how much social security you make that you can earn and still be in the 12% tax bracket. Okay. Cause I don’t want to go to another one. Thank you so much. Thank you. Bye-bye. Okay. So that was a fun one. All right. Let’s Rita get back on the road there. If you want to join the show, you can 615-737-9986. 615-737-9986.20:07-20:11Taking your phone calls, talking about my favorite subject, which is taxes. It’s what we love to do.20:13-20:21And we’re finally back in our season. It seems like a lot of times I’m like, oh, we’re preparing or we’re filing for extensions or we’re finally back in October, right?20:21-20:23We were finally finishing up 2023.20:23-20:27So we are just starting the 2024 tax season.20:28-20:38Some people will call it the 25 tax season because it’s 25, but I like to think of the year I’m actually filing the taxes, not necessarily the year that people are doing them in.20:38-20:42So if I’m confusing you, we are in the year of 2025, preparing tax year 2024.20:44-20:51So we have a few things that did get up to $7,500 on electric cars, brand new electric cars.20:52-20:56You can get $4,000 on a used electric car.20:56-21:00Now, these are for individuals that are using them for personal use, right?21:00-21:03Not for anything else, just personal use.21:03-21:09Effective, the 17th of 2020 final assembly of new cars must be in North America.21:09-21:16So if you brought a car that was not fully assembled here and it’s a new car, then it won’t qualify.21:16-21:18I would always suggest go to irs.gov.21:19-21:23You can search under the search engine for tax credit electric cars.21:24-21:30It will pull up all the manufacturers if you qualify, how much you might qualify for, allowing you to do that.21:31-21:40New in 2024, you may be allowed to transfer the allowable credit to an eligible dealer to reduce the amount owed on the purchase of the new or used car.21:40-21:41It’s kind of interesting.21:42-21:43Be interesting if that actually works.21:44-21:45I guess we have a new car person.21:46-21:48We’ll find out if that’s the case at some point.21:48-21:58Also, energy credits for the home, non-business energy credits for energy efficient property and residential economy credits for solar equipment was increased.21:58-22:01So you are going to still be able to do that.22:02-22:07And then extensions for the marketplace insurance are still out there.22:07-22:10I will be honest, guys, I’m not a huge fan of the marketplace.22:10-22:12And it’s nothing to do with the insurance.22:12-22:13I’ve never used it.22:13-22:14I don’t have it.22:14-22:16What I have an issue is it’s based on income.22:18-22:26So if you happen to have a really good year and or just as that gentleman, Danny, I called earlier, let’s say he was on the marketplace.22:26-22:29I know he said he’s over age 60, but let’s say he was on the marketplace.22:30-22:31And then somehow you sell something.22:31-22:37Next thing you know, all the money that you would have gotten credit for, your income is too high.22:37-22:38And now you have to pay back.22:38-22:55I’ve had people have to pay $20,000 to $30,000 back to the marketplace because of something just like that, where their income changed enough to make it where they didn’t get any credit and they had to pay back the money that the state had paid for them on their insurance.22:55-23:25And that’s a lot of money when you don’t think about it, right? So if you’re going to be in the marketplace, my suggestion is always overstate your income. You will get some credit back on your tax return if you’ve overstated it, unlike the other way where you have to pay it back. So I understand it’s nice to pay zero or $15 for health insurance, but at the end of the year, not so nice when you have to pay three or $4,000 in additional taxes because of it, especially if you’re already basically on the line for finances, right?23:25-23:30So just want to make sure you understand marketplaces, I mean, I’m not necessarily pro or con against it.23:31-23:36I just don’t like the way it works that directly with your finances and that creates a tax burden.23:37-23:42And then it becomes a tax situation because now you owe the IRS money, which are not the best loan offices.23:42-23:51Much better to owe a credit card company that you can take into bankruptcy versus the IRS, which takes you 36, I think it’s 33 months before you can take them into bankruptcy.23:52-23:56Okay, so we’re going to take another break here, get us back on the proper time clock.23:56-24:07You can join the show when we come back at 615-737-9986, 615-737-9986.24:08-24:15Or you can just go to the web if you’d rather text or email, at least email, fridayatdrfriday.com.24:15-24:18We’re going to be right back with the Dr. Friday Show.24:20-24:24All righty, we are back here live in the studio.24:24-24:29So if you want to join the show, you can at 615-737-9986.24:30-24:34615-737-9986.24:34-24:38Taking your calls, talking about, oh, my favorite subject, taxes.24:39-24:41Again, I wanted to get back on that 1099K.24:41-24:42I don’t want to confuse anybody.24:43-24:48Starting in the year of 2024, the taxes were, you know, obviously you’re filing now.24:48-24:51Anyone meets the threshold of $5,000.24:53-24:58It will then lower to 600 threshold and next by the American Rescue Plan.24:58-25:10But right now in 2024, if you have marketplaces of any sort, PayPal, Square, any of them, they’re going to send you out because of the delays.25:10-25:18Obviously, we hadn’t had it, but don’t be surprised if you have sold things and $5,000 or more, and it doesn’t have to be in one transaction.25:18-25:44is over the entire year, $5,000, then you need to make sure that you’re putting that in to your income. So, you know, just, just again, making sure that you guys are following that kind of concept and making sure earned income credit for children up to with a family with three could be as much as $7,830. I already covered the fact that you cannot be under 25 or over 65 to qualify.25:45-25:54The child dependent care credit in 2024 is 1,050 for one child, 2,100 credit for two or more children.25:54-25:58So, you know, that’s not limited.25:58-26:04You have the college students, the American Rescue provided certain students, 21 through 2025.26:05-26:31I do want to reiterate almost all the laws that we have in effect right now that I’m talking about, the ones for the credits, the ones for the childhood, all those will expire December 31st, 2025. So we will be watching to see if anything’s going to change. You still have the college credits and there is some investor credits, cryptocurrency tax calculator. They have now on the website.26:31-26:37I think that’s kind of pretty cool. The IRS is now trying to help people do the calculations.26:38-26:43So, so again, just, you know, I mean, obviously crypto is very, very confusing.26:44-26:47We don’t know what’s going to make a difference or not.26:47-26:51And we want to make sure that you have all the right information.26:51-27:01So you, you, again, if you’re a Lyft driver, if you’re a freelance blogger, you know, you want to make sure that you are tracking the proper expenses.27:02-27:07And, you know, again, you know, Lyft and Uber provide miles.27:08-27:15So unless you have a mileage log that tells otherwise, that is the information that the government’s going to use.27:15-27:21Because unless you’re using mileage IQ or some other mileage situation, you need to be tracking.27:21-27:24It’s the number one deduction that the IRS is auditing, right?27:25-27:27I mean, everyone always acts like home offices.27:27-27:29That’s like so long ago.27:29-27:40People don’t really even worry so much because they did the simplified $5 per square foot up to 300 square feet, or you can take the fiscal expenses depending on how large your office is and how much money you’re spending.27:41-27:43But when it comes to miles, it’s straight out, people.27:44-27:56Miles are miles, and you’re going to need to make sure that you are tracking those properly and you looking up and saying, oh, I think I did about 60,000 miles.27:56-27:59I think I did this.27:59-28:00That’s not really going to fly.28:00-28:02IRS wants to see an actual log.28:02-28:03They want to know what kind of business you did.28:03-28:04Why did you drive there?28:05-28:08And I mean, now it’s 70 cents a mile in 2025.28:10-28:10That’s pretty healthy.28:11-28:23So again, if you are a person that used mile, there’s a lot of companies, real estate agents, something I talk to them a lot about, not just so much because some, they’re afraid they don’t do any, right?28:23-28:28They’re not gonna track a mile because they just don’t know what they’re tracking or where or why.28:28-28:34So they’re leaving theoretically 67, 68 cents a mile or 70 cents a mile on the table.28:34-28:35And that can add up a lot.28:35-28:38I mean, that’s, you know, thousand miles.28:38-28:41You get what, $700 or 700 miles?28:41-28:49That’s $700, excuse me, which is a deduction, which means that your tax bracket, you’re still saving a couple hundred bucks.28:50-28:58Very, very important to know how to track it, what to do about it and make sure that you understand this is going to make more money in your pocket.28:58-29:03Sometimes people get all hung up on meals and entertainment.29:03-29:05Well, there really isn’t entertainment on the table right now.29:05-29:11Meals can be, but to be honest, most meals that are deducted have to meet two criterias.29:11-29:20One, you are traveling out of town, you’re staying in a hotel, and you need to, for business, and you’re deducting those meals because that is what you have.29:21-29:31Or you have met somebody that you are taking out to dinner to discuss business, Um, and it night, nine times out of 10, I’ll be quite honest with you guys.29:31-29:35We really do not want to be taking your spouse, even though that may be your partner.29:35-29:39I’m not saying you can’t do that quarterly, but every week it becomes date night.29:40-29:44So just be consistent, make sure you’re documenting.29:44-29:57And even if it is something that you, you are family membered, um, or you’re taking them out, there’s nothing that says in the tax law, you can’t do that, but it would be very important if you ever run into an audit to be able to document these were the things we discussed.29:58-30:43This was the discussion at the table. It wasn’t date night, especially if you start doing that very consistently. So it’s not that you can’t do it, but doing it properly is what’s going to save you money because if you get audited, it’s not going to work well. All right. So if you’ve got questions, maybe you have inherited property, maybe you’ve sold something and you’re not too sure how to work the basis. Been talking back and forth with a young lady here where, um, uh, shorten it out. Basically her parents put her sister and her on the, uh, title of a piece of property. I’m not big on quick claiming property with your kids because it’s better for them to inherit. But in this case they wouldn’t have. So anyways, um, mom passed away, became all three.30:43-32:09the father was still living father and the two children the father sold the property therefore they each got a percentage but there is no step up in basis in this kind of scenario so understanding and this is really for even a lot of my clients that may own the property take the time to try to backtrack into how did you get that property was it inherited from your parents therefore the step up in basis would apply the year that the parent passed away. Did you purchase it? Was this a out purchase? And if so, do you not have the closing documents from that? And if you don’t, I mean, a lot of that is filed in the courts or not the courts, at the courthouses and title companies, all of them are often filed. And normally it’s actually reported. If you go back and do a search at an address, it will give you the dates that it changed hands on the situation. So it is important for you to the owner of those properties to have how much money you paid for them. And in some cases, were they rental properties? Have they been changing? You know, was it just that? Did you have depreciate anything on that property? It just, it’s all very vital because like in this case, She doesn’t, they’re trying to backtrack, finding out how much money that was originally paid for, what we had, where we’re going, and then figuring out where it’s got.32:09-32:17But it is important because otherwise, you’re basically going to have to go back to the year that was purchased and maybe use property tax assessment.32:18-32:25If you purchased it, if you inherited, that would be the value of the property at the date that you inherited.32:25-32:27All right, let’s see if we can get Ben on really quick.32:27-32:29So we got to have four minutes for the next break.32:29-32:30Hey, Ben, what’s happening?32:31-32:34Okay, it’s good to hear you talk to you, Dr. Friday.32:34-32:35Question for you.32:36-32:38I bought a place this year.32:38-32:39I mean, I already have one.32:39-32:41I’m in the process of trying to sell.32:41-32:42Well, I actually bought it last year.32:42-32:44I’m trying to sell the one we currently have.32:46-32:52And so when you sell it, how long do you have before you have to…32:54-33:01So the tax on it, Ben, is the house that you’re wanting to sell, Have you lived in it and how long have you lived in it?33:02-33:02Oh, yeah.33:02-33:03We’ve lived in it.33:03-33:03We’re still living.33:03-33:06We’re working on the other house where we can move in.33:06-33:07So several years.33:08-33:08Okay.33:08-33:10Two out of the last five at least?33:11-33:11Yes.33:11-33:12Okay.33:12-33:13So the tax law is this.33:14-33:14And you said we.33:15-33:15So are you married?33:16-33:17Yes.33:17-33:17Okay.33:18-33:28So whatever you paid for that house, add another $500,000, and then whatever is left would either be taxable or you’ll be negative and you won’t owe any tax.33:28-34:25okay so we don’t have any reinvestment loss okay my other question is on the place that we bought we pulled some money out of the ira for down payment okay and i wasn’t able to meet that 60 day window so last year we’re pretty tough year trying to sell stuff i agree uh yeah especially when you got some land to go with the house when you got like more than five acres it’s a real challenge sometimes. So anyway so I wasn’t able to get the money back in the IRA before the 60-day limit was up. So I’m over 65 so what does that do for me from a tax standpoint? Well the good news is no penalty. The bad news is whatever you had to take out depending on your other income you know I’m assuming you have, you said you’re over 65.34:25-34:33So I’m assuming you have social security, maybe a pension or maybe take RMDs, whatever you live off of normally.34:33-34:40You just have to add that on top and whatever that, do you have a ballpark, Ben, of what your normal income is, what you usually would file just in the ballpark?34:43-34:45Yeah, I mean, but I’m still working, so I’m not drawing social security.34:45-34:46Oh, okay.34:46-34:47So you still got a real job too.34:48-35:20So whatever that is, you’re probably going to be looking at 20, I mean, again, not knowing you been i’m gonna guess that you’re gonna put yourself in a different tax bracket so probably 24 percent depending on your total income but with a real job possibility of um do you do you take social security and have a real job or are you you pushing your social security out because you’re not yet 70 i’m pushing it out because i’m not yet 70 okay well well i wasn’t sure if you’re doing both Sometimes people have a job and work, you know, get Social Security.35:20-35:30But so, again, not knowing how much you took out, I’m going to guess that you’re going to be looking at at least another 20% on top of what you normally pay.35:30-35:33So, you know, hopefully you have to take a whole bunch out.35:33-35:36But that’s a totally winging it conversation.35:37-35:38I understand.35:38-35:44Well, I had to take out close to, you know, over 50K.35:44-35:45I’ll phrase it that way.35:45-35:48And how much are you making on your W-2 nowadays?35:49-35:49Just ballpark.35:49-35:51You don’t have to give me the exact dollars or anything.35:51-35:51Ballpark it.35:52-35:54Ballpark, you know, we’re talking like 100.35:55-35:55Okay.35:56-35:56Does the wife work?35:58-35:58No.35:59-35:59Okay.35:59-36:01Is there other income that comes in the house?36:01-36:04Again, interest, dividends, capital gains, investments.36:05-36:06Not enough to make a difference.36:06-36:08I mean, we’re talking, you know.36:08-36:08Okay.36:08-36:37So if you’re looking at 150, taking that out, you’re you’re you’re still going to keep yourself roughly of being a big chunk of that i would go with 20 so you’re oh you might owe about 10 grand ben that would be worse scenario on the numbers you gave me right maybe this just depends maybe less okay yeah we’ll hope for less all right Yes, we hope for less.36:39-36:39Exactly.36:39-36:43We hope for less, but I want to prepare you for more because you never know.36:45-36:45Okay.36:45-36:46All right, buddy.36:46-36:47Thanks for calling.36:47-36:47Thank you.36:49-36:49Thanks.36:49-36:51All right, we’re going to take another break here.36:51-36:52When we get back, we’ll be our last break.36:52-36:57If you want to join the show, you can at 615-737-9986.36:58-36:58We’ll be right back.37:00-37:01All righty.37:01-37:05We are back here live in studio for the last part of the show.37:05-37:08So if you’ve got a question, now would be the time to pick up the phone.37:09-37:12615-737-9986.37:13-37:18615-737-9986.37:19-37:23If you’re not sure who I am, I am Dr. Friday and enrolled agent licensed.37:25-37:27is for close to 30 years.37:28-37:31Basically here to help you think about what your tax question is.37:31-37:34If there’s something on here, that’s why you hear me give people estimates.37:35-37:40You need to talk to your tax person to confirm because anything I talk is more generic.37:40-37:43I want to make sure people are thinking, what should I be doing?37:43-37:44What could I have?37:44-37:45What could I be changing?37:46-37:46Whatever.37:46-37:52I want to make sure that the information that you’re going to do, you’re not just going out there and making decisions.37:52-37:54Because sometimes, you know, I’ll be quite honest.37:54-38:06Just like I was talking before the break about a young lady that her father and mother added the children on as a quick claim, thinking they were sharing something with their kids.38:07-38:13So if something happened, the money would go directly to them, which would have been better in a will or even better in a trust.38:13-38:15I am an avid believer in trust.38:15-38:18I don’t believe everyone should have to have everything in the will.38:18-38:41But, um, but in my opinion, that way they got to step up in basis and it would have been a tax free or the father, if you wanted to sell it, I mean, probably better because the tax brackets would be lower, but it’s just, if you quick claim, and I have people that do this to their parents will quick claim them on their homes on their, you know, there is power of attorneys.38:41-40:13So if you’re afraid that the children, um, won’t be able to access the bank accounts, get a power of attorney, um, um, financial power of attorney, I think is what they refer to it as you should all have financial power of attorneys. You should have, um, medical powers, attorneys, you should have wills. And I don’t care how old you are. I don’t care if you’re, if you’re on your own and you’re out there working and doing that, everyone should have those things, especially if you have parents and your young children, you know, um, I love the ads. I don’t, I think it’s for like legal zoom or something, but the ads are awesome because the one guy sitting there and he tells his son, Hey, son, if anything ever happens to me, you’re going to get this car. But he tells him, right? Tax. I mean, the law says you can’t just tell somebody you have to have it in writing. It’s a lot like taxes, right? If you want to take a deduction, you need to have proof of that deduction. Same thing with the law. So again, this has nothing to do with taxes, but so often the taxes will feed back into financial planning and therefore estate planning. So if you have nothing better to do, you might want to consider calling an attorney or talking to your financial advisor to make sure that you have covered all those bases. Because if something happens to you, I guarantee you, the state of Tennessee does have a plan for you. And unless you want your children to inherit what you thought your spouse would take and then take care of the children and give them, It doesn’t always work that way. So again, I’m not an attorney. I don’t know all the ins and outs.40:13-41:09What I do know is if it’s not in writing, then you’re going to have some problems later in life, or you can even be leaving a hardship onto the people you love. So making sure you’ve got all that covered. If you want to set up a tax appointment at our office, you can do that easily at drfriday.com. Click on schedule. Either Chris or myself is available. Just find the dates, pick up a time, go for it. Also, if you need help doing back taxes, obviously, you know, been doing this a long time. Sometimes something happens and you haven’t filed your 21s or you haven’t filed 18, 19. We do have to go back a minimum of six years to stay in compliance. And They’ve already assessed them. You either need to file a return so you can get the proper number in there one way or the other and then make a deal with the IRS.41:09-41:17It isn’t, you know, a lot of times there’s a lot of companies out there and they will tell you how they can settle 10 cents on the dollar.41:17-41:21They can do. And I’m not going to tell you, we have settled for 10 cents on the dollar.41:21-41:26But the typical situation is those people do not own any real estate.41:26-41:59Those people do not have any 401ks or retirement. They’re living paycheck to paycheck. They are renting a facility or a house or apartment. So it’s not hard to file for those individuals when it comes down to it because they have very little that the IRS can do anything. If you have a home with equity in it, if you own a second place of a rental or even land, theoretically the IRS, If you owe the IRS, they can make you or they can seize that property in exchange for the money you owe them.41:59-42:05And they’re going to do it for a fast sale. Right. They’re not going to wait and try to sell it for what it could be worth.42:06-42:10One, they’re only looking for what they need to their they’re in.42:10-42:14No, they’re not real estate people. They don’t care to become real estate people.42:14-42:18So they’re not going to make that in a big deal for them.42:19-43:12And they don’t, you know, if the land doesn’t cover the debt, they’re going to just keep holding out for other things. So you need to think about all of that. If you have an issue with the IRS, make sure you’re talking to somebody that’s going to take the entire spectrum of what is required, not just get a salesperson on the phone and say, oh yeah, yeah, we can do that. We’re going to take care of you. We can do this. And they don’t even have any idea because every time I’ve ever talked to anyone that’s went with some of these big box locations. All they’ve done is basically tell them, hey, I haven’t filed taxes for a number of years. I don’t know for sure what I owe, or I’ve gotten letters and they’re saying I owe all this money. And then they base it based on what you owe the money. So if you owe 50 grand, they’re going to say you need to pay us 5,000. If you owe them 100 grand, it’s going to be 10 to $15,000. And it could be easier work for the guy that owes 100, than the guy that owes 50.43:12-43:13That doesn’t come into play.43:14-43:25They base it based on what they think you owe them and then how much they think you can afford because you’re going to say, well, heck, if I can pay $10,000 and not have to pay the government, that’s not the way it works either, may I point out?43:25-43:27But it sounds good on paper.43:27-43:31So again, if you have IRS issues, I’m an enrolled agent, I can help you.43:31-43:39But more importantly, if you have tax things, let’s get you on the calendar so we can make sure we can get you filed and stay in compliance.43:39-43:40And then we can move backwards.43:40-43:45We can always take care of other situations, making sure everything is going right and follow up with it.43:45-43:51So if you’ve got questions on that, you can always email Friday at drfriday.com.43:51-43:53Yes, my first name is Friday.43:54-43:55You can thank my father for that.43:55-44:00Friday at drfriday.com or you can just go to the web.44:00-44:03You can also send questions or anything through there, which is drfriday.com.44:04-44:10You can also book your appointment, find out who this crazy lady is just in case you don’t or haven’t heard me in the past.44:11-44:19And then if you want, you can also call our office Monday morning at 615-367-0819.44:19-44:22Let’s make this year the year that you file your taxes.44:23-44:31You make sure you’ve dealt with it because I’ve just done two different people with multiple years and both of them had refunds back in 2020.44:32-44:33Well, that sounds great, right?44:33-44:34Refunds.44:34-44:35I can’t get that refund.44:35-44:37It’s outside the collection period.44:37-44:42That means you can only go back three years, 22, 23, 24, right?44:43-44:48So you might be able to get some depending on the other, but basically you’re looking at three years.44:48-44:53If you get a refund from any time prior to that, then you’re not going to get it.44:53-44:58So you’re leaving money on the table in fear that you might owe money here or there.44:58-45:02Well, it’d be nice for the government to take that money and pay back something you might owe.45:02-45:06It’s not going to happen if it’s outside those three years.45:06-45:09So maybe thinking, do we need to go ahead and get caught up?45:09-45:14So that way, maybe if there is any money to be had, you could actually get it.45:15-45:20Again, in 20 and 21, there was also stimulus money that still people never got.45:20-45:23You can get that when you file the tax return.45:23-45:26You get it applied, at least against the money you owe.45:27-45:29So it’s not refundable because it’s outside the collection.45:29-45:33But these are the kinds of important things you need to understand.45:33-45:39Getting organized and getting straight with the IRS is going to make your life so much easier.45:40-45:42And also think about if you have children, FASFA comes.45:43-45:46In fact, a lot of you guys are dealing with that right now because I’ve gotten several calls.45:46-45:47I need my taxes.45:47-45:50I need to get something so we can get our kids lined up for FASFA.45:52-45:53They are using the prior year now.45:53-45:56So as long as you file 23, you’re fine.45:57-46:0824, they’re giving us a year now because it used to be we had to have it filed by like January 27th when it opened so that the parents could get the children onto the fast. Not going to be a big deal.46:09-46:33Anyways, just make sure if you need help, you can call us at 615-367-0819, 615-367-0819. You us out on the web at drfriday.com drfriday.com cop you later!

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The 1099 filing deadline has passed—did you file yours? Businesses must issue 1099-NEC, 1099-MISC, and 1099-INT forms for payments over $600. However, corporations with “Inc.” in their name are exempt. Ensure compliance to avoid IRS penalties. Need help? Call Dr. Friday!

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The 1099 filing deadline has passed! Make sure you’ve sent out all required forms, including 1099-NEC, 1099-MISC, and 1099-INT. Businesses must issue 1099s for any payments over $600 to contractors or service providers.

If you paid a corporation (one with “Inc.” in its name), they are usually exempt, but they must provide a W-9 form to confirm their status. If you haven’t filed your 1099s yet, get them done now!

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Nonprofits and 501(c)(3) organizations must file Form 990 annually to maintain tax-exempt status. If a nonprofit fails to file for three consecutive years, it will lose its exemption. The IRS provides tools to check compliance, so verify your standing today. Don’t risk losing your status—file on time! Need guidance? Call Dr. Friday.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

If you work for a 501(c)(3) nonprofit, make sure you’re in compliance! The IRS requires nonprofits to file Form 990 every year. If you fail to file for three consecutive years, your organization will lose its tax-exempt status.

You can check your standing on the IRS website by searching for your organization’s name under Tax Exempt Status. If you’re not listed or marked as non-compliant, you may need to take action.

Need help? Call me today.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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If you or your child is in college, don’t miss out on valuable education tax credits! To qualify, you need Form 1098-T, which details tuition payments, scholarships, and grants. Additionally, if you have a 529 plan, make sure all distributions are properly reported. Education expenses like housing and meals may also be deductible. Need assistance? Call Dr. Friday at 615-367-0819.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

When preparing your tax forms, don’t forget about college expenses! Many people qualify for education tax credits, but you’ll need Form 1098-T to claim them. This form shows how much tuition was paid, as well as grants and scholarships received.

If you have a 529 plan, ensure you report the distributions correctly. Keep in mind that while tuition is covered, housing, food, and other education-related expenses may also be deductible.

Need help? Give us a call at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Tax season is in full swing! If you haven’t made your tax appointment yet, visit drfriday.com and schedule one today. Before filing, ensure you have all necessary documents, such as 1099-B forms (which may not arrive until late February). Filing without all your documents could lead to amended returns—a costly and time-consuming mistake. Stay organized and file correctly the first time! Need help? Call Dr. Friday at 615-367-0819.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

We are busy working on taxes! If you haven’t scheduled your appointment yet, go to drfriday.com, click on the calendar, and book a time so we can help you. If you’re new to our services, give us a call at 615-367-0819, and let’s see how we can assist you.

When preparing your taxes, don’t rush! Make sure you have all your documents, or you may end up needing to file an amended return. For example, 1099-B forms—which report investment income—often don’t arrive until late February. Filing without them could cause major issues. Be patient and make sure everything is in order before submitting your return.

If you need help, call my firm today!

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Waiting for a 1099 form before reporting your income? That’s not how it works! The IRS requires you to report all earned income, regardless of whether you receive a 1099 or not. Even if someone pays you in cash or provides payments in another form, it’s still taxable. Audits can uncover unreported income, and the IRS can retroactively issue 1099s for past years. Stay compliant and report your income correctly. Need help? Call Dr. Friday at 615-367-0819.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

If you are waiting to receive a 1099 before figuring out how much money you earned for the year, let me tell you—that’s not how it’s supposed to work. It doesn’t matter if you receive a 1099 or not. I’ve seen cases where people were audited, and after reviewing past records, the IRS went back three years and reissued 1099s. This caused major tax issues for those involved.

Remember, tax law states that any money you earn must be reported unless it’s tax-free income. Whether you’re paid in cash, checks, or another form, it’s still taxable. Don’t risk an audit by underreporting!

If you need help, call my office at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Casualty loss deductions have changed significantly over the years. Previously, if your insurance didn’t fully cover a fire or other loss, you could deduct the remaining amount on your taxes. However, under current tax law, you can only claim casualty losses if they are related to a federally declared natural disaster. If you’ve been affected by a qualifying disaster, be sure to review your casualty loss eligibility, as it could mean tax savings for you. Need assistance? Contact Dr. Friday at 615-367-0819.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Casualty loss has changed a lot over the last few years. It used to be that if you had a fire in your house and your insurance company didn’t cover the full amount, you could write off the losses on your taxes. However, under current tax law, that is no longer allowed—unless the loss is due to a federally declared natural disaster. There are a few on record, so if you’ve been affected by storms or other disasters, be sure to check your eligibility for a tax deduction. You could be entitled to some tax savings.

If you need help understanding this, just call my office at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday discusses mortgage interest deductions for primary and secondary homes. Mortgages over $750,000 are only deductible for the first $750,000, especially if refinanced after 2017. Interest on second homes, like a camper or houseboat, also qualifies for deduction. Stay informed about limitations to avoid surprises during tax season.

Transcript:

G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Interest paid on a house. One of the things I think people need to remember is that in 2017, if you have a mortgage over $750,000 and you had it from that point, you can continue to take your interest. But let’s say you refinanced in 2019 or 2020, and you have a million-dollar mortgage. You cannot write off all of that interest, only up to $750,000. Now, you can also write off the interest on your second home. Maybe you have a house in Florida or a camper or a houseboat. Remember, those are considered second residences, and they are deductible for tax purposes. 615-367-0819. Looking forward to hearing from you.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Self-employed individuals, including partners and S-corporation employees, can deduct 100% of their health insurance premiums above the line. This tax benefit reduces taxable income while encouraging health coverage. Dr. Friday explains how this deduction could save thousands annually and emphasizes the importance of understanding its application for tax savings.

Transcript:

G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

If you’re self-employed, you may deduct 100% of your health insurance premiums above the line. And this could also go for individuals that are part of partnerships, limited liabilities, or employees’ share of an S-corporation. These are all considered self-employed for the purpose of tax law. So this could be a great thing if you are paying $4,000 or $5,000 a year in premiums, and this is an above-the-line tax deduction. This is a way of putting more money in your pocket while also making sure that you have health insurance. You need help? Just call our firm. The easiest way to do it is to pick up the phone, 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains the 2024 auto mileage rates: 67 cents per mile for business, 21 cents for medical, and 14 cents for charity. Business owners can benefit from these deductions but must maintain a mileage log. Employees with W-2s cannot claim mileage or home office deductions. With rising fuel and maintenance costs, tracking mileage accurately is more important than ever.

Transcript:

G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Auto expense. Now let’s first clarify: if you work for an employer that you have a W-2, you’re not deducting mileage. There’s no place, no 2106, no home office—that isn’t going to happen. But if you’re a sole proprietor or business owner, you will be. And it’s 67 cents a mile in 2024 for business, 21 for medical, and 14 for charity. These are huge numbers, especially for business owners. The cost of petrol and maintenance has gone up, and they’re accounting for that in these numbers. But you must have a mileage log to justify these deductions. You need help? Go to the web, drfriday.com.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday discusses the challenges of itemizing medical expenses on your tax return. To deduct medical costs, they must exceed 7.5% of your adjusted gross income. For example, with $100,000 in earnings, only expenses above $7,500 are deductible. Proper planning is essential to maximize savings in years with substantial medical costs. Take advantage of itemizing only when it benefits your financial situation.

Transcript:

G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Many times people will ask me about medical deductions, because when I talk about itemizing, I very rarely bring that up because of the fact that first you have to say, let’s say you earn $100,000. And if that’s the case, then you have $7,500 worth of exemption, right? So if you have a $10,000 bill that you’ve paid for medical and you’re thinking you can deduct that, you’re really only going to get $2,500 of it under that scenario. Itemizing medical is very hard, and making sure you maximize the year that you do have a lot of medical will be the only way you’re going to put more money in your pocket.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of the Dr. Friday Radio Show, Dr. Friday covers essential tax updates and financial tips as tax season approaches. From changes in tax credits to scam prevention advice, this episode equips listeners with the knowledge to navigate the 2025 tax season confidently.

Topics Covered Donald Trump’s Presidency and Tax ImplicationsSpeculation on how the administration and 119th Congress may impact tax laws, including Section 179 depreciation changes. * Key Dates for Tax SeasonE-filing for 2024 taxes begins on January 27, 2025. Deadlines for W-2 and 1099 issuance are also highlighted. * California Tax ExtensionsResidents in disaster-affected areas receive tax filing extensions. * Commercial Clean Vehicle Tax CreditNew IRS proposals for tax credits on qualified commercial and used clean vehicles. * SALT Tax Reform EffortsDiscussion of potential changes to the $10,000 cap on state and local tax (SALT) deductions. * Recovery Rebate CreditsIRS efforts to issue payments to those who missed their 2021 recovery rebate credits. * Scam Awareness During Tax SeasonTips to recognize and avoid tax-related scams, including fraudulent IRS calls and Ponzi schemes. * Tax Return PreparersAdvice on ensuring your tax preparer signs your return and has proper credentials. * Employer Retention Tax Credit (ERTC)Clarification that ERTC funds are taxable. * Child Tax Credit and Earned Income Credit UpdatesInsights into fraud prevention efforts and eligibility criteria. * Preparing for Emergencies*Importance of offsite document backups to protect tax and financial records.

Transcript

00:00-00:02All right, guys, this is the Doctor Friday show.00:02-00:04A couple new discussions.00:04-00:09Obviously, we know Donald Trump is going to be soon brought into the presidency.00:10-00:11What will that mean for taxes?00:11-00:13And to be quite honest, we’re not sure.00:13-00:17I mean, there is, the 119th Congress will be enrolled.00:17-00:23And we will find out if they’re going to go back and do anything when it comes to some tax law.00:23-00:29One of the big ones I would love is a section 179, instead of having theoretically 40% in 2020.00:29-00:32having that back to the 100%.00:32-00:37I think it encourages small business owners to be able to go do things and make it work00:37-00:41where if you spend $100,000 or $100, whatever,00:41-00:47and then you turn around and you don’t have the ability to make anything work,00:47-00:49then it will become more of an issue.00:49-00:54So if you spend $100 and you can only get $60 versus you spend $100,00:54-00:58you get $100, more people are encouraged to probably do the 100,00:58-00:59is all I’m going to say on that one.00:59-01:03So that way you can actually make sure that you have everything you need.01:04-01:08Other things, obviously, we’re still waiting to hear on some of the different situations.01:08-01:16If you have family in California, obviously tax season isn’t going to be an issue that’s all been extended.01:18-01:25So there is nothing there that anyone has to worry about as far as the tax season that’s in those areas, in those counties.01:25-01:28Tax season will start on January the 27th for e-filing.01:29-01:34So that is something that we will be looking forward to and moving forward on.01:35-01:47But other than that, we will be able to hopefully start finalizing some of our tax returns and getting them sent out so people will be able to, you know, put some money back in their pocket, make sure it’s all working.01:48-01:51We also have some new IRS proposals.01:52-01:55The IRS has issued a proposal for the commercial clean vehicle tax credit.01:55-01:59These rules impact eligible taxpayers who place a qualified commercial clean.01:59-02:01clean vehicle and service during the tax year.02:02-02:08They were trying to go back to December 31st, 2022 to try to get some hearings going and02:09-02:10seeing if they can enact some credits.02:11-02:13So that will be something we’re going to watch.02:15-02:20We don’t have a ton of individuals that, I mean, let’s be honest, we are not as green02:20-02:21as, again, California.02:21-02:25My family lives there, almost all of them drive a version of a Tesla.02:25-02:29And there’s a place to plug in every block almost here.02:30-02:31We have less situations.02:32-02:33It makes it a little bit harder.02:34-02:39But if you did buy one of those vehicles and it is something that you’re able to do.02:40-02:44And also there is a tax credit for individuals that may have purchased a used vehicle.02:45-02:48Again, another win-win situation on that.02:48-02:55So if you are a person that has purchased something like that, make sure you talk to your tax person to deal with some of that.02:55-03:03reform. The caucus is also trying to fix the salt tax. The salt tax you guys have heard me talk about03:03-03:09for a number of years ever since the tax cuts came through. The salt tax is the state sales tax,03:11-03:17property taxes. In some states, we have sales tax here, but there is state income tax. And the03:17-03:23top of that is $10,000 for an individual. Married couple is $10,000. So there’s a bit of a marriage03:23-03:30penalty there. And if married filing separately, it would only be $5,000 each. So if you live in03:30-03:36California, again, I use that because I have family that. My brother, he, before he worries about03:36-03:41property tax, his state income tax is already exceeding $10,000. And then you have the property03:41-03:47taxes and they’re not very low in California as well. So he lost, you know, tens of thousands of03:48-03:53dollars as a tax deduction when the Trump things came in. So they are working on trying to correct03:53-03:59that it um it it isn’t fair for a lot of different reasons but probably one of the biggest reasons it’s04:01-04:07not extremely fair is because if you happen to live in a state that does have a high income tax um or04:07-04:12you know income tax situation then you’re losing or leaving quite a bit of money still on the table04:13-04:18and that leads to um sooner or later it becomes more of a problem right because you know if you’re spending04:18-04:22$30,000 a year and you only get to deduct 10 how is that really going to affect you?04:23-04:25I don’t know until we really get into that.04:25-04:27Hey guys, I’m in the studios too.04:27-04:27So thanks.04:29-04:31So that works for us.04:32-04:38We make sure we have all of that.04:38-04:39We also have the recovery.04:40-04:42The IRS announced the continued effort to help taxpayers04:42-04:45if they plan to issue automatic payments to eligible people04:45-04:50who did not claim the recovery rebate credit on their 2021 tax returns.04:50-04:53I can honestly tell you that is.04:53-05:00happening because I had two clients that called and said, hey, one of them was my brother,05:00-05:02where we had tried to claim it.05:03-05:05It turned around where the government said he had already gotten it.05:06-05:12They’re finally going back and matching because I think what happened was that was a year05:12-05:14that he had transitioned between a rental to this house.05:15-05:19I think the check ended up getting returned to the IRS and it got lost.05:19-05:22So whenever we kept trying to get it, they kept saying, no, it’s already been issued.05:22-05:24He never cashed the check.05:24-05:26Now it just got put back in his bank.05:26-05:33So now in 2020, it was around Christmas, but 2024, he finally got that rebate from 2021.05:34-05:39I can honestly tell you that we had a number of individuals that we kept trying.05:39-05:40We would send bank statements.05:41-05:51We sent all kinds of things in showing that these individuals did not have anything as far as they never received it.05:51-05:56I had somebody that their daughter accidentally tore the checkup thinking it was a fraud.05:57-05:59And it obviously wasn’t.06:00-06:06So they are able to, you know, get it replaced.06:06-06:07We weren’t able to get it replaced.06:08-06:16So again, it’s just one of those situations where if you are one of those individuals and back in 2021, you did not get that rebate.06:16-06:25that’s the third one credit you may be in a perfect place you may be in a06:25-06:32you may have found that you can honestly say that you have it coming in I can’t see the06:32-06:36studio guys so if there’s any callers just let me know I don’t see anything on the screen06:36-06:42it’s just black so we have that so that’s important because if you didn’t I was honestly06:42-06:45saying that we had a situation in our office where people kept saying06:45-07:15some people say be careful the IRS actually put a note up there about scammers coming and saying they’re going to help you retrieve this money the IRS is the only person there is no process in essence that we as a as an enrolled agent that I will be able to do to follow up and get this money for you any faster anything different it is just there so do not take a phone call and someone says hey it looks like07:15-07:23you did not get your stimulus money or send us this information and you provide them either07:23-07:29with your personal information. Thanks guys. I see it now. Or anything else, then we are going to have07:30-07:34a problem because then they’re going to steal your identity. It’s going to become messy and it’s07:34-07:40not going to be a pretty situation. So again, don’t take, and this kind of goes along with any time07:41-07:44you get a phone call. If you get a phone call from the Internal Revenue Service and don’t get07:44-07:50be wrong. There are local agents many times that may try to call to resolve or to get more07:50-07:56information. But even if you don’t know this agent, if this agent has come knocking on your door07:56-08:00and they have stopped most of that, but I’m sure there are still some agents that will go08:00-08:05probably more business to business than to an individual. But either way you look at it,08:05-08:10if you have somebody that says there with the Internal Revenue Service, especially on the telephone,08:11-08:14if you’re not comfortable, if you don’t know this person because you’ve already had prior08:14-08:20contact with this person, hang up the phone. If they’re going to be insulted because of it, I’m sorry.08:20-08:25But the fact is there’s too many frauds out there. So especially if they’re asking you, can you08:25-08:30prove your information? I know I talk to the IRS all the time. As an enrolled agent, I actually have to08:30-08:35give them my social security number over the phone. Most uncomfortable situation as far as I’m concerned,08:36-08:42but it’s part of what we have to do to prove that we’re representing our people. So, you know,08:42-08:47you need to make sure that you’re talking with a legitimate IRS or revenue officer,08:48-08:50not just somebody that calls you and says,08:50-08:50hey,08:50-08:51I’m representing the IRS.08:51-08:53You have an outstanding debt.08:53-08:54You need to make a payment.08:55-08:56making a payment,08:56-08:57they will never,08:58-08:58ever,08:58-09:00ever take a payment over the phone.09:00-09:01Not going to happen.09:01-09:07If they ask you to do anything other than send them either a cashier’s check,09:07-09:09if they’re asking for direct payment,09:09-09:12they will give you an address if that address makes you feel uncommon.09:12-09:19comfortable. Again, call, confirm. You know, you can even in some cases, I know sometimes,09:19-09:25back for, this is a number of years ago, but I had someone call my office that said that they were09:25-09:29with the Internal Revenue Service. And we do get calls from the Internal Revenue Service. But this person was,09:30-09:34you know, they said I had backed debt, blah, blah, blah. We knew it was a fraud. So we basically put09:34-09:41the phone number out on the net just to let people know. But of course, nowadays they can clone the phone09:41-09:46number. I’ve shared this in the past where a local, they said I was supposed to be on a court thing or09:47-09:53something, a jury duty. And they called and said I had not and that I was being fine for not showing up09:53-09:58and blah, blah, blah. And I’m sitting there going, oh my gosh, because they knew things that are not09:58-10:05normal public knowledge. So I’m like, okay, how this person know this? And then of course, I hung up the10:05-10:10phone just like I could tell you guys. And then I called the local sheriff’s office. And the first thing they10:10-10:16said is yes there is this deputy but he is not here this is a scam blah blah blah and of course you know10:17-10:21afterwards you kind of feel silly because you’re like oh my gosh why did i even think that it was real10:21-10:27but sometimes that you know me if it’s a tax issue i’m always oh no i know this but this was not a tax10:27-10:32issue and so it put me in a little uncomfortable situation right because i’m like oh my gosh i’m just10:32-10:36like everyone else guys i’m going to you know fall for it a little bit i didn’t do anything crazy but10:37-10:40everyone in the office was kind of laughing because they’re like hey that’s all10:40-10:44obviously a fraud. I didn’t see as an obvious because I get so busy sometimes. I’m like, did I miss10:44-10:49something at my house? All right. So we’re going to get ready to take our first break. If you guys want,10:49-11:00you can join the show. 615 7379986. 615 737-979986. And we’re going to be right back with11:00-11:04the Dr. Friday show. Friday, we are back here.11:05-11:10I’m in studio. And if you want to join the show, you can. 615.11:10-11:20737-9-896-6-15-7-37-39-89-6. And Charlie is on the line. Let’s see if we can get Charlie to join the show.11:20-11:21Hi, Dr. Friday.11:21-11:29And Charlie, what’s happening? Just listening to you talking about the fraudulent activity, and I have maybe a close cousin to that.11:31-11:39I was, I filed an extension last year on my 20-23 taxes, and then I ended up paying about $7,500.11:39-11:47dollars and then i got a bill for an underpayment and a penalty which i paid so i’ve paid11:48-11:57everything to the irs however it’s almost ironic that i’m also getting calls from companies that are11:58-12:08so-called tax relievers who are telling me that i owe the irs money um do they is there a possibility i12:08-12:12do owe the IRS money and do they know something or are they just fishing?12:13-12:14That’s a good question, actually.12:15-12:18What they’re usually chasing, I call them ambulance chasers,12:18-12:23but they’re basically chasing if there was possibility of a lien placed on you,12:23-12:24even if you’ve resolved the issue,12:25-12:27it could have been out there because their lists are sometimes a little slow.12:29-12:33So depending on if you immediately paid it when the letter came in12:33-12:37or if you had to make a couple payments or, you know, a timing issue,12:37-12:38We’ve all had those.12:38-12:39I paid everything immediately.12:40-12:40Okay.12:41-12:46Well, I would say your best bet, I don’t know if you have access to anything like credit12:46-12:49karma or the free ones, you know, where you can check.12:49-12:51Just make sure there’s been no lien put against you.12:53-12:54That’s what they’re basing it on.12:54-12:57And otherwise, it could just be scams, right?12:57-13:02I mean, as long as you know, or you could just call the IRS, you know, at the local number13:02-13:04or whatever, and just find out.13:04-13:07I just don’t want to say that it’s completely because normally they’re working.13:07-13:13working off of a list, and that list usually comes from levies and liens that were placed by the IRS,13:13-13:16that they publish so that these companies can actually call them bug you.13:18-13:24So that would be my concern is that somewhere along the line there was something that could have gotten dropped.13:24-13:28I’m assuming you haven’t moved a lot, Charlie, but if you have, sometimes timing with letters can be slow.13:30-13:33I have not moved, and I’ve paid everything right away.13:34-13:38my credit scores well above 830.13:38-13:41So, well, as long as you know that, then the13:41-13:43likeness is that this is just somebody that somehow13:44-13:46got some information, maybe even just the fact that you13:47-13:47were in collections.13:48-13:51Because we all go, I mean, if you paid, there was13:51-13:53collections when they sent you the second letter for13:54-13:56failure to pay on time and all that other garbage.13:58-13:59But you paid that off immediately.14:00-14:04So again, Charlie, probably to put myself, my own14:34-14:39you know, I will say, again, Charles brings up a really good point is that, again, I was talking14:39-14:44about how fraudulent situations and things happen. And this could be a prime example of that.14:44-14:51It’s just that those collection companies can be a bit overwhelming. And that, you know,14:51-14:55I will say, and I’m not using any names. I don’t care what companies are out there. I mean,14:55-15:02obviously we do tax resolution and we do not, I don’t chase it. I mean, people come to us.15:02-15:15But one of my biggest things is that every time someone comes into my office that has used one of these resolution companies, the pet peeve is that they basically listen to you, tell your story.15:15-15:21And then they basically say, oh, yes, we can help you pay us this much money and this much a month.15:22-15:25Yet they haven’t taken control.15:25-15:32They don’t know what your true tax situation is because even if you have all the love letters, we don’t know exactly what.15:32-15:37what can be resolved until we pull transcripts,15:37-15:41until we know how long that has been out there,15:41-15:43just because you have taxed that from 2012,15:44-15:46it could have fallen off in 2023,15:46-15:49but if you didn’t file it until 2023,15:49-15:51whatever, your time clock started late.15:52-15:54All these things are important to know15:54-15:57before you know how long this is going to really take15:57-15:58to do your resolution.15:59-16:00If you haven’t filed tax years,16:00-16:02how many years are they planning on filing?16:02-16:03How are they getting that information?16:04-16:07Do they even know there’s any information turned in to the IRS?16:09-16:14You know, I mean, a lot of self-employed people don’t have very much information that the IRS knows,16:14-16:18at least not from the initial traditional ways of doing it.16:20-16:26But, you know, just be careful is all I’m going to say is these companies, some of them, I’m sure, do a good job.16:27-16:32I don’t know firsthand, but I will tell you that anytime someone tells you they can fix your problem,16:32-16:38before they really truly know those are salespeople that’s all they are 99% of the time you’re16:38-16:43talking to someone that makes a commission off every time they close a deal on that phone and then the16:44-16:50attorneys are they out then they sub it out to other either attorneys or EA offices that are taking16:50-16:55and buying those contracts you’re not often getting to the same person or the same office and most16:55-17:00the time they transition you to someone that’s going to handle your case is what they say17:00-17:04which means they’ve taken it from the sales department to the actual resolution department.17:05-17:09All I’m being saying is those contracts are very hard to get out of.17:10-17:13I mean, I can’t tell you over 30 years of doing this.17:13-17:17I’ve had hundreds of people that’s come in and we’ve had to start from scratch and they’ve17:18-17:23already had to pay somebody and nothing’s gotten done or they have been with these people for a number17:24-17:29of years and yet no real resolution, even though the IRS hasn’t come and taken or seized anything.17:29-17:35no resolution people and that’s partly because they may have started something that they’d even know17:35-17:41if they could do resolution on that’s all i’m saying so again if you’re at a situation where you’re17:42-17:46having a difficult time with the internal revenue service you know you’re you’re in a pretty big17:46-17:51circle of individuals and that in that list can be and i know it’s tempting when you hear ads17:51-17:58to say we can help you solve your irs issues for 10 cents on the dollar um we have done that we have17:58-18:02settled cases that were in hundreds of thousands for as low as $50.18:03-18:08But keep in mind, those same individuals have basically nothing at this point, even though they18:08-18:11may have had something back at the time that they had the tax issue.18:12-18:17Over the years, they haven’t, you know, if you still have assets, if you still have retirement18:17-18:22and homes and blah, blah, blah, then you’re less likely to get that same resolution.18:22-18:23That’s all I’m saying.18:23-18:27And you need to understand that before you sign on that dotted line thinking they’re going to18:27-18:33save you, you know, tens of thousands of dollars when they don’t know what you’re going to18:33-18:37be required to pay because they haven’t really taken on your case until they get that resolution18:37-18:43coming through. So, you know, that’s the way it works and how it’s coming through and everything18:43-18:50like that. It’s just really, really important that you take care of and you just don’t, don’t sign up18:51-18:57for something that you might not be able to get out of, okay? And I’m sure there is scammers out there on the18:57-19:07that I just want to make sure because tax season, the January, February, March, and April season is the big time for scams.19:07-19:11You’re going to have more phone calls from the Internal Revenue Service according to the IRS.19:11-19:12But that’s not true.19:13-19:15I mean, that’s when the scammers are calling, right?19:15-19:17There’s going to be emails being sent out.19:17-19:26They’re going to be people that basically are going to call, say, and they’re part of a resolution or like I said this, rebate credits coming back.19:26-19:28The IRS has said they’re going to send checks.19:28-19:33So now they’re going to try to call and see if they can convince you that they’re going to get you a check.19:33-19:36And anyone that’s sitting there, I mean, think about it.19:36-19:39They call hundreds, maybe thousands of people a day.19:39-19:44And all they’re looking for is that one person that stops long enough to say, oh, yeah, I never got that money.19:44-19:45How do I get it?19:45-19:47Boom, you might be the next victim.19:48-19:56So, you know, what started this conversation to a point was I got an email today from someone that said that they had gotten a part of a Ponzi.19:56-20:04scheme. And they ended up in 2022 paying tax on a 1099 interest that they never really received.20:04-20:10They said they were reinvesting the money. So they didn’t think about it, then found out in20:10-20:152023 that this was all a scheme, that there was really no investment. They took the money. The money20:15-20:20was gone. They were just sending statements to these people saying, you know, hey, we’re reinvesting.20:20-20:26Here’s your interest and all this. In meantime, they actually paid tax on $5,000 some dollars in 2020.20:26-20:27and what was their options?20:29-20:35And there is a whole section in tax law that talks about the safe harbor situation.20:35-20:37And that’s where you would have to go with that.20:38-20:39And you’d have to find out more information.20:39-20:41Again, it’s not something, it’s not an easy conversation.20:43-20:49But we all have dealt with some sort of scam, be it a Ponzi or just silliness or whatever.20:49-20:56But it’s really important that you want to make sure that when you’re dealing with any of20:56-21:02these things. A, do your best, obviously. But documentation, if someone says that you’re reinvesting,21:02-21:08maybe it’s better for you to, if it’s not a local brokerage house, maybe it’s something you found21:08-21:12on the internet. And I will tell you, we’re going to be dealing a lot with some of the scams that’s21:12-21:18helped me with virtual currency, you know, Bitcoin scams and all that as well. I’ve got two cases21:18-21:23coming in that’s having to do with that. So all I’m trying to say is there’s no way of totally21:23-21:26protecting yourself, but do it as smart as you can. Deal.21:26-21:32with local companies, local person that you sit down with and, you know, you actually know they work21:32-21:38for, you know, Schwab or somebody. So you have something is going to be better than even if, and if it21:38-21:44sounds too good to be true, if you’re saying we’re going to pay you eight or 10 or 12% interest21:44-21:50right now in the current numbers, that seems almost too good to be true. So how and how are they doing21:50-21:56that? Where’s my money going to be? And how can you confirm that the money is invested where they’re21:56-22:01it is just because someone can make a fake statement, it makes you feel like the money’s there,22:01-22:05but can you really see it or track it some other way other than just that statement?22:05-22:11So again, just trying to make people realize this is going to be a very tough season for22:12-22:13scams and Ponzi schemes.22:14-22:17So if we can stay aware and help each other, that will be the best way.22:17-22:20If you know of something that’s going around, also let me know.22:20-22:24I mean, more than glad to tell my listeners at least, hey, this is what to be aware of because22:24-22:26nobody wants to be taken in.22:26-22:28All right, we’re going to take our second break.22:28-22:37You can reach us here in the studio, 615-737-9986, 6157-37-9986.22:37-22:40This is the Dr. Friday show, and we’ll be right back.22:41-22:48All right, we’re back here live in studio, and I had a longtime client sent over a pretty good one.22:50-22:52I hadn’t even thought about with talking about scams and different things.22:52-22:54She suggested you need to tell people to make sure.22:54-22:57they go to someone who signs their tax return.22:58-22:58And she is correct.22:59-23:03I can’t tell you how many returns that someone tells me that they had to prepare.23:03-23:08But when you look under the bottom where it says prepared by, it’s blank.23:08-23:13Or it even says self-prepared, even though someone else prepared that tax return.23:13-23:17If someone’s preparing your tax return, they should be putting their information on it.23:17-23:23There’s no reason for them not to unless they’re basically trying to loop the system.23:23-23:30You can go to the iris.com and you can look under tax preparers and you can look up our names23:30-23:35and you can see our credentials, making sure that if this person says they’re an EA or a CPA,23:36-23:39even a tax preparer nowadays, most of them have taken the test.23:39-23:45I know that you don’t have to, but you really do want someone that does have some background.23:45-23:47I mean, anyone can throw numbers on a tax return.23:47-23:50If they’ve learned to work or software, they could probably throw the information in.23:51-23:53But really, that’s not the job.23:53-23:55I mean, the job is sure, let’s make sure everything’s in the right place.23:56-24:02And also, if something comes up and you get a love letter that you have someone that you can talk to and make sure that resolution can be made.24:02-24:06But also to help you try to figure out what could be done different.24:06-24:09Is there somewhere we can be saving tax dollars?24:10-24:17Maybe you have a future plan of going into your own business or maybe you are self-employed or maybe you’re thinking about retirement.24:17-24:23All those things are going through your head and how your tax person should be able to help.24:23-24:28you plan for some of that. Should you be converting your IRAs? I mean, we, my office,24:29-24:34we are not financial planners. So we’re not there to tell you what’s the best investment.24:34-24:38I always think that it’s probably a conflict of interest in my world, personally speaking,24:38-24:44to be a tax advisor and a financial planner only because I think sometimes as a tax person,24:44-24:51my job is pretty much yearly in how to save tax dollars. Whereas a financial planner,24:51-24:54they’re looking at five, 10, 15 years out.24:54-24:58And sometimes if you have a good team, I work with Hank Parrott a lot,25:00-25:02and a number of other financial planners.25:03-25:06But when we work together, many times,25:06-25:10what is instant gratification in my world is a tax person.25:10-25:15It’s kind of put to, hey, you know, what if we do this, this, and this over the big picture,25:15-25:18over the next five and 10 years, you can save tax dollars.25:18-25:20Or you can have, when you hit retirement,25:21-25:22maybe you’ll put less money to the IRS.25:23-25:26You may not even have to file tax returns because you’ve done a conversion and you25:27-25:31have all of your money sitting in a Roth or some other vehicle where you don’t have to worry25:32-25:36so much about taxes or taxing your Social Security and all these different Irma.25:37-25:38All these things come into play.25:38-25:42And when you have a financial planner and a tax person,25:42-25:45we’re both looking at both of our expertise,25:45-25:48but sometimes we have to merge those two.25:48-25:49And sometimes I’ll come up and say,25:49-25:56you know, you’re hitting the AMT tax or Irma’s going to kick in or different things like that that may come in,25:56-25:59then they’re looking at what’s the growth, what’s the expectation,25:59-26:04are we going to meet the goals of retirement or vacations or whatever it is you’re trying to say for?26:05-26:12So I will say that you do want to make sure, and going back to my client that has suggested checking the IRS,26:12-26:17you can also check the Department of Insurance here in Tennessee.26:17-26:20If you have a financial planner, they’re licensed.26:21-26:22Insurance salesmen are licensed.26:23-26:24Enrolled agents.26:24-26:29All of us have places where you could check to see if this person is legit.26:30-26:34And again, if they’re not willing to put their name on something, then you shouldn’t be going to them.26:35-26:39If it’s because you think, well, it’s inexpensive and they’ve got the software, so they’re going to fill it in for me.26:40-26:41That’s your choice.26:41-26:44But you know that you’re paying somebody that really doesn’t know how to do taxes.26:45-26:46They’re just throwing numbers on a return.26:46-26:48They’re not going to stand behind it.26:49-26:53I personally think anytime you go to anybody that you’re paying for tax prep,26:53-26:56be that one of the big franchises or a small independent,26:57-26:59they need to be able to stand behind the work they do.27:00-27:02If mistakes are made, they need to be able to stand up for that.27:03-27:07And if you make a mistake, they need to still help you resolve that issue, right?27:07-27:11I mean, normally when the time comes and I’m doing this for 30 years,27:12-27:14I love to tell you I have never made a mistake.27:14-27:15It’s not possible.27:15-27:15Okay?27:16-27:21I mean, I have, but I’ve always thought I’ve actually been able to show where I stood behind my27:21-27:27mistakes. And if a mistake was made by a client, we still fixed those as well. And so it’s really important27:28-27:32that it’s a team effort. I mean, it’s what comes down to. And I think that’s one of the reasons I’m27:33-27:39fortunate enough to have a lot of my clients come back every month, or every year, every year to do27:39-27:44taxes as well as they bring their kids and all that kind of stuff. And that’s, that’s the compliment that27:44-27:50keeps on giving. So you want to have that same relationship with your tax person. And I know that27:51-27:55if you’ve relocated sometimes, I mean, I have clients that live all of the United States, even overseas,27:56-28:00that we still do their taxes. And we can. As an enrolled agent, we’re all licensed. There,28:01-28:06most of us are licensed by the federal government, which means we’re also licensed by most of the states.28:07-28:12So, you know, it’s not something we can’t help with. But again, making sure that you have a good28:12-28:17relationship, making sure that person’s accountable, be that your financial planner or your tax28:18-28:18person.28:18-28:19We’re getting into tax season.28:19-28:22So getting ready for tax season.28:22-28:28Let’s talk a little bit about that because not everyone’s as organized as others.28:28-28:30So you need to make sure you keep your book.28:30-28:33If you’re self-employed, you’ve got your 1099s.28:33-28:36Everyone should have them out by the end of the month.28:36-28:37And that also includes you.28:37-28:42If you have subcontractors, people that you paid money more than $600.28:42-28:46to in a given year, you should be issuing these 1099s.28:46-28:48You guys know, I’ve talked about it.28:48-28:52This also includes our rentals, our lawn guys, our handymen.28:53-28:57And in some cases, our roofers and our air conditioning companies, if they’re not,28:57-29:02if they’re operating as LLCs, theoretically, they repaired in air condition, they’re a repair29:02-29:02person.29:02-29:04They should get a 1099.29:05-29:10Normally, it’s normally more the lawn person that doesn’t get it or, you know, those29:10-29:10situations.29:10-29:16But any of us in business that have paid for somebody need to be issuing those 1099s out.29:17-29:23And that way they are making sure that they understand how the system works and what you have going.29:23-29:26If you, you know, if you haven’t.29:26-29:31And once you get those together, of course, you also still have your bank interest and you have all of your expenses.29:32-29:37Ideally, that is kept in something like Excel or QuickBooks, obviously.29:37-29:39Some people are good on a manual system.29:40-29:44You know, you can use a word doc or something, but really keeping track of those expenses,29:45-29:51preferably scanning them in someplace and probably bringing back to the fact that I have family29:51-29:52in California.29:52-29:53Thank God.29:54-29:57None of them are in the area where the fires are at this point.29:57-30:00But friends of my family are in those areas.30:01-30:02And, you know, kind of brings back to home.30:03-30:07What would you do if you had a situation where you had to get out of your home?30:07-30:13quickly and maybe you come back and it’s all gone. I know some listeners, you have lost your30:13-30:21homes, either do storms or fires. But having everything backed up off of your computer offsite30:21-30:26seems to me that would be one of our New Year’s resolutions for a lot of us. I have done that for a30:27-30:32number of years, but I’ll be honest, my little personal computer where I have a lot of family30:33-30:37photos and things like that, I don’t necessarily probably back up as often. I don’t think it’s30:37-30:42even on carbonite, which is one of my goals, set it up on carbonite, making sure all the,30:43-30:46everything I have is backing up either through apple or carbonite or something.30:47-30:48Because of that reason, right?30:48-30:56We want to make sure that if we had to leave for some reason that all of our documents are30:56-31:02saved and protected because, you know, it’s a lot harder to recreate something than you31:02-31:07think in you’re already in the midst of everything else and trying to get your pets and31:07-31:10family safe is always the priority.31:11-31:14So again, just makes us think a little bit more about that.31:14-31:20So preparing ourselves for that emergency is probably not a bad concept moving forward.31:21-31:22So if you want to join the show, you can.31:22-31:30615-737-9986-6-15-737-9-8986.31:30-31:32You can go to DRFriday.com.31:32-31:37That’s DRFRI-D-A-Y.com and download the current tax.31:37-31:41organizers those are out there for you if you even if you don’t use my services they’re31:41-31:46available they’re free gives you something to start with as far as thinking about what tax31:47-31:51deductions I should be doing do I have everything together before you start doing your31:51-31:57tax preparation you can also use the website to set up your tax appointment if you31:57-32:01need to you can set up an appointment we also have Chris who is also an EA32:02-32:06that will be working this year so we have you know plenty room of taking on some32:06-32:12new clients and making sure that we can help you get your taxes done properly and dealing32:12-32:18with the right issues and making sure that we’re going to be able to, you know, back up what we can do,32:19-32:24making sure everyone gets their taxes filed on time or an extension is filed so that way you don’t32:24-32:31have to worry too much about, you know, dealing with taxes. And I know it’s frustrating.32:32-32:35And that’s why I file an extension almost every year because of that same reason.32:35-32:39It’s hard to get some of my own tax documents if I don’t have something on there.32:40-32:42You know, let’s see if we can get Dave in real quick.32:42-32:43Otherwise, he’ll have to wait through the break.32:43-32:44Hey, Dave, what can I do for you?32:45-32:46Hey, quick question.32:47-32:52If I paid rent, I’m a business owner and I lease a lease a building.32:52-32:54Do I send you something like 1099?32:54-32:56Do I give that person a 1099?32:57-32:57Absolutely.32:57-32:59It’s a, it will be under rents.32:59-33:04But yes, all of us should be 1099 as long as that organization is not a corporation.33:04-33:06If it’s a corporation, we don’t have to do it.33:07-33:09No, no, no, it’s not a corporation.33:09-33:10I got a barbershop.33:10-33:12And I, uh, and I, uh, and I, uh, and I,33:12-33:13and I, leave, right.33:14-33:14Yes.33:15-33:15Okay.33:15-33:16I appreciate that.33:16-33:16Thank you.33:17-33:17No worries.33:17-33:18That’s a great question.33:18-33:18Thanks, Dave.33:19-33:19All right.33:20-33:20Um, and he’s right.33:20-33:24Just to reiterate just, because I know I talk fast sometimes, guys.33:24-33:26Um, Dave is 100% correct.33:26-33:32If we eat, pay rents, be at a restaurant, be at a tax office, be at a hair shop or a barber, um,33:33-33:34especially if you guys do.34:04-34:08my office is going really crazy about making sure all of those are done.34:08-34:12So if you have a small business, you know, just run through anyone you’ve paid more than34:13-34:17$600 unless it was for a product, like going out and buying inventory of some sort.34:17-34:22But if there’s a service, an accounting service, a lawyer, a rent, any of those,34:22-34:26should be turned around and made into a 1099.34:26-34:28All right, we’re going to get ready to take our last break.34:28-34:29If you want to join the show, you can.34:29-34:33615-737-9986.34:33-34:35We’ll be right back with The Doctor Friday show.34:37-34:40All righty, we’re back here live in studio, field.34:42-34:44And if you have any questions, you can join us.34:44-34:51615-737-99-86-615-737-99-8986.34:52-34:54I had the text going during the break,34:54-34:58and someone was asking me if they were a part of a Ponzi scheme,34:59-35:01what or can they do or what’s the situation?35:02-35:07I’m going to say first go to the IRS and pull up some of the help lines they have35:09-35:14because that would be at first an important thing for them because just because you were35:14-35:19scammed doesn’t always mean that that’s going to be a tax deduction because sometimes35:20-35:26you have to prove that this was a true scam and in many cases it has to be turned in35:26-35:28to the fraud department and all that.35:28-35:32So you want to kind of start that process so that you then have to.35:32-35:36have proof that you’ve submitted the documents, that you know that it’s gone that direction,35:36-35:42that you are making sure that all of that is coming into play properly, then you might, you know,35:42-35:47you might have to go back and keep in mind, you can only get a refund for taxes paid on something35:48-35:51like that. Let’s say you paid taxes and then you found out like this couple I was talking about,35:52-35:56they can only go back three years for a refund. So it’s something that has to happen relatively35:56-36:02quickly. All right. Let’s go to Linda from Columbia, which is right down the road. Hey, Linda, what36:02-36:02I do for you, girl?36:04-36:05Yes, quick question.36:06-36:10For companies that received funds from the ERC program,36:12-36:13is that money taxable?36:14-36:15It is.36:15-36:20And in theory, the employer retention tax credit is what Linda’s talking about for all of us,36:22-36:28is you need to report that as income because you took off those taxes that they’re giving to you now.36:29-36:31Okay, that will be company in,36:31-36:36come down. Yep, unlike the PPP and all those other ones, this one is going to be taxable.36:37-36:41Okay, all right, good you know. Thank you so much. No problem. Thanks for listening.36:41-36:46All right, let’s go to Nelson and Nashville and see if we can help Nelson. Hey, Nelson.36:47-36:50Hey, how you doing? I’m doing pretty good. What can I do for you?36:51-36:54What is the early if you can file your income tax?36:54-37:01January 27th. Unless you go, I will say I do know that some of the big box stores will give people advances.37:01-37:03on their tax return.37:03-37:06But if you’re looking for the IRS just to, you know,37:06-37:09do the regular e-files, send it back within 21 days,37:09-37:12then that will start as of January 27th.37:13-37:15Okay, January 27th.37:15-37:19And you have to have your W-2s in 599 by January 1st?37:20-37:20Yes.37:20-37:23I mean, most people should have already, yes,37:24-37:26employers have to have them out by the 31st of January.37:28-37:31Okay, so when is the IRS asked?37:31-37:33we will accept your tax.37:33-37:39On the 27th, they will start accepting e-filed tax returns on January 27th.37:40-37:41Oh, okay.37:42-37:42All right.37:42-37:43Thank you.37:43-37:44No problem.37:44-37:44Thanks for listening.37:45-37:47I guess it’s about a week from now, right?37:48-37:49No, it’s 18th.37:49-37:49A little over a week from now.37:50-37:50All right.37:50-37:51So, yes.37:52-37:55So by then, the theory is that you will have.37:55-37:57Now, my employees receive their W-2s already.37:58-38:01If that’s all they had, or have, I should say,38:01-38:04then, you know, they probably could file their tax returns.38:05-38:12So that would be plan one, but at least for our system, again, I know some of the big box38:12-38:19stores will start go ahead and accepting the returns, processing the returns, but the IRS38:19-38:23will not physically open e-file until the 27th.38:23-38:30And from January 27th, basically they tell us 21 days from the date that it’s accepted, you38:30-38:36should have your refund under normal circumstances. I want to put a caveat out there. If you are a person38:36-38:43that receives child tax credits and or earned income credit because of the children, they have said38:43-38:49that it could be as late as February 15th before they’ll start opening those up. I think the reason is38:49-38:56they’re trying to cross-reference parents with the children to make sure that the wrong person38:56-39:02isn’t claiming the child because, you know, rule of thumb is first person in is most likely39:02-39:07going to get credit for the children. So if you’re having a battle with your significant other,39:08-39:13be that the biological parent or whatever, and they’re claiming the child or yours, in my case,39:13-39:21many times the parents, the grandparents have gotten custody of the kids. And the parent is still39:21-39:25claiming those children on their tax return to get the earned income credit and child credit.39:25-39:28yet they’re not even raising the children any longer.39:29-39:30We have won many of those,39:30-39:35and they have changed some of the online filing for us to be able to upload more information.39:36-39:40I will tell you, I’m always very happy to take that kind of case on39:40-39:43because in my personal opinion, the person that’s raising the children,39:43-39:46the children are living with, be that whoever the custody is with,39:47-39:49should be getting that extra money,39:49-39:51not just the person that, you know,39:51-39:55because you biologically gave birth or were parents of theirs,39:55-39:58it doesn’t entail you to be able to get this extra money.39:58-39:59That money is supposed to be for the children.39:59-40:02The children are not living with you, therefore it’s not your money.40:02-40:07So it’s a good case to take on, and it’s a way that we always want to make sure.40:07-40:12And now the IRS is doing more and more checking to make sure that is the case.40:12-40:20Because let’s be honest, there was a big court case not too long ago with a big box tax store40:20-40:25that was actually allowing people, you know, there are certain names, smiths,40:25-40:30Jones, Garcia, whatever, that are kind of traditional names, right? So the people, we come into the40:31-40:35place and they would say these are their children and they would have maybe six or seven children40:35-40:40and then three or four people would be sitting there and they’d be each claiming a number of these40:40-40:44children, even though one person had those children, they were spreading them among their family40:45-40:52so everybody could qualify for earned income credit and get child credit. It’s completely illegal.40:52-40:55It’s a completely scam. They got caught. And then the,40:55-40:58the preparer company and everyone got penalized for it.40:59-41:04But they’re trying to put a hold on that kind of stuff, right?41:04-41:06Because that’s not the reason.41:06-41:08The purpose for this is supposed to be,41:08-41:12I had a revenue officer and an audit once tell me because I’m like,41:12-41:12well,41:12-41:16it doesn’t really see my opinion at the time of this particular audit.41:16-41:17It didn’t seem very fair.41:17-41:19Why is this person getting earned income credit yet this other?41:20-41:20And he’s,41:20-41:22well, this is all to level the playing field.41:23-41:30You have to give these people help sometimes to level the play field, which I thought, well, food stamps and all these other programs were there to help level the playing field.41:32-41:33But I don’t write tax law.41:33-41:38All I do is know it so that we make sure we stay out of trouble, right?41:39-41:46And so one of the things is, is if you’re claiming someone’s child, be that your girlfriends, be that anyone else, and you don’t have the right to.41:47-41:53If you claim them and the IRS rules against you, you will never be able to claim a child again, that child again.41:53-41:58on your tax return because they basically passed a law that says, hey, if you misuse the system,41:58-42:01you can’t use it when you might be doing it correctly, it is gone.42:02-42:08You cannot go back and fix that because you claim somebody you shouldn’t have.42:08-42:12So again, very important to make sure you understand how tax law works so you don’t get yourself42:12-42:12in trouble.42:13-42:17And that’s the reason those cases are good because there is a actual recourse knowing that that42:17-42:21person can never claim those children again once we win that court case.42:21-42:25So if you have questions, you need help, go to DR Friday.com.42:26-42:32You can pick up an appointment on there so we can help you get your taxes straight or if you need help just filing a simple tax return.42:33-42:34We’re there to help.42:34-42:41Also, if you need help with resolution or you know somebody that might need some help with resolution, maybe they haven’t filed taxes in 20 years.42:41-42:42Had someone last week come in.42:43-42:49Good news is you don’t have to file all 20 years unless the IRS has assessed you for those and even some of those probably have fallen off.42:49-42:53So again, important to understand what is required to be filed.42:54-42:56What timely manner do you have?42:56-42:59And then how can we have the resolution to make that work for you?43:00-43:09And just start unfolder, guys, putting all your 1099’s interest, 1098’s mortgage, 1099Rs for retirements43:09-43:13or any kind of distributions from a retirement or pension, W2s.43:14-43:15Make sure you have all of them.43:15-43:18You know, you don’t always just stay with one job.43:18-43:20Sometimes people have two, three, four, five jobs in a year.43:21-43:25And make sure you don’t forget about some of those because sometimes that can happen.43:25-43:33If you need help and you need to reach us at our office on Monday, 615-367-0819.43:33-43:37615-367-0819.43:37-43:44You can also email questions at Friday at dr.friiday.com, Friday at dr.friday.com.43:44-43:48And again, the website, you can get a free.43:48-43:54um tax organizer that’ll help you for the 2024 year as well as set up tax appointments is d r friday43:54-44:00dot com and you can uh either choose myself or chris chris is also an enrolled agent so he’ll be44:00-44:06able to help uh do the exact same things i do um to make sure your taxes are filed properly and44:06-44:11that we have everything done in order so um hopefully you guys are enjoying this saturday and44:11-44:16hopefully you’ve already done your grocery shopping because based on the weather we can end up with44:16-44:21another snowy Sunday or Monday, or if nothing else, bitterly cold. So make sure you stay safe and44:22-44:27fill up your gas tanks. And then, you know, if something comes up and again, you have a question44:27-44:33and you weren’t able to get us on the radio, you can email those questions to Friday at dr.44:33-44:40Friday.com. Friday is my first name. So Friday at dr. Friday.com or just call the office.44:40-44:45Sometimes it’s the fastest way to get your resolution. 615-367.44:45-44:470819.44:47-44:52615-367-0819.

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The 2024 Child Tax Credit has reverted to $2,000 per child after the temporary increase under the American Rescue Plan in 2021. Children over 17 qualify for only $500. Dr. Friday highlights the importance of adjusting withholdings in January to avoid surprises when filing your tax return. These changes could significantly impact families relying on prior years’ expanded credits.

Transcript:

G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Child tax credit. We all know the ARP, the American Rescue Plan that came in in 2021, temporarily expanded the tax credit, right? It was up to $3,000 and $3,600 depending on the age of the children. But in 2024, remember, that is only $2,000. And if they’re over the age of 17, it drops to $500. That can make a huge difference. If you’ve been using these other numbers and kind of calculating your withholding and now you’ve lost up to $1,600 on a child, that can make a difference on you owing taxes. Again, making sure now in January that you’re making these adjustments so you’re not going to feel the pain when the tax returns are being e-filed.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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The 2024 Adoption Tax Credit offers adoptive parents up to $16,810 as a dollar-for-dollar reduction of their tax liability. Unlike deductions, this credit directly lowers the taxes owed, provided expenses are documented. Ensure you have your adopted child’s Social Security number to claim this benefit and avoid filing delays. Dr. Friday emphasizes the importance of proper paperwork for a seamless filing process.

Transcript:

G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The 2024 adoption tax credit is $16,810. The tax credit is not a deduction that reduces your income for the purpose of determining tax liability. Rather, it’s a tax refund that is based on a dollar-for-dollar reduction of your tax liability. So it’s a credit, right? Simply put, an adoption credit in, and you will save $16,810 if you have spent that. You need to make sure you have a Social Security number for the child that you have adopted. We’ve had to file extensions more than once just to make sure we had the paperwork in line. You need help, 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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The Alternative Minimum Tax (AMT) can be confusing, especially when selling stocks or participating in employee stock ownership plans (ESOPs). Dr. Friday explains how AMT kicks in when W-2 forms only show the basis, leaving capital gains unreported. Avoid IRS troubles by learning to account for both AMT and capital gains in your tax filings. Stay ahead with these essential tips.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The Alternative Minimum Tax (AMT)—people often forget about this. It often kicks in when you sell stocks from a business, such as through an ESOP program. You might think the W-2 includes everything, but it only shows the basis. Capital gains still need to be reported. This is when AMT often applies and lands people in my office dealing with the IRS. Don’t forget to file your capital gains and account for AMT. Need help? Call us at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Are you maximizing deductions for charitable donations? Dr. Friday explains the challenges of itemizing under the higher standard deduction, especially for married couples. Learn how to properly document contributions—whether cash, clothing, or food—and ensure compliance to claim your deductions. Stay informed on the rules for charity-related tax savings.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Charity deductions—it’s so much harder now, especially for married couples, to reach the nearly $30,000 threshold for itemizing. You’ve got the SALT tax (state and local taxes) limit of $10,000, and mortgage interest may only add $5,000 or $6,000 with today’s low-interest rates. That’s only halfway there. Charitable donations play a significant role. Make sure you have proper documentation for cash contributions, clothing, food, or other items. Proof is essential to claim those deductions. Need help? Call us at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Thinking about selling real estate? Dr. Friday breaks down the tax implications for primary homes, investment properties, and 1031 exchanges. Learn about exclusion limits for primary residences—$250,000 for individuals and $500,000 for married couples—and capital gains rates for investments. Don’t forget to understand tax advantages before spending the profits. Stay informed and prepared with these real estate tax tips.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

If you’re thinking about selling real estate, let’s categorize them. First, your primary home. Taxes on that can include some exclusions—$250,000 for individuals and $500,000 for married couples. Then there are investment properties, subject to capital gains. Rates start at 0% but can go up to 15%, 18.8%, and even 23.8%. There’s also the option of a 1031 exchange, which involves swapping like-kind properties to defer taxes. It’s crucial to understand your tax advantages and pay taxes before spending the money. If you need help, call us at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Wondering if there’s an age when taxes stop? Dr. Friday busts the myth that seniors can avoid filing taxes based on age. Tax obligations depend on income, not age. Whether you’re in your 40s or 90s, filing is necessary if you meet the income threshold. Plus, Medicare taxes always apply to earned income, no matter your age. Tune in to learn more about age, income, and taxes!

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I can’t tell you how many times people come into my office and ask, “When will I not have to pay taxes? Is there an age when the IRS will stop taking my taxes? I don’t have to file no matter what?” Let’s clarify—no, there is no age. It’s all based on income. I have people in their 90s that file taxes, and people in their 40s that don’t file because they don’t have income. Taxes depend on income, not age. Remember, for working individuals, Medicare tax applies to every earned dollar with no cutoff. If you need help understanding taxes, give our office a call at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of the Dr. Friday Radio Show, Dr. Friday dives into key tax updates and practical advice to help listeners navigate the 2024 tax season. From filing deadlines to common tax pitfalls, this episode is packed with useful tips for individuals, small business owners, and contractors alike. Plus, callers share unique tax situations, including gambling income, Medicare payments, and travel deductions.

Topics Covered Tax Filing Deadlines: + E-filing for 2024 taxes opens January 27, 2025. + Employers must issue W-2s by the end of January; IRS filing for employers due mid-February. * Filing Tips for Early Filers: + Avoid using your last pay stub to file taxes; discrepancies can lead to IRS issues. + Tax credits like Child Credit or Earned Income Credit may delay refunds until mid-February. * Mileage Deduction Insights: + Business mileage rates increased to $0.70 per mile for 2025. + Clear guidelines on deductible miles for delivery drivers and contractors. * Medicare and Tax Considerations: + Paying Medicare premiums via Social Security or separately has no tax impact. * Small Business Tips: + Importance of reconciling expenses and documenting credit card purchases for taxes. + Use tools like QuickBooks for receipt and record-keeping. * Gambling Income & Deductions: + Winnings must be reported; deductions for losses limited to winnings and require itemization. + Key considerations for online gambling and tax obligations. * Energy Tax Credits: + 30% tax credit for installing solar energy systems; unused credits roll over to future years. * Unique Caller Questions: + Handling taxes on Canadian Social Security while living in the U.S. + Per diem and actual expenses for travel related to income-generating activities. + Addressing scams and financial exploitation from a tax perspective. * Tax Scams Awareness:* + IRS never demands payments via phone; verify any suspicious calls independently.

Transcript00:00-00:05If you want to join the show, you can at 615-737-9986.00:05-00:09615-7-37-9986.00:10-00:13And to be quite honest, it’s been a pretty quiet weekend.00:14-00:16Friday, most everybody was trying to deal with the snow.00:17-00:19Saturday, it’s been pretty nice on the roads.00:19-00:23I was out there a couple times, but still, it hasn’t been overly crazy.00:25-01:59But hopefully everyone will get back to work on Monday morning and we’ll be in good shape able to make it through and I’m sure all the kids love the snow day so that was actually a fun and exciting thing but if you have questions or you need help you can call the show I do realize it’s a it’s a pretty quiet day I’m not expecting a lot of phone calls but 615 737 986 615 737 97 9986 is the number here in the studio and you can call and ask your questions and then if you if I can help I’ll be definitely glad to you know we want to review it is what the 10th 11th of January so tax season for 2024 has started individuals are getting I know many of our clients have already received we use ADP so a lot of them have received their W-2s already some are still waiting the just so you know the employer does not have to have anything to the employees until the last day of January so and I believe they don’t even have to have filed with the Social Security Administration until the second week of February. So sometime between the end of January and the second week of February, if there’s been corrections or anything, you should be able to have your W-2. I know that some people will use their final paycheck stub. I’m going to be quite honest. In the 30 years of doing taxes, I can’t say I’ve ever been a huge. I have found that by using that final pay stub, it doesn’t always match to the penny.01:59-02:02exactly what the IRS receives on the W-2s.02:02-02:04Could be that there’s some corrections.02:04-02:06I can’t say I’ve done a ton of them.02:06-02:12But in my opinion, you might want to wait until this, until it opens up.02:12-02:20So that way you can, you know, make sure you’re filing everything at the right time, doing the right place.02:21-02:24You know, so, you know, no one wants to get the love letter.02:24-03:05And when you file really early, the reason you usually do that is because you’re, you’re think that you’re going to get the refund faster or you really need the refund so you you know you’re filing and then you file something that doesn’t happen so and just just for anyone that is thinking about filing early again I’m my firm we don’t do advances on on refunds just not something I’ve ever really gotten into because I found again that that can be expensive tax season officially opens us e-filing returns on January 29th so January 29th is the date that the IRS will start sending confirmation of receiving e-files.03:06-03:15Not to say you can’t file it prior to that, but they just, that is for your information to know that the 2024 tax season.03:16-03:24And if you have a child credit or an income credit, most of them they will wait until after the February 15th.03:24-03:25So some of those are delayed.03:25-03:29Now, I know you can go to companies and get advances on your refunds.03:29-04:32again not something I really do okay let’s see if I can get Steve and Levin thanks for calling it’s a quiet day it’s nice to have a caller hey Steve what could I do for you hello thanks for hi oops Steve we lost see if you can call us back Steve I’m not too sure but I’m not seeing you on my caller I know it’s a Medicare question so it should be a good one so again the phone number here in studio 615 7000 379986 hopefully he can get back with us and ask that question meanwhile we will continue with so filing deadlines January 29th so basically taxes can be prepared there are still many forms if you are not just a simple 1040 maybe a B skit fileer there are forms that aren’t even ready for e file yet because they haven’t been confirmed by the IRS I do think that there are some um possible forms that are holding off till after January 20th.04:32-04:42I know Donald Trump said he wasn’t going to backdate any taxes, tax laws, but it is possible that he does.04:42-04:43We’ve seen it happen.04:43-04:49We’ve had it more than once happen where a new president comes in and then makes some sort of adjustment that is retro.04:50-04:56So again, another good reason not to rush to the finish line and go from there.04:56-04:56Okay.04:56-04:58If Steve is on line one, you can add him in.04:58-04:59if you can.05:00-05:01That way we get Steve back on the…05:01-05:03Hey, Steve, sorry I lost you.05:04-05:08Yeah, I’m in the car and it’s switched over from, well, whatever.05:09-05:13I have Medicare and we have Social Security also.05:14-05:17And we have our Medicare advantage.05:17-05:20We pay for it separately with a check.05:21-05:21Right.05:23-05:24Security checks.05:24-05:26So they are, you know, they’re different.05:26-05:30Is there an advantage tax wise one way or the other?05:31-05:37If you’re paying for it either let Social Security take it out for you or pay for it separately.05:38-05:41Yeah, there is no, from the tax standpoint, it makes no difference.05:42-05:56So the fact that you probably are not going to itemize unless you have a lot of medical, a high mortgage, property tax, if you’re single or if you’re single, it’s like $17,000 if you’re over age 65 and then the standard deduction and then married is almost $3.3.3.000.05:56-06:1830 some thousand. So it is difficult to itemize any medical expenses, to be quite honest, unless someone’s in extended care or something. So it would make no difference, though, for tax purposes, if you write the check or if you sign up through Medicare and they take it out of your Medicare, sorry, to pay your Medicare, whichever is easier for you, I think.06:19-06:22Okay. Thank you so much. That was the question. I appreciate it.06:23-06:26Thanks, Steve. I appreciate you listening and driving. All right, buddy. Stay safe.06:26-06:55out there. Let’s see if we can get Richard on the phone. Hey, Richard, what can I do for you, Oh, Dr. Friday. Actually, I sent you an email last week, and I didn’t know if you would get around answering it on there or not, so I figured I’d just call you. Go for. I love it. What can I do? I’m an Amazon flex driver, which means I drive my own car delivering packages for Amazon, independent contractor, okay? And they don’t take any taxes out or anything like that.06:55-06:58My question is about mileage.06:59-06:59Okay.06:59-07:11I know it’s a 67 cents per mile ride off, but I know I’m not supposed to deduct the mileage going to the warehouse.07:12-07:13But there are times.07:13-07:16There are three different warehouses I deliver out of.07:17-07:20My question is, where does the mileage deduction stop?07:20-07:22Does it stop at my last delivery?07:23-07:27or my last delivery for the day if I go to two or three different warehouses.07:28-07:28Right.07:28-07:30So basically tax law says…07:30-07:35The distance between that last delivery or one and then to the next pickup is that deductible.07:37-07:37It is.07:38-07:46So bottom line is for the when you leave home and you go to your first pickup, that first pickup is when you start your time clock for miles.07:47-07:58And then if you go back and forth three or four times to two or three different, every miles there and back is considered, is considered deductible miles, not commuting.07:59-08:00Because you got the commuting miles.08:01-08:06And then when you drop your last package and you drive home, that’s the end of the commuting.08:07-08:13So the first trip to the warehouse and then from the last stop to home would be considered.08:14-09:18And that’s, I’m going to be quite honest with you, depending on your situation, I mean, there there could be the commuting on the way back home could actually possibly depending on the miles but i’m going to take it the safe way for because we’re on the radio richard so bottom line is home to warehouse first trip and then back and forth all day as long as you can show that you picked up from there and went to point b any stops like say you stop and got lunch that theoretically as long as it’s on the same miles and it didn’t add any miles that’s fine but lunch stop itself is not a tax deduction um or any of any personal use you did between, but from warehouse to me to drop off my Amazon and then back to another warehouse to go to another person back and forth, those would be actual true business miles. Yeah, the one thing I was concerned about was going to follow up on, you kind of touched on it. My last delivery, maybe 60, 70 miles from my house, whereas the warehouse is only five or ten miles from my house.09:20-09:34That’s where I have to say, you know, almost your ideal situation is the drive from that last delivery to the warehouse, call that the end of that business mile and from warehouse to home.09:35-09:36I mean, that’s what I was wondering about.09:36-09:45There is ways around it, but that would be the way around it would be to go ahead and make the drive back to the warehouse and then from warehouse to home.09:45-09:49and that way the commuting would be less than you get a longer business mile.09:49-09:50I have people that will leave their home.09:51-09:58And within a mile or two, their first, let’s just say, their first business is a state farm.09:58-09:59And it’s only two miles from the home.09:59-10:01So they stop there first.10:01-10:06So the commuting from their home to the state farm, because that’s a client, they won’t count.10:06-10:28But from that point on, the rest of the day, and they do the same thing on the other end, where they’re basically seeing their last client a few miles from home because the commuting is what’s, we don’t get to deduct. So yes, if you can work your calendar to allow for that, that’s a perfect miles day. Yeah, it’s possible, but it’s a headache to do because they do the routing and, you know.10:29-10:46And traffic, I mean, sometimes you have to put up with a lot, even those few miles could be more tedious to your nerves than it is in tax savings. But now with, what, 70 cents a mile in 2025, it’s kind of worth the headache if it’s available to you.10:47-10:48I mean, if that keeps going up.10:49-10:50Yes, well, three cents.10:50-10:56So like you said, it was 67 and 24 the year we’re talking, but currently you’re at 70 cents a mile.10:57-11:00So for next year, I’ll have even a bigger deduction.11:00-11:00Okay.11:00-11:01Yes, that. Which.11:02-11:06I was wondering about that because I try to keep up with it.11:06-11:10I basically, I’m retired and I do this, you know, just stay active.11:11-11:11Right, right.11:11-11:14And basically, I don’t go anywhere anyway.11:15-11:22And just driving from my house to the gas station where I fill up, I usually keep track of my mileage there.11:23-11:33And then come back and the next day, I use all of that mileage, but I’m only four or five miles from the warehouse.11:34-11:39And I take that mileage and I deduct at least 10% of it before I ever take my standard deduction.11:40-11:40Okay.11:40-11:44So, it sounds like you have a mileage law as well.11:45-11:45Right.11:45-11:49Well, that’s the advantage if you’re doing this in the way it is.11:50-11:58I’m concerned that tax law may eventually turn you guys into carriers like rule mail carriers, and they’re not allowed to use miles.11:59-12:00They have to use actual.12:01-12:09And I’m wondering if they’re going to eventually change the tax law for the delivery companies, because they’re very similar to rule mail carriers, you know.12:09-12:12but so far that hasn’t happened, Richard.12:12-12:13I’m just saying.12:14-12:15They want me to go actual.12:15-12:19I’ll only gain because I’m knocking at least 10% off before I ever file.12:19-12:23And I don’t do that many miles for personal reasons.12:24-12:24All right.12:25-12:26Well, I appreciate it.12:26-12:27That’s a great full call.12:27-12:27Thank you.12:28-12:30And I listen to you while I deliver, by the way.12:31-12:32Thank you so much, Richard.12:32-12:33Stay safe out there, right?12:34-12:34All right.12:35-12:35Thanks.12:35-12:35All right.12:36-12:38Jacob, I’m going to hold through the break.12:38-12:39I’m already about a minute over.12:39-12:41We’re going to take a quick break on the Doctor Friday show.12:42-12:42We’ll be right back.12:44-12:48All righty, we are back here live in studio, and I’m sorry.12:48-12:49We lost our last caller.12:49-12:54I know those breaks can be long to hold, especially if you’re driving and getting out of the car or whatever.12:54-12:56If you get time, you can give us a call back.12:56-12:57The phone lines are open.12:58-13:06615-737-99-86-6-15-737-97-99-8986.13:06-13:09I did want to go back and just reiterate for everyone.13:09-13:19in 2024, the miles was 67 and 2025. Your mileage rate for businesses is going to be 70 cents a mile.13:20-13:27It is a great tax deduction, guys. I mean, think about it. If it’s done correctly, most businesses, most individuals have miles, you know.13:29-13:35But what was great about the conversation we just have with Richard is he brought up the fact that commuting is where people get in big trouble.13:36-13:46That or just not tracking it at all, just making it, oh, I think, I think I started about 35,000 and now I’ve got at least 75, so I must have done 40,000 miles last year on my car.13:47-13:48It doesn’t quite fly.13:49-14:00At least if you’re using something like mileage IQ, your calendar is one of your better tools as well because then you know who you met with, you know, why you were meeting, is it a new client?14:00-14:04Was it just to go out and visit to make sure that services were going good?14:05-14:10Was it a meal that you took with either clients or a potentially new client, et cetera, et cetera?14:11-14:13Then you have the details on that.14:13-14:14You do need the details.14:14-14:15You need to understand.14:16-14:20Another good thing nowadays with cell phones is meals.14:21-14:25Meals, we all know that entertainment right now is not a tax deduction, but meals are.14:26-14:34So you need to make sure that you have your meals put together so that you know what meals are going to be deducted.14:34-14:36Is it a meal that it was just for you?14:36-14:37Were you out of town?14:37-14:44Were you, you know, traveling or, I mean, if it’s just that you were further from home.14:44-14:47I know a lot of people do that 50 miles from home.14:47-14:50That doesn’t really apply as it used to.14:50-14:54I mean, at one point, I know, but the IRS has pretty much come down now.14:54-15:00And unless that meals has to do with generating income and you eating isn’t really going to do that.15:01-15:03I know, again, I’ve heard the things.15:03-15:07I had to take a meal out because I was too far from home to get back for lunch.15:07-15:12Well, nowadays, again, you know, that isn’t going to be one of your things.15:13-15:20If you have travel, which means you’re actually spending a night someplace, then there is a traveling allowed and there are meals.15:21-15:26But if you’re local and you’re just feeding yourself, that’s a choice, not a tax deduction.15:27-15:55And if you’re feeding your crew, now that’s where it gets a little interesting because if you’ve got, 50% or more of your crew, and a lot of times, like my construction guys, they’ve got 100% of their crew almost on the site, and you decide to feed them lunch for convenience of the company so people don’t, or maybe there’s no place to eat around the job site and you bring in food, So at least 50% of it would be a deduction.15:55-15:56So it’s something to think about.15:57-16:10And in some cases, though, if you’re a restaurant and you allow your employees discounts, while they’re there because it’s better for them to just eat at the restaurant than to go out and grab something and come back and you do it during the time there.16:10-16:10That’s fine.16:10-16:15But sometimes they are also given discounts when they are not working.16:17-16:21And if that’s the case, that becomes actually taxable income to your employee.16:22-16:24So be careful about what benefits you give.16:24-16:26All right, we’ve got Todd in Mount Juliet.16:26-16:28Let’s hit Todd and see if I can help him.16:28-16:29Hey, Todd.16:30-16:30Hello.16:30-16:43My question is, I’m on Social Security, and I’m wondering about my taxes.16:43-16:46Okay. Do you have other income other than Social Security?16:48-16:50No, just Social Security.16:51-16:52Are you married? Does your spouse work?16:53-17:00I threw out $3,000 last year for my 401.17:00-17:30K-fine. Okay. And I’m wondering I need to pay taxes on that. So Todd, are you just have Social Security and that $3,000? Excuse me? So in 2024, you said you had Social Security and the $3,000. Are you married? No. Okay. And the $3,000 was the only money you received above the Social Security, correct?17:33-17:33Yes.17:34-17:34Okay.17:34-17:39So the fact is you’re not going to be taxable at $3,000.17:39-17:51The provisional tax code is 50% of your Social Security plus other income to see, but the likelihood is you are not going to actually have to worry about making any kind of payment on that $3,000.17:51-17:54Now, did they withhold any taxes on that?17:56-17:58On the $3,000, did you pay any money in?17:58-17:59to Uncle Sam already?18:00-18:01Sometimes they’ll take out 10%.18:02-18:03I don’t know.18:04-18:08My question is, do I need to file income taxes here?18:08-18:09No.18:09-18:16The only reason, my answer is, the only reason you would file income tax would be because they withheld money on that 3,000.18:16-18:19Many organizations, they’ll take out 10%.18:19-18:22And if they did, you’re going to need to file to get your $300 back.18:23-18:26If there’s no money withheld, you do not need to file taxes.18:27-18:28Okay.18:28-18:32And I’ve got one other question here.18:35-18:37I gamble on a betting site.18:39-18:39Okay?18:40-18:57And after the whole year was done, I was, after all I betted, I was, after all I bet it, I was $270 in just a good.18:57-19:09I mean, I bet it and I was like a 1,47,000, but I lost 40,000.19:10-19:16So that one, you may have to file on, Todd, because the rule on gambling has changed a lot.19:16-19:38Now, you will get what’s called a W2G is in gambling, and you might want to see what they’ve issued on that, because the way the deduction is, nowadays if you’re using just the same site, a lot of times they’ll take all the positives and negatives and say, here’s a W2G for your final $215, whatever.19:39-19:54But in some organizations, they will actually 1099 every time you win, or W2, I should say, W2G every time you win, and then you are responsible for reporting the cost, in a sense, to that.19:54-20:03So I would definitely say you may have to file taxes without knowing and not really don’t want to get too far into the weeds on this one.20:04-20:15But I would say, Todd, before you make, before you don’t file, make sure you get all of those forms, the 1099R on your 401k as well as the W2G.20:16-20:22And then if you get those in the dollar amounts, if they actually give you a W2G, the answer is yes, you need to file.20:22-20:24because most likely they’re not showing your basis.20:25-20:27So you’re going to tell them how much your cost was.20:29-20:32Will they send me that in the mail?20:32-20:40Most likely, or if you’re doing it on electronic app, it may be able to be downloaded at the end of the month, at the end of January.20:42-20:46So if I don’t get anything in the mail, do I have to worry about it?20:47-20:55Well, you do if they say that they’re not mailing them, they’re only electronically sending them, and then you have to be able to download it.20:55-21:00So you need to double check with your, I’m assuming this is an online site that you’re using.21:00-21:01Yes, yes.21:02-21:12So you need to check that online site to see if there’s any year-in tax documents you need to use, because nowadays they’re not actually obligated to physically mail that information.21:15-21:19But I’m sure you get a lot of questions about this, people that gamble.21:19-21:24is this your response to it?21:24-21:25That’s my response.21:25-21:32My response is there’s no easy answer because depending on I have people that do the boats that travel that go to Las Vegas.21:32-21:36I have people that do the online sporting apps and all of them treat it differently.21:37-21:43All I can tell you is that you will most likely get a W2G and if you do, you’re most likely going to need to file taxes.21:44-21:46Again, I don’t know your exact.21:46-21:47I mean, it’s too hard.21:47-21:48It’s sort of a general answer.21:48-22:00and I get that, but you are going to need to make sure, because I have had a number of people that get love letters back later, where it says you didn’t report all of your income, and then we have to go back and file on those W2Gs.22:02-22:08So if I don’t get that in the mail, I don’t have to worry about it.22:08-22:09No, that’s not my answer.22:09-22:12My answer is by law they don’t have to mail it to you.22:12-22:17It can be required that you have to go on to the online site and download it yourself.22:17-22:18They do not have to physically put it.22:18-23:51put it in the mail. Okay. Thank you for your advice. No problem, buddy. Thanks. Let’s see if we can get Richard real quick before the break. Hey, Richard. Hi. Hi. I put in a solar energy system in 2024 and what documentation do I need to claim it on taxes? Um, let’s see. It’s an 8,000 report. I want to say, good job for doing that it’s a 5695 5695 yes sir okay so I just fill out the form fill it out and it’s gonna you’ll have to have a receipt for I mean you should have one it may not be required to attach but we usually scan it in just to show that you paid it so you can make sure you get credit for what I’m not even sure what the credit is right now are we at what 30 40 percent do you know I don’t have any on top of my list I was trying to figure out the uh yeah i don’t know exactly but i do have a receipt for it good that’s what we’re going to need so yeah it will fall on that and then it’ll give you the residential energy credit um for for that and um i may look that up after this break here and just let you know what that percentage is uh but definitely put it on your return under that form and then it will roll over for you okay okay thanks so much hey no problem thanks for calling we’re going to take our second break here and when we get back. I will let you know what the energy credit is, as well as take some of your calls.23:51-24:00615-737-9-39-86. We’ll be right back. All righty, we are back here live in studio.24:00-25:19You can join us in the studio, 615737-9986, 6157-37-9986. And for my gentleman that just called me about the energy, it is 30% of what you paid. And then it’s not refundable. It will, reduce your taxes and then if for some reason that is more than what you owe in taxes, then you’ll be able to roll it over into 2025. But it is a credit. So it’s a great one. So depending on your situation, will be good shape to make it work for you. All right. So again, if you want to join 615-737-99-86-1-5-737-99-8986, taking our calls, talking about, hey, we’re getting tax season, right? So I wanted to make sure when I was talking to that last gentleman about the gambling, I know I think he was wanting me to say he wasn’t going to have to file, or he just wanted to know what the actual true, you know, gambling situation is. But it’s a little bit trickier when it comes to gambling and taxes. If you report your W-2 federal tax are withhold that flat rate of 24%, if they actually give you one.25:21-25:28If you’re using like draft kings and things like that, there are certain state and federal regulations that you need to get into.25:29-25:38And draft king is relatively new in my office, maybe the last four or five years that we’ve seen more and more people using the online situation.25:39-25:45If you have internet access and you want to know more about the gambling, you can go to the IRS website.25:45-25:46It’s topic 419.25:46-27:20gambling income and losses because it’s not quite as simple. The losses have to fall on a schedule A, right? Which we know is difficult because many people, if you only have, this gentleman, it sounds like he may have won some bigger pots, but if you won two or three thousand dollars and maybe you gamble, then you can only take up to what you won, you’re not going to get the tax deduction against the income. This is what I was trying to explain. I’m not too sure if I did a very decent job on it. But under the current tax law, it used to be you could write off your income of gambling right against your deduction of gambling under the 2106. But now they basically have it going under the Schedule A, if you don’t itemize, you may pay tax on the gambling without being able to itemize the deduction. Now again, I will say that they seem to be now when you go into casinos or if you use the same gambling for them, be it the boats or, like, Las Vegas or whatever and you gambling at the same place, they seem to take your positive and negatives and kind of wash them against each other so you don’t have to worry about paying tax on the big wins because you lost all that same money re-gambling. I mean, I know there are professional gamblers, but most people that gamble, and that could be either in gambling or in playing the stocks or anything else. Stocks, I think people have a much better chance, but I have some day traders that could easily have large losses in the 50 or 60 percentile there.27:21-27:24So again, just making sure that we have that information correct.27:24-27:30So if you need help or you’ve got a question, you want to join the show, it is a cold and wintry day outside.27:31-27:34Actually, you know, I just went out there a second ago, and it wasn’t as cold as I thought.27:34-27:36My snow is melting here in Spring Hill.27:37-27:41We got a pretty decent amount, but the grass is already starting to show through.27:41-27:44So it seems like it’s a bit warmer out there.27:45-27:52But if you’re sitting at home and you’re thinking, okay, I’m going to start thinking about taxes because I like to get them filed sooner versus later.27:53-28:01One thing would be for small business owners, this may be a perfect weekend to go in there and reconcile your final month of December.28:01-28:20And then review any kind of credit cards or anything where you may have had equipment purchases or trips or any kind of expense that may have been put on a credit card that you don’t you may not have picked up or if you haven’t itemized a lot of times I’ll see people that just have Chase or something like that on their expenses.28:21-28:29But, you know, just because you paid Chase credit cards $2,000, it doesn’t tell the IRS and or your tax person what that was for.28:30-28:34That needs to be broke down into office supplies, meals, equipment.28:35-28:36What was the money spent for?28:36-28:38Was it deposited in the bank?28:38-28:39Was it income?28:40-28:41You know, those are the kinds of things.28:41-28:42We need those details.28:43-28:47Sooner you keep it fresh in your brain, you go into, and I am a quick book user.28:47-28:53You can use desktop or they’re solely eliminating desktop and pushing everyone towards online.28:54-29:05But you can take pictures of all your receipts and you can upload them right in there so that throughout the year, instead of having to save every receipt, you know, every time you write a check, you can upload.29:05-29:42load the invoice every time you take a meals or entertainment or anything that, you know, running through your system, you can attach the receipt right behind it. And therefore, you’ve got a fairly audit-proof situation. The only time that would be questionable is if you’re taking a deduction that you really aren’t entitled to taking. A lot of times, you know, people think, again, I use meals because every many times people think anytime they eat out, every meal they ever do could be a tax deduction because they’re either thinking, doing, or going to do something to do with business, therefore, you know, but it’s not essential. Meals in most businesses are not essential.29:42-29:48Now, there’s always an exception to every exception in taxes. That’s why it’s difficult to just do a black and white answer.29:48-29:57Because usually in my own brain, I can come up with a scenario where I’ll tell someone, you know, you can’t take this commuting, but in other cases, it is deductible.29:58-30:08So whatever you hear on this show or any blog, or anything you’re listening to from a tax expert, just keep in mind, it’s mainly generic.30:09-30:12We’re not trying to give any one person tax advice.30:12-30:13In my case, I’m not.30:13-30:17I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.30:18-30:25I am trying to get people to think about their own taxes, to use tax law in the best of their ability to do it.30:25-30:29I mean, I don’t, many people can do their own tax return.30:29-30:32I don’t think everybody needs a person to prepare their tax.30:32-30:37But there are times when something comes up and you might need to have someone help you with your taxes.30:38-30:44Maybe you’ve got rental property and you don’t understand depreciation or what’s the difference between an asset and repairs?30:46-31:01Should it be on a Schedule C and all of you that have Airbnbs or VRBO’s short-term rentals, then most of you should be putting them on Schedule C’s, not Schedule E’s.31:01-31:03And this was a learning curve for many of us.31:03-31:18So I’m not going to say when first, but the courts have come down saying that short-term rentals are going to be considered earned income, unlike long-term rentals, which are passive.31:19-31:30So again, one of those things that you really want to make sure you’re going with, adjusting and taking, because what may have been 10 years ago common tax law, you know, it changes every year, guys.31:30-31:48So sometimes something that was isn’t anymore at all, or they’ve changed the tax law, main one that comes into mind, I still go to speaking engagements and meetings, and people will say, well, as long as I sell my home today and I reinvest it in the next year or two, I don’t have to pay any capital gains, correct?31:48-31:52And the answer is no, that was a tax law many, many years ago.31:53-31:58But the current tax law is you have an exclusion of $250 per person.31:58-32:00So if married people, it’s $500.32:00-32:05if you’re both lived in the house for two out of the last five years, single people would be 250.32:05-32:08If you’ve lived in that house, two out of the last five years.32:08-32:16And there are some mandates you have to meet if you’ve been doing it every two years or something, trying to avoid capital gains.32:16-32:26Again, that’s what tax law is about, is trying to maximize tax deductions, but also understanding what obligation do you have and what type of paper trail do you need?32:26-32:37Because there are situations, one that comes to mind where a person only lives, lived in the house a year, but due to serious medical issues, they had to sell the house.32:37-32:40There are exclusions on not having to meet that whole year.32:41-32:43Another one just came up was a divorce couple.32:43-32:47They had brought a house, purchased the house about a year or so ago.32:47-32:48They ended up divorced.32:49-32:52So obviously, they’re not both living there.32:52-32:55They sold the home because it was a joint property.32:56-32:58And there is an exclusion for something like that.32:58-33:10So, you know, even though I give you one, the standard is two out of the last five years, you get the $250,000 exclusion, but there are exceptions to most rules when it comes to taxes.33:10-33:17So, you know, just make sure that when you’re doing your taxes, you understand your Pacific tax situation.33:18-33:19That’s all I’m trying to say.33:19-33:28If it’s something that is black and white, 70 cents a mile for 2025, then that’s fairly black and white.33:28-34:27but what mild what constitute miles for you versus the guy that’s the delivery guy the guy that is like myself where i basically have a home office but my clients are not never come to my home therefore it’s for the benefit of myself more than the business um on that situation so um let’s go ahead and get alan on if we can and that way he can get through the break hey alan what can I do for you? Yeah, I’m kind of wondering, this is kind of a weird question. If somebody that is a Canadian citizen and they lived here in the United States and they have a green card, did they call it, they’re allowed to work here, and they did work some in Canada, would they be entitled for their Canadian Social Security, do you know? Oh, I mean, I have many Canadians that their Social Security from Canada, and now they live here.34:28-34:28Yeah.34:29-34:45You know, so the answer is, as far as I know, as long as you meet the Canadian criteria, whatever, and I don’t know what it is, like here in Tennessee, here in the United States, you’d have to have worked 10 years to qualify or 40 quarters for Social Security.34:45-34:51I don’t know what theirs is, but yes, I have people that receive their Canadian Social Security and still live here in the United States.34:52-34:54So that could apply to quarters rather than years.34:56-34:57Quarters would be the same.34:58-35:05Yeah, I mean, some people, let’s say they only worked half a year, so that’s two quarters in, you know, in a full year.35:06-35:10So you have to have had 40 quarters or 10 years, which is 40 quarters.35:10-35:12But some people could spread that out.35:12-35:16It may have taken them 15 years to get 40 quarters, I guess, what I’m saying, for the United States.35:17-35:24I don’t know Canadian law, so I don’t know for sure if they have, any mandate or as long as you’ve paid in.35:24-35:26It’s a lot like Social Security.35:26-35:27It seems like to me.35:28-35:30Well, I guess somebody gets a hold of a Malky.35:31-35:32There you go.35:32-35:33You need to go check it down.35:33-35:35Find out if you’ve qualified for it.35:36-35:36All right.35:36-35:37Well, thanks for your help.35:37-35:38And enjoy your show.35:38-35:39Thank you.35:39-35:39Thanks, buddy.35:40-35:42All right, we’re going to take our last break for the show.35:42-35:50And if you want to join the show, 615-37-99-86, we’ll be right back with the Doctor Friday show.35:50-35:51We are back here.35:51-37:01live in studio. So let’s go ahead hit Eric who came in through the break and that way we can hopefully give him a little help. Hey Eric, what can I do for you, sweetie? Hi, Dr. Friday. I enjoy your show. I have a travel expense question. I own some property in Arkansas and it’s timber property and I stay overnight, several days doing work there. And I’m wondering if I can just use the per diem on the meal allowance. Of course, I use the same per diem on mileage, but I would think my actual expenses on meals are much lower than the per diem. So I think I’m entitled to it. I just wanted to check with you. You would be entitled to per diem, assuming that the reason you’re going to that property is for generating income, right? You’re visiting it to make sure that either there’s timber available for cutting, where it’s growing. If you’re growing, I don’t, you know, I mean, And the biggest thing is making sure that the reason you’re going down there is for the property and to generate potential future earnings, then you have family down there and you just say you’re going to look at the land.37:01-37:02That’s all I’m saying.37:02-37:05I mean, you know, but answer to your question, the per diem would be allowed.37:05-37:05Yes, sir.37:07-37:13Yeah, I notice there are local areas that have a different rate than the metropolitan areas.37:13-37:14So I’m aware of that.37:14-37:21I normally use the per diem in my tax claims.37:21-37:29I mean, there’s nothing wrong with that because most of the time, any meal, it’s under $75 a period anyways.37:29-37:36I think it’s cleaner when you can use the per diem as long as you can prove the trip and you’ve got your hotel stay and everything.37:36-37:38So you’ve got documents that you actually went there.37:38-37:39So that’s not a problem.37:40-38:09Yeah, and I think you claim actual motel expenses rather than, than the per diem allowed correct yes no you’d want to use your actual hotel because you’re not you’re not going to take the per diem it could be actually lower than what you paid right okay well thank you very much appreciate your show thanks buddy appreciate it all right um we’ve got another caller coming on here his name is doug from nashville let’s see if doug’s available hey Doug, what’s happening?38:10-38:13I have a rather unfortunate one for you.38:14-38:15See if you’ve had one like this.38:17-38:23Family member, brother is involved in a husband, it’s still involved in a dating scam.38:23-38:30And so far he’s admitted to have been paid out $20,000 odd dollars and admits it to scam.38:33-38:35Number one, would that be tax-aductible, blah, blah, blah.38:36-38:41Also, he’s involved in another one, which, I mean, just off the charts how stupid it is.38:41-38:44And I’m working on that, but still, any suggestions.38:44-38:46I’m seeking for any suggestions.38:46-39:02Yeah. To be honest with you, Doug, no, unless it becomes a federal case where there is an actual lawsuit going on, sometimes that does lead to the ability to have fraud, you know, charges.39:03-39:08But the basic scams, unfortunately, the IRS looks at it and as gifting.39:08-39:16I guess of lack of a better term, is more like he’s just, he’s agreed to gift this money to some stranger.39:16-39:28And we all know that it’s sad because most likely, from my personal experience within friends and family, it’s because the person is a little lonely and therefore they find somebody that, you know, knows how to play on that.39:29-39:31And it’s not like one big check.39:31-39:34It’s just a lot of little payments made out in the situation.39:34-39:37But Doug, none of that is going to be a tax deduction for him.39:37-39:45And I’m hoping I had a case where the guy took money right out of his 401K and sent it overseas to a potential supposedly wife.39:47-39:53Obviously, he got hit with the taxes on that 401K withdrawal, and there was nothing we could do.39:53-39:58There’s no tax law saying that he couldn’t do it, but there’s also no deduction for it.40:00-40:04Yeah, it’s beyond stupid some of the things you see happening.40:05-40:07Yeah, they suck. I mean, I hate that.40:07-40:41say it, but they do take advantage for individuals that, um, mostly lonely or just, they think they’re dealing with a reptable person and, you know, they just play on it. So it is a shame. Um, and I know some banks have done some good things with trying to help, you know, protect against that kind of thing, but all in all, Doug, your best bet is to get, if possible on that, on that sibling, if he’s still doing it, and I don’t know if he’s been, you know, is maybe a second, uh, signature required for anything over, you know, $100 or something until he gets a handle on what, what’s really happening.40:42-40:51Because he may not see it even though it’s happening. The kicker is they will not, he will not admit that it’s occurring. And I really don’t want to be a scene that you’re on the account.40:51-41:07Yeah. And you don’t want to be a babysitter. I mean, that’s not what you want. I get it. But, you know, unfortunately, these people can drain the people dry. You know, I mean, and they don’t care. They have no mercy for what they’re doing to, to the other person. It might be.41:07-42:06opinion so yeah but from tax standpoint there is nothing that can be done I am so sorry all right no I appreciate it thank you thanks buddy yeah and and I will you can hang up on dog I will say that this is no different than the scams we have from people call and say the IRS is calling and they say you owe money that’s still out there guys and if for any reason even if you owe money first the IRS is not likely to pick up the phone and call you you very rarely. I won’t say it doesn’t happen because sure it does. But if for any reason, you just aren’t sure, I will tell you this, no revenue officer or revenue agent would ever call and say, you need to pay us now, give us your credit card, give us your banking information. Never, ever, ever going to happen. If there’s a payment required, they’re going to either have you certify a check directly to the local or the main office or whatever.42:06-42:11I always suggest using the IRS website to make those payments so you have confirmation.42:12-42:15Don’t just give that information out.42:15-42:27And if a revenue officer or collection agent calls and they’re wanting to confirm information and they’re like, confirm your social security number, confirm your address, confirm your date of birth, don’t do it.42:27-42:27I’m sorry.42:27-42:30Even if it’s a legitimate caller, don’t do it.42:30-42:46at least hang up, call the local 615, you know, I don’t need, 250 something number or, or if you have letters from the IRS, follow up, there’s phone numbers on there, there’s 800 numbers.42:47-42:47Call those numbers.42:48-42:50Do not call back, even the number.42:50-43:02I had it happen here in my office, said I missed jury duty, and they said that I owed a fine because I had missed jury duty, and it came up as the, the local sheriff’s office.43:02-43:04And I’m like, oh, gosh, did I somehow forget.43:04-43:05I didn’t see a sticker or whatever.43:05-43:10And this guy knew certain things that I had not, as far as I know, preempted.43:10-43:17But I hung up the phone and called the sheriff’s office back again because it just wasn’t making sense what he was saying as far as I was concerned.43:17-43:21And sure enough, that was a scam, but they could duplicate the phone number.43:21-43:30So even if the phone number of the person you’re talking to seems legit, if it says, you know, it says U.S. Treasury or whatever, still hang up.43:30-43:32It’s that simple.43:32-43:43Get the name, get the badge number, and then hang up and then call the local or call the 800 number for the IRS and then see if that person is true.43:43-43:52And then you can consider that because you’ve, you’ve instigated and you know you’re actually talking to this correct agent because they may never exist.43:52-43:55And any information you’re providing now is just crazy.43:55-43:59So, all right, guys, we’re down to about the last minute almost of the show.43:59-44:03So what an aide, thank you all for participating.44:03-44:12Next, we’re going to be getting ready for obviously making sure if you haven’t got your tax appointment at our office, you can go to DRFriday.com.44:12-44:16Click on the calendar or the scheduler and go ahead and make your appointment.44:17-44:24We do have Chris in the office this year, so we have a little more room to hopefully get some of you guys some expertise if you need it.44:24-44:29Also, you can also email Friday at DR Friday.com.44:29-44:32Monday morning, you can give us a call here in the office.44:34-44:37615-367-0819.44:37-44:38I do want to correct something.44:38-44:44I said tax season opened on the 29th, and it actually opens on the 27th for E-File.44:44-44:47January 27th for E-File is happening.44:47-45:26And if any of you, because I know we do have people that listen online or have family in the California wildfire areas, Um, just know that they’ve extended their taxes all the way out to October. Not that that’s at this moment. I’m sure no one over there is thinking about that, but sometimes it’s nice to just take the pressure off. Know that you’re not going to be held responsible, uh, for that. So if you do want to reach us again, the phone number is 615, 365, 367.0819. Looking for an appointment. Just go to DR Friday.com and click on the calendar or email Friday at That’s DR Friday.com.45:27-45:28That is how you reach us.45:28-45:29We’re going to be here again next Saturday.45:29-45:31Hope you enjoy this cold day.45:31-45:32Cop you later.

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Did you know that gifting money to your children doesn’t offer a tax deduction? In this episode, Dr. Friday clarifies common misconceptions about monetary gifts. While your children won’t pay taxes on the money you give, any applicable taxes are your responsibility. Learn how gifting up to $18,000 per person annually—or $36,000 for married couples—can help, and understand the tax implications for these transactions.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Gifting money to individuals. People often think that if I gift my children money, I can deduct it as a way of gifting. Let’s just put that to bed. No, that’s never going to happen. That would be transferring money to your kids, and everyone would love to do that for a way of saving tax dollars. You can gift your children money, and they will not pay tax. You, the giver, will pay any tax if any is due. If it’s just sitting in your checking account, you’ve already paid tax. You give the money to your children; they do not pay tax. You can do that $18,000 per person. So if you’re a husband and wife, $36,000. Need help? Give us a call at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday outlines the key differences between flex savings accounts (FSA) and health savings accounts (HSA). While FSAs allow a rollover of only $640, HSAs offer the benefit of accumulating funds year after year. Both options help you save on taxes, but understanding their limitations and advantages is crucial for smarter financial planning.

Transcript:G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Flex savings accounts and health savings accounts are both wonderful tools to save money and defer some income. However, remember that with a flex savings account, you can only roll over $640 into the next year. Health savings accounts, on the other hand, allow you to accumulate funds year after year.

There are pros and cons to each. While I’m not an insurance expert, I can tell you that if you want to save tax dollars, an HSA is a fantastic option. If you’re looking for immediate benefits, an FSA might be the way to go. Either way, both are excellent for keeping more money in your pocket.

If you have questions, give our office a call at 367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday discusses capital gains tax under current laws, explaining how rates differ from ordinary income taxes. She highlights the zero-percent capital gains rate for single filers earning $55,000 or less and married couples earning $100,000 or less. Learn how understanding these thresholds can help you keep more money in your pocket.

Transcript:G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Things that we need to think about that may change: capital gains tax, for example. It’s kind of unusual. It used to go right along with the ordinary income tax. Under the current tax laws, it doesn’t. Right now, we have a 12% ordinary income tax, but capital gains kick in at 15%.

But don’t forget that free, zero-percent capital gains rate that’s available for people with smaller gains. For a single person earning $55,000 or less, including all income, you could qualify for the zero tax. For married couples, it’s $100,000 or less.

These are the kinds of things you want to know to put more money in your pocket by understanding taxes.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday emphasizes the importance of early adjustments to your W-4, 401(k), or 403(b) to maximize your tax benefits. Starting early in the year allows you to make meaningful changes, whether you’re fine-tuning your withholdings or increasing retirement contributions. Avoid the rush and financial strain of last-minute adjustments by planning now.

Transcript:G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

We are in a brand new year, and it’s time right now to start thinking about W-4 forms. That’s how much money is going to be coming out of your W-2s. Also, do you want to put a little more money into a 401(k) or 403(b)? Now’s the time to think, so you have the whole year to make these adjustments.

So often, when people come into my office, it’s already April or even as late as September or October. Then we’re scrambling to make changes, which doesn’t leave much time to adjust for the current year.

Now is the time to ask: Are you withholding enough? Are you in the middle of a divorce? Make the adjustments today, so it doesn’t hurt so much tomorrow.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday highlights the importance of understanding your 2025 standard deduction for accurate tax preparation. For singles, it’s $14,600; married couples get $29,200; and heads of household, $21,900. Plus, additional deductions apply if you’re over 65. Start with the standard deduction to assess your tax situation and ensure you’re ready for the season.

Transcript:G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Preparing for your tax preparation is very important. Time is coming, and you need to understand simple things, like what the standard deduction is this year. If you’re single, it’s going to be $14,600. If you’re married, it’s $29,200. Heads of household get $21,900.

If you’re over the age of 65, you’ll add another $1,250 for married couples and $1,500 if you’re single. These are important numbers to start with. Knowing your standard deduction helps you figure out if you’ll owe taxes, get a refund, or what your overall situation will look like.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Welcome to the January 5, 2025 episode of The Dr. Friday Radio Show! Dr. Friday, an experienced tax consultant and financial counselor, is here to answer your tax questions and help you kick off the 2024 tax season the right way. Tune in as she covers key updates, answers listener calls, and shares practical advice for navigating taxes, RMDs, and financial planning in 2025.

Key Topics Covered: 2024 Tax Season Kickoff + Importance of organizing tax records early. + Recommendations for small business accounting tools like QuickBooks. * BOI Compliance Updates + Recent court hold on the Business Owners Information (BOI) mandate. * Estimated Tax Payments + Strategies for wage earners with investment income to avoid penalties. + Explanation of quarterly tax requirements for self-employed individuals. * Claiming Dependents and Tax Credits + Guidelines for claiming non-income earning dependents, such as elderly parents. * Inheritance and Taxes + Tax implications of life insurance payouts and inherited assets. * Cryptocurrency Taxes + Warning about potential scams and clarification on crypto taxation rules. * Required Minimum Distributions (RMDs) + Updates on rules for RMDs and Qualified Charitable Deductions (QCDs). * Listener Questions* + Topics ranged from Roth IRAs, trusts, and estate planning to charitable giving strategies.

Transcript00:00-00:07No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes.00:07-00:10She’s the how-to girl. It’s the Doctor Friday show.00:14-00:22If you have a question for Dr. Friday, call her now. 737 W.WTN. That’s 7379986.00:23-00:27So here’s your host, financial counselor and tax consultant Dr. Friday.00:27-00:32Oops, I have a feeling I wasn’t talking.00:32-00:33This is Dr. Friday.00:33-00:34I’m here live in the studio.00:35-00:36And sorry about that.00:37-00:40We are wishing everyone to Merry Christmas and a Happy New Year’s.00:41-00:44And we’re getting ready to start the 2024 tax season.00:45-00:47And obviously it’s 2025.00:47-00:52So we’re going to get ready to making sure that everyone has their tax appointments, making sure that we’re dealing.00:53-00:56I want to start with the B-O-I business owners information.00:56-01:00You heard us talk a lot about that in the last year, especially in the last month.01:00-01:06And then, no surprise, someone decides they’re going to be taking that particular ruling to court.01:06-01:08So they put a hold on the mandate.01:08-01:16So if you did not comply or you’re not even sure what I’m talking about when I say B-O-I, at the moment, you are good.01:16-01:18You don’t have to worry about doing anything else.01:18-01:23All you have to worry about is getting your tax records ready for the 2024.01:23-02:06And if you’re a brand new company, making sure that you have, you know, starting the new year outright, start out with a good system. That system can be something as simple as pen and paper, to be quite honest with you. There are some businesses that really do do just fine with pen and paper, but the most likely or best system that we have found in almost 30 years of doing accounting and taxes is using Intuit or QuickBooks. It has changed a lot in the last, number of years. It was a little easier when everything I think some ways was on desktop. That may be just making me a little bit older. The online system does work. It’s just a little bit more unique to work with.02:07-02:36But it doesn’t mean you can’t work with it. So if you are looking to start doing something proper, making sure you have everything, then you might want to start. It’s what, January 3rd, 4th. And it’s time to start the new season, maybe go online, look at QuickBooks or Intuit or Online QuickBooks and see about starting your accounting out the right way because, you know, the number one reason most small businesses, I shouldn’t just say small medium and small businesses, which is what we usually deal with.02:37-02:41The one reason they usually get in trouble is not great paperwork, right?02:41-03:13They’re good at doing what they do, whatever that business might be, but they’re not necessarily good at tracking how the income and expenses, or they’re working with some misconceptions that, that, you know, every mile put on a vehicle, if it’s sent home with an employee, could be a tax deduction, or it could not be a tax deduction, buying certain gifts, especially over the holiday season. Sometimes you like to thank your customers for doing things, but if you’re spending hundreds of dollars to do that, you may be in trouble, depending on the proper documentation and all that that goes with it.03:13-03:19So really, and do you have a reimbursement program, a part of your company? Are you non-reimbursed?03:19-03:22So employees cannot write off deductions.03:22-03:23Companies can.03:24-03:25So all these questions come up.03:26-03:39And so really right now, what we want to be concentrating as the first week of January 2025 is really making sure 2025 starts out right and starting to prepare for our taxes for the whole year of 2024.03:40-03:44That means reconciling your 2025, you know, last year paperwork.03:44-03:46Most likely people are just starting to work on that.03:46-03:52and then going through the whole year and making sure there’s nothing in there that you missed.03:53-03:56Was there some sort of accident that you got an insurance payment?03:57-04:01Was there some sort of equipment purchase that didn’t get put on the books?04:01-04:03All these kinds of things come into play.04:03-04:06And you’re really just starting to think, what do I need to know?04:07-04:07What should I know?04:08-04:08What should I not know?04:09-04:13And what am I wasting a lot of times trying to figure out, which may not make as much different.04:13-04:16So all these things come into play, it really makes it.04:16-04:45a fun and exciting situation. All right, let’s hit Steve and Franklin. Thank goodness, an early phone call. I’ve got to figure out, hey, Steve, what’s happening? Well, I hope you’re having a good new year. I am, and I want to ask about quarterly payments. Now, I’m a wage earner, and so I’m W2 and all of that. I do have some other stuff like interest and dividend income, but I’m just concerned.04:45-04:47should I be making quarterly payments?04:47-04:56I anticipate I’m going to have a small liability, maybe $1,000 based on everything that I can But how important is that?04:57-04:58And I’m just going to hang up and listen.04:59-04:59Okay, sure.04:59-05:00That’s great question.05:01-05:01Estimated payments.05:02-05:04Our last one for the year is due January 15th.05:04-05:07Our first one for 2025 will be due April 15th.05:08-05:25And what Steve is asking is even though he’s on a W-2 and he may be paying enough taxes on his earned income, with the fact that he has interest, dividends, stock, other investments that do distribute to him, even if he’s reinvesting that money and still growing it, it has to be taxed.05:26-05:31Is he going to need to be making an estimated payment if he only owes $1,000?05:31-05:42Tax law says we need to pay in a minimum of 100% of what we owed the year before and or were required to make quarterly payments based on what we have.05:42-05:52The problem that Steve’s going to have to a point is this year, maybe he did great, maybe even cleaned up or did a rebalancing of his portfolio that’s with after-tax dollars.05:52-05:55And so maybe he has a higher capital gains, a lower capital gains.05:55-05:58All of that is sometimes managed by an outside person.05:59-06:06So we don’t always know until we receive the end of the year package that says, hey, this is what we have or this is what we don’t have.06:07-06:12So if you’re consistently making, let’s say, an extra $10,000 a year and that’s costing you.06:12-06:31you roughly $1,000 a year in taxes, my suggestion to Steve would be is I wouldn’t go to quarterly taxes. What I would do is just take that $1,000 divided by 52 paychecks or 26 paychecks or whatever and just have a little extra come out of my paycheck. That’s all I would do. And that’s what I do.06:32-07:12I have a number of rentals and another side business that I do. But my paycheck covers all of my taxes, at least to the best of my ability. If I sell some real estate or something, I will then usually make an estimate based on that particular transaction. But since I have an actual paycheck, I can use that as a vehicle of actually paying. But if you are an entrepreneur, totally self-employed, it is not an option. It is not a volunteer system that says, hey, if I want to pay quarterly, that’s fine. But otherwise, as long as I pay it by April 15th, or I wait till October 15th, which is a total misconception, I’m good. No, tax law says that you need to make full.07:12-07:14equal payments.07:14-07:19Because a lot of times what people will do is they’ll look at their first quarter and say, hey, I had a slow first quarter.07:19-07:20So I’m going to make an estimate of this much.07:21-07:22Second quarter, oh, is a better time.07:23-07:23I’m going to make this much.07:23-07:25Third quarter, oh, I had an awesome time.07:25-07:26I’m going to pay this much.07:26-07:27That is not equal.07:28-07:29They want you to use the prior year.07:29-07:34So in this conversation, whatever happened in 2023 is what we’re looking at.07:34-07:35Did you owe money?07:36-07:38If you’re self-employed, I’m sure you did.07:38-07:39We always owe money.07:40-07:41And then how much have you paid in?07:41-07:49And they want you to take, if you owe $20,000, they wanted you to make four, $5,000 payments on the due dates of the estimate.07:50-08:00Even if you didn’t earn as much money, basically, you can make an adjustment, but they really want that adjustment to be the one that’s being made now, because until now, you wouldn’t have known what your December was.08:00-08:02Now, some people may have closed their business.08:02-08:07There’s always exceptions to some of these rules, but the fact is it is not a volunteer system.08:07-08:42if you owe money every year most likely you pay a penalty if you don’t make quarterly estimates again if you are self-employed you don’t have any choice you need to be making them if you are an employee and you still have a side business or a side investments as stephen might have had but even if you maybe had a side business you can use your w-2 and say hey you know what take an extra hundred dollars a paycheck out so i don’t have to worry about taxes at the end of the year and i don’t have to worry about the mandate of quarterly because I have it coming out with every one of my paychecks, and I’m making those payments in a timely manner.08:44-08:46But, you know, that’s up to you.08:46-08:56If you want to keep your investments away from your paycheck, then in the case of this gentleman, he may be needing to make a $250 estimated payment every quarter.08:57-09:01And that way, then, when he files his taxes, he doesn’t have to worry about a penalty.09:02-09:03Penalties can be pretty hefty.09:03-09:06You know, they can charge up to 25 percent failure to file.09:06-09:09is 25% failure to pay is 25%.09:10-09:11Interest is now almost 10%.09:12-09:23Failure to make proper estimated payments are 0.5% for every month, so up to 6% is going to be for not making those estimated payments.09:23-09:27Now, some people will come right in my office and say, hey, I can earn more than 6%.09:27-09:29I don’t care if I have to pay that penalty.09:30-09:31That’s a choice, totally your choice.09:32-09:34But if you’re asking me, I don’t like penalties.09:35-09:40I prefer to meet the obligations to the best of my ability, so I don’t have to do it.09:40-09:45Sometimes penalties are a fact that we have to deal with as long as we know they’re there.09:45-09:48It’s not, it’s always harder when there is a surprise.09:48-09:50Okay, so if you want to join the show, you can.09:50-09:54615-737-9986.09:55-09:59615-737-9986.09:59-10:03For anyone that may just be new listener or you’ve heard me, but you don’t really know who I am.10:03-10:04I am Dr. Friday.10:04-10:07an enrolled agent licensed by the Internal Revenue Service.10:08-10:11I have never worked for the Internal Revenue Service.10:11-10:19I am licensed by them to be an enrolled agent, which is a represent you, the taxpayer, in front of the IRS, to kind of be a little shield.10:20-10:27So you have someone that knows how to talk to talk and help you manage the mandates and the questions that are going to come about.10:28-10:32So I’ve been doing this for almost 30 years here in the Brentwood area.10:33-11:03If you want, you can always go to DR Friday.com. As an enrolled agent, I am licensed to do representation and taxation. So I basically represent and I do taxes. I do all tax returns. That’s individual businesses, estates, corporations, partnerships, any of those. And we are licensed basically in all states. So if you come from another state and you need help filing it, we can certainly accommodate that as well. So if you want, you can certainly call the show again at 615-737.11:03-11:09sorry, 615-7-37-9986, I think is the correct number.11:09-11:10I may be giving my number out.11:11-11:15And then you can also email Friday at DRFriday.com.11:15-11:19That is Friday at DRFriday.com.11:20-11:25If you want to ask a question or just pursue that interest that’s going through there.11:25-11:28And we’re going to get ready to take our first break.11:28-11:31When we get back, we can get some more of your questions.11:31-11:38And you can certainly, again, email Friday at DRFriday.com or call 737979986.11:39-11:44737979986 is the number here in the studio.11:45-11:49So that way you can, it’s easy if you have a question or whatever.11:49-11:50We’re going to take a quick break and we get back.11:51-11:52We’ll get to your phone calls.11:52-11:53This is a Dr. Friday show.11:53-11:54We’ll be right back.11:57-11:58All righty.11:58-12:01We are back here live in studio.12:01-12:04And thankfully for my listeners, the phone lines are starting to light up.12:04-12:09So it looks like the first one that came in was Robert from Columbia, my neighbor right here.12:09-12:10Hey, Robert, what can I do for you?12:11-12:13Hey, Dr. Friday, how you doing, ma’am?12:13-12:13I am good.12:13-12:14Happy New Year.12:15-12:16Happy New Year’s.12:16-12:18Got a quick question for you.12:18-12:25My mother-in-law currently, she’s lived a trailer I own for the past two years.12:26-12:28And I was wondering if I could claim her on my taxes.12:28-12:31She does not pay rent or anything like that.12:31-12:38the previous, I did have somebody living there before she did, and they did pay rent, but she does not pay rent.12:39-12:39Right.12:39-12:43You’re providing that as a benefit, I guess you would say, being your mother-in-law.12:43-12:56But the answer is if she only has Social Security and you’re providing, obviously you’re providing 50% of her care because you’re providing her home, which would be in, I’m assuming utilities, unless she pays those.12:57-13:06So the rule is she has to be providing at least 50% of her care, which would be, home, utilities, food, insurance, all that kind of stuff.13:07-13:09So I think you would probably meet that.13:09-13:11Did she get other pensions other than Social Security?13:12-13:12Negative.13:13-13:13Just Social Security.13:14-13:15Okay, so I had to figure.13:15-13:19So, yeah, you can claim her without a problem because I doubt she’s filing taxes.13:21-13:21Correct.13:21-13:22She is not filing taxes.13:22-13:26So that would give you a $500 credit on your tax return.13:27-13:27Okay.13:28-13:28Okay.13:29-13:30Okay. You asked my question.13:30-13:31Thank you very much.13:31-13:35Cool. Thanks for listening. I appreciate it, Robert. All right, let’s go to Charles in Nashville.13:36-13:37Hey, Charles. What can I do for you, sweetie?13:38-13:44Hey, Dr. Friday. Thanks for taking my call. It’s an inheritance question with somebody being on Social Security.13:45-13:45Okay.13:46-13:59Mom recently passed in August. There’s four of us, and we settled her estate. So far, I have received about 15,000, and that’s from life insurance policy.13:59-14:03Is that going to affect my Social Security as far as what I get each front?14:04-14:13No, that will have, even if you’re on early Social Security disability or ordinary Social Security, inheritance would not most likely have an effect.14:13-14:16I shouldn’t say life insurance would not.14:16-14:28If you had inherited an IRA, which would come back in as ordinary income, it could affect some disability possibly, not early Social Security or Social Security.14:28-14:31Neither of those are going to be affected because they have to be from earned income.14:32-14:35But that being said, what you’ve listed would have a zero effect.14:35-14:41In fact, most likely you wouldn’t have to, if you’re only on Social Security, you would not even have to file taxes on what you’ve received.14:42-14:42Okay.14:42-14:45I just want to make sure my wife still works and everything.14:45-14:45Right.14:46-14:51So she may be claiming you, depending on how it is, but it still won’t affect your Social Security.14:52-14:53That won’t be an additional bill.14:53-14:56Let’s put it that way if it’s just life insurance.14:57-14:57All right.14:57-14:58Let me, that’s this year.14:59-15:04Now, this coming year, start this year, we have sold in a car and sold the house.15:05-15:10And on a time it’s all split up between us four, I should give me into about $60,000.15:11-15:14Again, I’ve got some really good news for you.15:15-15:20Both the vehicle and the house, you receive what we refer to as a step-up in basis.15:20-15:25So whatever it was worth back in August when mom was alive is what we would have.15:25-15:39unless something amazing happened and the vehicle she had was turned into a collectible or the house she owned went commercial from after, you know, her death, which it doesn’t sound like most likely.15:39-15:40We had actually.15:40-15:41There’d be no tax.15:42-15:47We actually sold it below what the appraised value was so we could get it sold.15:48-15:49Yeah, that often happens.15:49-15:55Sometimes the houses often need a little work sometimes, you know, even though the- That’s what we did.15:55-15:55Yeah.15:56-15:56Yeah.15:56-15:59So they could, they would take care of doing any work on it.15:59-16:01We gave them a discount on it.16:01-16:01Exactly.16:02-16:03No, that’s perfect.16:04-16:13So you will, since all four of you were most likely, was there in a state or trust or was it all just the four siblings signing off on everything?16:14-16:16All four siblings signing off.16:17-16:17She had a will.16:18-16:21And my youngest sister was the executive.16:22-16:23She took care of all of it.16:24-16:25So just curious.16:25-16:43Yeah, so you will be reporting the home sale will come to you on a 1099S, and you will have to report it, but it’s going to be zero capital gains because whatever you received was also your cost basis, or maybe you could claim a loss if you had an appraisal done.16:43-16:44So it could work either way.16:44-16:47But bottom line is it will have a zero effect for taxes.16:47-16:51It may even help you in taxes if you can capture the loss on the home sale.16:52-16:57Well, that makes me sleep a lot better at night, and I do appreciate it, Dr. Friday. Thanks for all you do.16:58-17:02No problem. Thanks for listening. I appreciate it. All right. Let’s run to Scott in Nashville.17:04-17:07Oh, thanks for taking my call, Dr. Friday.17:07-17:09Sure, sweetie. What can I do for you?17:10-17:12Okay. I have a crypto question for you.17:12-17:13Okay, I’m ready.17:20-17:20Okay. I’m ready.17:20-17:40And so it’s a function where you basically use USDT, which is Tether, and then it gets on an Ethereum chain, and they basically arbitrage prices between exchanges.17:40-17:42Anyway, on with that.17:43-17:47Technically, I made some money on this, and that’s fine.17:48-18:05But the company that I was trading with has decided to hold all of my earnings hostage until I pay what they consider a 32% profits tax before I get any money released to me.18:05-18:08And I’m telling them, you can’t do that.18:09-18:10Am I right or wrong?18:10-18:16Well, I mean, I guess it would depend on what country, what it’s being run out of, right?18:16-18:17Because with crypto…18:17-18:21They’re saying this is U.S. They’re saying this is U.S. IRS requirements.18:23-18:45No. There’s no 32 percent. I mean, even corporate taxes only 20. So there’s no 32 percent. And I doubt they’re paying your tax. You know, I’m saying. I mean, and that’s even higher than capital gains, but ordinary income tax, depending if it’s short term, could be that high. But they’re calling it a service fee, right?18:46-18:46No.18:46-18:54They’re saying I need to pay, I need, because this is what they claim, and I know they’re absolutely scamming me on this, my belief.18:55-18:57They say, I need to pay it and listen to this.18:58-19:16Since most of the trades are done in Tether, USDT, they say, I need to pay to a tax address, this 32% tax into basically the Netherlands, you know, a USDT account.19:16-19:21that supposedly is a tax account, and then they’ll release my funds.19:22-19:25And I’m like, no, you guys are lying.19:26-19:26Am I right?19:26-19:34I mean, I don’t believe that there’s any U.S. tax guide that says that this is decentralized finance.19:35-19:42And so they’re saying, you know, you can’t have, I don’t know if you’re familiar with DAPs, but those are decentralized financial applications.19:43-19:52And they’re saying that because of that, the U.S. government, due to money laundering, is making a requirement that taxes are paid before you collect any of the profits.19:53-19:55And I’m thinking, I’ve never heard of that before.19:56-20:00And so I wanted to find out from someone who actually understands the tax code.20:02-20:02Yeah.20:03-20:11I mean, okay, so I see here, who owes 32% tax bracket brought Bitcoin, blah, blah, blah, on January.20:11-20:12He failed to pay this.20:12-20:13So they’re withholding.20:13-20:18They’re calling it a USDT or a U.S.D.C.20:20-20:21Stabilizer situation.20:22-20:24I don’t, I mean, I’m going to be honest.20:24-20:26This is on Bitway, which is just one of them I follow.20:27-20:27It’s a blog.20:28-20:31And they do have something in there about it.20:31-20:37And they’re saying that that’s being reported on a form of 89, 49, which is, of course, our capital gains.20:37-20:43So it sounds like from this very quick conversation we’re having, and we need to get much deeper into this.20:43-20:45It’s not one I would go on the radio and finish.20:46-21:07But, Scott, it does sound like there is something they’re claiming that they’re collecting it on your behalf before they reuse it because they’re saying the U.S. Department of Treasury is saying that they’re being held responsible for collecting the tax before removing it so that the tax is not disappearing into the ether.21:07-21:10This is what I’m quickly reading about in this little blog, Scott.21:10-22:14we can we will definitely email back forth more about this but i don’t believe there is a direct tax law but i don’t know if i can honestly say that they haven’t taken and interpreted there’s so much that’s changed in the last four or five years with crypto i mean trying to make it more um visible right making sure people are i mean that there’s now a tax question on our 1040 there’s requirements for making sure that we’re reporting and i would say even in this when you report it into this every time they made one of those exchanges did you report that on your tax return every year even though you get the money was i mean because you could have already paid tax on some of this money oh no this is all new this is all this year oh it’s all one year okay okay i wasn’t sure i mean so it’s all within actually the last quarter so this is all from october okay um i will say that we need to double check and there is some um you know on the irs website we can go back and see if there’s mandate for these holding companies to actually withhold this.22:14-22:19It sounds a lot like the mandate that they have for people that work is 1099s.22:19-22:20There is a mandate out there.22:20-22:27It says we have to withhold 25% if their information doesn’t pass spec.22:27-22:34You know, like if their social security number doesn’t match their name or they don’t have a social security number, then by law we’re supposed to be withholding 25%.22:34-22:36I’m using the same basic language.22:36-23:04I have never yet heard anyone telling me that they couldn’t, get access to their investment fund, be it crypto or anything else, and have to pay the tax prior to. I’ve never heard of that yet, Scott. But I guarantee you I will be looking into it. Yeah, that’s what I’m thinking too, because I asked them, I said, well, why don’t you, if there’s some requirement, it would be withholding. So why don’t you withhold it? They says, no, we can’t do that.23:05-24:07And I’m like, oh, why not? Yeah, that’s, that would make me very questionable. Because it has to be a withholding they have to be with taking the tax out so in essence it should be paid in advance into your social security number right i mean that would be the the situation but when he says that we can’t do that that okay we’re going to give you 100 000 we’re sending 32 000 to the IRS and giving you the difference that would be the normal situation that they would cash the whole account out and yeah that no they’re saying you have to physically pay it in advance before they give you a dollar that is Exactly. So if I’ve got 100,000, right, if I’ve got 100,000 in profit out there, they’re saying, please send this $32,000 and we’ll release the $100,000. Yeah. See, that doesn’t make sense. No, that doesn’t make sense. The mandate would be for them to withhold the percentage, just like on an IRA, like I said, if we have 1099 people that don’t have EIN numbers or whatever. I’ve never heard having to prepay. That sounds like a scam. Seriously, it sounds like a scam.24:08-24:08Yep.24:08-24:09All right, buddy.24:09-24:11I will look into it more, but I see.24:11-24:11Okay.24:11-24:17Unfortunately, I’ve already gotten to the point where I told them, you know, I’m not giving you another penny.24:17-24:17So.24:17-24:17Good.24:18-24:19Well, yeah.24:19-24:26I mean, I’m pretty sure, but it’d be interesting to see what the regulations on their side, if you have the ability to get your money out is the problem.24:26-24:29So you have to keep us informed on that and let us know.24:30-24:31Yeah.24:31-24:33Unfortunately, you work in the world of crypto.24:34-24:34All right.24:34-24:34Bye.24:34-24:35Thanks, buddy.24:35-24:35Bye.24:36-24:36All right.24:36-24:37We’re going to take our second break.24:37-24:45When we get back, you can join us at 615-737-9986-6-15-737-9-9-89-6.24:45-24:46We’ll be right back.24:48-24:52All righty, we are back live here in studio.24:54-24:55And you have Jim on the line.24:55-24:56I love it, guys.24:56-24:56Thanks.24:57-24:59Let’s see what Jim has to share today.24:59-25:00Hey, Jim, what can I do for you?25:02-25:07Yes, my question is about the required minimum withdrawal from an hour.25:07-25:11A, you know, as you get to that age.25:11-25:25It was my understanding last year that you were able to, you know, if you gave directly to a charity of that, you would not then count it on your income.25:26-25:28You would save income tax.25:29-25:32Is that going to be, what are the requirements on that?25:32-25:36I know it would have to be a registered or approved charity.25:36-25:42Right. Okay. So let me jump in with Jim, just so other people may not know what you’re exactly.25:43-25:52Jim is talking about required minimum distributions, usually on 401Ks or IRAs. And he’s also talking about qualified charitable deduction, right, Jim?25:53-26:00Correct. Okay. And I will say, go ahead. Part of the money that you want to withdraw, it goes directly to a charity.26:01-26:06Instead of coming to you, you would avoid the income tax on that. Is that correct?26:06-26:37That is correct, but the one thing I want to change is it does get reported. I mean, so you’re going to receive a 1099R from your distribution, whoever it is, fidelity or whoever’s handling it. And then on that, there is a place on a tax return to list how much of that, maybe all of it, maybe part of it, went to a qualified charitable deduction. So it shows on the front of the 1040 in box A, which is the total distribution, and then box B, would be what is still left.26:38-26:41It could be zero if you gave it all, or it could be a portion of.26:42-26:45So there is a reporting system that does go through.26:45-26:48But your thought is correct, Jim.26:48-26:59When you give, let’s just say you have a $10,000 RMD, require minimum distribution, and you want to give all 10 to your church, which is a qualified charitable deduction.26:59-27:05You will not pay tax and you don’t have to, you don’t have to itemize, which is what most people have to do.27:05-27:08You don’t have to itemize to meet that mandate.27:08-27:10It will come dollar for dollar off your tax return.27:12-27:12Right.27:12-27:15And is that going to be also in 2025?27:16-27:18To my knowledge, they have made that permanent.27:19-27:22So unless somebody decides to take it back off the books, we are good to roll.27:24-27:24Yeah.27:26-27:26Okay.27:26-27:26Okay.27:27-27:28Oh, thank you.27:28-27:30And I’m so glad Jim brought that up.27:30-27:32Qualified charitable deductions, guys.27:32-27:35I do want to bring this, and I need to probably talk more.27:35-27:49about it. You can’t, you can’t go backwards. You should have already taken. If you are age 73 or older, you should be on RMDs. Some people may have hit it at 70 and a half, which is what it was a few years ago.27:50-28:32And so, bottom line is when you are required to take money out of your retirement accounts, at this point, the government says, hey, we want our share of taxes. You’ve saved it all your life. Now it’s time to start giving our tax money back to us. So they mandate how much you have to take out. And the only way, and this is great for, especially for people older, because most of the time they’ve paid almost their mortgages off, or they don’t itemize in most cases, and they almost always are giving to some organization. So instead of taking it out, instead of taking your RMD and putting it in the bank, which that means you had to pay tax, um, you.28:32-28:48You take your RMD and you tell the custodial, the person that’s holding it, like I said, Fidelity or whoever it is, you say, hey, I would like to have a check made out to, you know, Cayenne Warriors or to my church or whatever it is.28:48-28:50And I would like to have that check made out to them.28:50-28:57They have to be a certified or an IRS.gov has a list of everyone that qualifies.28:57-29:00You have to be a 501c3 or one of those versions.29:00-29:02And they make the checkout.29:02-29:03They usually mail the check to you.29:04-29:09You then give it to the organization and you get credit for it, but you don’t have to itemize.29:09-29:14Like if I write a check to an organization, I have to put that on my personal tax return.29:14-29:17And unless I have enough to itemize, I don’t get to deduct.29:17-29:19And it’s not dollar for dollar.29:19-29:26It is more of a credit when you look at a QCD where if I give and I do qualify, mine’s a deduction, right?29:26-29:27So it’s only based on my income bracket.29:28-29:30So again, very, and I believe you can give us.29:30-29:50up to $100,000 in a QCD, but most of the time, you know, that’s not an issue for for most the people that are doing it. But I do have people to give $20,000 and $30,000 a year out of their QCDs to charities. And it’s great because they grew that money tax free, right? Because it was in an IRA.29:51-30:01And now they’re able to give it to a tax, to a nonprofit tax free. And, you know, and it’s letting the money work harder at that level.30:01-30:08They don’t have to pay the IRS, which gives you a way of getting around paying taxes on money that was partially for taxes, right?30:08-30:10So it’s a nice thought.30:10-30:20It’s a great plan to work with your financial planner as well, your tax person and financial planner because a lot of times they have some really good insight to that kind of situation.30:20-30:24So if you have questions or you need some help, you can certainly call the show today.30:24-31:23615 737-9986 615 737-9-896. I’m assuming a lot of people are probably out and about today because supposedly we’re getting a pretty bad cold front coming through, which means not a whole bunch is going to probably be happening on Sunday or Monday. But our office will be open on Monday. So if you’ve got some questions or taxes that you don’t really want to have to go through, you can always email or talk to us via that as well. And, um, Now is the time, you know, just take yourself a Manila folder and write on the outside. Who do you get money from? Is it Social Security Administration, my W2? Do I have any kind of 1099 R’s, which could be annuities? They could be IRAs. Did you take money out of an IRA, even if you’re not retired? Sometimes people have to borrow from IRAs to accomplish that. And they, or maybe you’ve lost your job and you had a loan.31:24-31:29with that company, again, one of those situations where you could end up having to pay taxes.31:30-31:31You need to make a list now.31:31-31:39So that way as the forms start coming in, because I have found that a lot more forms, they send an email saying you can now download, but they’re not mailing those forms.31:39-31:40All right, really quick.31:40-31:43Let’s hit Tom and Brentwood so he doesn’t have to wait through the next break.31:43-31:45Hey, Tom, what can I do for you?31:46-31:49I want to go back on those QCDs and RMDs.31:50-31:50Yes, sir.31:51-31:54QCD, I don’t believe can come out of a full.31:54-31:58a 401k, I think it can only come out of an IRA.31:59-32:03It can come out of a 401k if you’re 73.32:04-32:13Because then the mandate, unless you’re still working at the same company, and then obviously you’re not mandated, it only falls when people are mandated for required minimum distributions.32:14-32:17And they would be mandated on a 401k as well as an IRA.32:17-32:18Okay.32:18-32:19I stand corrected then.32:20-32:20That’s right.32:21-32:24And I believe the QCD can be made.32:24-32:59at 70 and after you are right you are right that they never changed the date on a QCD I used to try to say that then I was confusing people because you could be 70 and a half and even though you’re not required to do an RMD you can still do a QCD out of an IRA and you would not be able to do that out of 401k you could only do it out of an IRA at that age and And QCDs are, I agree, QCDs are a great way to reduce your taxable income, especially if you want to do charge.33:00-33:04You want to, don’t want to do itemized deductions.33:05-33:06Yeah, and that was great, Tom.33:07-33:18I didn’t think about the 70 until you said it and triggered again, but because there are people that might want to, it’s a great way to go ahead and start giving, I mean, a lot of times people want to reduce their estate and the portion of it.33:18-33:19They want to give to charity.33:20-33:21Why not do it while you’re alive?33:21-34:27you know and um and do it tax free i mean that’s pretty sweet especially when iras are not tax free when you die right i mean that money now becomes taxable to the people that are beneficiaries um unless it’s an i unless it’s a non-profit but anyways thank you tom that was great thanks for your show i appreciate it no problem um yeah tom was spot on there um especially with the uh the qcd’s being at 70 and a half i honestly forgot, but they never did change the ruling. So it used to be that RMDs were also 70 and a half, right? But a few years ago, they up the age to 73, but they left the qualified charitable deduction. So if nothing else, if you have a financial planner and you’re sitting here going, I don’t know what Dr. Friday’s talking about. Write down the letter Q is in quote, C is in Charles, D is in dog, and ask your financial planner about it or qualified charitable deduction. It is a a great tool for anyone that is 70 and a half and older that will be mandated to take money out of an IRA.34:28-34:40It also is a great way for you to reduce, to give to a charity while alive and or because if you pass away and the money’s being left to a child, then they’re going to pay taxes.34:40-34:55Maybe there’s a way of you saving more money on one side, converting, doing something else and using part of your active IRA that is, already got taxes built into it and using more of that for charity and using others for conversion.34:55-35:12And I am not a financial planner. So you need to go through and do all of that with someone that knows you and your situation. But they have some really neat ways of maximizing your tax liability or minimizing your tax liability and maximizing contributions to the things that really are great.35:12-35:58So it sounds like a lot of my listeners are using it. But if you have not heard of it or you haven’t really started, maybe you’re getting to that age and you’re thinking, hey maybe this is something I can do because again if you’re giving 10 15,000 dollars think about it you could be saving 2,000 three thousand dollars a year in taxes where right now you’re putting the money paying the taxes and give it to the charity now you can be giving more to a charity without costing you any more money once you hit that age all right we’ll take our last break and we get back where I’ll take more of your calls 615 7379986 we’ll be right back with the doctor Friday show All righty, we are back to your live in studio with the Doctor Friday show.35:58-36:00This is the last part of the show.36:00-36:03And we’ll be able to take your calls for a last few minutes.36:03-36:13615737-9986, 615737-9-8986, taking your calls.36:13-36:17Talking about my favorite subject, which is taxes, which is now the season, right?36:17-36:18It is tax season.36:18-36:43We are now going to be thinking about not only what happened in 24, but if you have a new job, If you were already making small payments to the IRS, this will be a big change for you.36:47-36:48So do you need to adjust your W2 now to take that child?36:48-36:51instead of being married in one, maybe you go to married in zero.36:51-36:57So now you’re compensating for the fact that your child is now what the IRS is considering more of an adult.36:57-37:01So we need now in January, it’s so easy to make these adjustments.37:01-37:07When you have to wait until April, May, June, when you’re actually talking to your tax person, you’re halfway through the year.37:08-37:18And it’s harder to make the adjustment because it may be a bigger, a dollar amount, where you’ve got all 26 paychecks or 24 or 12 or 52, whatever it might be, depending on when you’re paid.37:18-37:25Um, it’s easier to have a few pennies come out every month, every week than it is to actually pay thousands at the end of the year.37:25-37:30Okay, let’s hit Roy in Hendersonville really quick since our time clock. Hey, Roy, what can I do for you?37:31-38:18How you doing? I love listening to any of your show. Thank you. Um, I got to take out $8,500 this year from my, uh, from my account. I’m 74. And now last year, my tax person, said that I’m getting it all back because I’m not making any other income. Do I need to file a tax return? If you only have 8,500 plus Social Security, I’m assuming you have Social Security, you would not be required to file taxes. You’re not making enough to offset the standard deduction. Okay, that’s what I wanted to find out. Last year, it cost me $100 to get it filed, and I only got $750 back.38:18-38:25And I would honestly say you might want to consider talking to whoever you’re finding, you’re leaving money on the table.38:25-38:33If you’re taking 85 and you can take out 12,000 tax free, you might want to consider taking just a smidge more because it’s tax free.38:34-38:40And if somebody inherits or whatever, they may end up paying taxes, you could use that and invest it after tax.38:40-38:44That’s just a, I’m not, again, not a financial joy, Roy, just thought maybe I’d throw that out there.38:45-38:46Thank you very much.38:46-38:47I really appreciate it.38:47-38:48Thank you.38:48-38:51Okay, let’s take Devin and Franklin while we have a few minutes. Hey, Dev.38:53-39:17Hi, can you hear me? I can hear you. All right. So I had a question about I was setting up a trust in a Roth IRA to give my son, you know, some, I guess, an investment account for whatever happened. But I didn’t know what like the taxability of a Ross IRA versus like a regular traditional IRA would be.39:17-39:24as far as if there’s any, I don’t know, write off for one or the other.39:25-39:27So pros and cons really quick.39:28-39:30Again, let me give you the tax pros and cons.39:30-39:31It’s from a Roth IRA.39:31-39:34You pay tax today and it grows tax free.39:35-39:47So especially if it’s a kid, and I’m assuming this child is working, is the Roth your money or you’re setting this up for your son who is working a job and then you’re going to put money in the Roth for him?39:47-39:53So it’ll be the Roth will be under my name and the beneficiary will be the trust.39:53-39:54He’s three years old.39:55-39:55Okay.39:56-39:58Little young to put him to work already.39:58-39:59Sorry about that.40:00-40:15So again, the nice thing about a Roth is, it sounds like you’re also fairly young, is if you can put money into a Roth and just let it grow, when that person, God forbid, something happens to you and it goes into the trust, it’s all tax free.40:15-40:17There’ll be no taxes to that child.40:17-40:23So all the money that you’ve accumulated will be able to be used to help finish his education, whatever has to be done, you know?40:25-40:33Where if it’s a traditional IRA, you will get a tax deduction today, but they will have to pay taxes whenever they inherit.40:35-40:36For whatever values in that.40:37-40:41It’s either I take the taxes now or I put it off on him later.40:42-40:42Right.40:42-40:45And I guess it really depends on your tax bracket to be.40:45-42:40quite honest I tell people if you’re in the 24 or higher bracket then it’s probably smart to go ahead and pay use a standard traditional and take the deduction because you know most likely I mean again we don’t know your son could be 45 50 years old and you know I mean fully growing and not he may be pushing this to his grandchild but um and that’s what we hope but in the other case if it were to happen as a younger child um or you’re making you’re in the 12 or 22 percent so you’re tax bracket it’s probably smart to you go ahead and use the current lower tax rates and go ahead and put pay the tax today and let it grow tax free so that’s just my rule of thumb no specialty i make about 80 so i think that might put me in the 22 or right well 80 i mean i’m assuming you’re married or am i wrong uh no single so i’d be i’m single but not had a household okay so you’re single basically not have households so you are in the 22% tax bracket yes so again my rule of thumb would be go ahead and pay taxes today and again a financial planner may be better at this but that’s what i usually just say pay taxes today because taxes are most likely going to be higher in five to 10 years especially the way the government spends money okay hey well that that works thank you very much for your time and your knowledge all right thanks for listening i appreciate it devon thanks all right this was a Great show, guys. Thank you for all the phone calls. I wasn’t too sure on the fourth day of January if people would be out and about ready to take on taxes yet. So I really appreciate that. We’re getting ready to wind down the show. So again, if you haven’t made a tax appointment, there’s Chris or myself. Sorry, my dog is in the background again. If you want to go to the website, DRFriday.com, you can set up an appointment.42:43-42:46Or you can email Friday at DR Friday.com.42:47-42:54You can also call my office on Monday morning, 615-367-0819.42:54-42:58615-367-0819.42:58-43:04If you’ve got questions and you’re just not too sure, go ahead and email Friday at DR Friday.com.43:05-44:40We’ll do our very best to get back with you because, you know, one thing is if you can at least get an answer or, led in the right direction, depending on what the questions are, obviously. We can help you at least make the decision because if you go ahead and do something based on what you think is the right answer and maybe it is or maybe it isn’t, if you make the wrong choice, that could cost you a lot of money. I mean, I can’t tell you how many times we’ve dealt with people with RMDs that forgot to take the requirement on distribution because no one told them they had to take it or they had multiple accounts and they only took it out of one. And the penalty on that guys is 50%. 50% of what you should have taken out. That’s a huge penalty for a lot of people. So again, just making sure that you know when you should be taking out estimated payments. Again, then you should have been most likely unless it was a one-time situation. Okay, you sold a home, you sold something and you ended up owing taxes, or you had a big change of life, but that same thing didn’t happen in 2024, you might not have to worry about it. But if you’re self-employed, nine times out of ten, every single year you’ve owed money and you’ve either just elected to make the payment, hopefully on April 15th, or you’ve pushed it off until October, and now you’ve paid, you know, a huge penalty, about 12% just for failure to file.44:40-44:48penalties or failure to pay penalties are 25%. So, you know, there are ways of asking for forgiveness.44:48-46:09I had a gentleman come in the other day and, you know, during this whole time, his wife was in the hospital. She had passed away this last January. So, I mean, there are reasonable cause for people to be able to get a relief from the IRS. But if you can get the thing done right the first time, you won’t have to be asking for forgiveness. And they really only give you one of those every three, years and it have to be a pretty good reasonable person that’s really trying their best to file their taxes. So that being said, just making sure, again, if you have questions, you can email Friday at DR Friday.com. You can check us out on the web, DR Friday.com, or you can call the office 615-367-0819. That is the number there. And again, I hope you guys are having a one- wonderful Saturday. We’re going to be getting into a lot more tax this next few weeks. And don’t forget to set up your tax appointment. I know our calendar is just about full. If you’re a returning client and you don’t see a time available, please call the office. We will always have time for returning clients. Otherwise, we’ll, you know, Chris can take you. We have a new EA in the office that can help take up some of the people. He’s awesome. So again, I hope you have a wonderful Saturday. Stay warm. Cop you later.

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Dr. Friday demystifies capital gains tax and the often-overlooked net investment income tax. While many know the capital gains rates of 15% or 20%, she explains how the additional 3.8% net investment tax applies at certain income thresholds, making the actual rates 18.8% or 23.8%. Get clarity on these rates and avoid surprises in your tax bill.

Transcript:G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Capital gains and, more importantly, net investment income tax. So often, you hear people talk about capital gains tax—15%, 20%—but very rarely do they also mention the net investment income tax, which is 3.8% and falls in between the 15% and 20%.

If you’re a single person with up to $200,000 in income, your capital gains rate is 15%. Beyond that, it’s actually 18.8% until you reach the highest rate of 23.8%. There really is no standalone 20% capital gains rate, people!

If you need help or clarification, call us at 367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday introduces her tax and financial firm, highlighting three decades of expertise in tax preparation and representation. As an enrolled agent licensed by the IRS, she offers personalized advice on saving tax dollars and resolving IRS issues. Discover how her team in Brentwood, Tennessee, can provide second opinions and practical solutions for your tax needs.

Transcript:G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I am Dr. Friday, president of Dr. Friday Tax and Financial Firm, Inc., here in Brentwood, Tennessee. We have been in business here for almost 30 years. What we do is taxes and representation. As an enrolled agent, I am licensed by the Internal Revenue Service to do representation and tax preparation.

If you have issues, need help, or want someone to give you a second opinion, we’re here to ensure you’re saving tax dollars and handling IRS matters properly. Two ways to get us: go to the web at drfriday.com and make an appointment there, or pick up the phone and call us at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday warns about the implications of receiving a 1099-C for debt cancellation. While forgiving debt might feel like a relief, it can lead to unexpected tax liabilities, turning your debt into a bill from the IRS. Learn how to navigate the deadlines and tax consequences of canceled debts, and avoid trading one financial burden for another.

Transcript:G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

1099-C, cancellation of debt—be very careful about these. First, they’re going to come out by January 31st if you have done this, and they’ll get them to the IRS by February 28th. That being said, cancellation of debt sounds great. You call the credit card company, they say, “Sure, we’ll forgive $10,000.” Next thing you know, that year or the following year, you now have a 1099-C, and you’re paying tax to the IRS. And if you don’t have the money, you’ve gone from owing a creditor that couldn’t really do anything to owing the IRS.

Call us if you need help at 367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday shares essential tax planning tips to start 2025 right. While there’s little you can do for 2024 taxes now, it’s the perfect time to prepare for the new tax season. Set a New Year’s resolution to file your taxes on time and start planning contributions to accounts like IRAs. Make 2025 the year of tax preparedness!

Transcript:G’day. I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment, and happy 2025! Now is tax season, people. It’s time to start thinking about what you’re going to do in 2025. With the exception of a few small things, like maybe making a contribution to an IRA, there’s not much we can do about 2024—it is over. But you can start planning, start doing, and start preparing for 2025 while also getting ready to prepare your 2024 taxes. I hope you guys are having a fabulous New Year’s Day and make a wonderful New Year’s resolution: “I’m going to file my taxes on time.” Catch you later!

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday emphasizes the power of early savings with a Roth IRA. A 15-year-old earning $2,000 annually and contributing to a Roth IRA could amass over $700,000 by retirement with consistent saving. This episode highlights how to instill strong financial habits in the next generation.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Fund. To get more info, go to www.drfriday.com.

This is a one-minute moment. This is a great way for you to teach your children to save. Think about this. You have a 15-year-old daughter that makes $800 babysitting. She puts that money into a Roth IRA. Doesn’t put any more money in there at 8% growth. At the age of 65, she will have over $35,000 in that account.

Better yet, let’s teach them really how to do this, right? So at 15, she starts babysitting. She makes $2,000 a year. She puts every year after that $2,000, $2,000, $2,000 at 8%. By the time she hits full retirement, she has over $700,000. She puts that $2,000 a year for the rest of her life.

This is a great way. You need help? Go to drfriday.com. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains the 2024 phase-out ranges for tax credits like the Child Tax Credit and Adoption Credit. She highlights the income thresholds for singles and married couples, shedding light on the impact of marriage penalties in the tax code. Learn how to navigate phase-outs and maximize your credits this tax season.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com.

This is a one-minute moment. 2024 income tax phase-out ranges are going to be Child Tax Credit. It starts phasing out for a single person at $200,000, completely gone at $240,000. If you’re married, double it, $400,000, $440,000. Doesn’t quite double, does it?

Adoption Credit. If you’re single, you get Adoption Credit. It starts phasing out at $252,000. It’s completely gone at $292,000. Same as a single person. So sometimes you think, hey, if I’m married, I’m just going to double everything in tax code. There is marriage penalties, people. Sometimes it is not pretty.

So making sure when the phase-outs are, puts more money in your pocket. Go to drfriday.com if you need an appointment. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday shares tax tips for baby boomers supporting their parents. While dependent exemptions are unavailable, you may qualify for a $500 credit. Explore other deductions, like medical expenses, to maximize your return. Plan wisely to reduce your tax burden while caring for loved ones.

Transcript:G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com.

This is a one-minute moment. Are you supporting your parent? Growing numbers of baby boomers are supporting their parents. If you’re among that group, you may qualify for some valuable tax brackets. As part of the law eliminating dependent exemptions in 2018 through 2025, taxpayers will no longer have to be able to claim their parent as a dependent.

However, the Tax Cuts Jobs Act does allow you to get a $500 credit for your parent on the tax return, assuming that they’re not being claiming themselves on their own personal taxes. There are medical ways that you help them. There are other ways. So make sure you’re looking at that when completing your taxes. Need help? 367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 FM. Thank you. WTN.

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Dr. Friday breaks down how Medicare premiums are affected by IRMA (Income-Related Monthly Adjustment Amount). From real estate sales to large withdrawals, your taxable income can significantly impact Medicare costs. Plan wisely to save on premiums and avoid unexpected expenses.

Transcript:G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Fund. To get more info, go to www.drfriday.com.

This is a one-minute moment. When you’re thinking about retiring, one of the big things we all think about is Medicare. How is Medicare going to kick in? When do you need to take Medicare? I know that there’s going to be, at some point here, the big donut hole everyone talks about and the re-signing up.

But the important thing from the tax standpoint, and when you’re looking at your taxes, is basically thinking about IRMA. IRMA is what they use to figure out how much money you’re going to pay tax on when dealing with Medicare. So if you sell a piece of real estate, if you take a big, large distribution, or you have some other source of income that comes in through yours, you could end up with paying thousands of dollars a year extra.

If you need help, 615-367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon. afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday shares a heartwarming holiday message, encouraging listeners to give back during Christmas. Whether donating to a local cause or helping those in need, the season is the perfect time to make a difference. Enjoy your holidays and spread kindness!

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Fund. To get more info, go to www.drfriday.com.

This is a one-minute moment, and it’s Christmas, people, so we’re not talking taxes. We’re going to talk about all the good things that could be happening. Maybe you’re out there helping people that are homeless. Maybe you’re thinking about ways that you can do something for someone else. I hope you are.

I always try to do something myself because we all get so wound up in our own lives. And as a single person, let’s be honest, we don’t have a lot of things that we have to do for ourselves on Christmas. But it is always nice to think about the angel tree, which I am a big advocate for, and other ways that we can give back.

So hopefully you’re enjoying the day, you’re giving back, or you’re getting something that you always wish for. And as we always like to say in Australia, hey, cop you later. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday takes a festive break to remind listeners about itemized deductions. With thresholds at $14,600 for singles and $29,200 for married couples, many won’t need to itemize. Enjoy your holiday while keeping this simple tax tip in mind for future planning.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info, go to www.drfriday.com.

This is a one-minute moment, and it’s Christmas Eve, and I know none of you are sitting around thinking about taxes on this day. Most likely you’re wrapping presents, putting together toys, or just basically chilling because you know tomorrow you don’t have to go to work.

No matter how it works out, hopefully you’re going to enjoy it. But let’s talk a little bit about itemized deductions. This is an easy one. You’re not going to have to do anything because most of you are not going to meet the itemization. A single person is going to be $14,600, married $29,200, and head of household $21,900. You have to exceed that before it even kicks in for itemizing.

So hopefully you’re going to enjoy the night. If you need help, 615-367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.

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Dr. Friday offers valuable tips for preparing your tax documents before the New Year. By listing expected documents, such as retirement withdrawals, charitable contributions, or HSA transactions, you can avoid IRS notices and ensure a smooth tax season. Start planning now to make January stress-free.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com.

This is a one-minute moment. Planning for our taxes. We’re almost there, guys. It’s almost Christmas, and we need to think about what we need to be preparing come January. Once the New Year’s is here, we’re going to have all this stuff coming in. I will totally tell you, you need to sit down now and think about what documents should be coming in.

Did you take money out of retirement? Did you invest money into a retirement? Do you have a health savings account? Do you have money coming out of that? Did you give money to charities? Making sure all of that is wrote down so when the documents come in and you’re missing one, you know it. Because otherwise, guess what? The IRS will be more than happy to tell you what you missed.

You need help? Just go to the web, drfriday.com. You can catch the Dr. Friday Call-In Show live. Every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday encourages listeners to schedule their 2024 tax preparation appointments early. Learn how proactive planning with expert guidance can help you navigate current tax situations and prepare for future changes. Visit Dr. Friday’s website to book your appointment today!

Transcript:G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com.

This is a one-minute moment. I am Dr. Friday, an enrolled agent. You know that. But what you don’t know is if you need an appointment, you’re going to need to go to drfriday.com and select Calendar and make an appointment now for your 2024 tax preparation. Very important.

If you need help, you need someone with my expertise to help you understand not only what you have happening this year, but possibly what’s going to be coming down the line, then you need to get on the calendar today. It’s an easy way to do it. Just go to the website, click on the calendar, and select the time and date for you. If you don’t see my name, you can always use my assistant, and Chris will be there to help you out.

615-367-0819 or drfriday.com. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday discusses significant estate tax changes coming in 2025, including a reduction of the individual exemption from $13 million to $5 million. Learn how these changes could impact your estate and why it’s crucial to start planning ahead to minimize taxes and preserve your wealth.

Transcript:G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com.

This is Dr. Friday and this is a One Minute Moment. Estate planning tax changes at the end of 2025. Right now you can have an estate up to $13,061,000 for an individual, double that if you are a married couple, and the tax rate above that is 40%. That’s probably not going to affect a lot of us.

But at the end of 2025, remember that goes back to $5,000,000 for an individual. That’s a big drop and could start affecting. So maybe understanding how that’s going to work, we might need to start working on that now because, hey guys, 2025 is right around the corner. You need help, 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains the rules for tax-free gifting, allowing up to $18,000 per person annually. She highlights how this strategy can reduce estate size and benefit recipients without tax implications. Use these tips to simplify estate planning and ensure compliance with IRS regulations.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Fund. To get more info, go to www.drfriday.com.

This is a one-minute moment. Maybe you’re at a point where you either inherited some money and you want to give it to other individuals, or you have a little extra money in the bank and you want to give it. So you can give $18,000 per person as a gift. The person giving the gift, again, is the person that’s paying the taxes. The person receiving the gift does not pay taxes.

I can give it to any individual. It does not have to be someone in my family. I can give it to anyone I want. If you’re married, the spouse can give $18,000. You can give $18,000. So a total of $36,000. We split any way you want. So just keep in mind, that is one way to start reducing your estate. If you need help, go to our web and set up an appointment, drfriday.com.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday highlights the importance of ensuring Required Minimum Distributions (RMDs) are taken on time to avoid a hefty 50% penalty. She explains how to avoid common missteps, such as overlooking communications from fiduciaries, and offers tips to manage RMDs effectively before the year-end deadline.

Transcript:G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Fund. To get more info, go to www.drfriday.com.

This is a one-minute moment. Do not forget your RMD. That’s your Required Minimum Distribution. Sometimes people sit there and they think, oh, my fiduciary person’s going to send it to me so I don’t have to do anything. And what happened is they’ve emailed something over to you, probably in early November, saying how much or how do you want us to handle this, and you didn’t look at the email.

So it is your responsibility. The penalty is 50% of what you would have taken out. So if you have a $10,000 RMD, Uncle Sam wants $5,000 of it because you didn’t take it out timely. Very easy to fix. Sometimes you can even get that waived. More importantly, let’s not let it happen. Make sure you have taken all of your Required Minimum Distributions and set an appointment. Go to drfriday.com.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this festive episode of the Dr. Friday Radio Show, Dr. Friday combines holiday cheer with practical year-end tax advice. Whether you’re gearing up for Christmas celebrations or navigating the complexities of accelerated depreciation, this show has something for everyone. Dr. Friday answers listener questions, shares tips for staying on top of your taxes, and spreads Christmas joy through exciting gift card giveaways.

Topics Covered:

• Christmas Show Giveaway: Dr. Friday celebrates the holidays with Amazon, Olive Garden, Home Depot, and Outback gift card giveaways.
• Year-End Tax Planning: Insights into accelerated depreciation, year-end purchases, and tax-saving strategies for 2024 and 2025.
• Tax Compliance Help: Guidance for those behind on taxes, including representation options like payment plans and offers in compromise.
• Business Tax Queries: Selling a business, home office depreciation, and navigating capital gains and ordinary income taxes.
• Retirement Considerations: Tips on managing Medicare, Social Security, and income during retirement transitions.
• Listener Questions: Addressing issues like IRS love letters, missing 941 forms, and QuickBooks account management post-retirement.

Transcript:

00:01-00:06No, no, no, she’s not a medical doctor, but she can sure cure your taxproblems or your00:06-00:07financial woes.00:08-00:09She’s the how-to girl.00:09-00:10It’s the Dr. Friday Show.00:14-00:19If you have a question for Dr. Friday, call her now, 737-WWTN.00:20-00:22That’s 737-9986.00:23-00:27So here’s your host, financial counselor and tax consultant, Dr. Friday.00:27-00:34G’day, I’m Dr. Friday and the doctor is in the house on this wonderfulSaturday.00:35-00:42And today is always a show I like to do because, well, I think we’ve been atthis 13, 14, getting close to 15 years.00:43-00:46First year I’m doing it without Dr. Electric. It’s our big Christmas showgiveaway.00:46-01:02And so if you are listening and we’ll be giving away some Amazon cards, somerestaurant cards, some Home Depot cards for all my favorite listeners andclients, the show will open up with just some fun facts.01:02-01:07And if you have tax questions as well, I mean, it is a tax show, guys, andit’s almost the end of the year.01:07-01:12So if you’re thinking, do I need to buy something? We may talk about thepotential of doing that.01:12-01:17We may also say buying something isn’t going to save you as much as youthink it will this year.01:17-01:27So if you have your own tax person, I would definitely suggest talking tosomebody on what accelerated depreciation is at this point in the currentsituation.01:28-01:36But if you have questions, maybe you’ve inherited something or you are inthe process of selling something, then we need to talk.01:36-01:41We need to find out what’s going to be the best thing and what’s going to befor 2024, which is the year we’re finishing.01:41-01:54and then what’s going to happen in 2025, you can join the show at615-737-9986, 615-737-9986.01:55-01:59I am an enrolled agent licensed by the Internal Revenue Service to do taxesand representation.02:00-02:06That is what I do, guys. I help individuals that want to obviously filetaxes on a normal basis.02:06-02:10If you have businesses, trust, I do all of those, also for multiple states.02:11-02:19And then for those individuals that maybe have had some tax issues, maybeyou haven’t filed taxes in a long time or you haven’t done much going on atthat point.02:19-02:26That will also be what I do as far as the representation. We can get you allcaught up, get you into compliance, and then we can talk about what is youroptions.02:27-02:32Do you want to be able, can you pay it in full? If you’re unable to pay itin full, then what are your options?02:32-02:39Payment plan, offer and compromise, partial payment plan, non-collectible.This is the kind of categories you may have.02:39-02:45And sometimes it’s a little shocking because I know there’s a lot ofdifferent things on TV and on the radio.02:45-02:47It says, oh, we can negotiate 10 cents on the dollar.02:48-02:50I mean, we’ve done it.02:50-02:54We’ve saved people hundreds of thousands of dollars in doing offeringcompromises.02:55-02:58But in all fairness, not everyone that walks in the door of my office isgoing to get that deal.02:59-03:00It just isn’t going to happen.03:00-03:03Sometimes you have equity in a home, 401ks.03:03-03:10You have money that is in the bank or held someplace where you have theability stocks and things that you can actually sell.03:10-03:13You have multiple cars. A lot goes into that consideration.03:13-03:20So if you are dealing or talking to somebody and the first thing they sayis, oh, yeah, we can, you know, we’ll make this work with the IRS.03:21-03:29Make sure they’re asking you the right questions before you sign on thosecontract lines that say you’re going to pay $500 a month for the next sixmonths or more.03:30-03:35depending on, it’s often depends on how much money you owe the IRS, not howmuch work they’re doing,03:35-03:39but how much money they think they’re going to save you or even just howmuch money you owe period.03:40-03:46So, um, again, just keep that in mind. All right. So this is the Christmasshow, right? So let’s go03:46-03:51ahead and do our first giveaway. Hopefully we’ve got some people out therewaiting to call in.03:51-03:56It’s a, it’s a quiet Saturday. So we’ll see the phone number here. If youwant to get a free gift03:56-04:03card to Olive Garden, Longhorn, Cheddar Yard, House, Bahama Breeze, a $50gift card to number04:03-04:13five, which is a $50 Olive Garden. It goes to a couple other restaurants.And if you call 615-737-998604:13-04:20is the number here in the studio. 615-737-9986 is the number you’re going towant to call. And we’re04:20-04:26take caller number two, um, that calls in. So we’ll wait for the phones. Oh,well, maybe they04:26-04:32start lining up. You never know at this time. It’s a early Saturday. So I’lllet, uh, my studio guys04:32-04:36deal with that, but thank goodness. There’s a few of you listening. Thankyou very much. Uh, again,04:36-04:40it’s a time of the year where, you know, I know you guys are all Christmasshopping and I know04:40-04:44there’s all kinds of different things. We’ve got a whole bunch of giveaways.So if you don’t qualify04:45-04:49for this one, you know, the number will come in and we’ll be able to getsome more people for you.04:49-04:55So, um, if you get them, uh, let’s put them on the phone if you can. Andthen that way we can04:55-05:00wish them a very Merry Christmas and also talk a little bit about, uh, maybewhat they, uh,05:01-05:05they’re doing today. So, um, while they’re getting the phone straightenedout again,05:05-05:09if you are calling and I know a lot of you guys, it’s Christmas time. I knowyou’re calling for,05:09-05:13uh, for the giveaways. Heck I would be doing that if I was on the other sideof this,05:13-05:17but if you do have some questions or you have some tax issues or you haveanything you want,05:17-05:22You can also call the studio. We’ll get you in between some of the crazinessthat will happen05:22-05:27today. I know many of you guys are going to really miss Dr. Electric becausehe always gave away05:27-05:34those deers, which were our number one giveaways. I can’t say I was ever ahuge deer meat. I can’t05:34-05:41say I’ve always loved deer meats, but that being said, I do have that. Ohyes. Sorry. Number two,05:41-05:44you got them on the line. Do you want me to do something? There you go.Number two,05:44-05:50I see the thing. Give me a name or tell me who it is. And then I will bemore than glad to,05:50-05:56you guys can connect him online here if you don’t mind. Doug, Doug Rollins.Doug Rollins is winner.05:57-06:06Doug Rollins. And hello, Doug. Merry Christmas, Dr. Friday. Merry, MerryChristmas. Thank you for06:06-06:10listening first. And second, what do you have? Do you have any plans forChristmas this year, Doug?06:10-06:15Anything that’s going to happen different or exciting, or maybe it’straditional every year you do it?06:16-06:19Yeah, just visiting my family, what I do every year.06:20-06:20How about you?06:21-06:25This year, I’m actually going to be going, I’m visiting family, but familyin California.06:25-06:28So this year, I’m going to go to California and visit my brother, which Ihave.06:29-06:30He usually ends up coming to me.06:30-06:32So this is kind of a reversal, which is nice.06:33-06:34Weather will be nice of that, hopefully.06:35-06:37But yeah, so looking forward to it, though.06:37-06:40Going to get to spend about five days with a couple of the sibs.06:40-06:41So that would be great.06:41-06:42Fantastic.06:42-06:44So, all right.06:44-06:46So tell him to hold.06:48-06:48Sorry, guys.06:48-06:49I should know this after.06:49-06:51Hey, Doug, stay on the phone line.06:51-06:52Hold.06:52-06:54They’re going to make sure they get your phone number and everything.06:54-06:57So that way then I can get the gift card out to you.06:57-06:57Okay?06:58-06:58And Merry Christmas.07:01-07:01All right.07:01-07:02So we’ve got Doug.07:02-07:07So while he’s getting taken care of and all’s going well, again, if you arepicked, we’re07:07-07:10just talk for a minute. And then the guys on the other end, we’ll make surewe’ve got the phone07:11-07:16numbers and all the contact information. So that way we don’t lose you guys.And if for any reason07:16-07:21we lose you, we will make sure that you guys, uh, we’ll get a call back onthat and move forward.07:22-07:28So, um, I do want to mention again, I’ve had a lot of calls this week aboutdepreciation.07:28-07:32A lot of times people think right now’s the time, Hey, you know what, maybeI need to think about07:32-07:40getting a new truck for my business or something like that. And so you canthink about it, but in07:41-07:4820 services that go in 2025, it’s 40%. But right now, so if you pay a$10,000, which would be a07:48-07:54heck of a deal, $10,000 for a truck, you’re going to save 6,000 in taxes,maybe a little bit more07:54-07:59for the straight line with the accelerated depreciation. So it’s not ahundred percent,07:59-08:05which it was a few years ago, that’s the important part. So if you’re outbuying something and you’re08:05-08:11thinking you’re going to reduce based on what you paid, and if it’s a$70,000 or $80,000 vehicle,08:11-08:18you’re still going to get a decent savings. But it is 60% accelerateddepreciation in 2024. And08:18-08:29right now for 2025, it’s 40%. So they’re trying to eliminate the accelerateddepreciation. Hopefully08:29-08:34with that and make it, you know, with the new administration. We’re hopingthat that will08:34-08:38change the thing. All right. So before the first break, we’re going to doone more giveaway. It’s08:38-08:43an Amazon $50 card for Amazon. You can buy anything you want pretty muchfrom Amazon.08:43-08:53So we’re going to take caller number five, phone number again, 615-737-9986,615-737-9986.08:53-08:59Start calling caller number five for an Amazon gift card. And while we’rewaiting for the08:59-09:04phone lines to start coming up. We’re going to answer an email here wheresomebody wanted to know,09:05-09:12should they be depreciating their home for a home office? So I personallythink that that’s a,09:12-09:18it’s a question. It’s a kind of a crazy question a little bit only because,um, if you depreciate09:18-09:24a home that has the exclusion for a home, then you have to recapture thatdepreciation when you09:24-09:32sell the home, which is normally on an exclusion. So I like to do the $5 persquare foot or take it,09:33-09:37but don’t do the depreciation. Now, I know there’s a lot of people out therethat are accountants or09:37-09:42whatever that will say differently, but my opinion is don’t depreciate yourprimary home for the09:42-09:48office because it will come back and have to be recaptured. Jimmy King isthe winner of the Amazon09:48-09:55card. Hey, Jimmy, are you online? Yes, ma’am. I am. How are you doing today?Hello. Merry Christmas,09:55-10:00my love. Thank you for listening. Yes, ma’am. I listen all the time. I enjoyyour show.10:01-10:05Thank you. Do you have any plans for Christmas, Jimmy, or anything that youusually do every year10:05-10:10around this time? Yeah, my family and spend some time with grandbabies. Ialways enjoy that.10:11-10:17Those are the best. I didn’t have children, but I got my sister who hadthree grandbabies. And so10:17-10:21we’re actually going down for a few days this next week just to go visitthem. They’re not babies10:22-10:28anymore, may I say? They’re like 17 and 18, but it is still fun to see themand to enjoy10:29-10:32Christmas time around the kids and everything. And they’re the youngest inthe family,10:33-10:37so I guess that’s the youngest I get to have until someone starts havingmore babies I can rent and10:37-10:42return. Well, Jimmy, thank you for listening, and I hope you have a MerryChristmas and enjoy your10:42-10:48$50 gift card. Okay. Well, thank you, Dr. Friday. You too. Thanks, sir.Alrighty. That was fun. And10:49-10:53we are going to, um, in a minute here, we’ll go, we’ll get some more, butwe’ll take our first break.10:54-11:00Um, again, so if you have questions today, you can also email Friday atdrfriday.com again,11:00-11:05Friday at drfriday.com. Cause I know getting through the phone lines today,and I’m always11:05-11:09so excited when I see the phone lines light up. Cause you know, when you’resitting in a studio11:09-11:13and you’re like talking to yourself and you’re not always sure if there’salways a lot of people11:14-11:20listening sometimes. Um, so you’re, you’re hoping that you’re, you’re doinga good job. So anyways,11:20-11:24it’s always fun to see the phone lines just start lighting up and you know,people are willing to,11:25-11:29to call the station. So that’s so cool. Um, we’re going to take our firstbreak here in a minute11:29-11:34here, and then, um, we’ll come back and we’ll do some more cards. But again,if you have a question11:34-11:38and you can either get through the phone lines or, um, and most of the timeit’s kind of click,11:39-11:43click, click, because we’re looking for a particular caller, then you canalso email11:43-11:48friday at drfriday.com and we can get to your questions between the waitingfor people to call11:49-11:53in and do. The phone number here in the studio, if you’re getting ready toregister or get your11:53-12:02finger ready and have the number in there for the next card giveaway isgoing to be 615-737-9986.12:02-12:09615-737-9986. We’re going to take a quick break and then we’re going to comeback and we’ll give12:09-12:14away a few more cards because we’ve got plenty here for the giveaway. Andagain, if you have a12:15-12:20question, just email friday at drfriday.com. That way I can make sure I canget your questions in12:20-12:25between. And we are going to take a quick break and we’ll be right back withthe Dr. Friday show.12:29-12:44all righty we are back and thank you i love the christmas jesus thank you umand we’re back with12:45-12:49the doctor friday show and let’s see jeff is on the line let’s see if we canactually see if i can12:49-12:55help Jeff. Hey, Jeff, what’s going on? Hey, this is the appliance guy. Youknow me. I do know who12:55-13:06you are. Hi. I miss being on your show. I have just sold my shop and I am onSocial Security.13:06-13:13I just sold my shop and I’m wondering what it’s going to do to my cap fortaxes for this year13:13-13:20and then capital gains and what it’s going to do for as far as my socialsecurity for, I guess it’d be 2025.13:21-13:24You’re not on early social security though, are you, Jeff?13:24-13:26Jeff, you’re on regular, right?13:26-13:29You waited until your social security age, correct?13:29-13:30Right, right.13:30-13:30Okay.13:31-13:37So it’s going to make your social security, 85% of the social security isgoing to be taxable.13:38-13:42You may run into a little of that because you may have taken it while youwere still working or whatever.13:42-13:47But so that that will be the first thing, but it won’t affect how much youget in Social Security.13:48-13:53The more the more concerning will be is will it hit your Irma or yourMedicare?13:53-13:57Because Medicare is based on how much money you actually make.13:57-14:09You know, I’m saying so capital gains, even though it’s a one timesituation, it may have actually or it could trigger where you end up payingMedicare at a higher rate for the next year until the following year.14:09-14:17you sold it in what 24 or is it actually going to close in 25 i closedyesterday okay so you14:17-14:23closed in 24 and i’m gonna i’m gonna kind of close my business up i’m gonnastill do some work but14:23-14:28i’m not gonna have any more employees i’m gonna quit all the all thebusiness business stuff i’ll14:28-14:34just do work for people now and then right well it keeps you out of troubleif nothing else um you14:34-14:38know i mean i think it i actually think it’s good to still keep some busyyou’ve always worked so14:38-14:43hard your whole life but i’m not saying you have to be as busy as you werebut uh anyways but i14:44-14:49would say you might want to um you might want to sit down and just figureout exactly since you14:50-14:54sold it how much that’s going to affect and how much if there’s anyrecapture if you sold any did14:54-15:00you sell some did you have some equipment or not really in the shop wellanything i had in the shop15:00-15:06i’ve expensed out right but then if you sold it it becomes capital gainsagain or ordinary okay no15:06-15:10No, I won’t actually. I might sell some of it and I’ll keep track of what Ido sell.15:11-15:16Okay. Yeah. And I mean, the value obviously is worth a lot less than whatyou paid for today. So,15:16-15:21you know, that’s not the big deal, but yeah. So if you sold your business,which I’m glad to hear15:21-15:25you might still be out there doing a little work. But I would say you needto sit down and figure15:25-15:31out whatever you sold it for, you know, at least 15% of that’s going to betaxable at least if not15:31-15:3720 because okay okay okay but now how much what’s the dollar limit withsocial security that i could15:37-15:44make in a year without affecting me i can’t remember jeff are you married orsingle married okay so15:44-15:50200 000 it’s basically i could make 200 000 a year without hurting my socialsecurity15:51-15:55yeah without hurting your urma social security you can only make about 20000 and then it becomes15:55-16:00taxable but um it’s worth it if you consider you’re making 20 grand andyou’re only paying a few dollars16:00-16:06tax so um my opinion but you if you as long as you don’t affect the irmawhich is the medicare16:07-16:13you can go up to 200 000 okay so i’m okay i i think i’ll be under that oneso i’ll say then16:13-16:19one other quick question sure i’ve got quickbooks i’ve run every i’ve beenrunning quickbooks for16:19-16:24years and i had to go online because i had too much inventory that myquickbooks wouldn’t hold it16:25-16:28but now I’m doing it all online. If I cancel that online,16:28-16:30will I still be able to get?16:31-16:33You’ll have a one year to access it.16:35-16:37QuickBooks gives you one year to be able to access,16:37-16:41but you can also run all your reports and stuff if you need to.16:41-16:42I would probably make a backup somehow,16:43-16:46either convert it to desktop one more time or make sure you have some,16:47-16:49but after, after one year, they,16:50-16:53that you won’t have access to online unless you continue to pay the price.16:54-16:57Of course, I won’t be having them do my16:59-17:00I’m paying for the17:01-17:03Oh, for the year and stuff and all that, right?17:03-17:05For the wages and all that stuff17:05-17:07They do the income tax for my people17:08-17:10Right, W-2s and 941s and all that17:10-17:10So I won’t be paying that no more17:11-17:13So I don’t know how much the other thing by itself is17:14-17:15Well, I sure appreciate it17:16-17:16No problem17:17-17:17Thank you, Jeff17:17-17:18Merry Christmas17:18-17:19All right, Merry Christmas17:20-17:20Thanks17:21-17:23All right, well, I’m going to get Larry17:23-17:29on the phone here in a second, but let’s go ahead and give a $50 Outbackcard to, I don’t know,17:29-17:34caller six. Caller six, Outback card. And meanwhile, if you want to putLarry on the phone, we’ll see17:34-17:39what question he has for us, if that’s possible. Or did we just lose Larry?We might have lost Larry.17:40-17:49Okay, that’s fine. Caller number six, Outback card, $50, 615-737-9986 is thenumber here in the17:49-17:57studio, 615-737-9986. Pick a number, pick a number, pick any number. Allright. And we’ll17:57-18:01go there. And then Larry, if you want to, uh, you know, call back in aminute or two,18:02-18:07you might want to wait until after we, uh, get this card done because it canget a little crazy18:07-18:14sometimes. Um, but anyhow, all right. So again, it was an interestingquestion for, um, one of my18:14-18:20friends there because when you sell a business, it’s mostly capital gains.But after that,18:20-18:28it can be a little bit more crazy because then you have recapture ofdepreciation and you’ll still18:28-18:33have some ordinary income. All right. I’m not too sure if I’m going to saythe first name of this18:33-18:43individual, Sari or Siri, S-R-I, first name, the winner. He’s still talkingto her real quick.18:43-19:00Oh, I’m sorry. I’m so sorry. I thought it was me. I thought I had the wrongthing. Sorry, guys. All right. So we’ll let that go through. And then, likeI said, so if you sell a business, make sure you think about two sides,ordinary income and then capital gains. All right. Is it Siri?19:01-19:03Yes, this is Sheree.19:04-19:08Sheree. Oh, I’m so sorry. I didn’t know for sure how to say the first name.Hello, sweetheart.19:10-19:12Hey, hello. This is exciting. Happy holidays.19:13-19:16Happy holidays. And hopefully, do you have any plans for the holidays?19:17-19:22Anything you do normally, traditionally, just take a nap and relax becauseeverything else is so busy?19:24-19:28Just fun with family and friends. My daughter is coming back from college.19:28-19:31So that’s exciting. I’m just looking forward to spending some time with her.19:32-19:32Yes.19:32-19:35And making a few travel plans and such.19:35-19:37That sounds like a good time. Seriously.19:37-19:43Well, hopefully the $50 gift card to, it’s either going to be Outback,Carrabba’s, Bonefish, or Fleming.19:43-19:45I mean, they’re all under the same card.19:45-19:46So hopefully you’ll enjoy that.19:46-19:47And thank you for listening.19:48-19:48Sure.19:49-19:49Absolutely.19:49-19:52I’ve been listening for years together and we’ve used your services before.19:53-19:54Love your show.19:54-19:54Thank you so much.19:55-19:55Thank you, sweetie.19:56-19:56All right.19:57-20:02So again, I appreciate all of you guys that listen and we have the time andthe conversation.20:03-20:12That’s the reason we’ve started this show back in the first year when westarted doing the radio, because a radio show without listeners would not bemuch of an enjoyment.20:13-20:21So it is always fun to to just be able to give back a little bit andsometimes kind of listen all the you know, to what everyone’s doing.20:22-20:26And thank you, David, for sending me a best wishes and Merry Christmas.20:26-20:30I appreciate that as well from from all my listeners.20:30-20:35Seriously, hopefully the holidays will give you and make you as happy as itdoes me.20:35-20:37To be honest, I enjoy the holidays.20:37-20:44If you guys could ever see the front of my house, I probably have about 200lighted things up all over the place.20:44-20:50It is crazy. I’ll have to share it with my my my people, maybe put it onFacebook or something.20:51-20:54But it’s fun. And I do. I’m one of those crazy light people for theholidays.20:54-21:00So it makes life so much more enjoyable and what we have something thatsomeone just emailed.21:00-21:04again. And I’m using the email because gosh knows the phone lines are harderto get through at this21:04-21:11time. But one of the questions someone had was the IRS is actually sent themsome sort of love21:12-21:20letter and it says that they had it filed one of their 941s. So a 941 formis what we file for our21:20-21:26employees every quarter. And if the IRS is missing it, in this case, theysent a letter saying they21:26-21:33have an overpayment, but they’ve never received the form. So it’s astraightforward, if you get a21:33-21:38love letter from the IRS and they’re basically saying they haven’t receivedyour tax return,21:38-21:46they haven’t received a 941, my suggestion is to put second copy at the topor resubmitting,21:46-21:53re-sign the form, re-date the form, and then certify that to the government.Even if you have21:53-21:58copies of proof of filing it the first time, like an e-file confirmation, orif you have a21:59-22:05certification because you mailed it, include that so you can show that youdid file it on time. But22:05-22:09at this point, you really want to make sure they have that because if theydon’t have your 941 on22:09-22:13file, that means they’re not matching your W-2s, which means social securityis having an issue22:14-22:21with balancing your W-2s as well. So that actually opens up a lot more issuethan just not having a22:21-22:27941 showing an overpayment. And the one thing I will tell you is back, Imean, I’ve been doing22:27-22:33this 30 years, but back about 10 or so years ago, if you filed your W-2s andwe had to certify them22:33-22:40at the time to social security administration, um, you file them and the IRSwould come back and22:40-22:45they say you never filed the social security would not. And they allowed usto refile them22:45-22:47and request for an error or waiver.22:48-22:49Now there is no waiver.22:49-22:51So if your W-2s are not submitted,22:51-22:56they will charge you 10% penalty of what your total wages.22:56-23:01So if you’ve got a $500,000 W-2s in total gross wages,23:02-23:03the penalty could be 50 grand.23:04-23:06That’s a very, very expensive penalty.23:06-23:07So we don’t want that to happen.23:08-23:09All right, let’s do this really quick.23:09-23:12We’re gonna do a $50 Home Depot card.23:12-23:13Caller 3.23:13-23:14Caller 3.23:14-23:17615-737-9986.23:17-23:20615-737-9986.23:21-23:23Caller 3 for a Home Depot.23:23-23:24Come on, guys.23:24-23:25This is one of my favorite places to shop.23:26-23:27If it’s not shoes, it is Home Depot.23:28-23:32So hopefully someone out there might need a new tool or something to playwith.23:33-23:34So feel free to give us a call.23:34-23:39We’re looking for caller number 3, $50 Home Depot gift card.23:39-23:40And we’ll let that go through.23:40-23:43And then once that one goes, and we’ll be in good shape.23:44-23:50and we’ll be able to move along and make sure we have a lot of exciting anddifferent things to23:51-23:54talk about. All right. We already got someone coming in. It looks like it’sgoing to be someone23:54-23:59named John. We’ll wait for them to get available and then we’ll get John onthe phone and we’ll23:59-24:03take it from there. After we get this one, we’re going to take a quick breakand then we come back.24:03-24:08We’re not even halfway through the gift cards, guys, so I may have to dothis a little faster24:09-24:11for the next half of the show.24:11-24:12But stay tuned.24:12-24:13We’re going to have more of them.24:13-24:16We’re going to be able to do a lot more of them.24:16-24:17Is John already?24:18-24:18Yes.24:19-24:20Hey, John, are you there?24:21-24:22Yes, I am.24:22-24:23Hello, John.24:24-24:25Thank you for listening.24:27-24:27Oh, my pleasure.24:28-24:30I learn a lot all the time.24:31-24:33I do too when I listen to other people.24:33-24:36So Home Depot is like one of my favorite places in the shop.24:37-24:40I don’t know why, but I have a tool chest that is like way too many tools.24:41-24:43Are you a Home Depot kind of, or a Lowell’s?24:43-24:46I mean, brand, I don’t care, but do you like to repair and do things?24:46-24:50Or is it more like it’s a, you know, just a little hobby thing?24:50-24:53Well, it tends to keep me off the streets, you know.24:54-24:54There you go.24:55-24:55That’s exactly.24:56-24:58My sister’s always like, what project are you doing now?24:58-25:00There is always a project at my house.25:00-25:03And it always seems to require me making at least one Home Depot run.25:04-25:05Because that’s closer to me than Lowell’s.25:05-25:06The only reason I push that one.25:06-25:10So anyways, Merry Christmas, John, and I hope that you enjoy your holidays.25:11-25:12Thank you.25:13-25:14Stay tuned, and there I’ll get your information.25:14-25:16All right, we’re going to take a quick break here.25:16-25:18When we get back, we’ll get to more of your phone calls25:19-25:22and more card giveaway in just a few minutes.25:23-25:23We’ll be right back.25:30-25:33All righty, we are back live here in studio.25:34-25:36So if you’d like to join the show, you can.25:36-25:43obviously at 615-737-9986, 615-737-9986.25:43-25:47But right now we’re giving away a second Olive Garden, which also is owned.25:48-25:49It’s all basically involved.25:49-25:55So it’s Olive Garden, Longhorn, Cheddar, Yard House, and Bahama Breeze,25:55-25:56and also Season 52.25:57-25:58You are all there.25:59-26:01And so we’ll be able to – thank you, sweetheart.26:02-26:03We’ll be able to keep it going.26:03-26:05So let’s go ahead and give this card.26:06-26:10Phone number is 615-737-9986.26:10-26:15And we’re going to go ahead and take caller one because those callers alwaysseem to get bypassed.26:15-26:17So we’re going to go right to caller one.26:17-26:21So that person who jumped on the phone really fast will be one of them whogets it.26:22-26:24Because sometimes I do number six and number seven.26:24-26:25And you guys are all awesome.26:26-26:27So we still have lots to give away here.26:27-26:28What was the gift again?26:29-26:31The gift card is a $50 Olive Garden.26:31-26:40Um, so, and it’s also like different restaurants, but Olive Garden. Allright. So my staff at the26:40-26:45other end here is doing an awesome job keeping my people going and, andbeing there. So, um,26:46-26:51anyway, so we’re talking about that. And then also wanting to make sure thatif you are thinking about26:52-26:56taxes, I realized I have a crazy show, but I love this time of the year. AndI just want to make26:56-27:02sure everyone has a good time too, is when you’re doing or thinking, we onlyhave a couple weeks27:02-27:08left. So think about the fact that you might have a conversion you want toget done, or if you want27:08-27:13to put money into an IRA, you do have some extra time into the next year.But you know, these are27:13-27:17the kinds of decisions you really want to think about now and how that’sgoing to help you or27:17-27:24affect you. All right, we have Debbie Brown on the phone, my girl, Debbie.Hey, Debbie, are you there?27:25-27:26Yes, Dr. Friday, hello.27:27-27:29Hello, sweetheart. Thank you for being a listener.27:30-27:31Oh, I’ve been listening for years.27:32-27:36Thank you so much. I love that. And I’ve been doing this for years, so Iguess it’s a good team.27:36-27:40So any plans for the holidays? Anything fun or traditional that you usuallydo?27:41-27:49Well, we have all the kids over for Christmas Eve, and then we, instead of aDirty Santa, we do a gift card Dirty Santa.27:49-27:55And it’s fun to watch the little grandkids and the parents argue over whogets what.27:55-27:56So it’s kind of fun.27:57-27:57I like that.27:58-27:59I will have to think about that.27:59-28:03I’m picking people’s brains to a point too, because we have some greattraditions like28:04-28:08every family, but now we have more family and I’m, I’m one of eight.28:08-28:13So when we get together and their kids and their wives, I mean, it becomesquite magical,28:13-28:15I guess is the word, if you like big, loud families.28:16-28:21So I’m always looking for ways to, to do just what you said, kind of make itall a little28:21-28:21bit more fun.28:22-28:23So we’ll have to work with that.28:23-28:25Debbie, thank you for being a listener and Merry Christmas.28:26-28:27Thank you, Dr. Friday.28:27-28:28Same to you.28:28-28:29Thanks.28:29-28:30All right.28:30-28:31This is so much fun.28:31-28:32I love giving things away.28:33-28:33Okay.28:33-28:39So we, um, we are taking again, phone calls and then I know, and Iappreciate some of you28:39-28:44guys using the email bag today because I do realize that let’s be honest,it’s a little28:44-28:45crazy on the other end.28:45-28:54So I want to bring up, someone was asking about the BOIR, which of course isthe business owner’s information reporting.28:55-28:56You’ve heard me talking about it.28:56-29:01You’ve heard a lot of people talking about this is the one where you had toupload your driver’s license.29:01-29:04It’s through FinCEN or through the federal banking.29:05-29:10And if you didn’t do it by December 31st, there was going to be a penalty of$500 a day.29:10-29:12And they had this big scare thing going on.29:13-29:18And now there’s a hold on that, guys. Someone, which is not surprising ifyou think about it,29:18-29:25someone has started a lawsuit. They’re suing to saying that this is againstour rights and they’ve29:25-29:33got a whole thing. So there’s been a freeze put on the BOIs. So if you havenot filed your BOI or29:33-29:38you’re just hearing about it right now, and again, you may have heard it asbusiness owners information29:38-29:44reporting or BOI. And this is the one where you kept hearing people say it’sa $50 or $500 fine29:44-29:52by the day if we didn’t comply. Um, and I mean, we did probably close to 70,a hundred of these.29:52-29:56And a lot of people are like, well, why should I have to do this? It seemslike, and we’re like,29:56-30:01if you don’t, the penalties five, then the lawsuit happened. So now it’s a,it’s a big deep breath.30:01-30:05So if you were one of those people dragging your feet, or you really had notheard about it,30:06-30:33This is definitely one of those situations where probably being slower isgood because a lot of us uploaded our driver’s license and did everything wewere supposed to do to comply. And then we found out that this was not goingto be a good situation when it came into to that. So just again. So if youare a person that have a business, LLC, a corporation, anyone that’s listedwith the state as a charter. So that’d be single member LLCs, corporationsor any of that.30:36-30:42the B O I R and right now don’t do anything. Just, just relax, just chill.It may be one of those30:42-30:47situations where you’re able to just see what you have and make sure youhave the ability to just30:47-30:53relax and not worry too much about it or whatever. So again, just puttingthat out there. Cause I’ve30:53-30:57gotten throughout the week, I’ve gotten a lot of them, but someone justemailed and asked about that30:58-31:03as well. And you know, the answer is a plain and simple. You don’t need todo anything with the B O I31:03-31:09are until later notice. They may bring it back depending on what happens inthe court situation,31:09-31:14and then we’ll take it from there about how or what they’re going to do. Allright, let’s see here.31:14-31:19It looks like we may actually have a question with Dan and Gallatin about2022 taxes or something.31:19-31:26Hey, Dan, what can I do for you? Hello, Dr. Friday. Hey, I received thenotices on 2023 taxes. I have31:26-31:33not got the return back yet and it was a notice in july or so and i don’thave the paper in front31:33-31:39of me but uh they said they’re reviewing the taxes my return uh we had justgot married last year31:40-31:46and get a a joint and so the income was a lot higher than than what it wouldbe for a single31:46-31:53anyway uh september got a second notice they’re still revealing and have notheard back should i31:53-32:00call them or let it ride. Um, I would say, and, and if you, is there arefund? Did you say a refund,32:00-32:04Dan? Yes, there’ll be a refund because did you check? And if you go on theIRS website,32:05-32:10is it just say it’s still processing? Uh, I’m sure it does. I have not donethat though. Okay.32:10-32:16I would check the IRS.gov and click where’s my refund and just see, I, Iwould not be surprised32:16-32:20saying that there’s a, but there would be a phone number you can call versuscalling the regular32:20-32:26800-829-1040. This would be one that goes into that division and it might beeasier to get32:26-32:31through. I did one just the other day and it was less than 40 minutes onhold, which doesn’t sound32:31-32:37like a great day, but it was a nice day. So we were able to get ahold ofsomebody and find out32:37-32:41more information. We couldn’t resolve it because they were still reviewingit, but at least we know32:42-32:46that the return wasn’t held up, that they needed documents or something thatI missed for that32:46-32:53client. So yeah, I would do that. Just see what the status is. Okay. Okay.Thanks, Dan. Okay. I’ll32:53-32:59give it a try. Thanks. Bye. All right. Let’s do one more giveaway herebefore the break. Which one32:59-33:04do I want to do? Let’s do Outback. We’re going to do another Outback, $50.And again, the Outback33:05-33:10card does also do Caraba, Bonefish, and Fleming. It’s obviously thesefranchises own multiple33:10-33:16locations of different things. $50 Outback card. And we’ll take callernumber four. Caller number33:17-33:29four, 615-737-9986, 615-737-9986. Let’s see those phones light up like aChristmas tree. Oh my33:29-33:33gosh, it actually does light up like a Christmas tree. I love seeing that.Too bad I can’t get that33:33-33:37kind of excitement when I’m talking tax law sometimes. But that’s all right.This is perfect.33:38-33:42So as soon as we get that one, and then we’re, I’ll take one more break andwe still have33:42-33:44a few more cards, about three or four more cards to give away.33:45-33:47And we’ll make sure we get all those out.33:47-33:50So we’ll make do a few more extra cause this will be the last part.33:50-33:52So, you know, we got to do what we’re going to do.33:53-33:57And then hopefully everybody will not get hit tonight.33:57-34:01If you, if you have nothing to do, spring hills, Christmas parade is thisevening.34:02-34:06So if you like Christmas parades, which you guys all know, if you know mefor a while,34:06-34:07I used to do them all the time.34:07-34:13then COVID hit and made it hard. But, uh, I still love Christmas parades.Hopefully the rain will34:13-34:19not make it where it’s hard to go to it, but we will find out and see. But,um, again, it’s, uh,34:19-34:24it is tonight. I think it starts around five or six. Um, all right. We havea winner, Melissa,34:24-34:30Melissa, this is Dr. Friday. Thank you for listening. Oh, thank you, Dr.Friday.34:31-34:35This is exciting. I love giving things away and I love people that listen.It’s a win-win.34:36-34:45um so any plans for christmas melissa well uh spending time with familydoing a little traveling34:45-34:51and just trying to have some fun i think that’s perfect everyone forgetssometimes i went to34:52-34:56walmart this morning and people were a little grouchy just saying somepeople were not like34:56-35:02smiling and giggling they were like scrooge a little bit i’m thinking peopleneed to to remember35:02-35:05the whole purpose of Christmas is really more about this,35:05-35:09like the smiling and fun and just enjoying yourself not to be stressed.35:10-35:14No stress. Yeah. Yeah. All right. Well, Merry Christmas.35:14-35:16Thanks for listening. Hopefully they’ve gotten your information.35:16-35:19If not stay on hold and they’ll get it and then we’ll get you your giftcard.35:20-35:24Merry Christmas. Very Merry Christmas to you. Thanks. All right.35:24-35:27We’re going to take our last break for the show. And then when we get back,35:27-35:31we still have about four more cards. So don’t give up on it.35:31-35:35You may still be able to be a winner for these free gift cards.35:35-35:38And when we get back again, you might want to have the phone number.35:38-35:45It’s going to be 615-737-9986 is the number you’re going to be calling toget on.35:45-35:48And again, and now who knows what number?35:48-35:51It’s just a number that comes out of my head that we’ll go with.35:51-35:53But we still have four more gift cards.35:53-35:57And then after that, we’ll be able to give you some of the information.35:57-36:01In case you did have a text question today, weren’t able to get through thephone lines.36:01-36:02Totally understand.36:02-36:06This is a day of giving and enjoying and just wishing everyone a MerryChristmas.36:06-36:09We’re going to be right back with the Dr. Friday Show.36:24-36:25All righty.36:25-36:26We are back.36:26-36:30Live here in studio with Frosty and all our friends.36:31-36:32So here’s what we’re going to do.36:32-36:34We have Jim from Spring Hill that has a question.36:35-36:45While I get Jim on the line, let’s see if I can also go ahead and give away,because I’ve only got about eight minutes, a $50 Amazon card to callernumber seven.36:45-36:50I’ll leave that in the studio, and you guys can connect me with Jim, andI’ll see if I can help him out.36:51-36:52Hey, Jim, what’s happening?36:53-37:12Hey, I was wondering if there was like a handy set of rules to do to observebefore you retire to not just minimize taxes, but get in line with Medicareand all that other stuff that you have to do when you retire.37:13-37:15That is an awesome question.37:15-37:25And I’m going to be honest to tell you that I have never yet, because whenmy sister, I mean, obviously, I would suggest talking to your financialplanner and your tax person.37:26-37:32Those are the two most important, probably. But like like a, you know,simple checkoff list.37:32-37:35Oh, let’s make sure I do this so that way I don’t do Irma.37:36-37:43Or if I a lot of times the year in which you retire, it’s difficult becauselike my sister, she had a big buyout that she had to deal with.37:43-37:48Right. And some of that affected how much she was going to pay in Irma andall that.37:48-37:53So very important to to do. But I don’t have a great question.37:53-38:01I mean, answer besides if you’ve got a good tax person, I would shootthrough some of that information just to make sure that you’re not going tobe triggering.38:02-38:06Again, I talk a lot about more Irma because Medicare, Social Security iswhat it is.38:07-38:10You’re going to get paid whatever wages the year you with, you know, youretire.38:11-38:18But if you can work it out where you don’t trigger having to pay anotheryear worth of high Medicare, that would be great.38:18-38:20But sometimes you can, sometimes you can’t.38:20-38:27And then also, like, if you have a health savings account, you can’tcontribute to that like six months before you go on to Medicare.38:27-38:35Different things like that, Jim, that all these little rules that I find outor I even found out after my sister retired, which you’d think I would knowsome of those.38:35-38:38And I didn’t know until I didn’t deal a lot with that aspect.38:38-38:40So I’m not helping you much, Jim.38:41-38:41I am so sorry.38:43-38:44All right.38:45-38:45Thanks, buddy.38:45-38:46Merry Christmas, though.38:47-38:48Merry Christmas.38:48-38:48Thanks.38:49-38:49All right.38:50-38:55One of my best friends is on the line and happened to win, Milton Wills.38:55-38:56Hello, Milton.38:57-38:58Hey, Dr. Fryder.38:58-38:58How are you?38:58-38:59Merry Christmas.38:59-39:02I know that name, and I love that voice.39:03-39:03All right.39:03-39:05I got Bunchy here with me as well.39:06-39:07Oh, my girl is there.39:07-39:07Good.39:08-39:11That is so, now that she’s retired, she’s having to probably hang out withyou more.39:12-39:12Oh, yeah.39:12-39:14She’s a good pain in the neck.39:16-39:18After this many years, I’m sure you two have got it done.39:18-39:20But I’m sure she said the opposite.39:20-39:26Anyways, thank you guys for being listeners and awesome clients for goshknows how many years.39:27-39:28Most definitely.39:29-39:30Hey, I got to give you a little insight.39:31-39:32We went to see Hank Parrish on Thursday.39:33-39:35And, of course, we brought your name up.39:35-39:38And the reason why, because we were doing the RMDs, and I said,39:38-39:43I said, Hank, I wish I could go to Dr. Friday and just tell her that I wantall my money at once.39:43-39:45He said, wash your mouth out with soap.39:47-39:49Exactly. I can see him saying that.39:50-39:54And we all know that, Melton, the way you plan and put everything intosavings accounts,39:54-39:56you would have a heart attack if you had to pay all your taxes at once.39:57-40:00Most definitely. Hey, you know what? We miss, this seems so different.40:00-40:04You’re doing a good job, but we miss Dr. Electric. Is he still in Florida?40:04-40:09he is yes he’s out playing around his son is now running the company here in40:10-40:14Tennessee he’s doing a great job I’ve worked with him a few times but yeah I40:14-40:18miss him too my friend I miss him too well we miss him but don’t worryyou’re40:18-40:22doing a great job you’re holding down the fort as always well thank you bothof40:22-40:26you and I look forward to seeing you in a few months hey fantastic MerryChristmas40:26-40:30to you and your staff yeah thank you Merry Christmas okay guys we’re gonnago40:30-40:34ahead and jump on another giveaway because we still have like three leftlet’s40:34-40:40Let’s do a second, my $50 Home Depot card, a $50 Home Depot to caller numberfour.40:40-40:43Caller number four, $50 Home Depot card.40:44-40:48So I’ll let you guys at the other side play with that because, well, let’sjust be honest.40:49-40:50The phone lines light up so fast.40:50-40:54I don’t know how you guys figure out who’s who, but they do a great job.40:54-40:56They’re counting them and highlighting them and doing their things.40:57-40:59But so we got $50.40:59-41:03We still have two more cards to give away and we have about five minutes todo that in.41:04-41:06So we’ll get those put through.41:06-41:10And again, I do want to thank all of you, all of you that serve in themilitary, all41:10-41:16of you that have used my services for the last 30 years of being a personhere in Tennessee,41:17-41:19working on taxes in about 12.41:19-41:21I don’t know how many years I’ve been on the radio, to be quite honest.41:22-41:23I think I need to figure that out.41:23-41:25Somewhere between 12 and 15 years.41:26-41:30And all those listeners that have actually listened for all of those years,it is so amazing41:31-41:37that you guys want to listen to somebody about taxes all year round, whichleads to some fun41:38-41:43and exciting things we’ve actually been able to do together, right? We’vehad some fun and make41:43-41:48things exciting and happen and make them work with what we have. All right.We have a Tim,41:49-41:57I think it’s Tim Coombs. Hey Tim, it’s Dr. Friday. Are you there? Dr.Friday. I thought that might be41:57-42:05you oh my goodness this is so much fun i know these voices oh my god i’vebeen calling just42:05-42:11non-stop and what what he what he answers the phone he goes you’re thewinner of the home depot42:11-42:21card i went oh my god you’re always so excited anyways um so another anotherwonderful client42:21-42:27that also is a listener so that that’s so cool um so uh what do you wait forchristmas shout out42:27-42:35to you go ahead I give a shout out to you anybody listening to this lady letme just tell you42:35-42:44something she is the best by far so if you don’t use her you need to I loveher thank you sweetheart42:44-42:48and I want to say I got two more cards to give away so I’m gonna say MerryChristmas and I’ll42:48-42:54see you next year Merry Christmas sweetie bye okay bye all right we have avery quick rush we’re42:54-43:01going to give a $50 Olive Garden, $50 Olive Garden card to caller numberthree, caller number three,43:02-43:07$50 Olive Garden. You guys choose it and we’ll have one more and we onlyhave a few more minutes.43:07-43:12So I’m hoping to get all these given away because I talk too much. I thinkdon’t give them as fast.43:13-43:18If Joe is on the phone, he would be a boom, boom, boom. And we usually endup doing two hours worth43:18-43:23of it. So made it a little easier than just one hour, but we’ll have thisone. And that was so43:23-43:27much fun to have you guys all calling and listening. And hopefully you guysare all going to have43:28-43:32wonderful, seriously, wonderful Christmases. And hopefully the weather willbe nice. If you’re43:32-43:38traveling and having to fly or drive, I will be flying over the holidays. Sothat should be exciting.43:39-43:43But at least I’m heading towards California. So hopefully there’ll be nomajor storms or anything.43:44-43:49All right, we’ve got Charlie on the line. He’s the winner of Olive Garden.Hey, Charlie, you there?43:49-43:54Hey, Dr. Friday. Yes, ma’am. I’m here. I’ve been trying to call and call andcall.43:55-44:05Well, I am so happy and hopefully you’ll enjoy. It’s either Olive Garden,Longhorn, about five different restaurants will take this card. And thankyou for listening, Charlie. I really appreciate it.44:06-44:07I love you. Thank you.44:08-44:16Thanks. All right, guys, the last card, and we only have like two minutesleft. It’s going to be a $50 Outback card. I’m going to let the studiochoose the number.44:16-44:19I’m just going to let them choose whatever because the phone lines are alllit up.44:19-44:27I’m going to let them figure out which one they want to go with and theywill be able to select and they’ll give me a name and that will be the lastone.44:27-44:32And we only have like two minutes left of the show. So we want to make surewhile we’re getting that through there.44:32-44:37Oh, wow. You guys are fast today. So we have an Anthony Scott in a minute.44:37-44:41They’ll be able to join us on and I’ll be able to just thank you forlistening.44:42-44:46And hopefully you guys will all have a wonderful Christmas and do yourthing.44:47-44:47Hey, Anthony, you there?44:49-44:50Yes, I’m here.44:50-44:50All right.44:51-44:56Well, you are the wonderful final winner of the 2024 Christmas giveaway.44:58-45:02Well, I’ve been trying ever since you come on, and I can’t believe I got it.45:02-45:07Well, I appreciate all of you guys that try, because the phone lines havebeen going crazy.45:07-45:08And thanks for listening.45:08-45:11It’s so wonderful that you listen and everything.45:11-45:11Thank you.45:11-45:14I appreciate your show.45:14-45:15I love listening to it.45:15-45:16It’s worth listening.45:17-45:17Well, thank you.45:18-45:18And Merry Christmas.45:18-45:22If they haven’t gotten your info, stay on the line, and then we’ll be ingood shape.45:22-45:25Other than that, guys, we’re going to be winding down the show.45:25-45:31Just keep in mind that, yes, if you have any tax issue, if you have anyproblems with the45:31-45:34IRS or the state, it’s what I do for a living.45:35-45:37It’s what we’ve done for 30 years here in this town.45:38-45:47So you can basically, all you have to do is pick up the phone Mondaymorning, 615-367-0819.45:47-45:53If you’re not too sure who this crazy person was on the radio today, becauseit was a little bit more of a crazy show than our normal.45:54-45:59But it’s always so much fun to be able to, again, give back and just havesome Christmas with all my listeners.46:00-46:03But if you want, you can check out the web.46:03-46:04It’s drfriday.com.46:05-46:11Also, you can email, as many of you guys have been doing, email Friday atdrfriday.com.46:12-46:17Or if you go to the DR Friday, you can set up an appointment for me or withChris, which46:17-46:17is my sidekick.46:18-46:24And you can also print, we have the 2024 tax organizer in there.46:24-46:28So if you’re thinking about starting to organize your tax documents, they’rethere.46:29-46:35Or you can just, again, give us a call in the office at 615-367-0819.46:36-46:37Hope you guys have an awesome time.46:38-46:40Cop ya later, as we always say in Australia.47:09-47:09.

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Dr. Friday explains the importance of accurately reporting all income, even if you don’t receive a 1099 form for every payment. Underreporting income is a major audit trigger with significant penalties. Learn how to stay compliant and avoid common mistakes that could lead to trouble with the IRS.

Transcript:G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Fund. To get more info, go to www.drfriday.com.

This is a one-minute moment. Very soon you’re going to start receiving your tax forms, and one of them is probably going to be, if you’re self-employed, a 1099. A little bit of information. If someone does not give you a 1099, does not mean you’re not supposed to report that income. It doesn’t mean that all you do is report what you’ve received on 1099s. Most businesses will not receive 100% of their income in 1099s. Some do. But your job is to report every dollar that has went through your bank or that you’ve collected. If it’s cash, then you collected it that way. Make sure you report all of your income. One of the biggest things we’re getting audited on is people under-reporting income, and that penalty can be huge.

Need help? Go to drfriday.com. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. We’re live every Saturday. right here on 99.7 WTN.

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Dr. Friday shares smart strategies to reduce taxes by maximizing contributions to retirement accounts like 401(k)s or IRAs before year-end. She explains the tax benefits of traditional vs. Roth IRAs, helping you choose the best option for your financial goals. Take advantage of last-minute opportunities to save on taxes and grow your retirement savings.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Right now, you’re thinking, how can I reduce taxes? I’ve already done as much. Now, if you have a 401k at work, you may have one paycheck, maybe two, depending on how often you’re paid, where you could maximize. You could put the entire paycheck, after taxes, into your retirement account, 401k, 403b. That may be a smart thing to do. Maybe you can’t afford that. Keep in mind that sometimes, if you don’t have a retirement, now’s the time to put that money or set it aside for your IRA. Now, I’m not going to tell you if it’s a Roth IRA, it’s not going to save tax dollars, but it will grow tax-free, where if it’s a traditional IRA, it will save you taxes today. Need help? Go to the web, drfriday.com.

You can catch the Dr. Friday call and show. Live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday discusses the tax implications of early IRA withdrawals, emphasizing the need to account for penalties and tax brackets accurately. If you’re under 59 ½, expect a 10% penalty in addition to your tax bracket rate. Don’t rely on default withholdings—get professional help to avoid underpayment issues and surprises at tax time.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

If you’re 40 years old and you see your IRA over there and it’s got lots of money and you’re having a hardship and you’re like, okay, I’m going to take some money out of there so I can pay this money off. And then when you get ready to do your taxes, because they took out 20%, so I pay taxes. 20% isn’t enough, people. 10% of it was a penalty. You’ve really only paid 10 and you’re in the 25% tax bracket. So there you go. So you need to make sure if you’re going to take money out of an IRA and you’re going to do it under the age of 59 1⁄2, you need to calculate 10% above whatever tax bracket you’re in. If you need help, 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday highlights the 2024 changes to Section 179, where only 60% of equipment costs are deductible, down from the previous 100%. She advises business owners to adjust their tax planning accordingly and understand the impact of this change. If you’re budgeting for significant purchases, make sure your tax strategy aligns with current laws.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

And I know many of you business owners are sitting there thinking, oh, I need to go buy some equipment so I can reduce my taxes. Keep in mind, Section 179 in 2024 is only 60%, not the 100 that you’re used to, 60%. So now when you go buy something, you’re not going to get all 100% that did not get extended, and it’s very important because when people come in and they’re like, hey, I spent $100,000 on equipment, why am I only getting $60,000 of it? That is because that’s the current tax law. Not like we write it, we just make sure it’s done right. If you need help doing taxes, you need to check our calendar out today at drfriday.com.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of The Dr. Friday Show, Dr. Friday offers practical financial advice for listeners navigating taxes, business transitions, and retirement planning. With real-life questions from callers, the show dives into topics ranging from sales tax collection to Social Security strategies. If you’re looking to optimize your finances as the year wraps up, this episode is packed with valuable insights.

Topics Covered

• Preparing for the 2024 Tax Season: Deadlines, changes, and key considerations for e-filing.
• Sales Tax Guidance for Businesses: When and how to file sales tax, especially for new retail ventures.
• Gifting a Vehicle: Tax implications and processes for transferring a car as a gift in Tennessee.
• Social Security and Income Limits: How earnings affect Social Security benefits for early retirees.
• Maximizing Retirement Savings: Contribution limits and strategies for 401(k)s and Roth IRAs.
• Capital Gains on Home Sales: Tax exclusions and calculating your taxable gains.
• Disability and Asset Management: Selling a home while receiving disability benefits.
• Cryptocurrency Taxes: What you need to know about reporting and tracking crypto transactions.
• Electric Vehicle Tax Credits: Qualifications and considerations for new and used EVs.

Transcription00:01-00:07No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes.00:08-00:11She’s the how-to girl. It’s the Dr. Friday Show.00:14-00:22If you have a question for Dr. Friday, call her now, 737-WWTN. That’s 737-9986.00:23-00:27So here’s your host, financial counselor and tax consultant, Dr. Friday.00:27-00:33Warm Saturday, considering I’m inside.00:33-00:36Do not want to be outside in that bitter cold if I don’t have to be.00:36-00:44So enjoying the holiday time, getting ready to, I’m sure, have a couple parties and things like that in your guys’ neighborhood.00:44-00:49But right now we’re going to talk a little bit about preparing for 2024 taxes.00:49-00:51Hopefully everyone has filed their 23.00:52-00:53If not, you’re going to be late.00:53-00:57So probably preparing for 24 and then doing 24 and 23.00:57-00:59E-file is not available at this time.00:59-01:03They usually close it down until about January 18th, I believe.01:04-01:04It may be 20th.01:04-01:06I haven’t heard the date yet.01:06-01:11But at this point, if you wanted to file 21, 22, or 23, you would have to do it by mail.01:11-01:14Any year prior to that would have to be done by mail anyways.01:14-01:21But e-file is not available to anyone while they’re prepping for the new tax season, I guess we’ll call it.01:22-01:27So let’s talk about a little bit of a few things that we know we might want to consider.01:27-01:31Obviously, when we’re looking at our taxes, we’re also thinking about our tax brackets.01:32-01:45Anything that might have changed in the year of 2024, marriage, divorce, had a baby, a child that may have turned 17 in the year of this 2024, because that would change your child credits.01:46-01:49All those kinds of interesting things that you might have.01:49-01:54You need to make a little bit of a list so you can try to figure out what you have and where you’re going to go with it.01:54-01:55But we are lucky here.01:56-01:57Wayne has already jumped on from the borough.01:58-02:00So let’s go ahead and get Wayne on the phone.02:01-02:02Hey, Wayne, what’s going on?02:03-02:04Hey, Dr. Friday.02:04-02:04How are you today?02:05-02:06Awesome.02:06-02:06How about yourself?02:07-02:08Just fine.02:08-02:09I have a quick question.02:09-02:10We are a service company.02:11-02:13We do kitchen cabinets and service installations.02:15-02:18The reason I was calling is we are starting to look at selling cabinets.02:19-02:24as individual do-it-yourselfers buying them from us instead of us having them installed.02:25-02:35Now, in the past, we did not have to collect sales tax because it was an installed item and it was part of an exemption because of it being an installed item on a contract.02:36-02:39But I wanted to ask you about that.02:39-02:47When we start looking at paying sales tax in the state of Tennessee, is that a quarterly payment due every quarter?02:47-02:51Is that every, I mean, is it, how does it work when you’re paying sales tax?02:51-03:03Absolutely. Normally you have two options. If you’re going to have, just depends on how much you do in retail sales, but if it’s more than $1,500 a month, they’re going to put you on a monthly filing. Some months, maybe zero.03:04-03:05Some months may have taxes.03:06-04:02I find that usually is easier because the alternative is yearly once a year that you would file. And even though that’s seems like a nice idea, sometimes that can get a little cumbersome if you’ve actually got a fairly healthy bill coming out. So I would sign up for a monthly and that’s the same. You already have the number because I’m assuming you buy wholesale. Your wholesale number is also your sales tax number. You may have always filed a zero annual report because you didn’t have any retail to have to report. But now you’ll have to take that on. But yes, your thoughts are correct. A hundred percent actually, because a lot of times people forget that if you’re selling and it’s not attached or not installed with a contract, if someone, if I go to Home Depot, buy the cabinets and ask you to install, I have to pay sales tax on those cabinets. If I go to you and say, I want these cabinets and you, you purchase them and then install them, then they’re part of our property taxes, not part of sales tax.04:03-05:23So yeah, Wayne, you’re on the right track. To give you one other real quick thing, we’re an S-Corp. And as such, we are actually an installer service group through the Big Blue and the Big Orange here in town. And so we have been for over 18 years. Now, because we’re starting this as a selling side of our company, we’ve done that for two years now, on contract, installed everything we sell. But when we start talking about doing it when we’re collecting sales tax, should I break this off into a separate checking account and anything that’s sold diy can be under a separate collecting and storage of the monies until the payments are made what are your what are your thoughts there it may make it easier so that way because as you know on business licenses you guys would be more um consumer to consumer kind of situation where uh this is going to be more of a retail situation somebody has to come by and pick up just pick up the cabinets you may still install on some of them, but some people may just buy them and have their contractor install them or, or whatever. Um, I mean, you may want to make a DBA. It could still be a DBA under your S corp, but you may have, um, a retail division here, you know, as lack of a better term, uh, that would then track and, and you could even get a separate sales tax number theoretically if you wanted to.05:23-06:08And that way, all the sales going in and out would be tracked for the retail division that are sold that way and all your um consumer i don’t know what the proper term is but the ones that are installed directly uh either through um contract of some sort those would run through your standard where you’re at today that way you’d have two divisions that you could track and even to see if it’s worth your headache of doing the retail it may or may not be in the big picture there may not be enough profit to even be dealing with that i don’t know you know i don’t know enough about your industry but it’d be good and that and that’s that’s the that’s the situation we’re in too being able to break it down and track where sales are going and where they’re coming from. And we have automatically, we have our service separated from our company’s actual sales of installed product.06:09-06:20And so we have already set this up as two different accounts for that. I’m just wondering if I start collecting sales tax, would it make sense to set a set of books for that income and outgo?06:21-07:22I would at least set up a taxable account. You may even have one that you use for payroll taxes and business tax and franchise excise tax. If you have one, I would use that for the sales tax collection, moving that 9.25 or 9.75, I don’t know where you’re at, into the tax account, which we do with a lot of our clients. That way, the money that’s actually in your general operating is not tax money. It’s already taken out. But other than that, I think it sounds like you’re already tracking your sales by category, which is probably the most important part of that conversation so that way you can see what is being done wholesale, what is being done retail, what’s being collected with sales tax, what’s full installation, because it sounds like you have multiple sources of income. Well, thank you very much. That’s the best anyone’s ever had to actually give me the information. I’ve asked my own CPA and they’ve had to get back with me on different things. So that was really a great answer and I appreciate your time. Thanks, Wayne. I appreciate you listening. All right, let’s go to Evan and Thompson Station, see if I can help. Hey, sweetheart, What can I do for you?07:23-07:24Hi, Dr. Friday.07:24-07:25I hope you’re well.07:25-07:26I am.07:28-07:33Hey, my mother-in-law is no longer able to drive, and she wants to give us her car.07:34-07:37The car retails probably for over $20,000.07:38-07:50And I’m wondering, is there a tax implication if we accept it as a gift or if there’s some kind of cutoff amount we should offer to buy it for?07:50-08:06Obviously, we don’t want it to be considered income, but at the same time, I understand that the DMV and the state and the IRS would like to get their share if that’s possible.08:07-08:09Yes, this is an easy one, Evan.08:10-08:13One, sorry that she can’t drive, but it’s a wonderful gift that she’s giving you.08:14-08:15Yeah, it’s great.08:16-08:18So she could sign over the car.08:18-08:22Theoretically, we have right now, I believe it’s $18,000 gifting tax.08:23-08:23It could be $16,000.08:24-08:25I need to cheat and look that up really quick.08:26-08:30The value of what we can give in gifting before we file a gift tax return.08:30-08:32But are you married?08:34-08:34Yes, I am.08:35-08:35Wonderful.08:35-08:37It’s my wife’s mother.08:38-08:53Okay, so the wife’s mother could basically gift you and the wife the car, which means 30,000 or more. I want to say it’s 16, but I’m sorry. I didn’t know that number right off the top of my head, but it’s so $20,000. Theoretically, she gifts it both to you guys.08:54-09:11She’s got $30,000 at least that she can use in gifting, no gift tax return, no taxes to her, no taxes to you. Boom. It’s a wonderful gift and it keeps on giving. Okay. Is there any kind of, is there documentation that she has to sign that she’s gifting us this car?09:11-09:19You know, it probably wouldn’t hurt because the biggest thing is you’re going to have to go to the DMV and show that it was gifted and at what value.09:19-09:27So I would probably pull up a fair value at whatever the value might be, like a CarMax or something, right?09:27-09:32Just take it in there and see if they can give you a value so they don’t think that you’re trying to short.09:33-09:38Because the only thing you’re going to pay in taxes is the sales tax to the state.09:38-09:58Because when she gives it to you, you’re going to retitle it at the value. And a lot of people will tell you value it at $1,000, but that’s not really the case, right? I mean, I’m just saying, so I would do a fair value on it because when you insure the car and everything else, it’s going to be insured at whatever value would be the insurance company and everyone says it is.09:58-10:03So whatever that is, I would go down with the DMV, get a letter of gifting.10:03-10:06Then it’s going to be put into your name when it transfers over.10:06-10:09As far as I know, that’s like considered a sale to the state.10:09-10:10So that’s where the money will be done.10:11-10:13Not the federal government, not normal taxes.10:13-10:15Mama won’t have to worry about anything.10:16-10:20But you guys will pay the sales tax, which is about 7% on 20.10:20-10:22So about $1,400 in tax, if I’m guessing.10:24-10:24Okay.10:24-10:30So the letter of gifting is available from the DMV or do I draft one up and have my mother-in-law sign it?10:30-10:32I would just draft one up.10:32-10:35I don’t believe you could Google the DMV to see if there’s anything.10:35-10:39Because on the back of the title, she’s going to sign it over to you.10:40-10:41You know, on the back of the free title.10:42-10:44She’s going to sign it over to you guys.10:45-10:47So at that point, she’s done her job.10:47-10:51And I would just have a letter showing that it was gifted to you at whatever that value is.10:51-10:54If it’s, you know, and I would try to get fair.10:54-11:03I mean, it may have a wholesale, but, you know, depending on the number of miles and everything else, like I said, normally CarMax or some of those places will give you one online.11:03-11:04You know, just fill it all in.11:04-11:06It gives you online what it is.11:07-11:07Okay, great.11:08-11:11You’ve been so helpful, Dr. Friday, and I so much appreciate you.11:11-11:12Thank you.11:12-11:13Talk to you later, sweetie.11:14-11:15Okay, thanks.11:15-11:15Thanks.11:16-11:16All right.11:16-11:18Those were both awesome questions, guys.11:18-11:22I have to appreciate it because sometimes I don’t always know what I need to be worried.11:22-11:30I wish I knew exactly what the gift, and I want to say it’s $17,000 this year, but I will find that out after we take this next break.11:30-11:40And I will let you know the exact dollar amount, because if the car appraises for $17,000 or $18,000, then you’ll be way within the dollar amount that she can gift to the two of you.11:41-11:43And that way you’ll have it with what you want.11:45-11:50But again, I know the state’s going to have you probably retitle it for the dollar amount that it was gifted to you.11:50-11:51So that’s where the tax will come in.11:51-11:52All right.11:52-12:01So if you want to join the show, maybe you’ve got a question or a situation, 615-737-9986 is the number here in the studio.12:02-12:08615-737-9986 is the number here in the studio.12:08-12:14You can join us if you’ve got a question or maybe you’ve inherited something or you’re getting ready to buy or sell.12:14-12:21I had one that came in the office this last week and she was basically, she had put a name down and she had to buy this property.12:21-12:30And so she’s going to be flipping it. So she had some capital gains for short term. We’ll talk a little bit more about how that works. But when we get back with the Dr. Friday show, we’ll be right back.12:36-12:40All righty, we are back here live in studio.12:40-12:43And it looks like the phone lines are coming through.12:43-12:44I did want to jump on real quick.12:45-12:48Gifting in 2020, 2014 is $18,000 per person.12:49-12:54So if you want to give your grandchildren or your children, you can give $18,000 without filing a gift.12:54-12:58And in 2025, it pops up to $19,000.12:58-12:59So it’s putting that out there.12:59-13:01All right, let’s talk to Dallas in the borough.13:02-13:02Hey, Dallas.13:03-13:04Hey, how are you doing?13:05-13:05I am well.13:06-13:06How about yourself?13:07-13:08I’m doing great.13:08-13:15I just wanted to give a little information about the car being gifted to a daughter, son, or actually relative.13:16-13:23There is a state form you can download from the state of Tennessee, and you can fill that out.13:23-13:29And if it goes to a family member, which I have done this even to cousins, there is no sales tax.13:30-13:31Oh, wonderful.13:31-13:33Yeah, see, I have never done that, so I just assume.13:33-13:41As long as it says family member, and like I said, I’ve done it to all three of my sons, and I’ve done it to a couple of my cousins.13:41-13:46I’ve given them cars, and as long as you fill it out, it’s a state that they can download it off of the web.13:47-13:54Fill that out, take it into the county court clerk, hand it over with the title, and the county court clerk usually fills everything out.13:54-13:56You just sign, and then there’s no sales tax.13:57-13:58Oh, that’s awesome.13:58-14:01When you say the state, are you talking about like Tennessee Department of Revenue?14:02-14:02Do you know?14:03-14:03Tennessee, yes.14:04-14:41Tennessee uh on the state of Tennessee when you because if you go in and buy one from somebody and you take the title in you’re going to have to pay a tax on the value exactly that’s what I was thinking he would still have to pay but you’re saying there’s a form out there on the state site that he can use to transfer to family members right I just did one two days ago to one of my that’s awesome all right Evan we’re going to look that up for you and see thank you for telling us Dallas. Thanks. Appreciate that. Thanks. All right. Have a good day. Thank you. Hey, Ron in Manchester, you may be adding to this conversation, but I appreciate any help. So, hey, Ron, what’s happening?14:43-14:48Yes. The guy from Murfreesboro just told you the same thing I was going to tell you.14:49-14:58Yeah. Transfer. That’s awesome, guys. I seriously appreciate that. I’m going to look it up and that way, Evan, if you want to call my office or whatever, we can see if we can find that form.14:58-15:02But thank you, because I was thinking he was going to have to pay the sales tax, even if he got the car for free.15:03-15:08So I did not realize we had something in the state that allows him to train or, you know, the transfer within family members.15:08-15:12So, Ron, thank you for listening and participating. I appreciate it.15:13-15:19Thank you. Bye now. Bye. All right. Let’s see if Mark can have a question for us.15:19-15:22Hey, Mark, what’s happening? Doing good. I’m doing well.15:22-15:28I have a question about I’m 60 years old, and I’m looking towards what Social Security is going to do to me.15:28-15:33I work as an independent contractor, and I get paid a 1099 every year.15:33-15:43But I drive enough miles to do my – I’m a courier, and I drive enough miles to cover basically my income where it doesn’t look like I make any money.15:44-15:44Right.15:44-15:52From a progressive standpoint, how does that affect my Social Security if I keep doing this until, say, 70?15:52-16:02How long have you, Mark, how long have you been doing that? I mean, if you’re 60 years old, did you have, quote, a regular job at some point in the last 20 years? Or have you been doing this for a long time?16:02-16:16Yeah, I’ve just been doing this for seven years, but I have a pension, and it’s not as much as if I would have been kept working a regular job, but I’ve been doing this for seven, but I’ve got basically 30 years of other jobs that I’ve done.16:16-16:40Right. Well, they look at 10 years over the last, or I should say 40 quarters, which is 10 years, and they’re going to take the highest out of the last 30 years. So you’re not going to really get into Social Security at the earliest would be 62 or 63 if you decide to take early Social Security. If you’re waiting till your actual Social Security, I think is like almost 67 if you take it without, you know, early.16:41-16:47So that the biggest question will be is out of the last 30 years, will you have 10 years?16:47-16:50I think you will because most you’re going to have is 14 years doing this.16:51-16:55You’d still have had 20 or whatever years or whatever that 16 years of working a real job.16:56-17:01And I don’t mean that’s not a real job, but I mean, you’re paying zero tax right now because you’re pretty much zeroing out your income.17:02-17:04So you’re not paying into Social Security with this current job.17:05-17:09No, I understand that. But what I guess what I’m wondering is how will my current job affect?17:10-17:12Let’s say I started drawing at 62.17:13-17:14Is there income restrictions?17:15-17:20When does the income restriction kick in or stop on Social Security?17:20-17:22At 62, it’s called early Social Security.17:23-17:28You can earn a little over $21,000, and you don’t have to worry about paying anything back.17:28-17:40But if you earn, which sounds like you aren’t actually, I mean, your tax return, because of all the miles you’re putting on at 65 cents a mile, you’re pretty much zeroing out your earnings by the wear and tear on your vehicle.17:40-17:45So if that’s the case, you could go on early Social Security and probably not worry about how much you earn.17:45-17:52But you could earn $20,000, a little over $20,000, and not worry about affecting your Social Security.17:53-17:53Okay.17:53-18:01So otherwise, I mean, I’m not saying I’m going to start one up because I’ve already kind of looked up, and it will be substantially better the longer I wait.18:01-18:09But what I haven’t been able to get a straight answer on was how my income right now, because it basically gets zeroed out every year.18:10-18:13Yes, it’s not helping you, so it’s not going to grow your Social Security.18:14-18:19But no, but it’s also not going to affect my pension once I start taking it.18:20-18:23That is correct. I mean, it’s having a zero effect one way or the other.18:24-18:31They’re going to go back to the years that you were making when you were paying into Social Security from a W-2, most likely.18:31-18:33And that’s the years they’re going to pull from.18:33-18:36So you’re not going to have a better or worse situation.18:36-18:41It’s just going to be, they’re just going to go back to the other years because these years are going to have zero effect.18:41-18:42Yeah.18:42-18:50I was more worried about how, if I could, I could, theoretically, I could do this for a long, as long as I’m able to drive.18:51-18:51Right.18:51-19:01And if I can draw, whatever age I decide to start drawing my Social Security, I don’t want, I didn’t know what the age was that income didn’t affect.19:01-19:31your social security. 67, it mostly, depending that this is one of those weird years, but let’s just say between 66 and 67. But since you’re a few years older than me, my year is 67. I’m going to guess 67 will be when you can be in full social security and make all the money you want and not affect payback. You still have to pay taxes on social security, but not affect the payback where if you go into early social security, your earnings, your actual profit, let me clarify, your profit can’t be more than $20,000 or thereabouts.19:32-19:33So it doesn’t sound like that’s a fact.19:33-19:42So you can continue being a courier and start Social Security when you’re of the age, even early Social Security, and have a zero effect on your benefits.19:43-19:44That was my main question.19:45-19:46I do appreciate it very much.19:46-19:46You have a good day.19:46-19:47No worries.19:47-19:47Thanks, Mark.19:49-19:49All right.19:49-19:50So we’re going to keep going here.19:50-20:05So if you’ve got questions, 615-737-9986, 615-737-9986, where I’ll take your calls talking about taxes or other situations that you might have coming.20:06-20:13And there is, it is on the Tennessee Department of Revenue or Tennessee Department of Revenue website.20:14-20:18Evan, again, I’m jumping back to you on that gifting because everyone was good enough.20:18-20:46I didn’t know that. I didn’t know that we had some sort of waiver that you could use. So it sounds like your mother or your wife’s mother can give you that car, not worry about federal tax. We don’t have a state tax. And now you don’t even have to worry about sales tax, the gift that just keeps on giving. So that’s awesome. So I don’t even know, I’m assuming you need to have a value on the car, but that may or may not be on that form. So you’ll have to look that up and see what you come up with. But that was very helpful listeners. I appreciate that.20:46-21:12All right. So we’re going to keep going. I was telling you about a client that came in my office last week and she ended up with a situation where she had put a contract on a new build and then found her dream house and she tried to get out of the new build, but they said no. And she had already put money down on it. So she’s going to have to buy the house and then turn around. She’s going to sell it. But her biggest concern was at her income. How much will she end up paying in capital gains?21:13-21:18And the mortgage person told us she was going to pay 40, excuse me, 40% capital gains.21:20-21:23And she’s making, you know, her, she’s, she’s, she’s retired.21:24-21:28So we’re not to say, but she’s not making three or $400,000 a year at this point in her life.21:28-21:30And the gains on this is like 25.21:30-21:47So my point being on this whole thing is we need, if we’re talking about capital gains, let’s make sure, especially if you’re a financial person and you’re talking real estate or something, You don’t want to really terrify the person, tell them they’re going to be paying 40% capital gains tax when our highest bracket is 37.21:47-21:51But again, she would have had to make $250,000 or something.21:51-21:54She’s making like $30,000 capital gains on this house sale.21:55-22:00So just make sure you check with your tax person when the time comes and you’re dealing with these questions.22:01-22:03We’re going to try to get Tim in real quick, hopefully before the break.22:04-22:05Hey, Tim, what’s happening?22:07-22:07Whoops.22:08-22:08There we are.22:08-22:09Good job.22:09-22:47tim what can i do for you tim you there in the borough uh yes i am all right yes um so i’ve had my house 20 years it’s my only house it’s gonna we’re looking at selling and it’ll be like i just wonder am i gonna have to pay capital gains on on whatever the profit is simple math is this whatever you purchase the house for, I’m going to use generic numbers just so you can understand, but let’s say you purchase the house for $200,000 and we have an exclusion. Are you married, Tim?22:49-22:57Yes, I am. Okay. So you get $500,000. So if you sold the house for $700,000, you’d pay a zero tax.22:57-23:21So whatever you purchase plus $500,000 gives you what your tax-free zone is. And also if you’ve in the house that long, you need to look at, did you read, did you got a kitchen? Did you got a bathroom? Did you put new hardwood floors? I don’t know. I’m just saying major repairs that may have increased the value of the home would, would increase in 20 years, you may have done something.23:22-24:09And in 20 years, you may not have, I don’t know. But that’s the question. So whatever you paid for any major repairs, and then 500,000, add that all together, that’s your basis. And then whatever you can sell it for. So if you could sell it for a million and you’ve got 700,000, you’re paying capital gains on $300,000. Super. Thank you for the simple explanation. No worries, Tim. I appreciate it. Thank you. All right. We’re going to have to take a quick break. Rick, if you can hold through this break, we will get right to you as soon as we come back from this commercial break. This is The Dr. Friday Show, and you can join us at 615-737-9986, 615-737-9986, and we’re going to be right back with the Dr. Friday Show.24:14-24:22All right, we are back here live in studio, and we’re going to head right to Rick in Hendersonville, waiting patiently through that commercial break.24:22-24:23Hey, Rick, what can I do for you?24:24-24:44How are you doing? I’m 69. I’ll be 70 next month. I’m still working. I’m married. I have a 401k. I’m contributing 9%. They’re doing a 4% match. How much can I set aside?24:46-24:50I mean, you want to maximize the 401k?24:51-24:51Yeah.24:51-24:55You know, tax wise, how much can I, will they allow me to put in?24:56-24:56I am 90.24:57-24:57Let’s see here.24:57-24:58I have a cheat sheet here.24:59-25:03I want to say, let’s see, 401ks, single guy.25:03-25:08You have the step up as well, which I believe is 7,000 plus the, it’s like 26.25:09-25:12So it’s like almost like $30,000 you can be putting in.25:12-25:15I’m going to get you the exact number here in one second.25:15-25:19So that’ll be on top of my regular income.25:20-25:20Right.25:20-25:22So it would be coming out of your income at this point.25:23-25:28I’m assuming that you have the original IRA Roth contributions, Calville educational.25:29-25:33Sorry, I’m cheating and trying to read educational deductions, employers.25:34-25:36And you’re in a 401k, correct?25:37-25:37Yes.25:38-25:38Okay.25:39-25:41But I also have a rollover IRA.25:42-25:44Do you do a backdoor or?25:44-28:12do you know what i’m saying what’s your income about 115 okay so you can put in 30 000 23 plus the additional seven for your age so 30 000 can come out of and then plus their match of four percent or whatever they’ll only match up to a certain dollar amount i’m sure um but then that would also kick you theoretically in a lower tax bracket you know because right now you’re in the 22 percent you know just with yours and if your wife works we’d have her income above so you would be saving quite a bit it does not work um okay so is that is that also the catch-up IRA and right that’s the 7,000 that’s the catch-up yes so when I’m 70 when I’m 73 I’m gonna have to start taking it out right not if you’re working at that same company so that never kicks in till i retire yep now if you have other retirements like if you work for someplace else and you have an ira or a 401k from some other company you have to take that rmd but not from the company that you’re still working at well i just have an ira a rollover ira from yeah the past right and so that one you would have RMDs, but the one that you’re contributing and still working at doesn’t come active until you’re retired. Well, it’s a significant amount in the rollover. I mean, I’m going to have to, am I going to, so they’re going to be taking it out of one and contribute, and we’re all contributing to the 401k at the same time I have to withdraw out of the rollover. Exactly, but that may be a good time to also think if at your age and income doing some conversions, meaning that you’ve already kind of have to take the money out. You can’t do a conversion on the RMD. That’s a mandate, but theoretically you could be contributing to a Roth at your income bracket. And I’m not a financial planner. Let me put that out there, Rick. You need to check this with a financial, but at your income being married, you’re basically at the top of the 12%, just jumping into the 22, but it may be smarter to be doing some conversion. So you’ve got some of that money in a Roth at this point versus having it all in a traditional or IRA 401k kind of situation. Well, I was going to ask you about that. I was going to put some other money I have set aside in a Roth, but I don’t even know how much can I do with a Roth? I believe you can do the 7,000 or I’m trying to see if it’s 65.28:13-30:10If older, you will remain at 75, 75. You could put 7,500 and you could put 7,500 into your wife, even though she’s not working because you can contribute for your wife okay so i mean you have 15 000 there that you could put into a roth instead of maximizing your current doing it if i maximize my current 401k and put 30 000 in it if i did i don’t think i could do that much but if i did then i i couldn’t do any of this other stuff right well i’m saying maybe leave what you’re doing right now on the 401k side and maybe and again double check this with a real financial planner but maybe putting some of the the money that you have extra into a Roth that way it’s growing tax-free and and you don’t have to worry about doing anything with that and then you know you’re still contributing to the 401k and getting the match that’s a thought if I hypothetically maxed out my 401k like you’re saying can I also do the Roth or I don’t think so I think there is some limitations there. So I think you’d have to be careful on, I know you could probably put it in your, you might be able to contribute the 7,500 into your wife’s, but I don’t think they can do anything on yours. So maybe it would be better. And you may even have something at work where your 401k allows you to do a Roth contribution and or a traditional, because again, at your income bracket, it may be a good time to consider putting some more money towards a Roth versus deferring the taxes, the taxes are eventually going to go up in our lifetime, maybe not for the next four years, but the way they’re spending, sooner or later, they’re going to come back at us and having that money at a Roth, which grows tax-free, is a nice place to have it. I got you. But you think it’s $7,500 for the Roth? Yes, it says here, yes. And that would be instead of doing it in the 401k?30:10-30:38the 401k so it’s really 22.5 yeah and 75 wherever i want to put it right that’s kind of my thought i don’t know double check it with someone that does financial planning but from the tax standpoint i like the numbers okay but i can’t but okay all right thank you very much hey no problem if i can help more give me a holler thanks all right all right let’s uh hit alan um see if i can help him Hey, Alan.30:39-30:40Yeah, thank you for taking my call.30:41-30:42I really enjoy your show.30:42-30:43Thanks for listening.30:44-31:05And I’d like to, if you have a home you’ve had for over 10 years and you sell it for, let’s just say $200,000 and your payoff was $50,000 and you found another home for $100,000, would you be allowed to keep that $50,000?31:05-31:06Absolutely.31:06-31:15If you sold the home for $200,000, there’d be zero tax because as a single person, we have an exclusion of $250,000.31:16-31:21And it sounds like you actually did buy the home for $50,000 or something like that, just using the numbers roughly.31:21-31:24You would not have to reinvest into a home at all.31:25-31:27You could keep all the money, but you have to live someplace.31:27-31:30So at some point, you will have to pay rent or buy a house.31:31-31:31Okay.31:31-31:34Now, if you’re a bit on disability, would that make a difference?31:34-32:07um i don’t think so i’m not an i’m gonna put i’m not a disability expert i know there’s sometimes some earning potentials and you can only keep so much money in the bank i think right so um and i think it’s like three thousand some dollars i mean it’s pretty low so right my concern would be is if you if you sell your house and you now have a hundred grand that you can put and invest where they look for you to spend that before they give you back your disability and getting off this. I mean, you know, I would double check that with disability.32:07-32:10It seems like there should be an exclusion for selling your home, right?32:11-32:12You know, the government, sometimes there’s not.32:13-32:17Well, I appreciate your show and help us out.32:18-32:50Thank you, sir. I know. All right. Thanks. All right. We, um, just a heads up next, uh, next Saturday, we’re going to be having our traditional Christmas show where we give away, um, gift cards and just an appreciation to all of our listeners and clients that have been with me for this will be, uh, we’re coming up on 30 years and almost 15, 16 years on the radio. So, um, you know, it’s a big appreciation. Uh, it’s a long time to be in business and, uh, appreciate all of you guys listening and participating and using the services. So that’s what the show’s about.32:50-34:36So that’s next Saturday. So hopefully you guys can tune in and, uh, get a free, a few gift cards for different restaurants and different things that we have accumulated here. So, and also this year, or right now, we’re talking a little bit about taxes and just to make sure, because a couple of people were calling and the house thing is a whole different tax code than what some people think. So under the current tax code for primary homes, primary home is any home you’ve lived in for the last two out of last five years. So if you’d lived in it for 10 or 15, 20 years, no question. It’s your primary home. Um, if you’re married, there’s an exclusion of 500,000, assuming both you and your spouse lived in that home to the last five years, um, you get 500,000 plus whatever you paid for it. So, um, if you inherited the home, it would have been at the value you inherited the house. If you built the home, it would have been at the value that hopefully you know what you paid for to buy the, the, the land and build the home. Um, or if you’re fortunate enough to purchase the home, that’s the easiest way because we actually had a closing and we’re able to track that number. So whatever it was, and then you have to go back to the best of your ability. I realized, and I try to tell people even now, any major repairs you’re doing to your home today, maybe you put up a new fence or maybe you put in a pool or maybe you’ve rebuilt patios or changed all the windows. Maybe you’ve redid your kitchen. I know during COVID, a lot of people did some serious home improvements. You need to put all those receipts, scan them in some place or put them in a folder. So if, and when you decide to sell the house, it will add to some of the basis.34:36-34:47Now, if you just changed out a toilet or you just fix the wall or you painted the house, that’s not really improving the property. We’re talking about improvements, not just maintenance or repairs.34:48-35:04But if you improved it, which means basically increase the value of the home because you did it, then that would add to your basis. And then you add that along with that 500 or if you’re single, the 250,000, that becomes your current or your new basis.35:04-35:27I had a woman that brought in Franklin 28 years ago, brought the house for $175,000. She redid the kitchen for like 50 and maybe put like 100 grand. So we have $275,000. She just sold it for $1.3 million. So $275,000 plus $250,000, you know, her basis is like $525,000 and she’s got $1.2 million or whatever.35:27-35:33So she has a very large capital gains and that will happen if you buy in the right areas and just live in the right.35:33-35:37But most time that exclusion will help cover most of your tax situation.35:38-35:41All right. We’re going to be right back with the show.35:41-35:45I am an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.35:46-35:49I am Dr. Friday and you are listening to the Dr. Friday show.35:50-35:57And you can join us here at 615-737-9986, 615-737-9986.35:58-35:59We’re going to be at our last part of the show.35:59-36:02So if you’ve got a question, now would be the time to call.36:02-36:02We’ll be right back.36:05-36:08All righty, we are back with the final part of the show.36:09-36:19So again, if you have any questions, you can join us live at 615-737-9986, 615-737-9986.36:19-36:449, 9, 8, 6. Seem to get a lot more people on the crypto side. Bitcoin, lithium, cryptocurrency, whatever you want to recall, you know, is taxable. So really need to make sure. I know a lot of you guys think that if you go into the whole crypto world, that somehow that’s going to make it where you don’t have to worry about paying taxes or dealing with any of it. It is considered property.36:44-36:51It is a virtual currency and is taxed the same way as any other asset, for example, gold or stock.36:53-36:54Taxes will be due.36:54-37:03So I’m not too sure otherwise, just to tell you, I mean, there is a lot of people and now the IRS is finding ways of tracking.37:03-37:09There’s several court cases right now out there where people are saying they didn’t have the tracking.37:09-37:10They didn’t know it.37:11-37:12They’re using estimating.37:13-37:14It’s not going to fly.37:14-38:35they’re going to lose in the IRS. If you don’t know your basis, the IRS has already ruled, the courts have already ruled, your basis is zero. So if you can’t prove, and this is the problem with some of the crypto versus some of the others, because what happens, you take US dollars and you convert it into some currency, be it Bitcoin or any of them, and you change that to cryptocurrency, and then you buy lithium, or you buy some other type of currency, and you change it from that one to that one. And some of my clients, they’ve been doing this for 15 years and getting it through gaming. So they never purchased anything. They want it by doing different things through the world of gaming that changes things big time, because now you have a situation where basically you’ve got, you know, a million dollars of some or a million cryptocurrency, depending on what type it is, um, in there cause you’ve been doing this, but you have no basis. So you’re now using it and buying things within the internet. And I had, you know, gentlemen, um, that physically retired, um, because of what he had earned through the, the cryptocurrency. And of course, a few years ago, went down, it’s going up, it’s going down, but it’s very important to understand that if you’re using the money and there’s a paper trail, I mean, how are you paying your rent? How are you eating?38:35-38:45Do you have a car? How are you paying your Petro? All of that is going to come back at some point and it’s going to track back at you. So you must, I mean, my suggestion is I like to sleep at night.38:45-39:21I’m not a person that wants to try to figure out how to outsmart the internal revenue service. Don’t really think it’s even going to succeed very well from my standpoint, knowing what I know. So I think your best bet is to set up a good wallet, try to backtrack into this information and start accumulating the tracking that you need, because if you don’t have that at some point, if you get audited, they’re going to say zero. And now you’ve got, you know, hundreds of thousands of dollars in cryptocurrency that you did not have before. And that’s going to be very expensive on tax dollars.39:21-41:07So just putting that out there for you, kind of important to know. We do have the EV, right? The for up to $7,500 under the new qualified plug-in EV or fuel-celled electric vehicles. $4,000 for used EVs. The inflation rate of 2022, it will go up. There is some qualifications. Married couples, less than $300. Head of household, less than $225. Single filer, less than $150. All of those are important. So you want to make sure that if you are looking to buy a new car, um, that you have the ability to, um, consider if you want to do it as an electric vehicle. I’m not too sure guys, I will be quite honest with you. I think in Tennessee, when we get these cold fronts, my understanding is that the electric cars do not hold charge when, or as well at when it’s really cold outside. And so if you think you have, I don’t know, an hour’s worth of travel, and then you get this cold front and it’s like 20 minutes, are you going to get stuck and have to sit for two hours for the car to charge up? I’m not really that keen on that particular aspect, just being honest with you. I don’t want my car to tell me when I have to stop. I kind of want to just fill up the petrol and keep moving. So that’s obviously a personal opinion. I am sure there are people that, I mean, I think some of the cars are really cool. My sister-in-law owns a Tesla. It’s gorgeous. Um, but again, I don’t know in, uh, in Tennessee, if it’s, if we’re really set up that they’re in California where there’s a lot more, um, advantages, there’s a lot more chargers, you know, when she goes to work, she can plug her car. And when she, she goes home, she hasn’t played.41:07-41:21We don’t really have any of that set up for that kind of situation. So it’s really important that you, you know, just think about that because, you know, putting it all in and going EV sounds great, but it’s kind of like doing solar.41:22-41:23There is still some solar credits out there.41:24-41:25And educational credits.41:25-41:26Now, I will tell you this.41:26-41:29Educational credits, that is when it comes on a 10, 90, 80.41:30-41:34Let’s say you have a 18, 19, 20 or whatever, and they’re in college.41:35-41:43I have had two returns in the last couple weeks where the people doing their taxes did not realize that they could qualify for college credits.41:44-42:40Their income was fine, and they were able to realize could qualify for it. So they had left, you know, $2,500 off their tax return. That was well worth amending and going after. So one of those things you want to make sure you’re maximizing all your tax credits. Sometimes it doesn’t work if you’re, if you, I mean, there are limitations to college credits, like many of the tax credits we have. So making sure that you have maximized those credits is one thing. And then if you can’t, well, you know, at least you looked into it and you know, you took everything that you could do. That was the important part of that. So, um, and then of, of course we’re getting to the end of the year. So get ready to, uh, think about right now, again, Roth conversion. If it’s something that you want to do, you don’t have much time, but it’s a couple of weeks left. If you want to convert, um, now’s a good time to probably consider that if your income wasn’t as high as you thought it would be or something, it’s a tax advantage to doing it.42:40-42:47Also, contributing money to an IRA or Roth, you do have until tax day, April 15th, to do that.42:47-42:49So sometimes it’s best to wait.42:50-42:54I know financial planners and people are always like, sooner you do it, faster it grows.42:54-42:55And I’m not disagreeing with that.42:56-43:01But I have had more than one person where we’ve had penalties because of it, because they contributed money.43:01-43:05And then they weren’t qualified to do that and become a problem for doing it.43:05-43:15So it’s really one of those situations where you want to be very quick at making sure that you understand how that works with the situation you’re in.43:15-43:22So just making sure that if you put money in and you weren’t qualified, there is a penalty that you have.43:22-43:25All right, let’s see if Dallas can get his question in really quick.43:25-43:26Hey, Dallas, what you have?43:27-43:31Yes, I talked to you years ago and I got some information on the dependents you can claim.43:32-43:33And I want to make sure that’s still good.43:33-43:41If I’ve got a child that’s 27, he’s been out of work a year and a half, but he’s living in my house, I can still claim him as a dependent.43:41-43:42Is that correct?43:42-43:47As long as you’re providing 50% of his care and providing a roof over his head.43:48-43:49Yep, I am.43:49-43:49Yeah.43:50-43:50It sounds like.43:50-43:52I just want to make sure that was still in effect.43:53-43:53Yes, still in effect.43:54-43:57He is still a dependent, even if you’re hoping that won’t be always the case.43:58-43:58Oh, yeah.43:59-44:01It’s time to get to work.44:01-44:02There you go.44:02-44:03Good question, though.44:03-44:04Thanks, Dallas.44:04-44:05Thank you very much.44:05-44:06No problem.44:06-44:06All right.44:06-44:09Well, we are pretty much at the end of the show here.44:09-44:11So let’s get the vital information out.44:12-44:17If you are a tax client and you haven’t yet made an appointment, you should go to drfriday.com.44:18-44:19The calendar is out there.44:19-44:25If you don’t see a time or a date, me or Chris, then you can give us an office a call.44:25-44:28We’ll see if we can find, we hold back some times for our clients.44:29-44:36So again, go to drfriday.com and you can click on calendar and you can make your appointment, making sure that you’re all set up.44:37-44:40Usually most of my guys, you guys all know pretty much when you’re going to do it, what time.44:40-44:42It’s always been the same every year.44:43-44:59If you’ve got questions and you just want to have a quick answer, I try my best because sometimes if you can get the answer before you make the mistake and hey, you listen to the show today, you’ll see not only me, but a lot of my listeners actually listen and they’ve got some of the answers I don’t, which is always appreciated because no one can know everything.44:59-45:33um so um if you have a question feel free to email friday at dr friday.com friday at dr friday.com friday is my first name just for some new listeners a lot of times you guys know that but new listeners they hear the name friday and they think dr friday it must be her last name but it is not my last name is actually burke but dr friday sounds a little better on it have a phd in economics. So, um, last is, uh, if you want to give us a call in the office Monday morning, 615-367-0819.45:33-46:33Again, a heads up next Saturday is our big Christmas show where we’ll be giving away appreciation to all of our listeners and clients. So, uh, feel free to give us a call. And I didn’t, uh, I didn’t hit anything on Lolita, um, uh, roasters, Lolita roasters. Um, again, I have the coffee. It’s something I’ve been giving out this week. They gave me my packages, beautiful boxes, big bag of coffee, and it is delicious. So if you’ve got a business or maybe you’re in real estate or something like me, and you’re looking for something, go to lolitaroasters.com. Take a look at their website. They do custom roasts for all businesses. Like I said, they did mine and it’s a dark roast. So far, so good. Everyone seems to love it and it’s working well. All right. So we’ve got a few seconds here give us a call at 615-367-0819 is the number directly in the studio or friday at drfriday.com try to stay warm enjoy the holidays and as we say in australia call you later

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Dr. Friday discusses the benefits of 529 college savings accounts for gifting and tax-free growth. Each year, contributions up to $18,000 are considered gifts, which grow tax-free and can be used for education expenses. Start investing in your children’s or grandchildren’s future while enjoying significant tax advantages.

Transcript:G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Maybe you’re thinking about helping out the kids or the grandkids usually and it’s called a 529 college savings account. The IRS looks at this as basically every year you can contribute up to eighteen thousand dollars and they consider it gifting. So that way then every year that money gets put in you do as the person giving the gift it’s taxable income if you haven’t already paid tax on that money. But the person receiving it the child the fund is going to grow tax-free they can use it for college or for other things but mostly for college and that way you’re gonna save tax dollars they’re gonna have a growing tax-free which will put more money in their pocket. 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2:00 p.m. to 3:00 p.m. on Fox News. 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains how to maximize your Dependent Care FSA before it expires at the end of the year. Unlike health savings accounts, FSAs have use-it-or-lose-it rules, with only a small portion eligible for rollover. Don’t let your funds go to waste—now is the time to use them for eligible expenses like childcare or healthcare costs.

Transcript:G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Does your employer offer dependent care FSA limits? Then you need to make sure that we’re getting close to the end of the year. Those limits do expire, right? They go away. So if you haven’t spent all of your FSA, you need to go spend it now. And health care, child care, and there’s limitations. Now, I do believe a small amount of it will be able to remain and move over. But guys, it’s not like a health savings account that will keep going and going and going. Family savings accounts are going to have limitations and you need to spend it. So now’s the time to start thinking we’re getting close to the end of the year and that’s going to have to go to zero and you’re going to lose money. 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on… 99.7 WTN.

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Dr. Friday recounts a case involving a charitable deduction disallowed by the IRS due to improper valuation. She stresses the importance of appraisals for non-cash donations over $250 and explains how to document contributions effectively to ensure compliance. Stay informed to maximize your deductions without running afoul of tax laws.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I had an interesting case come in my office about contributions. More like a gentleman lost his father, his house was full of a lot of furniture and different things, so he took and took pictures, he went on to the Goodwill site, he made a list, and he put it all together and then deducted it. It came out to more than $40,000 worth of charitable deduction. The IRS disallowed it, and if you’re asking why, it’s because anything over $250,000 individually has to be actually appraised. And if you have a lump sum like that, they want an outside appraiser to give those numbers, not just yours. So there are ways of deducting, but make sure you understand how the tax law works.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday shares essential tips on managing withdrawals from different accounts, such as Roth IRAs and annuities, to minimize tax burdens. She highlights the importance of understanding how taxes apply to qualified and non-qualified funds and how major financial decisions can impact additional factors like IRMA. Before making significant withdrawals, consult a tax professional to avoid costly surprises.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

If you want to put more money in your pocket, first thing you have to do is know where your money is. If you have money in a qualified, non-qualified, if you’re depending on it to be invested in annuities, and again, these are all financial planners, but when you take the money out is when it comes onto my desk. How you take the money out from a Roth, from a qualified, from a non-qualified, is all going to be a matter of how you’re taxed. So don’t just go in and do something. Let’s talk first to make sure you know how much money that’s going to cost you in tax dollars. Is it going to affect your IRMA? So many people forget that when they’re looking at big tax transactions. Call us at 367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday emphasizes the importance of addressing back-tax issues and planning for future taxes. She explains her role as an enrolled agent licensed with the IRS, sharing her expertise in helping clients resolve tax problems and avoid potential financial setbacks, like having Social Security benefits garnished. Tune in to learn how proactive tax planning can secure your financial future.

Transcript:G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I am Dr. Friday, an enrolled agent licensed with the Internal Revenue Service to do taxes and representation. I’ve been doing this for 25-plus years, and I’m here to help you not only get your current taxes in the right place, but help you solve back-tax issues or even plan for the future. So that way, we’re not just winging this, that we actually have some concept of where we want to be heading or what we need to resolve. If you can’t resolve it, then you can’t really move forward, because the IRS is always going to be hanging over and possibly taking your Social Security benefits to pay past tax issues. If you need help to get yourself straightened out, give us a call at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon, from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday explains the tax advantages of C corporations, especially for small businesses. She highlights the 2017 tax law changes that reduced corporate tax rates from 35% to 21%, making C corporations an attractive choice. She also discusses the benefits of investing in small C corporation stocks, which can offer tax-free gains if held for over five years. Tune in to learn how these strategies can help grow your wealth.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

C corporations. Now, back in 2017, that’s when the tax law came in effect with Donald Trump, and he moved it from like 35% down to 21% tax, which made corporations to be a very viable situation, especially for small business, because it’s considered a small business stock, which means that if you’ve invested in a small C corporation, and you’ve held it for five plus years, and now you sell that stock, you may not pay any taxes on the gain of that stock. There is some wonderful ways of helping to grow your money if you understand how to do it. 615-367-0819.

615-367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday dives into the benefits of like-kind exchanges, explaining how they allow investors to defer taxes when swapping similar assets. While not applicable to primary homes, these exchanges are ideal for rental properties and business investments. She outlines how gains from sales can be reinvested tax-free into similar properties or businesses, helping to diversify portfolios while maintaining tax advantages.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I don’t think people talk enough about like-kind exchanges. Now again, this really does not apply, let me put a caveat, no, it doesn’t apply to your primary home. This is actually people that have other properties, maybe rental properties or business investments, and they exchange it for another like-kind, either another business, so I have a business, I want to sell this business, I’ll take the profit from that, all the gains, not pay a dollar tax, go buy another business, and therefore I’ve expended or I can buy multiple businesses for the same money. It’s a way of diversifying, but keeping the tax dollars all together and not pay taxes today. So if you need help with understanding that, 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday discusses how to maximize itemized deductions, including mileage for charity, medical expenses, and long-term care deductions. She emphasizes identifying overlooked deductions that can help taxpayers reach the threshold for itemizing. For example, long-term care premiums can add substantial deductions, potentially pushing taxpayers over the itemization limit. Learn how to ensure no deductions are left on the table.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

When we think about itemizing, and many times I talk about mileage for charity, mileage for medical, and also talk about medical deductions, health insurance, any of these, but the problem is itemizing is difficult. But if you’re trying to find, maybe you’re close, and you’re sitting there going, well, if I only had a few thousand more in deductions, I would actually be able to itemize. And we don’t want to leave anything on the table. Keep in mind, if you have long-term care, you can deduct, if you’re 61 to 71, $4,710 of that long-term care. And if you’re married, obviously twice that, which may help kick you over when you’re dealing with the tax code. If you need help, 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this heartfelt episode, Dr. Friday expresses gratitude to those who serve the community, including members of the armed forces, firefighters, police officers, and teachers. She recognizes their invaluable contributions to society and highlights that her firm offers discounts to service members. It’s a moment of reflection and appreciation for those who protect and educate us.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I want to take this minute just to thank all of our people in the Armed Forces, all those people that are helping to make this world and this country a better place for all of us, so many of us don’t have to worry about going outside our houses. We can actually be thankful for the firemen, the policemen, the teachers. This is a time for all of us to give thanks to the people that are kind of the unsung heroes in our world that we just take for granted. I want you to know I don’t take you for granted. I appreciate all that you do, and actually, our firm actually offers discounts to people that are in the service, so if you need help with taxes or just understanding something, give us a call at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday breaks down how progressive tax rates work, explaining why it’s essential to adjust your tax planning. Many taxpayers misunderstand their tax brackets, leading to unexpected liabilities. She highlights how income levels impact tax brackets, with examples showing how a single individual earning $23,000 enters the 12% bracket. Learn how to leverage the progressive tax system to keep more money in your pocket.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Understanding the income tax rates will put more money in your pocket, or if nothing else, will help you understand why every year you’re having to write a check because you’re claiming married and two, but you don’t have any children. Or you’re thinking that if I have adult children, they still get to deduct them and it’s not really the same as if you have children under the age of 17. So if you are a single individual and you’re making $23,000, you’re going to actually hit the 12% tax bracket. We are progressive tax code, which means that the first dollar in doesn’t mean you’re going to be paying right up at that month, but you need to understand how the progressive code works to put money in your pocket. 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains the Alternative Minimum Tax (AMT), a parallel tax system designed to ensure wealthy taxpayers pay a fair share. While many may never encounter it, the AMT applies to individuals with high income from sources like interest or capital gains, imposing rates of up to 28%. Dr. Friday outlines how it works and why understanding it can help you stay ahead of your tax liabilities.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

What is AMT tax? Come on, we’ve all heard the letters and we’re all sitting there going, what in the good book is this person talking about? And for many of you, it may never come. Alternative minimum tax is a tax code within the tax code. And it’s supposed to help level the playing field for the wealthy, so some of them may actually have a lot of money coming in from interest, or they may have a lot of money coming in from capital gains. And so this is the way that the tax code supposedly is helping. They can’t just keep those lower tax rates. They end up getting hit with a higher rate, which could be up to 26% in AMT. Actually, the highest is 28. So if you have questions, give us a call.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Tracking your mileage is essential for maximizing tax deductions for business, charity, or medical purposes. In 2024, the standard rates are 67 cents per mile for business, 21 cents for medical or moving, and 14 cents for charity. Use tools like MileageIQ or maintain a detailed log to ensure accuracy and avoid costly mistakes during audits. Proper record-keeping can put more money back in your pocket.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Taking your standard mileage rate for business owners, for people that do charity work or medical, essential. And making sure you track it, I would suggest using something like MileageIQ. It’s free, but if you don’t want that, you need to either have a log in the car, you need to track what these miles are for. Once you have that, you’ll get 67 cents a mile in 2024. You’re going to get 21 cents per mile for moving or medical, and then you’re going to get 14 for charity. All of those will help add up and they’ll give you more money in your pocket, but make sure you have a good log. Estimating those numbers could cost you big on a tax audit. 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.

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Struggling to navigate your business losses from tough years like 2020 and 2021? Many business owners fail to understand how Net Operating Losses (NOLs) work, missing out on valuable tax relief by not properly carrying them over to future tax years. Dr. Friday explains the importance of ensuring your losses are rolled over correctly, using examples like Donald Trump’s tax strategies to highlight the benefits. If you’ve experienced losses in your business, make sure your accountant manages your NOL properly to maximize tax savings. Need guidance? Call Dr. Friday at 615-367-0819!

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

We all know that 2020 and 2021 for many business owners were really bad years. A lot of them had some pretty good losses. and I have found by reviewing some of the tax returns that people didn’t actually understand how NOL worked. So they basically took this loss, but when they did the next year, they didn’t carry it over. So they lost the NOL, which was the loss of income. Everyone heard about Donald Trump and not having to pay taxes. Well, this is that kind of thing. So if you had a loss in business and you didn’t use it all up in that year, you need to make sure your accountant rolled that over to the next year and again to the next year if necessary. You need help, 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.

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Bonus depreciation has undergone significant changes over the past few years. Once at 100%, it dropped to 80% in 2023 and will decrease further to 60% in 2024. This means if you purchase a $1,000 item, only $600 can be deducted immediately, with the remaining $400 subject to straight-line depreciation. Tune in to learn how these adjustments could impact your tax planning, and don’t forget to budget accordingly!

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Bonus depreciation. It is an amazing thing. And for up until, what, 2023, 2022, I guess 2022, it was 100%. I go out and buy a computer. I got to spend 100% of that right off my taxes in that first year. 2023 comes along and they basically said, nope, we’re going to go to 80%. And now they’re going to go 2024. We’re going to go down to 60%. 60%. So now you buy that computer for a thousand dollars. We’re only deducting 600 of it. The other four will be straight line depreciation. Make sure you budget that in when you’re thinking about taxes. 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.

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2023 marked the phased reduction of real estate bonus depreciation, making cost segregation studies even more critical for maximizing tax savings. By breaking down property purchases into specific assets like equipment, HVAC systems, and office furniture, businesses can accelerate depreciation and improve cash flow. Instead of depreciating everything over 39 years, cost segregation allows you to claim deductions faster, putting more money back in your pocket. Need help navigating these changes? Call Dr. Friday at 615-367-0819 today!

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

2023 kind of marked the beginning of the gradual decrease of real estate bonus depreciation. Why is that important? Because cost segregation studies were starting to really kind of kick in. What I’m talking about is, let’s say you go in and you buy a business, and it’s all inclusive. There’s equipment, there’s heating and air conditioning, there’s office desks, there’s computers. Everything is in there. What would happen in the past a lot of times, people would just kind of lump it all in, call it one thing, depreciate over 39 years. With a cost segregation, we can drill down to the equipment that may be accelerated faster and you get more money in your pocket. If you need help with this, 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.

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Travel expenses can be a tax deduction, but only with the proper documentation. Dr. Friday explains the IRS rules for business travel, emphasizing that mixing personal trips with business without substantial proof won’t work. Attending conventions or work-related activities can qualify if well-documented. Avoid costly tax mistakes by ensuring your travel is genuinely business-related.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

If you’re going to take travel off, especially for a sole proprietorship or business owner, LLC, any of those, you need to make sure you have the right supporting documents. So taking your kids to Disneyland and saying that you went and looked at another, I don’t know, house if you’re into real estate, car dealership if you sell cars, isn’t going to fly. Just being honest with you. The IRS will say that was a vacation, not a tax deduction. But if you went to a convention at Disney and you were able to say, I spent eight hours a day in a convention and this is how it went, you would have a better chance of writing off that vacation. 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.

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Welcome to the Dr. Friday Show from November 16, 2024! Dr. Friday, an enrolled agent and tax consultant, dives into timely financial tips and tax strategies to help you navigate the end-of-year tax planning season. Whether you’re preparing for changes in tax law, exploring charitable giving options, or tackling IRS debt, Dr. Friday has you covered.

Topics Covered End-of-Year Tax Planning: + Review tax situations before year’s end to make smart financial decisions. + Consider Roth conversions, stock sales, and tax estimates. * Accelerated Depreciation: + Current depreciation rate is 60% for 2024, impacting major asset purchases. * Charitable Contributions & Qualified Charitable Distributions (QCDs): + Maximize giving while lowering taxable income through QCDs. + Understand standard deduction limits for single and married taxpayers. * Estate Planning & Trusts: + Importance of wills and trusts to avoid probate and protect assets. + Planning for special needs or addiction issues within families. * IRS Debt Solutions: + Options include non-collectible status, payment plans, and offers in compromise. + Bankruptcy as a potential last-resort strategy. * Business Owners Information Act (BOI): + New filing requirements for 2024 to avoid steep penalties. * Maximizing Standard Deductions: + Sales tax, property tax, and mortgage interest strategies. * Unique Holiday Gifting Idea:* + Highlighting Lolita Roasters’ custom coffee blends for client gifts.

Transcript00:00-00:07No, no, no. She’s not a medical doctor, but she can sure cure your tax problems or your financial woes.00:08-00:11She’s the how-to girl. It’s the Dr. Friday Show.00:14-00:22If you have a question for Dr. Friday, call her now. 737-WWTN. That’s 737-9986.00:23-00:27So here’s your host, financial counselor and tax consultant, Dr. Friday.00:27-00:34G’day, I’m Dr. Friday and the doctor is in the house.00:35-00:40And we’re going to be here talking for the next hour about my favorite subject, which is taxes.00:41-00:56And seeing if there’s anything new we need to be covering as far as at the moment, nothing has obviously changed due to the president coming into the White House or will be coming in in January.00:56-01:12That’s not going to change anything at this moment. So we’re just waiting to see what will come if you’ll extend the current tax changes. But at the moment, what we’re looking at is just what we know, which means the current tax laws will change at the end of 2025.01:12-01:32This year, right now, accelerated depreciation is at 60%, which is important to know because at 60% means if you go buy, and a lot of people like to go buy new trucks or buy a new dozer or a piece of equipment, and you’re looking at being able to write the entire thing off, you will not be able to do this.01:32-01:36You couldn’t do it last year, but it’s also less this year than what you had.01:36-01:41So we’ll be one of those deals where you’re like, OK, got it. No big deal.01:41-01:47But I just want to make sure that we’re all on the same page and that we’re able to make sure we’re estimating our taxes.01:47-01:57Now is the time to have those conversations. Right. Because we don’t have anything that we can count on other than what we know.01:57-02:00And if we want to make a change, met with a couple the other day.02:00-02:08And the biggest reason you have someone that helps you with taxes, or one of the biggest, one is to make sure the information is correct going to the IRS.02:08-02:18But the other part is to make sure you have someone that you can bounce ideas off of and make sure that you’re actually getting some sort of service that helps you figure out your taxes.02:18-02:24Now, it’s not always going to save you tax dollars. Sometimes it’s really about how much am I going to owe at the end of the year.02:24-02:33So that way, when taxes are being done in the midst of the crazy time, you know, you don’t want to be trying to figure out a lot of other tax situations at that time.02:33-02:41You really would rather be able to, you know, figure out, OK, now, October, November, December, am I going to do a conversion?02:41-02:45How’s that conversion going to affect changes in the stock market now?02:45-02:48Am I going to be selling off some stocks?02:48-02:54So is my financial planner or am I going to be doing a rebalancing so that we have something on that side of things?02:55-02:56Never know, right?02:56-03:05It’s just one of those deals where you’re just working your way through the system trying to figure out what we have and what we need to do with making all of that make sense.03:05-03:09So it’s up to you to try to figure out what’s going to be best for you.03:09-03:10And everyone’s taxes are different.03:10-03:16So even on the show, I can’t just say, well, everyone needs to go do this or everyone needs to go do that.03:16-03:22There’s no such thing in tax law that everybody is going to have the exact same tax effect on something.03:22-03:32So it’s important to you to be able to take a look at your information, figure out what you have going and then be able to maximize whatever you may have.03:32-03:37It’s possible that you’ve had a drop in income or you’ve had an influx of income.03:38-03:42Maybe you’ve inherited something. Maybe you’ve had a change that’s going to come into effect.03:42-03:56then you just need to make sure that you’re looking at to the best of our ability. Because again, maybe you’ve changed jobs, and maybe you normally get a bigger bonus, or maybe you’ve gotten a large bonus this year. And you’re like, Oh, I paid a ton of taxes, so I should be fine.03:57-05:14But that’s not always the case. Because sometimes those bonuses kick you actually into a higher tax bracket. And if that’s the case, then you end up with that kind of situation where you’re actually looking more at one of those scenarios that you have to deal with and make sure that you have, you know, enough money paid in because last thing you want to go do is go spend that budget, or that, that increase of income, that bonus, and then find out that you did not pay enough money in. And I will tell you, being on the other side, having to tell a client, yes, but I took and put all that money in, why didn’t they take enough out? And then sometimes people think if they take money out for like a 1099R or a retirement pension, something along those lines, they sit there and they’re like, well, I paid the taxes, but they don’t realize that’s just an estimated payment, right? So when it comes time to filing your taxes, that’s when you’re going to go and put those on your taxes and see if you actually estimated it properly. So everything always ends up back on your taxes. Very important to understand because if it’s not on your taxes, you’re going to get a sweet little love letter from the IRS and it’s going to turn around and they’re going to say something like, you know, we’ve changed or we’re suggesting a change, whatever on your tax return.05:15-05:17Here’s what we’re thinking about.05:17-05:25And normally that’s because people have forgotten to report stock before, you know, something that’s changed normally, you know, inheritance, whatever.05:25-05:29And it is taxable and sometimes tax dollars have come out.05:29-05:31So it’s not such a big deal.05:31-05:46But if that dollar amount that came out wasn’t high enough to offset the tax, then, you know, you’re in trouble. Or if when you filed your taxes, you have a bigger refund than you may have expected because you had more money come out of something.05:46-05:55And then you turn around and find out that it’s not really going to be one of those situations where you can actually really do a good job in estimating your information.05:55-06:01So just, you know, taking time and doing that as far as what we have going on and where we’re at.06:02-06:08So if you want to join the show, you can. I’m trying to get the stream open. Sorry, I’ve had a little technical issue.06:08-08:02nothing to do with my engineer. This is all Friday’s fault. But if you want to join the show, you can at 615-737-9986, 615-737-9986. As soon as my stream thing comes up, I will be more than glad to get you guys into the show. Meanwhile, we’re going to keep moving forward talking about, right now is also the time to be thinking about contributions, right? A lot of times people come up and deal with things that we have on that. And so contributions will be one of those things that we need to be able to document. And if you are looking to give a large dollar amount and you are over or 70 or older, I guess it’s 70 and a half and older, but there is what’s called required minimum distributions. And I know some of you will say, but wait, that was moved up to 73. And that is correct. You are not required to do required minimum distributions till the age of 73 at this point. But if you are 70 and a half and older, you can take RMDs and do what’s called a QCD. And I know RMD, QCD require minimum distributions. You can also do a qualified charitable deduction at the age of 70 and a half out of your IRAs or those versions of those. So yes, you want to consider the fact that you might want to, it’s almost like a dollar for dollar, right? When you’re doing a qualified charitable, and some of you guys actually deal with your parents as well, and they may be of the age, or maybe they’ve been taking a requirement on distributions. And it’s Just very simply put, if you are of the age where you can do a qualified charitable deduction out of your IRA, most of my clients, many of my clients are very giving.08:02-08:12And so they basically, their theory or their answer to most of this stuff is they basically take the money, they put it in their bank, then they write a check to their charity.08:12-08:14Well, think of it as someone else writing the check.08:15-08:16They’re still going to most likely give it to you.08:17-08:21You’re going to then mail it or hand it off to the church doing whatever you do, right?08:22-08:32And then you get to completely take that off, not itemizing, which is something that most of us have a difficult time nowadays with the higher standard deductions.08:32-08:33Itemizing is very difficult.08:34-08:46But if you are in that window where you qualify for qualified charitable deduction, that money immediately goes back to or basically goes and reduces your income dollar for dollar.08:46-08:53So if you gave $10,000 to your church out of a QCD, you’re going to reduce your income by $10,000.08:54-09:02It’s so much better than when you try to put the money in your bank, then you write a check to the organization.09:02-09:04Now you have to meet itemizing.09:05-09:11And if you are a single person, you still have to have like $17,000 to make it worth it.09:11-09:18Or if you’re married people and you’re in that same age group, married couple, both of you over the age of 65, it’s like $31,000 or $32,000.09:19-09:27So it’s a lot where you don’t have to do quite so much if you are using the qualified charitable deduction.09:28-09:35So, again, if you are dealing with your parents or if you’re dealing with your own, depending on what the situation is.09:35-09:38And, again, you do need to talk to your financial planner.09:38-09:46It has to be coming from an IRA or from a 401k, a SEP, any of those devices.09:46-09:49And they actually write the checks to the organization.09:49-09:55So I suggest usually doing, sometimes it’s harder, but sometimes, you know, either quarterly, annually, just have one check.09:55-12:35If it’s anything like my church, we basically say, I’m going to tie this much money that they don’t care if it comes in one big lump sum, or if it comes over a period of time, no big deal, just as long as it basically comes in. So if you can have it sent in, then you’ve done your, what you feel is your charitable deduction, and we get to take the tax deduction. And it’s just so much easier than when you have to deal with the other side of it, where there is nothing, you know, really happening on if that same $10,000 would not be deductible, if you were single or married, and that’s all you had, because you wouldn’t be itemizing. So the standard deduction would still be in play. This way you get the standard deduction and you get the money that goes into the charity. So again, it is a wonderful, and I still feel, I mean, every year I talk about this a lot of times with all of my clients, many of them, of course, after the years we’ve done it, but you know, sometimes people are just like, well, I don’t, you know, I like giving the check and all of that, but it’s not so much, it’s not that hard, you know what I’m saying. So it’s really just a matter of working it out in your head so that you have one check or two checks that you give a year to this organization set every week when you go into church or do your tithing. So again, really just changing your mindset and it can save you tax dollars. And in some cases you could be giving almost 10% more or more of that depending on your tax bracket to this organization, because now you’re not paying tax on it. It’s completely washing. So that’s another really neat little trick that can be done on that kind of situation as well. So just really trying to make sure that you have the best way of putting money out, because I know a lot of people look at itemizing as if it was something we always did. And we did, because it was only 6,000 or 12,000 single or married back in those days. And now you have to be at 15, 16,000 or 30 or 30, you know, whatever thousand. So I think it’s 29 first people under the age of 65 and it’s like 32 or something if you’re over. So it is much harder for a couple to itemize than it was when we could, but why not maximize the QCD or the qualified charitable deduction? And at the same time, you still get your standard deduction. And if you have other smaller charities, you know, maybe you won’t get the tax deduction on it, but you can still do those. It’s usually the larger ones where you can actually really maximize what you have going on then where you’re at. All right, we’re going to take our first break and hope that my computer actually reboots here at some point. If you want to join the show, you can 615-737-9986.12:35-13:32We’ll be right back with the Dr. Friday show. All right, we are back here live in studio and I am live so I can see the board and everything. Great. It doesn’t help that my computer was having some fun always when you want to do this. Okay. So if you want to join the show, if you’ve got a question, maybe you’ve inherited something, maybe you’re thinking about selling something or, you know, maybe you’ve had some change of jobs and we want to talk about possibility of your W-4 being correct or not. The phone number here in the studio, 615-737-9986, 615-737-9986. I know we’re getting close to the Thanksgiving holiday, which means we’re really only going to have about 30 days, you know, to really do anything, if you’re, you know, you, you really do need to go talk to your financial planner, because that’s usually the ones that will help you make some of those decisions.13:32-13:52If it’s just a matter of, you know, taxes, that’s a different conversation. But if, you know, if you’re thinking about doing, especially a lot of my clients think about conversions, a lot of times you want to get your IRS out of your financials. And if you’re trying to do that, You know, you only have about 30 days to actually make that work.13:52-13:58So you really do need to consider talking to them and making that appointment.13:59-14:06And then if you have a tax person, sometimes including them in on some of the decisions you’re making is a smart idea.14:06-14:10I’m always surprised or often surprised. I mean, don’t get me wrong.14:10-14:16I realize that many financial advisors or financial planners have software that they can put in the tax information.14:16-14:40but sometimes they don’t understand how the tax code works. So when that comes up, you end up with a situation where I know there was one where they called their tax person and they had an NOL or net loss carry forward. And they were thinking that they could do this conversion and everything and it’d be tax free. But what they had forgotten about was AMT tax or alternative minimum tax.14:40-16:53that does kick in sometimes when we have these situations. So if your income’s at a certain point, the whole point of that conversation is that the IRS is basically saying, especially AMT tax, alternative minimum tax, they say it’s there to help level the playing field for the people that may be able to make their money through capital gains or other sources, not just wages. And so they actually tax those people a little higher if you hit certain thresholds. And in this case, with the conversion that she was doing, thinking she could wash out her NOL with this conversion and she wouldn’t have to pay any tax and she had already had all these losses. And it turned back that she actually had AMT tax that was going to owe several thousand dollars that she had not counted on. And so again, sometimes just making sure that they understand how all the tax law works is going to be a way for you to be able to move forward and make sure you’re getting the best tax advice when it comes to doing it. So if you want to join the show, 615-737-9986, 615-737-9986 is the number here in the studio, taking your calls. And again, I do know that life happens and sometimes we lose loved ones. And at that point, we now have estates or we have trust or wills. And I don’t sell any of those products just so people know, but I am a huge advocate for trust, doing a trust. A lot of times I think people think, well, they’re expensive, right? I thought, why am I paying? But if you pass away and you don’t have a trust, I mean, at least have a will no matter what, right? Because I have a client that did just pass away and did not have a will. Now they didn’t have a lot, but without a will, the money doesn’t go to the people you might think it would. Like you, you know, this particular person, they thought all the money would go to their spouse because they were married. And so if something happened to him, he thought she would get it all. And then from there, everything would go, you know, once she passed away, everything to their children. No, that doesn’t happen. If you don’t have, if you have a well, if you do not have a well, the state of Tennessee has a plan for you.16:53-18:06And that plan will be where a percentage goes to you and to your spouse and the rest of it will go to your children even before. So what you may have thought would have been money available to your spouse is now in your children’s hands because of the way the tax law works. And gosh forbid, if you have more than one family, right, married, divorced, his, hers, yours, all that kind of thing, you really do need to make sure first thing, at least the will. Because I mean, I think it’s so funny that many of my clients to this day, I mean, I’ll usually bring it up during tax season, you know, or just part of the conversation or whatever. And many of them are like, yeah, yeah, we’ve been meaning to do this, but you know, none of us are getting any younger and no one knows when that last day will be. And then the plan that’s going to happen, if you don’t provide a plan through either a well trust, then, you know, like I said, the government will have it. And then there’s going to be attorneys and cost. So with a trust, you pay for most of that upfront, because in most cases, you don’t have to really deal with probate. You probate the poor over well, The poor of the world is pretty straightforward. And then, you know, there’s really whoever your executor or executrix would be, they would handle all that.18:06-18:12You wouldn’t have to have an attorney necessarily involved unless it’s a very, very large estate.18:12-18:15But otherwise, you wouldn’t have to have an attorney involved to do it.18:15-18:21So the cost would be less because you’ve already set up all this before you pass the way.18:21-18:34And, you know, especially if there are, I can’t tell you a number of estates that we’ve been dealing with where one or two, especially one, but in one case, two of the children are addicts.18:34-18:48They have, you know, the parents knew they had this particular problem. So they set up these trusts to be able to protect their children from, you know, gosh forbid, you know, you get this big, huge chunk of money.18:48-19:02And they would basically kill themselves because the drugs or whatever, or they would basically spend it all and if they didn’t pass away, they would have nothing left in a month or two because of how much money they would just, you know, throw it away.19:02-19:19And so there is ways of protecting if you’ve got a child, in essence, with special needs. My niece, we have a special needs trust for her. And it’s the same with children that are not yet or maybe have other physical or addictive measures.19:19-19:25So keep in mind, because if you don’t, then again, the plan will be they will get all the money.19:26-19:27They will go do what they’re going to do.19:27-19:32And some people may not worry too much about that because maybe that’s, you know, you’re not here anymore.19:32-19:34So it’s not really your problem.19:34-19:41But I will tell you, it is and can be quite the burden for the people that are helping to handle the estates.19:42-19:44Because that’s the ones I get to see, right?19:44-22:26and we’re dealing with estate taxes, but often they’re talking about how they’re trying to figure out best ways to protect these nieces, nephews, children, whatever, from themselves, because, you know, there wasn’t something set up prior, so now you’re looking at somebody that could inherit two, three hundred thousand dollars, and if you are a person with an addiction of some sort, you know, be it any type of addiction, that is just basically volunteering the faith that that’s going to pretty much go down the tubes, if nothing else. But there are ways of protecting those people. And so that’s what I’m saying. So now’s the time to think about what you would want done, if you, because while you’re alive, you’re probably doing it, you’re already probably helping, protecting, maybe even assisting these children or nieces and nephews through this. But if something were to happen to you, how would you approach this? And so again, I am not an attorney. I am not a person that’s selling, but I do know on my side of the desk where I sit, it always goes smoother when people have already thought these things out. So I’m suggesting you go to an attorney, you got Jack McCann, Russ Cook, both awesome attorneys that I’ve worked with for goodness, 20, 30 years. But if you have one locally, just talk to one that is good with estate planning and see what you need to do to protect not only your assets after you have gone, but also to protect your own beneficiaries from these things, because it’s, you know, it’s pretty straightforward what you have. And some people may only have a house and maybe a 401k. So maybe a trust isn’t necessary. But making sure you have what’s called POD, at least on your stock portfolios and your 401ks, all of those kinds of things, you really do need to make sure you have all of that correct and make sure you’ve updated them. Statistically, I know, I think it was Russ Cook or someone that came on one time, and he was basically saying that the biggest mistake people do is they forget to update their beneficiary. So when you set it up, you know, 10 years ago, you may have had a sibling or a spouse or something, but if that person is no longer able or willing to be the executrix. You might want to have another person in line and another. Having two to three people that are able to step up is huge when you’re doing this kind of thing. So, you know, at the end of the year, one of the biggest things we’re getting close to is New Year’s and one of the big resolutions is usually trying to get ourselves back on track.22:26-23:59So this may be one of those things you want to think about. And I want to share again about Lolita Roasters. They are hopping. This is a service where if you are in real estate or if you’re like me, an accountant or maybe attorneys, maybe you have clients that you want to be able to give them something that is completely different than you’ve ever done before. Lolita Roasters is where you need to go. They custom design coffee that you will have in this really cool box, a little thank you card, a bag of coffee. And it’s going to be based on your business. Again, they’ve roasted one of mine. I’m Australian. Obviously, I like dark roast. So they’re using this wonderful blend that’s going to be so unique because for one, you don’t really think about Australia and coffee, more of wine country as far as I’m concerned. But it is a really great dark roast that’s going to be available for my clients that I’ll be giving out to some of my bigger customers and clients. And if you’ve got something like that, just Google Lolita Roasters. Let them know Dr. Friday sent you. But more importantly, get a cost because you’re going to find out that this is actually cheaper than some of the things you’ve already done. And it’s one of a kind. How often do we get that? Normally, we just get to put our little name on something. And it’s like, okay, well, here, this is what we’re doing this year, cookies, or we’ve done chocolate covered strawberries one time. And we’ve, you know, done all the different things. But this is so unique, because it’s going to not only be something I love, which is coffee.23:59-24:06Well, and many of my coffee lovers are my clients as well, but also that it’s a blend that they can’t just go buy somewhere else.24:06-24:10This is my blend and it’s something that’s going to be unique to Dr. Friday.24:11-24:16So again, lolitaroasters.com if you have a business that you’re looking for something unique.24:17-24:18All right, we’re going to take another break.24:18-24:21When we get back, we can get to some of your emails as well.24:21-24:25If you want to join the show, we are live 615-737-9986.24:25-24:26We’ll be right back.24:32-24:33All right.24:33-24:38We are back live here in studio on this absolutely gorgeous Saturday.24:39-24:45The weather is nice and I have already started, guys, pulling out my Christmas for outside.24:45-24:48I am one of those crazy people that likes to light up the sky.24:48-24:52So it will take me a few weeks to get it all put up.24:52-24:53But it is so much fun.24:53-24:54It’s so much more exciting.24:55-24:56It’s dark so easy out here.24:56-24:59So in the country, we kind of like to have everything lit up anyway.24:59-25:04So anyways, hopefully you guys are getting ready for your big Thanksgiving and Christmas holidays.25:04-25:10But while you’re thinking about that, we also have to consider taxes, guys, because they never really go away.25:11-25:17We just have to consider what is the next steps that we have to move forward to and what we need to be doing to make it work.25:17-25:24So if you’ve got questions, you can join us live 615-737-9986.25:24-26:31615-737-9986. It will take your calls live here in studio. But meanwhile, we can talk about a few of the other things we were talking about. Obviously, we’ve covered a little bit of some of the tax situations that I have thought about. But we also have a couple of people asking again about how they can maximize their standard deductions. And again, I know a lot of people put a lot of effort. So there is still the sales tax in Tennessee. So if you are an individual that’s close to itemizing, we call it the SALT tax. But sales tax and property taxes are usually the two that fall in there. Now, it cannot exceed $10,000. So your property tax and your sales tax cannot exceed $10,000. But again, if you’re close to that, and then of course, you will have your mortgage interest, which that we have zero control over. I mean, if you’ve already got a mortgage, you’re paying the interest. It is what it is. And it’s reported to if you pay off your house faster.26:31-31:01I’ve had a couple of people ask me, well, if I pay my house down quicker, is it going to help me tax wise? Well, if you’re itemizing right now, it will not help you to pay it off. But that being said, I’m a firm believer that debt is not a good tax deduction. Meaning if I’m in the 20% tax bracket, I have to spend $10,000 to save $2,000 out of my pocket, I think it’d be better for you to spend to pay the taxes of two and keep the eight in your pocket. So if you are holding on to somehow debt to reduce your taxes, it’s never a win win situation, even if you’re in the highest tax bracket, I mean, you still have 37%, you know, going out, and you’d have to spend 100. So, you know, I’m just saying every $10,000, maybe you’d save $3,700, still have to spend the 10,000 to save 3,700. You still have a lot of extra money there that you rather pay the tax of 3,700 and keep the rest of it in your pocket. So when you’re looking at your tax situation, and you’re thinking, is it better for me to do this or that? Well, for one with standard deductions, again, many people have small mortgages or a few dollars that they’re paying out in mortgage interest, but they’re not itemizing. So now your house is not really saving you money. So paying off the loan would have a zero tax effect. It may be that your interest rate is only two and a half or 3%. And if you’re taking money out of an investment that is earning four or five or 6%, I would never suggest taking money out of an investment that’s growing at six and I’m only having to pay two and a half or three. I’m making money on someone else’s money. So again, you need to look at the big picture before you just say, hey, because that’s really one of the big things. I have people that come in and they want to cash out a portion of their retirement account because they just want to get rid of their mortgage. They want to have their house debt free. And it sounds maybe good on paper. I don’t really know. It doesn’t sound good to me normally because in the last few years, most people refinance their houses and they ended up with very low mortgage. Right now, interest rates I know have come down, but for a while, people were making five and 6% just on interest, not even talking about if you had vested it into a decent portfolio. I’m sure your financial guy’s going to tell you. I mean, normally financial guys can average some years you’ll do 12% some year you two but average between five and six minimum in safe investment. So it doesn’t make sense to me for you to pay off a house that’s at 3% interest and not to make 6% because you’re actually making 3% on someone else’s money in essence, because if you paid off the house, you wouldn’t have that money and you wouldn’t be making the 3%. And the house is not going to appreciate most likely that fast. We’ve hit our big numbers. I I think here we have a decent inventory in real estate, buying real estate and managing it. So I think your better bet is to diversify. I mean, heck, you’re talking to a person that does enjoy buying or having rental properties. Not everybody is into that kind of thing, but I do personally, I do enjoy that kind of thing. So if it’s something that you’re into, I don’t think it’s a big problem, but I’m sure your financial planner is probably not going to be extremely happy about it. But, you know, diversification is the heart of everything. So if you’re into real estate, it’s probably one of those deals where you can take a little from here and still invest into your 401k or maybe your 401k. I’ve had a couple of people come in and like, my 401k is pretty much maxed. I mean, they feel it’s, there’s enough in there. I don’t know with inflation and what we’re dealing with if it is, but that’s not my expertise, guys. My expertise is when you decide you’re all take the money out, how can we do that without paying much in taxes? So again, talking about different things, if you want to join the show, if you have a question, maybe concerning taxes or something that’s coming up in your next, maybe if they give conversions or anything like that, you can call the show 615-737-9986. 615-737-9986 is our number here in the studio.31:02-31:39I do want to bring up also the BOI or what we call business owners information. I’ve had a couple of people in the last week asked me about it. And I think it’s funny because I’ve been trying, but obviously they may not be listening every Saturday. So I want to make sure I bring it out there. Business owner information is something that passed last year in January, and they’ve given us the entire year to basically file. Now, this information is through FinCEN, F-I-N-C-E-N. You can Google it, probably the easiest way to get to the proper website.31:41-31:46And then you’ll be able to file. You do have to have a copy of your driver’s license.31:46-31:55All partners, all the partners driver’s license, as well as the information on the business itself, a percentage of ownership, all of that.31:55-32:02And it’s free to file. It is something that if you need help with, you can call our office.32:02-32:08But all in all, it’s something that needs to be approached and taken care of pretty soon because you only have till December 31st.32:08-32:34And then if you do not do it, and this is for companies that were in existence prior to 2024. So if you were in existence prior to 2024, you had until December 31st. If you were just open in 2024, you basically had to do it within 30 or 60 or 90 days. Almost anyone that now is setting up companies are actually doing the BOI at the same time.32:34-32:45But you do need to make sure you’re filing because they’re saying the penalty is $500 a day for failure to do a BOI, a Business Owners Information Act.32:45-32:55The reason behind this, guys, is they’re trying to find or figure out how many foreign people are involved in these companies and if they are paying taxes.32:55-33:09This is what FinCEN does. That’s where they’re asking us for this information, trying to make sure that the people that we’re showing as partners are actually truly the partners and that it’s, you know, doing what it needs to be done.33:10-33:22So it really does come down to understanding why it’s not something, it’s not an option. It is not something it’s like, well, if I don’t want to do this, you know, personally, I don’t think it’s an option.33:22-33:24They’re saying that the penalty will be $500 a day.33:25-33:27It doesn’t seem like an option to me if we don’t do it.33:28-33:43So it’s one of those things that you need to make sure that is being done because at this point, we don’t have any information on is this something that the penalty will be waived because of whatever, you know, didn’t know you did it late.33:43-33:44I don’t know, guys.33:44-33:51And I really prefer with my clients, at least if we don’t even have to address that, you know, we have enough issues dealing with penalties.33:51-34:00And who knows what kind of answering system they’ll have there, because to be quite honest, we have enough troubles trying to get people at the IRS to answer the phone.34:00-34:07So this is a smaller firm or smaller organization within the government. So I can’t even imagine what that’s going to be.34:07-34:11So let’s just try to make sure. So if you haven’t heard about it, now you have.34:11-34:20This is for anybody that has a business registered with the state of Tennessee. So it doesn’t apply to sole proprietors.34:20-34:36Is anyone that has a business, so single member LLCs, partnerships, corporations, all of them are basically, there are a few exclusions within those numbers, mostly people that are probably already pre-licensed, but better to be safe than sorry.34:36-34:44So if you don’t know, you might want to go ahead and just double check that information and see what you can do to comply with it.34:44-35:00So if you need help, again, you can call our office, but also you can go right on to fincen.gov, I believe it is, but just Google FinCEN or BOI information and you can make sure you’re not using one of those sites.35:00-35:03There’s a lot of companies out there trying to bill you for it.35:03-35:06You know, really, it isn’t something that’s going to be that complicated.35:07-35:11It just depends on the number of partners that you have and how often they will need to be.35:11-35:13You know, it’s only a one time.35:13-35:15My understanding is a one time situation.35:15-35:20Unless you change partners or have something else that has changed, you won’t have to worry about it.35:20-35:24So it’s just a matter of letting it, you know, doing it this one time.35:24-35:27All right. We’re going to get ready to take our last break and then we’ll come back.35:27-35:38And if you do have any questions, you can join the show at 615-737-9986, 615-737-9986.35:38-35:48Again, I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation, which basically means that’s all I do, guys, is taxes and representation.35:48-35:53So if you’re looking for someone that can help you with tax issues, maybe you’re getting love letters.35:53-35:56Maybe you’re trying to get yourself squared away and you’re not too sure where to start.35:57-36:04even if you haven’t filed for a number of years, we can help you with all of that. It’s not, it’s not that complicated. We really can help you and get you back on track.36:04-36:07So again, we’ll be right back with the Dr. Friday show.36:07-37:50so if you have a question you can join the show 615-737-9986 615-737-9986 is the number here in studio so you can join us and we can hopefully answer any of your questions meanwhile we’re going to keep going with the mailbag just making sure that we’re trying to at least get some of the questions answered again i know it’s a close to the holidays here a little quiet on this saturday but um totally can relate i think there’s also a tennessee game going on so you know how that is so if you have questions again 615-737-9986 so we’ve talked a little bit about the different services that we have. And again, if you have, maybe you’ve received something or you’re just not sure if it’s going to be taxable, make sure even when it’s a court case, a lot of times we’ve had a couple cases that’s come across and people were being thought that they’re only being paid for damages, you know, basically pain and suffering. And part of the income they received was actually for loss of wages. If you get loss of wages, that is a taxable situation. Pain and suffering is not So sometimes when you’re settling these court cases, part of the money could be taxable, part of the money could not be. So again, reviewing some of the things that’s coming through my email bag, that was a question, and you would have to have someone review the court or the settlement documents to make sure that you have set aside enough.37:50-38:04And I actually had a situation a couple of years ago where a gentleman had had a really bad accident. Meanwhile, he had he had owed the IRS. We were working on an offer and compromise actually did an offer and compromise.38:04-38:22And within that five years, he had received a settlement from this accident. And of course, then the offer and compromise did get, he had to pay it off because he had received this money. So sometimes those kinds of things can come back into play.38:22-41:02very important to make sure that you have you know all of your documents and then you know same thing can happen if you inherit something after you’ve done a bankruptcy same thing if if you’ve done bankruptcy and the next year you inherit or you know win the lottery my understanding is that they can overturn that because you now have the ability to make payments and it was within this period of time and I don’t know what the exact time IRS has a five-year you have to be current, stay current for five years after you’ve done an offer and compromise. In the first two years, I believe they can keep your refunds. So again, just making sure that you know what you’re doing. But there are ways, I mean, if you owe the IRS, there are at least three ways. One, make yourself non-collectible because at this point, you just don’t have the money. You’re either between jobs or you’re barely making it as it is. So you might be able to put a non-collectible. Second way would be making a payment plan so that you can just do it. Third would be an offering compromise because there’s no way you’re going to be able to pay it. But an offering compromise, that’s the ones a lot of times you guys hear about them on the radio, you know, oh, we settle a case 10 cents on the dollar. Everyone thinks, I mean, I can’t tell you how many people have called and said, well, what if I just tell them I can pay them 50 grand and, you know, they’ll settle. It’s not how much you think you can afford. There is a process that has to be done. And in some cases, people don’t understand is that what you think you can’t afford, the government can say you can because your lifestyle is higher or you have credit card debts and stuff, and they don’t consider that any more of a debt than themselves. So they don’t allow some of that besides minimum payments on some of that. So again, it’s really just making sure you understand how all of that works. But those three, non-collectible payment plan, partial payment plan, and or offer and compromise. And of course, there’s always bankruptcy. I find it surprising that many times when people come in, they’ve never actually thought about the IRS can go into bankruptcy. You just have to have 36 months or thereabouts. I always say 36, I think it’s like 31 or 32 months of collections before. So basically, the IRS has three years. And if you haven’t done and you want to take it in, that is a possibility as well, especially for a couple of people we’ve talked to that have older debt. So they’ve been at this five, six years and they finally got themselves back on track, but that five or six years is still festering out there. And maybe they don’t qualify for an offering compromise, but they may be able to handle a bankruptcy.41:03-42:01So I am not an attorney, therefore I don’t do bankruptcies, but it is one of those deals that you can put into your Rolodex as an option. You should always think of all the different options that’s available and see which one’s going to fit your situation. Because bankruptcy doesn’t mean you have to take everything into bankruptcy. My understanding is that sometimes people have been able to keep their cars, their houses, you know, certain things out of bankruptcy. But, you know, again, depending on where you’re at in the financial situation, if you can’t afford to pay the IRS and they’re trying to collect or they’ve got levies and liens and they’re trying to seize property, you know, you need to address it. You don’t want to just sit back, put your head in the sand and say, well, you know, they’re not going to they’re not going to do anything because, I mean, I have people that have their Social Security and that’s all they’re they’re living on pretty much being loving because they’re they’re having to pay back old debt to the IRS.42:02-42:08Now, if it’s really truly the only thing you’re living on and you have no other income, you probably could get that as a non-collectible.42:08-42:13But in the case of one of my clients, it isn’t really what they’re only living off of.42:14-42:19They’ve got access to other money, but they don’t draw much from it.42:19-42:19But the money is there.42:20-42:25So the IRS is saying you have a choice and they could pay them off, but they just choose not to.42:25-42:29So you have a lot of options when it comes to that.42:29-42:34But your option is going to be, what do you want to do when it comes to dealing with your tax debt?42:35-42:37As an enrolled agent, I can help you make those choices.42:37-42:42I can send you in the right direction if you decide you want to go into bankruptcy.42:42-42:45But that’s not always the first option.42:45-42:48But it is an option that people need to think about, is all I’m saying.42:49-42:51It may not be the one that you want to do.42:51-42:52Maybe it’s not on your agenda.42:53-43:02But if you’re at that point where everything is just overwhelming and you need to do it anyways, Well, I’ve had people that went through bankruptcy and forgot to take the IRS through it.43:03-43:04I mean, come on, people.43:04-43:05That would be crazy.43:05-43:06But they did.43:06-43:11Because a lot of times attorneys are looking at what debt they have in front of them and they’re not seeing.43:12-43:17And once you start bankruptcy, the IRS cannot make any type of collection until you’ve done your bankruptcy.43:17-43:20But then they can turn the clock right back on.43:20-43:27So you just need to make sure you understand what your options are and how you’re going to do it and what’s going to be the best way of doing it.43:27-43:41And then if you are, if you’re a Dr. Friday client, make sure that you have went onto the website drfriday.com and make sure that you have already signed up for the 2024 tax season.43:41-43:46It is available now. If you don’t see a date, you can certainly call our office on Monday or next week or whatever.43:46-43:49And we’ll make sure we have a time scheduled for you if you don’t see one in there.43:49-43:56Last time on Lolita Roasters, I am telling you guys, I am not making money by telling you about this.43:56-44:07This is nothing to do. I just think that this is such a unique concept that if you are in a business where you have clients that you want to give them something that is just different.44:07-44:19And I mean, I think in my world, there’s so much sweets coming through my door because everyone’s great bakers and they’re wonderful at providing all of that, that a cup of coffee really goes good with all that.44:19-44:27And that’s what I’m giving out. So they can make a cup of coffee with my blend and also eat all those wonderful sweets that other people have already given them.44:27-44:39So LolitaRoasters.com is what you want to Google and or just put into your address and then send them a ticket and see if you’re interested.44:39-44:45Like I said, we are doing them this year and I’ve been very happy with what we’ve seen so far.44:45-45:00So we’ll see how it all comes out. And if you’re, if you do actually use them, I’d be really interested to hear your input as well. Again, because I’ve had a great experience with them, but I would like to find out what the experience is for other people.45:00-45:42so you can just call our office and you know ask for friday as you know okay so let’s uh wind the show down you can reach me at 615-367-0819 615-367-0819 is the number right here in our office call it monday morning we can get you in um if you need to review taxes or if you haven’t filed taxes or you’re needing someone to take a look at your tax situation whichever you can also go to drfriday.com. That’s our website. Find out who I am, what I’m doing, or if you want to book an appointment, that is all available right there on the website. Again, drfriday.com.45:42-46:36Or you can also just email me, friday at drfriday.com. Friday, like the day of the week, that’s my first name, friday at drfriday.com. Pretty straightforward, pretty easy. And if you’re trying to figure out guys where to start maybe you’ve got a friend that hasn’t filed taxes or he’s getting a ton of love letters or she’s getting them you know the initial consultations are always free we want to make sure that we’re going to be able to help you to get you with where you need to be or get you connected to the right people if it’s not something i can do so again if you have a friend or just someone that needs to have the initial consultation they can go to dr carfriday.com, set up the tax appointment, or give us a call at 615-367-0819. I really hope you guys are enjoying this weekend. It’s a beautiful Saturday. As we say in Australia, call you later.46:36-46:38♪ ♪

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When making non-cash donations, the IRS requires specific documentation based on the contribution amount. Donations under $250 need a receipt with the organization’s details, while gifts between $250 and $500 require a written acknowledgment with a description and condition of the item. For contributions over $5,000, a formal appraisal is mandatory. Following these guidelines can help ensure compliance and maximize tax deductions. Need more guidance? Contact Dr. Friday’s team for assistance!

Transcript: G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The IRS is saying, “Non cash contributions less than $250, a receipt from the organization showing the organization’s name, date, location of contribution, and description of property is fine.” Between $250 and $500, you have to have correspondence written, now acknowledgment, of the contribution to the organization that includes the description of the property, the service, the date, the description of if it was in good shape, if it was an estimated value, how they came to it. Anything over $5,000, you need an appraisal. So make sure if you’re giving, you have the right documentation. Call us at 367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.

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For self-employed individuals, HSAs offer a strategic way to reduce taxable income and save for future medical expenses. In 2024, contribution limits are $4,150 for individuals and $8,300 for families, with an additional $1,000 catch-up contribution for those aged 55 or older. Unused HSA funds roll over annually and can be invested, potentially serving as a supplementary retirement account. By fully funding both an IRA and an HSA, you can significantly enhance your retirement savings. For personalized advice, contact us at 367-0819.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

So if you want to put money aside and you’re self-employed, I always talk about the health savings accounts. First, they usually have a higher deductible, so that way you don’t pay as much on a monthly premium. Also, a single person could put up to $4,150. A married couple, $8,300. Plus, if you’re over the age of 55, you get an additional $1,000 per person. So that’s a lot of money. And if you don’t use it, guess what? It turns into basically an IRA. So you have two places. So you can maximize your IRA at $8,000. Then you can maximize your HSA. And you’re putting more money aside for retirement. Call us at 367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.

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In this episode of the “One Minute Moment,” Dr. Friday highlights her firm’s extensive expertise in tax preparation and consulting for a wide range of clients, including individuals, corporations, LLCs, partnerships, and trusts. With over 25 years of experience, Dr. Friday and her team offer specialized support for complex tax situations and general consulting. Whether you need help filing taxes or simply have questions, Dr. Friday’s firm is equipped to guide you. For more details or to connect, visit drfriday.com, and tune in to her call-in show on Saturdays for live tax advice.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

If you need help filing taxes, that’s what we do. I’m an enrolled agent. I can help you file your taxes, not only individuals but corporations, partnerships, general partnerships, LLCs, LLPs, trusts. We do it all. We’ve been in business for 25 plus years, we know how to help you handle your tax situation. So if you need that kind of guidance, great. If you just have some questions and you need some consulting, you can also call our firm or easier, go to our website, which is drfriday.com and go in there and fill out the questionnaire. We’ll be more than glad to help lead you in the right direction if you need tax help, legal help, financial planning.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.

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Starting January 1, 2024, the Business Owner Informational Reporting (BOIR) requirement mandates specific business types—like partnerships and corporations filing forms 1065, 1120, and 1120S—to submit essential documentation by January 1, 2025. Missing this deadline could lead to severe consequences, including a $500 daily penalty or even two years of jail time. To ensure compliance, consult with a tax professional to confirm if your business qualifies. Dr. Friday’s firm is ready to assist those navigating this new mandate.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Let’s talk about BOIR, Business Owner Informational Reporting. This came in effect as of January 1st, 2024. We have until January 1st, 2025, assuming you started your business prior to 2024. You have one year and if you you choose not to do it, here’s a nice little threat. You have a $500 a day penalty or two years in jail. So you might want to make sure you have filed this report. It is for all partnerships, 1065s, 1120, 1120Ss. There are some caveats, so talk to someone that knows if you need help. Our firm is handling it.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.

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In this episode of the Dr. Friday Radio Show, Dr. Friday discusses essential tax updates, business requirements, and strategies for keeping on top of IRS obligations. Whether you’re a business owner, contractor, or simply have tax questions, Dr. Friday provides valuable insights and practical advice for tax season and beyond.

Topics Covered:

• Business Owner Information (BOI) Filing: New requirements for businesses registered with the state, with a December 31, 2024 deadline.
• Tax Deductions for Contractors: Advice on allowable deductions, including mileage and clothing guidelines for 1099 workers.
• Saving for Taxes as a Subcontractor: Importance of setting aside 20-25% of net income for tax payments to avoid surprises.
• Capital Gains Tax on Real Estate and Business Sales: Tips for managing taxes on large asset sales and avoiding financial pitfalls.
• Estate Planning and Collectibles: How to handle valuable collections in your estate, valuation issues, and charitable donations.
• IRS Payment Plans and Hardship Options: Guidance on payment plans, compromises, and asset considerations for those in debt to the IRS.
• Veteran’s Day Tribute: Appreciation for military veterans and their families, recognizing their service and sacrifice.

Transcript:

00:00-00:07No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes.00:08-00:11She’s the how-to girl. It’s the Doctor Friday show.00:14-00:22If you have a question for Dr. Friday, call her now. 737 W.WTN. That’s 7379986.00:23-00:27So here’s your host, financial counselor and tax consultant Dr. Friday.00:27-00:57Good day. I’m Dr. Friday, and I’m here live in the studio. So if you want to join us, if you’ve got questions concerning taxes or what we have to expect coming up, you can give us a call here in the studio at 615-737-9986. 615-737-9986. You’ll need to make the board live on X-screen. And then we…00:57-01:04As an enrolled agent, I am licensed by the Internal Revenue Service to do taxes and representations.01:04-01:05So that’s pretty much all I do.01:05-01:11So this show talks a lot about the different taxes that we are responsible for when we need to file taxes.01:12-01:13I’ve been talking quite a bit.01:13-01:14I thought it was funny.01:14-01:20One of my clients called me or text me the other day and said, have you heard anything about B-O-I?01:20-01:26And I’m like, yes, I have been talking about business owner’s information, the requirement that’s due by the last day of this year.01:26-01:33and if you’ve opened up a new company in 2024, you need to be doing it within like 30 days.01:33-01:41So pretty much anyone that sets up a new company needs to also basically set up their B-O-I.01:42-01:46So that way, and it’s not the most complicated thing, but if you need help, obviously we’re here.01:46-01:52But it’s important that it’s done because they’re very scary about the penalties that are coming out.01:52-01:56They’re saying $500 a day if you don’t comply.01:57-01:58I don’t know.01:58-01:59We’ve never seen this.01:59-02:05So I have no experience of knowing what is or what isn’t going to be available to us.02:05-02:11But it is important that we comply so we don’t even have to find out how that $500 a day is going to happen.02:12-02:13Phone system is off just so you know.02:15-02:16He’ll be turning it on in just a second.02:17-02:18It looks like it’s got X’s on the whole board.02:19-02:20You can give us a call here.02:20-02:216.1.02:21-02:21Thank you.02:21-02:22615.02:22-02:57737-99-86-6-15-7-3-7-9-89-6, taking if you have purchased a piece of equipment, you’re going to get 60% of it.02:57-03:03The rest of it will be spread over the lifetime of said vehicle or a piece of equipment, depending on what it is.03:03-03:05You will not get 100%.03:05-03:25So it’s really important that we actually look at that information because many times people will go out and buy a truck or they’ll go out and buy a dozer or they’ll go out and buy some piece of equipment thinking that it’s going to be a great idea because they’re going to write off 100% and you don’t have that on the board right now. So again, that is very important.03:25-03:40Let’s talk to Christian, I think it is, in Goodlettsville. Hello, sweetie. Hi. I have recently started working after not working for 11 years and I’m an 8th R consultant and I’m going to get a 1099.03:40-04:23Right. So I’m curious. I know that I can take tax deductions for gas and mileage and clothing and all that kind of stuff, but I don’t know where to find an official list. Right. Well, you can go to IRS.com and pull up a Schedule C. It will give you a list of all the things. Clothing is not a deduction unless it is logoed, like Century 21 jackets or something like that where it’s a Pacific. If it’s street clothes, you cannot wear them on the streets. Then yes, it may qualify, but most people’s clothing or work clothes are almost always nowadays, especially our street clothes that people, you know, wear a pair of blue jeans and a T-shirt, whatever.04:23-04:26So that isn’t Miles maybe.04:26-04:35The job that you’re doing is a 1099 is the work from your home and then you’re going out and seeing people or is there an office in which you have to go to?04:35-04:38How do you handle your business right now?04:38-04:41I do go to an office four days a week.04:42-04:42Okay.04:43-04:45So from home to that office, and that’s…04:45-04:50where you’re seeing or doing the business that you’re doing as a subcontractor, like a real estate agent in essence?04:51-04:51Correct.04:52-04:52Okay.04:53-04:56So just like myself, my office is in Britwood.04:56-04:56I live in Spring Hill.04:56-05:01We cannot deduct the miles from my house to the office because all my clients come to my office.05:01-05:03That is my place of business.05:04-05:05Same thing for you.05:05-06:14So now if you holding that as a caveat, the one thing you want to know is if for some reason you have to leave your office and you go and pick up office, supplies or you go meet a client or something along these different those would be deductible miles just not commuting miles from home to office okay all right awesome okay yeah but you can get most of that again at irs.gov you can pull up self-employed or schedule C that’s what you’ll be filing under and there should be some details there for you okay okay and you were just talking just a few minutes ago before I called about if you started a business. I haven’t started a business. I’m just a consultant. You’re fine at this moment, but if you had started an LLC, which is a very common thing for people usually, you know, I mean, at some point you may become a separate entity of some sort, just as a shield or whatever. But first you got to establish yourself before I would go into that personally speaking. But if you had started an LLC or registered your business with the state of Tennessee, you are required to file what’s called a business owner information under FinCEN.06:14-06:22But you as an independent contractor, just working as a sole proprietor in essence, no worries, nothing to have to be done.06:23-06:23Okay.06:23-06:23Awesome.06:24-06:24Awesome.06:24-06:25Thank you for much.06:25-06:26No problem.06:26-06:26Thanks, sweetheart.06:27-06:27Bye.06:28-06:29Okay.06:29-06:30So, and that was a great question.06:30-06:39And probably the only thing before I said goodbye, I write what I said to her is make sure when you kind of figure out your bottom line, whatever that number is, take 20.06:39-07:1420% right now it sounds like you’re going to be making less than 150,000. So take 20% set it aside for good old Uncle Sam. That’s going to be his share. And then you’ll keep the 80%. You need to start thinking about the taxes because nothing worse than coming to tax day. And then someone says you owe 10 grand and you’re sitting there going, oh my gosh. I don’t have that money. I didn’t think I was going to owe that much. Again, this would be of your net, Christian, not of the gross amount, but of the net amount. So depending on how much write-offs you come up with, you know, you still need to set about 20, 25% aside for Uncle Sam.07:15-07:36Okay. And that’s for anyone that’s working as a subcontractor. Nobody as a subcontractor gets away without paying taxes unless you are working upside down, meaning you’re not making any money in doing it. And be very careful because in the big picture, if you are that person, you’re going to also be working as a hobby after two out of three, two out of five years.07:36-07:52So if you’ve taken losses in the last two to three years and your business has not yet created any income, unless you’re a farmer growing some sort of fruit trees or something that may take five to six years to start getting harvest.07:52-07:58Most businesses, the IRS says nobody can afford to lose money for three years without doing a business.07:59-08:05So just putting that out there that if that’s the case, then you want to make sure that you are taking your.08:05-08:08the share for Uncle Sam out of this equation.08:09-08:17You need to make sure that Uncle Sam is actually going to get his share because they’re going to get it one way or the other and nothing worse than every paycheck.08:17-08:21Normally when you work as a W-2, you guys have your taxes come out.08:21-08:25It happens, you know, but most of us self-employed individuals do not have that.08:25-08:27We have to be our own employers.08:27-08:28So I can’t say that enough.08:29-08:39One of the biggest problems I have, well, the people that come into my office, Most of them are entrepreneurs, self-employed people that have not set enough tax dollars aside in doing something.08:40-08:41The second is when people sell things.08:42-08:48Let’s say you’re going to sell a piece of real estate or you have sold a house or a business or anything like that.08:49-08:53Not talking necessarily primary homes because there is some exclusions out there.08:53-08:56But I am talking about real estate.08:56-09:01Say you have a second home or you inherited a house and you held it for a number of years and then you decided to sell it.09:01-09:03Then you have capital gains.09:03-09:13those capital gains are taxed, and it’s important that you think about those taxes, because if you don’t think about the taxes, then you’re going to think about what you need to actually have to do on the other side.09:14-09:15And then Uncle Sam’s going to get his share.09:15-09:23I had a gentleman that sold a business, received quite a bit of money in his first, and his big dream was to always pay off his home.09:23-09:24He did that.09:25-09:27Unfortunately, he didn’t set any money aside for Uncle Sam.09:27-09:31So now he has to go get another mortgage on his home to pay back the IRS.09:31-09:44and that could have been handled a lot better and probably with less penalties because, you know, he knew he was getting the settlement and he just didn’t think about why he was going to have to owe the IRS for capital gains.09:45-09:54And again, I know that’s not what most people’s business or their practicality is, but it does come down to where that is something you have to think about, okay?09:54-09:58You can’t just walk around the world and think about, oh, I don’t know anything.09:59-10:01oh, you know, I just got this big windfall.10:01-10:09Very few times do we get windfalls that really come out to the point that we don’t have to deal with taxes.10:09-10:10Okay?10:10-10:14So anytime that happens and you have to deal with taxes, then you have to deal with taxes.10:15-10:24So just putting that out there that you need to make sure that you’ve taken that money and done what you need to do and make sure it’s the way that you have what you need.10:24-10:24All right.10:24-10:29So if you have questions, you can join us, 615-7-3-6.7.10:29-10:34979986-6-1-5-737-9986.10:36-10:38We’re taking your calls here in the studio.10:39-10:48Again, we have a new president coming down, and it’s going to be interesting to see how that’s going to affect our current tax laws.10:48-11:10Many of them were to expire in December 31st of 2025, and he goes into office in January, So we’ll be looking forward to seeing if he’s going to be able to move some of those tax situations back to what we had prior to the same as we have today.11:10-11:15Because obviously right now we would be going up several percentages.11:15-11:23I know a lot of people say that the tax cuts are for the wealthy, but most middle class people, you know, you’re going to go from 12 to 15.11:24-11:28The 22% is going to go to 24.11:28-11:32And if you were in the 24%, you’re going to go to 28.11:32-11:39So you would have an increase of almost, what, 6% or something like that, which could add up to quite a bit of money.11:39-11:46So again, just making sure that you have the right information, and hopefully we’ll be able to get you more information as we go.11:46-11:49All right, we’re going to get ready to take our first break here.11:49-11:54So if you want, you can give us a call, 615-737.11:54-12:259986, 6157379986. Also, if you’re looking for an awesome idea for Christmas this year, especially for business owners, maybe you’re having a wedding or a big family get together. Lolita’s Roasters, they make custom coffees for each of you. So whatever you have, it’ll be your own type of coffee, your own brand, your own bag. It’s a really neat idea. We’re going to be doing that again in our office, found it to be very successful. So, you have, you’ll be your own type of coffee, your own brand, your own bag. It’s a really neat idea. We’re going to be doing that again in our office. I found it to be very successful. So, Again, we’re going to take our first break.12:25-12:28We’re going to be right back with The Doctor Friday Show.12:36-12:39All right.12:39-12:59If you want to join the show, 615-737-99-86-6-15-737-99-86, Yes, I have a question regarding collectibles.12:59-13:10I’ve been collecting fuels, just a hobby for 25 years.13:10-13:13But now I’m a senior and my wife has explained to me.13:13-13:17She really doesn’t have to deal with those things.13:17-13:57sir. My question is, if I don’t have values on, what’s the best way to value sold? Well, I’m going in and out a little bit, and I’m not sure it’s because I’m not in my studio as well, Tom, but it’s not like you said you ate collectibles and you want to know if you don’t have the actual value. The value, according to the IRS is zero. They have no, I mean, if you can’t prove that you purchase these or were gifted them from somebody, then theoretically, you will have to pay capital gains and on collectibles, capital gains can start at 24% taxation, antiques and collectibles.13:59-14:00That’s what I need to know.14:01-14:06And as far as historical value, is there any kind of a guide that you recommend?14:08-14:12Well, I mean, there are certain places that you can go back.14:12-14:13You could probably even go.14:13-14:16I mean, I might suggest what did you say you collected?14:16-14:18I’m sorry. I don’t think I heard what you collected.14:19-14:29Well, I have collected some hot wheel cars, and I also have several character watches, you know, Mickey Mouse, Disney, stones, whatever.14:30-14:38I mean, I would suggest, be honest with you, the easiest way to probably find that the current actual value would be going to, like, eBay and places.14:38-14:40Or taking them into it.14:40-14:46I mean, through a collection, you could go in and get an appraisal through, like, the pawn shops or them, a lot of.14:46-14:56sometimes they will do actual appraisals, not buy them, but, you know, give you an appraisal value that they have, you know, like a blue book theoretically of the value of all those types of things.14:57-15:00Okay. Okay. All right. Well, I appreciate your advice. Thank you so much.15:00-15:18No problem. Thanks, Tom. I appreciate you, Colin. All righty. That was an interesting question. I will give you that. I don’t deal a lot with, I mean, the collectible side. I always think it’s fun when people. My dad collected a ton of watches, And we still have all of them because the value to my father always seem more than it was to the world.15:19-15:27So sometimes that’s the problem with any kind of antiques or collectibles is that the individual that knows what they’re collecting.15:27-15:32Yes, sometimes there’s a value because they’re silver or their gold or their true antique furniture.15:33-15:38Some of the designers would have it or certain woods that they made them out.15:38-15:40We can’t mean we don’t even have any longer.15:40-15:41So they make them somewhat.15:41-15:44But again, it’s only what the person’s willing to pay.15:44-15:47And so that’s where it gets a little tricky on some of those.15:47-15:53I know I have a friend that collects 33 albums, records.15:53-15:57And again, I mean, he’s got thousands of them.15:57-16:07And I doubt unless you can find someone that was an avid true collector, what the true value of all those are would be a lot harder to come up with.16:08-16:11Because, again, you’d have to have a very specific audience.16:11-16:15that’s saying, oh, I want to, you know, and I know record players came back.16:15-16:16Don’t get me wrong.16:16-16:20I know my niece that’s like 15 last year or whatever.16:20-16:23She got a record player and loves to listen to records.16:23-16:25And so is one of my brothers.16:25-16:28But most of us do technology.16:28-16:29Let’s just be honest.16:29-16:31We take our music with us.16:31-16:32So it’s a little different.16:32-16:41But if you have anything like that, and I agree with one thing Tom said, and I can’t, again, nothing to do with taxes or anything, but having.16:41-17:11been a child and the parents passing away is making sure that your paperwork, your estate, your documents, and also all of those boxes of things that you may have in your attic or in your garage or in some cases, I know, I mean, my neighbor, she has like two storage units full of stuff. Nobody’s probably going to think that most of that is very valuable. It’s probably going to end up at Goodwell or something. Maybe that’s fine. But it would be easier.17:11-17:18if, you know, during your lifetime, just as Tom was thinking, clean the house out, you know, get rid of all of those things.17:18-17:25Because even though they have a meaning to you, the next generation isn’t going to have that same attachment.17:25-17:31And you might as well give it or get it to someone that might love it, respect it, or do something with it.17:31-17:40Because in many cases, I mean, let’s be honest, they have a big garage sale and they just sell everything off or they just take it all to goodwill.17:40-18:05and if you’re doing that, I have a case right now that’s been probably a year and a half we’re still playing with, where they basically disallowed. He had taken photos and made a list going through the Goodwill site and making a detailed list of every item he took in there and pulled the price from the, if you go to Goodwill, you can put together your own estimated value of what you’re donating.18:05-18:10He did all of that along with pictures and they said he did not have an appraisal.18:10-18:23tax law says anything over $500 or $2,500, depending on, but it’s not each individual thing, because that’s what we’re arguing is tax law says anything over.18:23-18:27Well, no one thing was over $500 in this particular situation.18:28-18:30It was a ton of little things.18:30-18:36But in that scenario, the IRS is saying you’re claiming more than $500 of everything.18:36-18:38Therefore, you needed to have an appraisal.18:39-18:57I’m just warning people if you don’t want to go through a two-year argument and still not win the argument because we haven’t proved that this is a situation, then, you know, if someone passes away and they happen to have a ton of stuff that you want to give to a charity, you need to have an appraisal.18:57-19:03Even if the charity gives you a charity letter, that’s not going to fly. He had that as well on some of it.19:04-19:08And they’re saying, no, we need proof that it was worth what you’re claiming.19:09-19:11And the charity was claiming that was worth that.19:11-19:17But you need to have an appraisal if you have a lot of things because it won’t work out the other way.19:17-19:19So just putting that out there.19:19-19:25If you have an issue with taxes and you’re getting love letters, it’s getting close to the end of the year.19:26-19:27Not that makes a big difference.19:27-19:33But the reason I’m saying that is that a lot of times people at the end of the year or first of the year want to have that New Year’s resolution.19:33-19:34going to do things correct.19:35-19:46Make sure before you decide what you’re going to pay and what’s going to have to go on a payment plan and how you’re going to, even how you’re going to deal with the IRS, are you going to make a payment plan?19:46-19:47Are you going to do an offering compromise?19:48-19:50Are you going to do a partial payment plan?19:50-19:52Are you going to become non-collectable?19:52-19:55Those are your basic plans or just write a check and pay them off.19:56-19:59But if you had the money, I think you would have done that already.19:59-20:03So I’m working with the idea if you have issues, then most likely you don’t have the money.20:03-20:41to pay them. What you think you don’t have the money, the situation where I said the gentleman had gotten the money, he then paid off his house, he now doesn’t have the money and he was trying to come a hardship. But there’s no hardship. You have a house that’s paid off. If you have equity in a home and you owe the IRS money and the house that you’re living in has enough equity to pay the IRS, you’re not going to, the only way I’ve ever seen anything happen like that was when the person was over the age of 78 and his house was the only asset he had no savings, no 401ks, nothing else.20:42-20:50It wasn’t me, but tax law shows that that individual was able to keep their house and claim a hardship.20:50-20:51That wasn’t easy.20:51-20:54He had to go away to tax court and make it happen.20:54-20:59So just saying in most situations, you’re going to have a very difficult time.20:59-21:19If you have money in the bank, money meaning IRAs or 401Ks or just a savings account or a home or stocks, those are all assets, all of those need to be accounted for when you’re trying to make a deal with the IRS.21:20-21:25And most people really do not think their house should be called a part of this.21:26-21:35I’ve had two cases I can think of where they think, well, I’m sending my children to private school, not because of a disability, but because it’s a better school.21:35-21:44And therefore, they’re not able to pay their taxes every year because they’re actually living away above their income because they’re self-employed and they’re not able to pay the taxes.21:45-21:50So the IRS is basically saying you cannot put your child in private school.21:50-21:52That is an option, a choice.21:53-21:55Your first choice is you need to pay the IRS.21:56-22:09So, you know, I’m just saying what you may think is a priority, but if you’re using money from the Internal Revenue Service or your tax dollars, they may have a different opinion on how that’s going to apply.22:09-22:11That’s the important part of that conversation.22:11-22:18Just because you think that you don’t have enough money to live and make payments to the IRS, doesn’t mean the IRS is going to believe that.22:18-22:44If you have a high mortgage, they may give you two years to, either sell the house or to renegotiate a mortgage because they only allow certain dollar amounts. If you have a Ferrari and you’re not paying off the IRS and they may give you a year to downsize your vehicle because that payment could be going towards them and you can be driving a Toyota.22:45-23:51Again, there are exceptions to any of these conversations, but it’s important that you understand how tax law works and let’s be honest they’re not there to make your life easier they’re there to collect the tax debt so it’s best to try to have a plan that’s why i started saying when the first of the year a lot of times people start replanting their life or getting back into play of doing what they want to do and when that comes up you don’t want to just go start thinking that you know how to do go talk to an enrolled agent go to your your tax person your financial planner whoever you have you don’t have anyone give me a call. Let’s make a plan before you start sending or getting money and doing things. Let’s make sure that we do it the right way so you don’t end up paying things that you didn’t have to but not paying things that you did or you need to. All right, we’re going to get ready to take our second break here. If you want to join the show, you can. 615-37-9-36. Sorry, 615 7379986 6157373986 is the number here in the studio.23:51-23:55You can also email Friday at DRFriday.com.23:55-24:01I try to keep my emails open just to see if there’s anything because sometimes people just don’t want to get on the radio and I totally understand that.24:02-24:11But if you do want to join the radio, 6157379986 or you can just email Friday at DR Friday.com.24:11-24:13We’ll try to get your question here on the air.24:13-24:16We’re going to be right back with The Doctor Friday Show.24:22-24:39All righty, we are back with the Doctor Friday show, and I’m enrolled agent licensed by the Internal Revenue Service to do taxes and representation, which basically just means I talk a lot about taxes, and we talk about how we can save money, how we can spend money, what we need to do.24:39-24:41And it’s going to be an interesting year.24:41-24:44so we can see how the next year is going to go.24:44-24:47I don’t think anything’s really going to happen until 2025.24:47-24:50So 2024 is as it is.24:50-24:59So that means at this point, unless something gets backdated, and we have seen that, guys, but I think we can pretty much predict that we’re going to be running our 2024 where we’re at.25:00-25:02So we’re almost at the end of the year.25:02-27:10If you haven’t met with your tax person and you’re a business owner, or if one of my clients, we need to be setting up a time if we haven’t already to talk and make sure that we have made sure, sure that we’ve covered all the important things, right? Now’s the time when your tax person is most basically not very busy in comparison to what happens come January, February, March, and April. Really hard to really sit down and get a true heart to hot. And then after that, sure, May and June, you’re pretty good until basically first to September. And then we go crazy again for the extensions. So it’s important that if you have a new business like the young lady that called, maybe getting with your tax person to make sure that you have tracked all the expenses in the best way you could have. And I will say if you’re not sure, make a spreadsheet or use quickbooks, any of those things, but track everything, right? Track all of your clothes. Track all of your nails, hair, whatever it is that you have your money being spent on. Your tax person is going to be able to go through that detail. If you put it in, there under clothing or you put it in there under cell phone and you put under you know whatever services insurance whatever it is they should be able to go through and pull out the proper expenses for you or tell you hey i need you to pull all these things out and this is what i’m going to use for the the taxes so you know then what is the important things to track and what isn’t because even though i tell christian you know clothing normally is not a tax right off there is some exceptions to that always an exception, right? I mean, people that have costumes, those are, you know, a clothing is, you know, is a deduction for them. Anyone that has a shirt that has their company name on it, that’s considered a uniform. Therefore, that’s a tax deduction. If you don’t, boots, steel-toe boots, many times if you’re a construction guy, specialty glasses or goggles, those can also be often a good thing to have because they’re required in your profession.27:11-27:15You know, but getting your hair and nails done, I’ve had more than one comes to me.27:15-27:16I’m a real estate agent.27:16-27:18I’m a yoga.27:18-27:19I have a personality.27:20-27:22I need to have these things done.27:22-27:29The only way I’ve ever saw in tax law that justified it was like people that went on stage and they did hair and makeup.27:30-27:40If you were doing like a TV interview or a blog or something where your image was, something that was generating actual part of your income, the answer is yes.27:41-27:48But if you’re just doing it because you’re selling real estate and your, you know, your looks are important, sure they are.27:48-29:24But the IRS says it’s not important enough to actually justify the procedure unless, again, I mean, I have saw one where the lady said she had to have a Mercedes because she was selling multi-million dollar homes and it would look bad if she drove up into Toyota and she won that battle. So I don’t want anyone to think that everything in tax law is black and white. It is not. Normally, plastic surgery is not a tax deduction, but in some professions, when you get plastic surgery, it’s part of your living, and therefore, it can become a tax deduction. So, you know, you have to be common sense along with the expenses, but that’s one of the reasons you’re going to an enrolled agent or to a CPA. You’re going to someone that is actually knowing what the laws are and how they apply so that way you don’t get yourself in trouble. No one wants to do taxes and then have to go back and deal with them again, you know, two years later when the IRS has decided to audit or question. Now, they are getting better. Normally, more paper audits and more paper audits usually come out within about 12 to 14 months from when you filed. But obviously, if you don’t file until October, you know, you’re looking at another tax year almost before you’re actually looking at the past tax year. So, you know, just keep in mind the IRS has basically 24 months to review your taxes and then decide if they’re going to audit or hold them back. Sometimes people worry because when they e-file and you go on and you see where’s your refund, it says it’s taking longer than normal for the IRS to process your return. You know, we are reviewing your return at this time.29:24-29:28That doesn’t necessarily mean it’s an audit. It may be the tax documents.29:28-29:29aren’t matching up.29:29-29:39I guess you can consider that auditing, but it’s not really, it may just be that you submitted something that did match what your employer submitted or they had some documents.29:40-29:42And that’s the ones that’s not the good ones.29:42-29:43We have one that come in the other day.29:43-29:55And apparently, AXO, which is an investment company, they sent out accidentally in 2022 multiple 1099 hours.29:55-30:00And they didn’t mark the, one of them as corrected.30:00-30:10So if you’re one of those individuals that you’ve gotten a love letter from the IRS and they’ll tell you in that letter that we’re making, we’re suggesting these changes and they’ll put in there all the different things that they’re changing.30:11-30:22And if it says Axel, in my client, this exact same dollar amount, it shows two 1099 Oz and then twice the exact same dollar amounts on both, different account numbers.30:22-30:27And actually the names from Axel are two different divisions.30:27-30:40but they’re being told by their financial plan, no, you only had the one that Axos did put something out saying that they had done a multiple 1099, but they didn’t mark them as amended or corrected.30:41-30:42That’s going to be a problem, I think.30:42-30:52And so we’re working on trying to get the information because the IRS isn’t going to just take our word that there was only $1099 aught.30:52-30:53I wish they would.30:53-30:57But we’re going to submit it and try and say, hey, this is the only 1099.30:57-31:21are that we have. This is a correct one. This is what we put through the bank. But they may say, well, we’re sorry, but your financial advisor company said that you got two of these. And even though the exact same dollar to the penny on both things, you know, the IRS isn’t just going to turn around and say, well, you know, that’s just a coincidence. They happen to be the same amount.31:21-31:27We can’t delete one of these without having something that says that one was corrected versus the other.31:27-31:29I don’t know what Axo was thinking.31:30-31:35Obviously, I’m fortunate because apparently a lot of my clients don’t use this, but this just came up.31:35-31:39So it might be getting more and more of these letters if other clients have it.31:39-31:56So if this sounds like something you’re dealing with as well, I am told by my clients that Axos, at least his financial advisor, is working on trying to get a letter from Axos that says that they did file double 1099 R’s and did not mark the second ones as corrected.31:56-31:59So, you know, again, not the best plan.31:59-32:02And now the clients have to deal with more of a headache.32:02-32:05So again, it’s not always going to be easy.32:05-32:07Anytime you file taxes, you do your very best.32:08-32:08Most people do.32:08-32:12It’s not like they’re out there trying to find ways to do things.32:12-32:18But on the other hand, it is very important that you, A, keep track of your documents, be, get yourself a decent team.32:18-32:20Have a good financial advisor.32:20-32:22I deal with Hank Parrott a lot.32:22-32:26And, you know, every year, I do a number of his clients.32:26-32:31And every year we have at least a handful of them that keep the wrong forms.32:31-32:36The good news is that his case is that he’s usually in the office when I’m preparing the returns.32:36-32:46So that way he can get on the phone with the chase or whoever it is that he’s with, Charles Schwab, whatever, and get the situation corrected.32:46-32:48So we get it done before we go to the IRS.32:48-32:52So we know what the IRS and we don’t have to deal with the correction later.32:52-34:54Very important to do, guys, because if something’s got the wrong, code. If you’re not a code 7 and you should be a code 2 or code 1 or vice versa, because code 1 and 2 usually means that there’s penalties, code 7 doesn’t, then, you know, again, if they don’t have the right age for you, I have one of those where they had the person’s age wrong, so they considered an early withdrawal and it was not. But getting them to change that 1099R, put us all the way into like August, had to file an extension, do it until August until we finally got the right return. But then we filed with the IRS and we didn’t have any issue. If we had done it with trying to go through the IRS, we would have been not only dealing with them anyways, then we would have had the IRS on our table as well trying to say, hey, you owe money because you misfiled this tax return because this code is what we have. Very important to understand your taxes and to make sure you have those documents. All right, we’re getting ready to go into our third break, and I do realize this is veterans haul it in. I really do appreciate any and all of you that have served in the military. We do many times work with the military. We do many times work with the military and help them with IRS issues and just try to help them resolve those through our nonprofit. But the military, without you guys, we would only have chaos. And also, not all of us are made to work with the military. So it is always an honor to help those that have sacrificed to serve this country. So again, I do want to put a big thank you out there to all of the people in the military that have served under time or even have family in the military. You can only imagine how difficult that would be. So thank you for your service and thank you for helping us all have a better life because of it. So we’re going to take ready to take another break here. And once we get back from that, that’ll be the last break. So if you have any calls, maybe you’ve inherited property, maybe you’ve bought some virtual currency that you’re going to get rid of. Maybe you’re buying and selling something, you’re not too sure how the tax code works with it.34:54-34:57Maybe you have a big capital gains and you’re thinking of a 1031.34:58-35:00We can cover any of those fairly quickly on the radio.35:01-35:11I would suggest any time I give any advice, always check with your tax person to make sure that it applies to you because on the radio sometimes I don’t have time to ask all the pertinent questions.35:11-35:15I try to lead you in the right direction to get you the education and do what you need to do.35:16-35:23But again, always make sure you seek out the advice of your personal tax person because they’re going to know everything about you versus me on the radio.35:23-35:25Maybe I’m just getting the basics.35:25-35:25All right.35:25-35:42So if you want to join the show, 615-737-9986, 615-737-37-9986, or again, you guys can suit me an email Friday at dr.r-Friday.com.35:42-35:47Friday at DR Friday.com is the easiest way to get a hold of me.35:48-35:51That way then we can try to get your question on the radio.35:51-35:54And I know people calling the radio station is never easy.35:54-35:55We don’t take down names.35:55-35:56We don’t take down numbers.35:57-35:58We’re not tracking any of this.35:58-36:00But I do appreciate the phone calls.36:00-36:03Makes it a little bit more interesting than you guys just hearing me talk.36:03-36:03All right.36:03-36:06We’re going back in just a minute with the Doctor Friday show.36:06-36:13For tech services, planning, business, and IRS negotiation, visit DRFriday.com.36:13-36:21All righty, we’re back with the last part of the show.36:21-36:31So if you want to join us, 615-737-99-86-6-15-7-37-9-9-89-6.36:31-36:36I do want to talk a little bit about Lolita Roasters because Christmas is going to be here before you know it.36:37-36:47Many of us businesses like to give thank-y-y-s or put out some sort of, uh, a appreciation for the clients that we have, businesses that we deal with.36:47-36:56And one thing that I have never seen before, and this is why I love this company, Lolita Roasters, is a custom-made coffee.36:56-37:00So Dr. Friday, obviously I’m in an Aussie.37:00-37:02I like dark roast coffees.37:02-37:05So, you know, they’re going to take and ask us a bunch of questions.37:05-37:12And they’re going to create a coffee and roast it just for Dr. Friday tax and financial firm, put them in cute little bags.37:12-37:17thank you cards and boxes so that they can be sent to our clients.37:18-37:27And it’s a great way, and it’s really no more expensive guys than whatever you’ve been using, most likely for buying cookies or other packaging situations.37:27-37:33But this is so unique because, for one, how many people get a ton of sweets during the holidays?37:34-37:35A lot of people.37:35-37:38And most of us love coffee.37:38-37:42And so this is something that can go with all those sweets that somebody can make up.37:42-37:47and actually pull out all the other sweets they’ve gotten and make the coffee to go with it.37:47-37:56All you have to do is go to the web, go to Lolita Coff, Lolita Roasters.com, pull up the information and fill in the questionnaire.37:56-38:06And then that way they can see if it’s something you can let them know, Dr. Friday sent you and see what you can do as far as getting an initial confrontation.38:06-38:18It’s really designed, as far as I can see, for groups, parties, individuals that have large things that they’re getting like a wedding or something or obviously a business giving an appreciation.38:19-38:40That’s what I think is a great idea. But if you’re getting married, what a cool idea. My nephew got married and we did that for his wedding. It was cool. Everyone got a little bag telling a little bit about the couple and the date and everything else. So you can either save that bag or you can use the coffee out of it and then obviously save the bag as a keepsake.38:40-38:46But it was something different because normally a lot of times you get those little mint bags or something that people have put together.38:47-38:48And this was a little bit more personal.38:48-38:50So again, I think it’s a unique concept.38:51-38:52Lolita Roasters.38:52-38:53Okay.38:53-38:56So we’re getting down to the last five, six minutes of the show.38:56-39:00And we need to make sure that we are covering most of the good stuff.39:01-39:10Again, I’m going to talk one more time about B-O-I business owner information because the time clock on that is probably going to expire sooner than the rest of anything else I talk about.39:10-39:47talk about. Very important that you, if you are registered with the state of Tennessee or any state, B-O-I comes into play according to what we have found out, which would mean most of us registered with the state. Now talking about business license, I’m talking about your charters. So if you’re a single-member LLC, multi-member corporation, partnerships, all of them normally have a charter registered with the state that creates the B-O-I or the business owner information you want to go to Finsen F-F-I-N-C-E-N.39:48-40:22FinC-E-N is of 22, January of 23, came in effect as of December 31st, 2024 for all existing clients that had been in business. But if you opened in 24, you needed to do it within like 30 days.40:22-40:39There are penalties can already start assessing. So if you haven’t done it, you’ve got a brand new business that you set up as an LLC and you did not do the B-O-I, you need to do it now. I don’t know, again, guys, I don’t know anything about how we’re going to deal with penalties if there’s going to be some sort of waivers.40:40-40:44Without knowing about it, I don’t honestly know yet.40:44-40:52We’ll find out more once we get past the December 31st, and I suppose somebody gets a love letter saying they owe money because they never filed the B-O-I.40:52-41:03The purpose behind it is the business information is for the feds, basically to be able to track foreign investors in the United States.41:03-41:08They want to make sure they’re paying tax on their share of an investment.41:08-41:10We all get K1s.41:10-41:15We process that gets processed to the IRS or to the U.S. Treasury.41:15-41:19The IRS then uses that to match to the tax returns of those taxpayers.41:20-41:21And that’s all pat through.41:21-41:29If you forget to process or to do something with a K-1, the IRS, if there’s any value on it, the IRS will come back to you and say, hey, you forgot this.41:29-41:30You need to report it.41:30-41:33They can’t do this with foreign investors, right?41:33-42:03Foreign investors are supposed to be doing 1040 NRs, even if you don’t live here, but you invest here, you need to be filing U.S. taxes. There are some deals where, you know, if you live in Canada and you pay tax on the money in Canada, you may get a foreign tax here in the United States or London. I know I have a client that has that. But you still have to file in the United States, even if you’re not a U.S. citizen, if you are invested in the United States.42:04-42:15So that’s what I think they’re trying to cut down on. I think they’re finding there are quite a few, foreign investors that are not filing tax on the money they’re making here in the United States.42:15-42:16It’s the same way.42:16-42:38If you’re a U.S. citizen and you have money overseas in any country and you’re making interest, dividends, or you just have money in there and it’s not going to, you still have to file an F-Barr that tells Foreign Banking Information Act that that way they know that you have a bank account in the Caribbean and it’s got more than 10.42:38-42:54thousand U.S. dollars in it that you have told them about it. And if there’s any interest or dividends that you pay tax on it here in the United States as a conversion, you don’t want to have a situation where you have, I mean, a lot of times people like, well, how do they know, who they know?42:55-43:08If you come many times, I mean, if you come from another country, you still normally have a bank account in those countries. I mean, if you have a, you know, coming from Australia, I still have bank accounts in Australia. So you need to report that information. If it’s got.43:08-43:38more than 10,000 U.S. dollars. Now, if it doesn’t, you’re not required to do it. So that’s, that’s, sorry. So you just want to make sure that as a U.S. citizen, you report everything. If you’ve got rentals overseas, you have an investment overseas. Maybe you’ve given money, maybe you’re from another country and you’ve invested in a business over there. Then you want to be able to do the same thing.43:38-44:00here that money needs to be converted to U.S. dollars. If you’ve made money, if you’ve lost money, still want it in me if it’s a legitimate, and if it’s a foreign company that has K-1s or something else that still has to convert to U.S. dollars. That’s the important part. And win or lose, you need to be reporting that on your tax return. Otherwise, it could come back later to you.44:01-44:16Now with everything connecting, right, you got F-Barr connecting, FinCin connecting. All of these are all more ways that the government can try to track where your money’s at, especially these are both for basically more foreign investors or individuals that are investing overseas.44:17-44:37All right. So we’re going to wind down the show here. We’ve got about two minutes or so. So here’s what we need to do. Give you all the details. If you want to give my office a call on Monday morning, no, yeah, Monday morning. It’s Veterans Day, but I believe we’re still in there. 615-367-0-819.44:37-45:10Again, the office number is 615367-0819. You can also email Friday at dr.friday.com. That’s F-R-I-D-A-Y at D-R-F-R-F-R anything pretty much that requires a U.S. tax return we handle.45:11-45:17But if you need more information, go to dr.friday.com, DRFRI, d-A-Y dot com.45:17-45:19That way then you can take a look on there.45:19-45:21You can also set up your tax appointment.45:21-45:25Chris, which is my sidekick, I guess you would say.45:25-45:28He’s an EA that’s also working in my office.45:28-45:30His calendar is in there.45:30-45:31My calendar’s in there.45:31-45:34So you can set up an appointment with either of us and go ahead and get your dates.45:34-45:37So that way you’re able to come in.45:37-45:39and see us and make sure that we can help you with your taxes.45:40-45:48We’ll get more about, I’ll probably bring Chris on the radio here before the first of the year just to get everyone introduced and know a little bit about my partner here.45:49-45:52And that way you can ask questions as well with him.45:52-45:52He’s a great guy.45:53-46:03So again, if you can call the office, 615-367-0819 Friday at DR Friday.com is my direct email.46:03-46:06We also do bookkeeping for small business owners.46:06-46:12We handle payroll for small business owners as well as obviously doing the taxes.46:13-46:17Which with the bookkeeping, they also do, you know, business licenses, annual reports.46:18-46:20Some of those are included in our fees.46:20-46:25If that’s a service that you need, it makes it easier for everybody to keep everything done.46:25-46:27Because as a business owner, let’s be honest, we’re all very busy.46:28-46:33Sometimes we don’t have time to think about this is coming due this month, this is coming to do that month.46:33-46:36So it’s nice to have a good bookkeeper that can help you do those.46:36-46:48things. So you can give our office a call Monday, 615-367-0819. I hope you guys truly do have a wonderful Veterans Day, as we say in Australia. Cop, you’ll later.

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In this episode, Dr. Friday highlights the tax differences between various business entities, such as LLCs, partnerships, and corporations. While popular choices like LLCs and S-Corps can offer benefits, they also come with specific tax responsibilities, especially for corporations requiring payroll rather than distributions. She advises that selecting the right structure depends on your business type and goals, underscoring the importance of tailored tax planning. For expert guidance on entity selection and tax strategy, reach out to Dr. Friday.

Transcript: G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Choosing the right entity when starting a new business. I’m not an attorney, so I’m not going to give you legal advice. What I’m going to tell you is there are different tax advantages to being different, and some of it may depend on what type of business you’re running. For example, I know everyone loves LLCs, everyone loves partnerships, mostly corporations, but some of those have a higher cost. Corporations require payroll, for example; you can’t just take a distribution to avoid the self-employment tax, which people will tell you is always why you should go with the Sub S. Tax law says don’t do it, or you’ll pay more in taxes. You need help? Call me at 367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Wondering how much money to contribute to your retirement from a tax perspective? Dr. Friday shares strategic advice on managing your funds when you inherit an IRA. If you are required to take annual RMDs but are still working, you can potentially create a tax-efficient solution. By maximizing contributions to your personal 401(k), you could offset the income from those RMDs, achieving a nearly zero tax effect. This strategy helps you save on taxes while keeping your retirement investments robust. For personalized tax assistance, call 615-367-0819.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

How much money should I be putting into my retirement? And again, I am not a financial planner, so I am not going to tell you from the financial planning point. From the tax point, I can tell you. Sometimes certain things happen. Let’s say you inherit an IRA, yet you still work. So you’re mandated to take RMDs, or Required Minimum Distributions, from that inherited IRA, and you only have 10 years to cash it out. So maybe you should be maximizing your personal 401k, taking that money out of one end, putting it in the other. Theoretically, a zero tax effect, people. That’s a great way to keep money in your pocket. If you need help, 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.

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In this episode, Dr. Friday clears up common tax misconceptions that could lead to costly mistakes. She explains why outdated ideas about tax laws—such as the belief that you have two years to reinvest after selling your primary home or that capital gains taxes are always capped at 15%—are incorrect and dangerous. With tax regulations constantly evolving, staying informed is crucial. Dr. Friday emphasizes the importance of consulting a professional to ensure you’re not leaving money on the table due to misinformation. For expert tax advice, reach out to her office today.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Taxes. Don’t we love taxes? I happen to love taxes. Not only because, well, I have to file them and pay them, but also because they’re constantly changing. So understanding what today’s tax law is what’s going to make you money or lose you money, I can’t tell you how many times people think, well, if I sell my primary home, I’ve got two years to reinvest. Or if I sell capital gains, it’s always just 15% capital gains rates. There’s no additional rates out there. Both of those are completely wrong. And if you’re working under those ideas, you’re going to lose money on taxes. You need help, you need to call me immediately. 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.

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The 2024 tax season marks the last opportunity to take advantage of current tax benefits before significant changes potentially take effect in 2025. With tax reforms looming unless Congress extends the current code, it’s crucial to strategize now. Dr. Friday emphasizes the importance of reviewing your 2024 taxes thoroughly, considering actions like Roth conversions to maximize your financial advantage over the long term, rather than merely minimizing taxes each year. Start preparing now to safeguard your financial future amid possible tax code shifts.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

2024 tax season is the last season we’re going to have pretty much before we start seeing some big tax breaks. Because when we file in 2025, at the end of 2025, we’re going to be making some big changes unless they extend the current tax code, which we don’t know if they will or won’t. So we have to prepare for the worst. So looking at your 2024 taxes are going to be very important, not only for understanding what we have left in 2025, but should I be doing a Roth conversion? Should I be doing something now that’s going to put more money in my pocket in the big picture and not always looking to reduce taxes every single time I file taxes?

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.

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When preparing your taxes, understanding your unique situation is crucial. Dr. Friday highlights essential questions to consider, such as your marital status, whether you have dependents, or if you’re self-employed. Knowing your income bracket and potential deductions like child care or retirement contributions can help you save significantly. For some, maximizing retirement savings could be the key to reducing tax liability. Evaluating these factors can ensure you’re making the smartest tax moves for your financial health. Need personalized advice? Dr. Friday is ready to help at 615-367-0819.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

What do you really need to know when you’re thinking about taxes? Well, it really kind of depends, right? I mean, am I an individual? Am I married? Do I have children? Am I self-employed? Am I an employee? Whew, this can go on for a whole minute here. So let’s just think about what your situation is. Then we can define it down to what’s important. Do you have child care? Is that deductible? What’s your income bracket? What can you do to help reduce taxes? In some cases, guys, if you are W-2, don’t have any kind of mortgage or deductions, you may have very little, so putting more into retirement may be the secret. But understanding what that secret is could put more money in your pocket. If you need help, 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.

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Wondering how to maximize deductions for a car used for both business and personal purposes? Dr. Friday explains the two main methods: the mileage deduction and the actual expense method. She emphasizes that a mileage log is the cleanest way to manage these deductions, with the 2023 rate at 67 cents per mile. Keeping a detailed log, using tools like Mileage IQ, ensures proper documentation. Although the actual expense method, covering fuel, insurance, and depreciation, is an option, it can be more complex. Dr. Friday recommends tracking miles for simplicity. For guidance, reach out to her office.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

So how can you deduct a car that you use for business but also for personal use? My opinion, the cleanest is a mileage log. Taking off per a mile, this year it’s what, 67 cents a mile for business use? Track it, document it, say who you met, what it’s for. Or you can take actual. Actual is the petrol, the insurance, the depreciation based on the percentage of use. I find that not to be as easy because it’s different uses and percentages every year. So taking the miles will be cleaner. Using something like Mileage IQ will give you the log. If you need help to understand that, call my office at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.

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Thinking of buying a heavy vehicle like a truck or SUV for your business? Dr. Friday explains how Section 179 can work in your favor, allowing you to deduct the full cost of eligible vehicles weighing between 6,000 and 14,000 pounds—if used exclusively for business. However, watch out for common pitfalls, like mixing business with personal use, which can disqualify your deduction. Tune in to learn how to stay compliant and take advantage of this substantial tax benefit.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Imagine you’re a business owner looking for a new vehicle for your company. You want something sturdy, reliable, something big like a truck or an SUV, and you need it to help you do your job. Now imagine you also have to pay tax on that money your business is making, but you have some good news here, really good news. You may be able to do what’s called a Section 179, which means all you have to do is have a big vehicle, 6,000 pounds up to 14,000 pounds, and it has to be used 100% for business. This is where it gets great because I have people that tell me they’re using it for business, but guess what? They’re using it for personal use too.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7. WTN.

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In this episode, Dr. Friday emphasizes the critical importance of filing taxes, even if you’ve missed years of returns. Whether you’re up-to-date or haven’t filed in decades, filing taxes not only ensures compliance but secures benefits for you and your family, such as Social Security and college opportunities. Dr. Friday shares a recent example of a self-employed individual who missed out on Social Security due to unfiled taxes, highlighting the long-term consequences of not staying current. Reach out to Dr. Friday’s firm for expert assistance in managing your tax obligations, no matter your history.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

I’m Dr. Friday, enrolled agent licensed by the Internal Revenue Service to do taxes and representation. So if you haven’t filed taxes, we can help you. If you want to file future taxes because you’re up to date and everything’s good and you just need help, we can help you. If you’ve never filed taxes in the last 20 years, guess what? We can help you. It’s important to actually get your taxes in line. What if you have children that want to go to college? I have a gentleman that just called me because he hasn’t filed tax in 20 years. Guess what? No social security benefits because he’s been self-employed. You need to make an effort to file taxes and if you need help with any of it, just call our firm, 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this Halloween-themed episode, Dr. Friday emphasizes the serious consequences of not filing taxes. The IRS recently reminded taxpayers that failure to file could lead to up to two years in prison, underscoring that tax filing is not optional but legally mandated. Dr. Friday offers her expertise in helping clients stay compliant, avoid IRS issues, and get back on track if they’re behind on taxes. Reach out to her firm for guidance and keep the IRS off your back this tax season.

Transcript: G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

You want to talk about something a little bit spooky since it’s Halloween? If you don’t file taxes and you get behind, the IRS has put out a lovely little reminder that they could put you in jail for two years for failure to file taxes. Now, does this happen very often? I don’t know. Well, we’ll find out. But, honestly, filing taxes is not an option. It is a mandate. Following the rules and making sure that you’re doing it right is something our firm can help you do. Not so much to scare you into doing taxes, but it’s really important that you keep the IRS off your back. You need help? 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Discover a savvy tax-saving strategy: donating appreciated stock to charity. Dr. Friday shares how this approach can help you avoid capital gains taxes while securing a full deduction for the stock’s current value. This method can be especially beneficial for taxpayers in higher brackets, allowing them to support causes they care about while also enhancing their tax savings. Dr. Friday explains a real-life example where a client donated $80,000 in stock, bypassing tax on capital gains and deducting the entire amount. For guidance on leveraging charitable donations, reach out to Dr. Friday’s Tax and Financial Firm.

Transcript: G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Do you know one way of actually putting a lot of money in your pocket and really not having to do much? Let’s say you have a stock and it has appreciated over the years and you’re like I really don’t want to sell it because it’s going to kick me into the 25% tax bracket because I have all of these gains. What if you think about donating that to a charity? So you have a big lump. I had a gentleman do this the other day. $80,000 donated the stock to the charity. He never had to pay tax on the capital gains. He got to deduct all $80,000. Talk about putting more money in your pocket and if you need help all you have to do is call us.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Social Security benefits are not taxable if they’re your only income, and you won’t need to file a tax return. However, if you have additional income, the IRS may tax up to 85% of your Social Security benefits, depending on your overall income level. This is determined by a complex “provisional income” calculation. Understanding how this works and managing your income sources can reduce or avoid unnecessary taxation on your Social Security. Need help navigating this? Contact Dr. Friday’s office to ensure you’re maximizing your benefits without the tax surprise.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

So you hear all the time, Social Security is not taxable. And that is true. Taxable on Social Security, if that’s all you have, you’re not even required to file a tax return. If you have less than $10,000 or thereabouts of other income and Social Security, most likely going to be a zero situation. But the provisional tax code is tricky. And to understand that, they can tax, they can add into your income up to 85% of what you get from Social Security if you’re not careful. Understanding that and your Irma can put money in your pocket. Call us at 367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of the Dr. Friday Radio Show, Dr. Friday addresses tax extensions for those impacted by Tropical Storm Helene, tax planning, and ways to manage unexpected IRS debts. She also discusses end-of-year gift ideas for clients, unique holiday plans, and shares a few personal anecdotes. This episode is packed with helpful tax tips and guidance for listeners navigating IRS and estate issues.

Topics Covered:

• Tropical Storm Helene Tax Extensions: Extended deadlines for Tennessee residents impacted by the storm.
• Voting Reminder: Importance of voting and early voting benefits.
• Tax Payment Plans: Steps for negotiating and maintaining affordable IRS payment plans.
• IRS Collection Hardship Options: Non-collectable status for those facing severe financial challenges.
• Estate Management: Tax considerations for inherited assets and stocks, including capital gains.
• Gift Ideas for Clients: Unique, personalized holiday gifts, featuring Lolita Roasters coffee.
• IRS 1099-K Changes: New transaction thresholds for 2024 and 2025.
• Avoiding Tax Scams: Recognizing fake IRS or sheriff calls.
• Energy Credits Update: IRS energy credit regulations and required PIN numbers for 2025.

Transcript

00:00-00:07No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes.00:08-00:11She’s the how-to girl. It’s the Doctor Friday show.00:14-00:22If you have a question for Dr. Friday, call her now. 737 W.WTN. That’s 7379986.00:23-00:27So here’s your host, Financial Counselor, and Tax Consultant, Dr. Friday.00:27-00:38Gooday, I’m Dr. Friday, and the doctor is in the house, and we’re here on this wonderful Saturday to take questions concerning taxes.00:39-00:41I did want to start the show talking.00:41-00:55I had a person that sent me a question asking about the fact that they were affected by the Tropical Storm Helene in Tennessee, and they were not able to make the October 15th deadline.00:56-01:06If you were affected by the storm, we are under an additional extension only for the people that fit into those storm areas.01:06-01:17And they have until May 1st, 2025, that applies to your quarterlies, that applies to your final payments.01:17-01:22So that would be April 15th, April, January 15th, April 15th, the 25th.01:22-01:30The deadline applies to quarterly payroll and excise taxes that might have been due on October 31st or January or April.01:31-01:39In addition to penalties and excise deposits that were done after September 26, 24, that might have been due after that due date.01:40-01:46There are waivers and extended state circumstances, but you do need to be in the true affected area.01:46-01:48It’s not the entire state getting this waiver.01:49-01:58So in the case of this particular individual that was hit, there’s no question you have time, probably not to be worrying about taxes as much as other issues.01:58-02:10So if you have something like that that may have come up, there is, like I said, there is an additional extension for individuals that were affected directly or in the area of where that happened.02:11-02:18Then you’ll be able to, and this will be for companies as well, businesses, payroll taxes, things like that that might have been due.02:18-02:47you will be able to apply for penalty waivers if that was a situation. So if you’ve got questions on that, you can always call our firm. But if you’ve got questions today, you can give us a call at 615-737-99-86. 615-737-99-86. This morning I was out and I was able to do my part. I voted. Hopefully, anyone that’s listening that’s kind of on the fence that maybe you haven’t.02:47-02:51I don’t really care which way you vote.02:52-02:53I just want everyone to vote.02:53-02:54Your vote counts.02:55-03:01So just put your two cents out there, do what you feel is best for you and what you believe.03:01-03:06And then that way we have a really good turnout in there for a good election.03:07-03:10So again, time to get out and vote.03:10-03:14It was a great day at the Springville, Spring Hill Library.03:16-03:17And so a lot of good people.03:17-03:19and everyone was doing their thing.03:19-03:19So it was cool.03:20-03:22So anyways, we’re getting close to that deadline.03:23-03:27So just putting that out there in case you’re thinking, I think early voting only have a few more days left.03:28-03:33So it’s a lot easier under the early voting versus, you know, trying to get there on the day of the election.03:33-03:36But I have some friends that do it every time, right?03:36-03:37It’s almost like a tradition.03:37-03:40They always go vote on the day of the election.03:40-03:41It’s just something they do.03:41-03:44But, you know, everyone’s got their own thing.03:44-03:47So if you want to join the show, talk about tax.03:47-04:17That’s what I am, an enrolled agent licensed by the Internal Revenue Service to do taxes and representation, which means I can prepare taxes, but mostly I can represent you in case you have tax questions or a tax issue. Possibly you owe the IRS and you’re not too sure which way you need to be going. Maybe you just need to get as simple as a payment plan going. You know, and again, if it’s, if you owe $50,000 or less, a payment plan is a fairly straightforward. You can even do them on the IRS.gov website.04:17-04:30If it goes over 50,000 that you totally owe for back tax issues, then you will have a little bit more 433 that you’ll need to complete a financial statement so they can find out how much you can afford to do.04:30-04:36And just a point of interest, do not set up a payment plan that you can’t afford to do.04:36-04:41A lot of times I’ll have people and say, well, I set it up, but I couldn’t afford it.04:41-04:47If you can’t afford it, you need to go through the process of renegotiating the payment plan.04:47-04:52and then after you’ve already defunct on one payment plan, it’s harder to reestablish that.04:53-04:56You kind of burned a bridge there that was a pretty straightforward situation.04:56-05:20So your best thing, in my personal opinion, is, you know, if when you’re studying at the payment plan, they say it’s $300 a month and you know there’s no possible way you’re going to be able to make it, you either need to have a conversation on why, because obviously you’re going to Starbucks or paying for things that are not, not part of your essential life, that needs to be readjusted, right?05:20-05:22You need to make the IRS your priority.05:22-05:23That’s fine.05:23-05:42But if it’s where, you know, I’m barely making my mortgage and putting petrol in the car and, you know, I’m already using a food bank to basically pay for half of my food bill, then, you know, you’re in a situation where it is possibly a non-collectable situation where the IRS can’t collect from somebody that’s in a hardship already.05:43-05:44They don’t want to.05:44-05:45I mean, to be honest.05:45-05:51Yes, their job is to collect the money we owe them, but they also have rules and regulations they have to follow.05:51-05:52And that is a very strict one.05:52-05:58So you don’t want to, if you’re in a situation where you’re barely making it.05:59-06:01And, you know, it’s kind of a snowball effect, right?06:01-06:15Because especially if you’re an entrepreneur or a self-employed individual where your taxes aren’t coming out on your W-2 and you’re living off every dollar coming in the house just to make things meet, that means 25% of that money.06:15-06:18is kind of Uncle Sam’s for most self-employed.06:19-06:24So you’re going to a situation where you’re not going to be able to pay the government.06:25-06:33And so, you know, you either have to consider getting a second job, getting a job that’s a W-2 so that the money’s coming out.06:33-06:36Therefore, you can’t live off money that’s not really yours.06:36-06:39Or you have to figure out a way to make the payments.06:39-06:47And sometimes it’s just that things have gotten behind, a car simply as a car breaking down, something happening, air conditioner going out in the house.06:47-06:57I mean, any of those things can lead you into thousands of dollars worth of unexpected repairs, and therefore you’re chasing, you know, catching up with the government.06:58-07:06And I can’t tell you how many times people have told me, well, I’m just, I borrowed the money, but I’m going to make it up next quarter because I know, you know, I’ve got all these things lined up.07:06-07:09And then unfortunately, you know, life happens.07:09-08:00So you have to be able to tell the government that, but there is ways of making your, yourself either non-collectable, making a partial payment plan, or obviously establishing a payment plan, or even go into an offer and compromise. Or, you know, in some cases, people, I mean, people listening, I have referred you to bankruptcy because bankruptcy is a way of removing not only debts that you may have accumulated due to life, but also the IRS. IRS can be taken into bankruptcy after 33 months of collections. So you can’t do anything for basically, the last three years you’ve owed them, but if you owe them for the last eight, ten years, and every year you’ve owed them, it may be better to go bankrupt than concentrate on this, but even that requires you starting with today. What can I do to start making this stop?08:00-08:03I don’t care what happened in the past. That’s the way I’ve always approached this.08:03-08:15What can we do? Can we start making monthly payments to the IRS for this year, for 2024, not for prior years? Whatever happened in the past, happened in the past, we can’t change it.08:15-08:21What we can see is if can we start getting in the habit of taking our share of tax dollars paying it out.08:21-08:26So there is processes that we can work through and figure out where that money is going to come from.08:26-08:34So if you need help and understanding how to do that, what the rules are and where you need to move forward, then you need to set an appointment at my office.08:35-08:43But if you’ve got a question, because maybe something has happened this year where either you’ve gotten a bonus, a lot of times there’s real estate sales or enhance.08:43-08:48that has triggered possible taxable situations.08:50-08:55I had someone email me just recently asking me that is all life insurance tax free.08:56-08:56And the answer is no.08:57-09:01I mean, probably in most things, can you say, is everything this?09:01-09:07But, you know, I mean, if you cancel out your own life insurance, for example, any growth that’s happened is taxable to you.09:07-09:18If it’s an inherited but paid by a company in some cases and the company deducted that expense, in some cases that life insurance becomes taxable to the receiver.09:20-10:12Normally in normal situations, I will say if you have life insurance and you’ve been paying it out of your own pocket and something happens to you and you leave it to your spouse or children or whatever, that life insurance is usually completely tax-free. Some people have a life insurance tied to annuities. And most of the time annuities are not tax-free because, I mean, normally you put the money in tax-free or after-tax, and then it grows. And then when they start cashing out the annuity, there is taxes involved. So, you know, it just depends on where the life insurance is paid from, how you received it, and who’s paying it out. So just don’t assume that if you have a situation with an inheritance or anything else, that it’s going to be tax-free. Again, I talk a lot about the step-up and basis with real estate, for example.10:13-10:29But if you inherited this property prior to, so I’ve had a situation right now, we’re trying to work with the IRS on because the person’s parents quick claim the house to them prior to death.10:30-10:35And then there was a question, did they have the ability to sell the house?10:36-10:42therefore it was, there was still a basis for a step-up and basis.10:42-10:47If your parents have quick-claimed the house to you, it doesn’t make a difference if they have a life estate.10:47-10:50At that point, the basis steps at the time that that happens.10:51-10:54So you do not want quick-claimed houses, okay?10:54-11:11I know people are trying to preserve their situation, but the IRS is pretty much coming down and saying, Now, if it was quick claimed into an estate, and then obviously at that point, the estate was managing it or something along those lines, that’s fine.11:11-11:22But if your mom has just quick claimed her house to you, you’ve eliminated possibly the look back if she makes it five years prior to doing Medicare or something.11:22-11:26But you’ve also eliminated a very good tax deduction.11:26-11:30So you may end up paying tax on that home when it’s sold later.11:31-11:34There are ways and documents and things that can be done.11:34-11:37I don’t know anything about preserving the Medicare side.11:38-11:39I’ll be honest, it’s not my expertise.11:39-11:50But on the tax side, there are ways of your parents leaving you a house or protecting that house against other family members or something like that that they’re concerned with.11:50-11:55But it’s not something that you want to just do yourself.11:55-11:57So often they just go down.11:57-12:01They do their own quick claim for a dollar, which means.12:01-12:19means your basis is a dollar. It’s, it’s crazy. So make sure if you’ve got a family member or a parent or somebody that wants to do that or has done that, that you find there are ways of us, they’ll preserve it at least their original investment, but it takes some work. So if you’ve got questions, you can join the radio show.12:19-12:28615-737-9986. 615737-9986. We’ll be right back with the Dr. Friday show.12:28-12:38All right, we are back here live in studio.12:38-12:39This is the Doctor Friday show.12:40-12:44You can join us live at 615-7379986.12:44-12:47Let’s see if Stanley is available to chit-chat.12:47-12:48Hey, Stanley, what’s happening?12:50-12:52Well, I have a very unusual problem.12:53-12:53Okay.12:53-12:56I mail my tax return.12:57-13:06And a week later, in my mailbox, I got two 1099s that were stapled to the front of the return.13:07-13:12So now I’m like, well, what happened to the rest of it?13:12-13:16Did the IRS get it or not?13:16-13:19And how would I ever go about finding that out?13:21-13:27And then I’m thinking, well, the other thing, too, I could do is I could just send another copy of the return.13:27-13:42and but I just wondered if there was a way I could find out at this point if the IRS got it or not and if they did get it, how many pieces did they get or what are they lacking?13:42-13:53Right. Well, I will be honest. If it was within a week, the likelihoodness of the IRS being able to open and then return that to you is pretty much rare.13:53-13:59I mean, it usually takes them 21 days to actually process an electronic return, you know?14:00-14:10So a paper return, it sounds like it was somehow damaged and returned by the post office is what it sounds like, maybe missing forms.14:10-14:13But you could always, you have two options.14:13-14:22You could go to IRS.gov and go through the IDME thing, and you can look and see if the IRS has processed your 2023 tax return.14:22-14:27you know, just see, or you can take time and make a phone call and ask them if they have received it.14:28-14:38I’m going to guess the answer is no, but just because of the fast turnaround, if you had said 30 days later, you got it back in the mail, you know, that would be possibility.14:38-14:42But within a week, I really don’t think, Stanley, that that has happened.14:43-14:46Did you owe money or was there a refund or did you have a check attached?14:49-14:51No, I’m getting a refund.14:51-15:51Okay. So you could also go to IRS.gov and just click on where’s my refund and see if there is anything in there. If it says that they don’t have, you know, at this time we can’t locate your return, probably gives you a good idea that they have not. And I would personally just, you don’t have to do originals any longer. So if you’re mailing, I would always keep my originals, make copies and then send, I would send them a whole new copy, signed return. You could put a letter on the front saying this is a second mailing return. You know, know, received the last one back, whatever, just, but since you’re getting a refund, there’s no penalty for filing late, you know, so you’re fine as far as that situation. So I would say, I would personally just refile the return, because if there is a second return, they will send you a letter saying we’ve received a second return, you know, but you haven’t received your refund, haven’t received any communications as of right now. So it sounds like you probably need to just resubmit.15:51-15:53But you can check IRS.gov first if you want.15:54-15:56Yeah, well, I tried to do that.15:56-15:58And I couldn’t get anywhere.15:58-16:01You know, they just said we don’t have any record.16:01-16:06And then I thought, well, if I call the local office, I wonder if they have a way of checking.16:07-16:09I mean, they do.16:09-16:16I mean, you could, if you could actually, any one of them, if they could get it, you know, with your information over the phone, they should be able to check.16:16-16:20But if you’re not seeing it on IRS.gov under where’s my refund?16:20-16:24likelihoodness is there’s no refund being processed.16:26-16:34I didn’t expect them to have done the refund that quickly since it, you know, it just was there a couple weeks ago.16:34-16:44Good point. Good point. Yeah. That is a good point because, but since they’ve already returned it to you and you know you never, the IRS never returns your tax return.16:45-17:16I mean, they don’t send you back your original documents or anything. You know, just in my my opinion, the likelihoodness is that fast of a turnaround, Stanley, that the IRS would not have had time to process. And for whatever reason, there should have been something attached to the front for the reason of the return. We return this tax return because, you know, no signature, you know, was missing vile information. I don’t know. But I’m just saying it doesn’t make sense that the, I think the post office returned it before it ever got to the IRS for whatever reason.17:17-17:21Well, they only returned two pieces out of probably 10.17:22-17:2410 pieces or whatever that.17:24-17:25Yeah, that I had.17:25-17:31And I know it came from there because they still had one of the staples in the corner.17:32-17:32Gotcha.17:32-17:38I wonder if it’s somehow the package got damaged and they found those pieces separate.17:39-17:41Yeah, that’s my expectation that that happened.17:42-17:45And then did they send the rest on or not?17:45-17:45Yeah.17:45-18:14or did it get put into some shredder someplace or unfortunately that one you and I will probably never know the answer to but but I mean again there’s no there is no harm in filing a second copy um okay well that’s good to hear that that’s the easiest way out of this and I guess is just and then that way I would uh I would probably just mail it priority or something not just regular mail just so you have a tracking when they receive it.18:15-18:48okay okay all right thank you thanks boss thanks for right bye bye okay that was a great question and a little unusual but i will say i’m not a huge advocate for mailing any longer heck when i started i can remember such as like april 15th loading everything in my car for all my clients and going to the post office making sure all of them were stamped on time um thank goodness for e5 no longer have to run to the post office.18:48-18:53But I do know some people prefer the mailing, especially mailing the payments.18:54-18:57But I’ve had a number of people, the payments never make it to the IRS.18:57-19:01And a lot of times people just put them in regular envelopes with stamps.19:01-19:06So there is no proof that you actually filed this and sent them this.19:06-19:08And then for there’s penalties and things.19:08-19:11And you can’t argue that you mailed it.19:11-19:12There’s no proof of it.19:12-19:23So unless you’re using a tracking system, like if you mailed it, priority and you have the tracking and say, hey, I mailed it to you, you lost my check, even though I had a revenue officer.19:23-19:24We had the tracking.19:25-19:26Everything was sent out from our office.19:27-19:30And she actually turned around and said, how do we know what was in the envelope?19:30-19:42And I’m like, what am I just to take a picture now of everything going into the envelope before I put it in to make sure you can see I have proof that the check and the envelope are pictured together.19:42-19:47I thought that was crazy, but I have been asked that.19:47-19:49So don’t be surprised if they ask you.19:49-19:53So, you know, I’m just saying your best bet is to track it.19:53-19:58Best bet is to go to IRS.gov and file things electronically, especially the payments.19:59-20:07Because if the payments are made, most of the penalties and things don’t really make a difference because there’s no penalty as long as they have your money in most cases.20:08-20:48So, you know, at least that way, if for some reason the return is lost in the mail, the payment isn’t. But I am an advocate for making sure you pay it. You can even use credit cards if you’re afraid to use your banking information. There’s a fee, I think, two and a half percent or something like that, where there’s no fee if you use your bank account. I have had people that will set up just one bank account. They use solely for the purpose of paying IRS every year. And that’s all they use it for. And so that way they don’t have to worry about, you know, if something gets lost or stolen. It’s from, you know, off their website and off their, their providers.20:48-21:16But everyone’s got their own way of doing it. But I will say that mail, especially anymore, it’s just not the most reliable source of doing your taxes. So that being said, just make sure, if you’re filing them, you send it priority, or you send it FedEx, or you send it some way so you can track it, you know, the government received it. All right. So we all know the holidays are coming, and you’re looking for a really unique holiday gift for your clients.21:16-21:18So this is going to be for businesses like myself.21:19-21:20We’re doing this this year.21:20-21:21And I saw it’s really a cool.21:21-21:26Lolita Roasters is offering this really cool personalized coffee roast.21:26-21:30So they’re taking my company, Dr. Friday, Tax and Financial firm.21:30-21:43And they’re making a coffee based on information, a questionnaire that they had about me, about what I, how I think of my business, what types of things I’m into, what, you know, all, I’m Australian, obviously.21:43-21:50So all these different things, they’re putting it in to this special blend that I’m going to be giving out to my clients.21:51-22:03So some my clients are going to get these cool little boxes that basically have the custom coffee and a thank you card in each box that can be shipped out to a number of our clients.22:03-22:11So I think if you, if you’re looking for something really different and you happen to be a coffee lover, I cannot start my day without a cup of coffee, guys, you guys.22:11-22:15probably know that, especially if you are a client of mine, you know that.22:15-22:18And I think it’s a really unique.22:18-22:20It’s called Lolitaroasters.com.22:21-22:23Again, Lolitaroasters.com.22:24-22:32And they put together, I mean, you know, orders of 25, 50, depending on what you’re, you know, you don’t have to get hundreds of them.22:32-22:36And it’s actually less expensive than what we did for cookies last year.22:36-22:39So I think they’re reasonably rated.22:39-22:41I think the concept is great.22:41-22:42And I think it’s so unique.22:42-22:52It’s got my brand on it, but of something that my clients can use, like coffee, versus sometimes, you know, you get these hats and t-shirts.22:52-22:56We’ve, you know, when you’re been in business almost 30 years, you’ve tried a lot of different things.22:56-23:08So I really think if you’re looking for a really unique concept, and you’ve got a list of clients, real estate agents, you know, I’m thinking accountants, obviously like myself, tax people, Lolita Roasters.23:09-23:11We’ll give you something that you’ve never done before.23:11-23:18We’ll see how this works and what the experience is like, but I think it’s going to be a lot of fun giving people something just a little different.23:18-23:21For all those sweets, now they’ve got the coffee to go with it.23:21-23:24And they’ll think, hey, Dr. Friday came up with this.23:24-23:25So hopefully it’ll be something cool.23:25-23:32All my clients will enjoy as well as it’s just, you know, one of those things that I think are really unique.23:32-23:36So one more time, Lolita Roasters.com is the website.23:36-23:39So if you find them cool, hopefully you’ll be.23:39-23:43enjoy it like I am. So we’re going to take a next break. If you have questions, you can join the show.23:43-23:55615-737-9986. 615 737-9986 is the number here in the studio that you can give us a hauler.23:55-24:09And we will talk about taxes. We will talk about tax planning. Maybe if you were in the middle of the storm, storm damages, what you can maybe do for tax breaks, not only the delay, but maybe also reclassed.24:09-24:21coop some of your losses on your tax return. But any of those questions you might have, you can join the show. 615-737-99-86. We’ll be right back with The Doctor Friday Show.24:21-24:32All righty, we are back here live in studio.24:32-24:35And if you’ve got a question, the show is flying by.24:35-24:45You can join this live here in studio at 615-737-99-866-615-737-97-99-8986.24:45-24:50Back a couple days ago on the 24th, the Internal Revenue passed a new reg.24:50-24:53on energy credits.24:54-24:58And a lot of times people will come in and they’ll say, oh yeah, I brought a new air conditioner.24:59-25:02I had some windows, blah, blah, blah.25:02-25:14So they have $600 per an item qualified properties, 600 total for exterior windows and skylights, 250 for exterior doors, 600 for total interior doors.25:14-25:46And then if you have somebody that came into your house and gave you like a review and saying, you do these things, you can save more in energy, you can get up to $150 if you’ve paid for an energy audit. These are the ones that are basics, right? And then taxpayers may have up to $3,200 with general total of $1,200 with a separate limit of $2,000 for natural gas or heat pumps, electric or natural gas heat pumps. So there’s a couple of these moving. But here’s the big change.25:46-26:21We’ve had that for a little while where you can get a few dollars for, energy efficient. But beginning in 2025, right now, all you really had to do, at least in our office, all you had to do was have a proof that you actually installed the air conditioning system and that it was qualified for the energy credit, right? That the energy efficiency was a part of it. Same thing with doors or skylights. You had to have now in 2025, you will no longer be able to claim the credit unless you receive a pin number from the distributor or the installer.26:21-26:26That number has to be inputted on the tax return to qualify for.26:26-26:33So there’s this new software they’ve got where apparently all the manufacturers will be able to go to the IRS Energy Credit Online portal.26:34-26:42They’ll be registering these installations and then we’ll be able to use those pin numbers to be able to get them off your taxes.26:43-26:55I will tell you if you’re using a small AC company or any of them, not so much that they won’t, but it’s not something, I mean, that’s going to be time consuming on their side.26:55-27:05If it’s a one or two person, now someone who has to go online and register each one of those sales, it’s going to probably be a lot harder to get that PIN number.27:06-27:18So if you are thinking, if you’re planning, I mean, let’s say come January and February, let’s say your heater goes out, and you’re like, okay, well, at least if I replaced the heater, I can take it off on my taxes, it will qualify.27:18-27:24You might want to make a note that you need this PIN number come January of 2025.27:25-27:26Very important.27:26-27:36It is a label that has a PIN number on it that has been provided by the IRS, meaning that it’s been registered with the IRS to be able to qualify.27:36-28:05Otherwise, we will not be able to take those tax deductions and add that additional six or $1,200 to your sign up on that. Also, anyone, I’ve got the number of people here that forget that they have a IPIN number with the IRS when we file taxes. Every year, there’s a six digit pin that the IRS mails to them individually because of normally identity theft.28:05-28:11If you’ve had that situation, I’ve had a couple of people say they never even knew they were part of it, but they are according to the IRS.28:11-28:18So you cannot e-file those taxes unless the PIN number has been received.28:18-28:21The IRS will never call, email, or text you this information.28:22-28:24So if someone calls and says, here’s your PIN number.28:24-28:27It is just hang up the phone.28:27-28:28It is just fake.28:30-28:35But there is on the IRS website, and I would suggest anyone that’s listening.28:35-28:42If you just want to keep up with what’s going on with the IRS, If you want to go to IRS.gov, go ahead and go through.28:43-28:43It’s a little painful.28:44-28:45ID.me.28:45-28:50They’ll ask for you to be in front of a camera and take pictures and do some things.28:50-28:52But they verify your identity.28:53-28:56And then you can go in there and you can see copies of your tax returns.28:56-28:59You can see if there’s any kind of IRS notifications.29:00-29:03You can get all kinds of information from the IRS.29:04-29:40And that way, you know, for example, like Stanley, who called if he was to be able to do, that he can go in there and he can make sure that that information is there. Otherwise, you know, you’re waiting for a love letter and gosh forbid that the IRS has the wrong address. You’ve relocated and even like this, if you’ve moved or, you know, relocated for some reason. And even if you’ve changed your address through the IRS, I have found that sometimes it takes them a year to catch up with you. So it’s just one of those situations where you really just best to be able to go online, Same thing with Social Security Administration.29:41-29:43I have people that call about their different things.29:43-29:44I’m like, go online.29:44-29:46You can usually see that information.29:47-29:47All right.29:47-29:49Let’s hit Mark in Clarksville.29:49-29:50See if I can help him out real quick.29:50-29:51Hey, Mark.29:52-29:54Hey, I love your show.29:54-29:55I’ve been listening to it for years.29:56-30:03I have a 96-year-old mother-in-law that we recently, me and my brother-in-law, he is the executor.30:03-30:06He had to take over her estate because of dementia.30:07-30:07Okay.30:07-30:12We had to have her, but she didn’t tell us about anything about her estate.30:13-30:13Right.30:13-30:16She didn’t tell him or me or my wife or anybody.30:16-30:20And he’s having to, like, go through everything and try to figure it out.30:21-30:25And she has, my late father-in-law, he properly took care of her.30:26-30:36But we don’t know what to do to, like, we don’t want to sell anything for, like, to lose in tax purposes or, you know, to pay him more taxes or anything like that.30:36-30:48I guess my question is she’s got quite a few stocks that she’s had for 30 years that my father-in-law bought back in the 90s that are worth a lot more than what they paid for them.30:49-30:51What is our liability with those?30:51-31:03Well, if you sell them during her lifetime, if we need them to help with her, well, for one, keep in mind that she’s in a dementia facility, I’m assuming, not living on her own, so I’m assuming.31:03-31:06So that’s considered a medical facility.31:06-31:10So the money we’re paying for that, which is four, five, six, ten.31:10-31:13I’ve got people on all kinds, you know, per a month.31:13-31:15Yeah, it’s $7,500 a month, yeah.31:16-31:16Right.31:16-31:31So if we’ve got that coming out, that she doesn’t have that being covered by some sort of long-term care, that her own income is having to support that, selling those stocks, even if we make capital gains, well probably be washed against the medical expense.31:32-32:08But in answer to your question, obviously, I mean, obviously measuring it out so it doesn’t kick her into over, you know, again, I don’t know her her other incomes, but we’d want to make sure that we keep her in the 15% tax bracket, which means under 200,000 all incomes all in, along with her capital gains, which, you know, so you want to make sure that you’re not just kind of cleaning house. There may be some winners and losers, but in her case, if she’s had them all that, even if they’re not making as much as they may have been 10 years ago, she still owned them for so long that there’s capital gains built in all the numbers.32:09-32:10Yeah.32:10-32:10I will say.32:11-32:15Yeah, we have been told that there’s substantial capital gains.32:15-32:25But I was thinking, like, what you’re telling me, that the nursing home or the assisted living care facility, or the memory care facility, that’s what they call it.32:25-32:26I’m sorry.32:26-32:29We should be able to write that off.32:29-32:39So if we have to write off $80,000 a year, we could otherwise we should be able to sell 80,000 of capital gain.32:39-32:39Exactly.32:40-32:40I mean, yeah.32:40-32:47I mean, again, I would I would only hesitate, Mark, on the fact that I don’t know if she has pensions.32:47-32:48I know she has Social Security.32:48-32:53I’m assuming she has Social Security, if nothing else, her husband’s benefits.32:54-33:00And so I don’t know where the other, so someone needs to kind of just figure out where the money’s coming from.33:00-33:42But your thoughts are along the same as I would have, which would be, you know, add up her cost and then that and then see what she she has now if if you inherit there’s a step up in basis and we wouldn’t pay the capital gains so we need to also look at if she has stuff in taxable accounts that would be taxable to you in the estate i’m just going to throw a newty 401k i don’t know her again but you might be better to be taking that money out because we have the medical to offset leaving the stock which is a step up in basis non-taxable to the inherits So there may be some things we need to again, you may not know all of her moving parts yet because you’re having to kind of dig into it and find out.33:44-33:51We’ve been doing this for about a year and we’ve been trying to pick and he keeps finding more like a different account here.33:51-34:04Yeah, that often happens. I mean, I find a lot of my clients will have four or five IRAs instead of just as we get older, we need to remember to merge things together in my opinion because it’s harder on the people that have to help us.34:04-34:08when we have five bank accounts because we open one up for this reason and that reason.34:08-34:12And, you know, but I feel sorry for you on that one, Mark.34:12-34:22But I would just, you know, obviously at some point, you know, obviously considering talking to a tax person, but just like this, but just your thoughts in the right place.34:22-34:24We need to be able to cover our lifestyle.34:24-34:31But if we can do that with truly taxable dollars and preserve any taxable benefits to the beneficiaries, who cares?34:31-34:32I mean, why not do both?34:32-34:34You know, I mean, it’s all win, win, win.34:34-35:32when it comes out okay would you recommend a good estate prepared like an estate attorney or somebody to help us because like I said none of us are really prepared for what we’re you know we understand the value and the amount of money that we’re talking about or anything like that right well do we have a well mark yeah it’s everything basically yeah okay so at least there is a will it’s not it’s not it’s not In test day. Okay. So that’s great. I didn’t know for sure if she had at least. So I would say yes. Ideally, I would find a good estate attorney because if it’s a will, not a trust, it will have to go through probate some of it possibly. I don’t know, again, just winging this. And you’re going to want somebody that, you know, maybe can be in on the front end telling you some of the things that you and I might not know about the law side of things, what we have and don’t have a responsibility to.35:34-35:54the same thing with a tax person, and a lot of times the attorneys will work with them, but a tax person that can also help you with that side of it, because obviously the attorney, some do both, but I mean, normally the attorney does the law, the tax person does, and it sounds like you could end up with a little of both just handling the estate the way it needs to be handled.35:55-36:00All right. I do appreciate you very much, and I love your show every time. I try to listen to it every bed.36:00-36:03Thanks for listening. I appreciate it so much.36:03-36:43stay safe all right and so we’re going to take our last break of the show if you want you can join the show 615 7379986 61579986 will be right back with the doctor friday show all righty we are back here live in studio and we’re here to hopefully get you straightened out as an internal revenue service representative, I should say I don’t represent the Internal Revenue Service. I represent the taxpayers in front of the Internal Revenue Service. And so we do offering compromises.36:43-37:22I have been doing this for more than 30 years. And we are actually local. I know Lance Jerry says he is, but I’ve had more than one case come through me. And apparently he is nationwide or has multiple offices in different places. So just wouldn’t suggest that. But if you want to want to have someone local that you want to deal with. That’s who I am, Dr. Friday, and you can just go on to the web and send me a little questionnaire. Okay, so two things. IRS has announced a delay in the 1099 Ks for the third party platinum for 2023. The plan threshold $5,000 for 24 is phased to implement.37:22-37:37So 2023, again, looks like we may be, we may be delayed not to receive the 1099 case that we, um, We’re expecting initially it was $600.37:38-37:40Then they brought up to $5,000.37:40-37:42It was $20,000 or 200 transactions.37:43-37:49But they will say that they will be receiving if you do over 20 and have over 200 transactions.37:50-37:59So it looks like some of the small business owners that were maybe doing some, you know, little sales through, you know, on ITSE and different things like that.37:59-38:02And you’re using a credit card merchant service that.38:02-38:06that you will not have to worry about it for 2020.38:06-38:073 is over.38:07-38:102024, they’re saying it’s going to be $5,000.38:12-38:15And it’s going to be, does it give us a number of transactions?38:16-38:19It says for any threshold, it’ll be $5,000 for the year 2020.38:19-38:23It’s part of the phase out to implement the $600 threshold enacted by the Rescue Act.38:24-38:27They do not have a number of transactions.38:27-38:37So if you have one transaction or multiple, If it’s over 5,000, do expect to receive a merchant 1099K.38:38-38:40One of those situations where you’re going to have.38:41-38:51I did want to share something that happened this week with me where I, you know, I’m always thinking, okay, there’s all these people that kind of fake things and try to basically take things from us, right?38:51-38:53Sometimes they’ll scare people by using the IRS.38:54-39:02I had a phone call from what somebody that said he was a sheriff and that I had missed a meeting.39:02-39:09for jury duty and that I was being fined and that I was going to have to do pay all this money.39:10-39:16And I’m sitting there thinking, oh my gosh, he had my home address, which is not something that’s usually out there.39:17-39:22And he was saying, yes, you know, the sheriff came by, left the notice, blah, blah, blah.39:22-39:25And never doing jury duty, I had no idea.39:25-39:29So for the first time, normally when people…39:29-39:46get the name and number of the person because if it’s collections, sometimes I have had them call, but most of the time that’s not the case.39:50-39:51Dr. Freddie, your internet’s crap.39:54-39:58It’s turned around, or one of my employees turned around and heard me or whatever.39:58-40:00she goes, no, it’s a scam, hang up.40:00-40:01And I did.40:01-40:04And then I called, they were calling from the sheriff’s.40:04-40:10I mean, the phone number on my phone was the same number of the sheriff’s department in my area.40:10-40:14So I’m like, oh, like, you know, so I’m Googling making sure it’s the right phone number.40:14-40:18Finally called and the lady sent me over and said, yeah, this is something that’s going on.40:18-40:19So just beware.40:19-40:25I mean, you know, I mean, again, sometimes we get so focused on doing things in life and then something like that.40:25-40:30I’ve always thought of myself as pretty much, you know, I won’t fall for one of those things.40:30-40:35But I was, yeah, I wasn’t pulling out my credit card or anything.40:35-40:41But I was about ready to go down to the police department and find out what was going on.40:41-40:43And they said, if I went into the police department, I would be arrested.40:44-40:45And I’m like, that doesn’t make sense.40:45-40:47That’s when it started going downhill for me.40:47-40:49Because I’m like, why would they arrest me if I’m paying a fine?40:50-40:52Anyhow, it was really bizarre.40:53-40:55And so I just want to say, you know, hey, beware.40:55-41:06there’s obviously, especially during this time of the year, usually between October and December, a lot more of those kind of phone calls coming out because a lot of times people are distracted.41:06-41:09They’re between working and getting ready for the holidays and all that.41:10-41:14Distraction leads to us to sometimes think of things a little differently, not a tax issue at all.41:14-41:16But I thought it was something that had happened.41:17-41:23And I’m like, wow, if it happened to me, I’m sure there’s other people out there, the same exact thing going on.41:23-41:24Again, never pay.41:24-41:30And if someone tells you you can’t go into a police department and pay, that makes no sense at all.41:30-41:31So at that point, the story fell apart.41:32-41:40But up until then, I’m like, oh, my gosh, did I somehow miss this sheriff coming to the door and dropping off?41:40-41:42And how do they even ask for jury duty?41:42-41:45So I’m Googling all this and trying to figure out because I had never done it.41:46-41:53And of course, afterwards, my employees were cracking up because obviously I didn’t know the process.41:53-42:03So just putting it out there, make sure if someone calls you and they say that there’s one of these, whatever the situation is, if it all feels weird, hang up the phone.42:04-42:06I am pretty sure if it was truly the sheriff’s department.42:06-42:16I can guarantee you if it’s the Internal Revenue Service, you can call back on the local line, ask for that particular agent, find out if that person even exists.42:16-42:22And if it does, they’ll, they’ll, you called the IRS now and they’ll be able to tell you the situation.42:22-42:28about your tax issue or whatever they were calling on in the first place.42:28-42:29So you’re back into control.42:29-42:41And they’re not going to care that you hung up on them because, let’s be honest, you’d rather be safe than talking to somebody that you are not sure was the right person or a good person to be talking about.42:41-42:42All right.42:42-42:44We’re going to be winding down the show for today.42:44-42:45So I appreciate you all for listening.42:46-42:49We also wanted to go through one more time.42:49-42:50It is the holiday season’s coming, guys.42:51-42:54We are almost to Halloween, which, means boom, Thanksgiving.42:55-43:01And after that, we start doing Christmas and the whole fun part of all of that.43:01-43:08And if you’re looking for a unique holiday gift for a client, I am suggesting Lolitaroasters.com.43:09-43:16You can go in there, find out what, you know, they put a personalized coffee for you or for your company.43:16-43:22Maybe you’ve got a wedding coming up and wouldn’t that be cool to have these little customized bags of coffee that people could use?43:22-43:24as a way of remembering.43:24-43:24I don’t know.43:25-43:28I’m just thinking out loud, but for my business, I think it’s a great idea.43:28-43:31Most people are always getting sweets and lots of different things like this.43:32-43:45Why not have a coffee that has my company name, a blend that’s only being done for me, and that makes it so unique and different versus so often people, you know, we just go with some of the traditional things that we do.43:46-43:50So if you’re looking for that, Lolita coffees.com, you can find it.43:50-44:27If you want to get a hold of me, You can call the office on Monday morning 615-367-0819. We’re time to start thinking about 2024. Is anything happened this year? Do we need to be pre-empting any taxes? So by January 15th, you can make that payment that you know you either sold something or you are expecting or you did a conversion, whatever, and you have this expectation. Remember, you’re usually 90 days after the sale of something. We supposed to make it on the following estimates. But, you know, obviously January 15th is the end of the line.44:27-44:39We don’t want to be penalized. So if we have the ability or we need to know, then you need to make an appointment. You can. Again, you can also go to IRS. Oh, goodness gracious. You can also go to DRFriday.com.44:40-44:52I’m promoting the wrong thing. DRFriday.com. Click on the calendar, set up your tax appointment for me or for my assistant. And we can get you in and review.44:52-45:52the information and know what we have going on for for you and get you prepped for um if you’re a new client we need to get you in before the end of the year so that we can make sure we have you all set up so we’re during the busy time of the year we’re not as as concerned you know we’ve already at depreciation schedules in there we’ve already got everything that we need to make it work so we can um you know keep everything good if you’ve got questions you can email Friday at dr Friday.com again Friday at DR Friday.com. Again, I am Dr. Friday. I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. That’s what I do. I’ve been doing it for almost 30 years here. Our office is in Brentwood. So if you want to set up a time, review your past tax issue individual. If you want to set up a time, review your past issue individual, with corporate tax.45:52-45:54We can help you with any of those different tax issues.45:54-46:01It’s really just the matter of getting a hold and getting a handle on where you’re at so that we can move forward and then make things roll a little better.46:02-46:04And then once things are moving in the right direction, you’ll see it.46:04-46:05It’s just like anything else.46:05-46:07You know, you’ll get the system back.46:07-46:15But if you need to set that appointment, you can also, you can call the office at 615-367-0-819.46:15-46:19Or you can just go to DR Friday.com, click on calendar, make up those appointments.46:19-46:26and then if you need assistance with dealing with any of the other tax issues, just give us a call again.46:26-46:29615-367-0819.46:30-46:31We hope that you’re enjoying.46:31-46:33I hope that you’re enjoying this Saturday.46:33-46:35It’s been a pretty good day.46:35-46:39And if you need any tax help, give us a call.46:39-46:40Call you later.

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If you’re 70+ or 73 and older and making required minimum distributions (RMDs), consider using a Qualified Charitable Distribution (QCD) to enhance your tax savings. By directing your charitable contributions directly from your RMD, you get a dollar-for-dollar deduction, reducing your taxable income without needing to itemize deductions. This method lets you support causes you care about while maximizing tax benefits. Learn more about QCDs and how to make the most of your retirement income.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

If you are 70 plus or 73 and older and you’re taking required minimum distributions, think about QCD—qualified charitable distributions. It’s a dollar-for-dollar deduction, so if you normally give $500 a month to your church or to some other organization, take that $6,000, have it come out of your RMD, so then you’re going to reduce it 100% because if that same six is all you have, you will have a zero tax deduction if you try to itemize. This is a great way for you to give more money and still save on tax dollars. Go to DrFriday.com.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday emphasizes the importance of organizing tax documents early, even though it’s October. She advises preparing a checklist of all jobs and sources of income from the start of the year to avoid errors and ensure all necessary paperwork is in hand before tax season. Missing documentation can lead to IRS corrections, penalties, and interest. For assistance, Dr. Friday offers her firm’s support.

Transcript: G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Making sure that you have all of your tax documents in line. I know it’s October guys, but right now is when we need to think back, put together that little manila envelope and put out there how many jobs did you have. Look back to January and February because they’re going to start coming in very early in January and you need to make sure before you prepare your taxes you have all of your documentation because I can’t tell you how many returns throughout the year we have to get corrected or worse the IRS has corrected because something has been forgotten on the return. Then you got penalties, then you have interest. If you need help, call our firm 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday highlights some important tax changes for 2024. Required minimum distributions (RMDs) remain mandatory at age 73. Additionally, employers may now transfer former employees’ retirement accounts, but only if the balance exceeds $1,000. Otherwise, you may receive a check, leading to potential tax consequences. Stay informed about these updates to ensure you’re prepared for the new tax year.

Transcript: G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Let’s look at some of the 2024 changes that we know are going to happen. Regarding mandatory RMDs, it’s still the age 73. So at the age of 73, you now have to take your required minimum distributions. Employers may transfer former employee retirement accounts to their retirement plan, no balance less than $1,000. So if you have an IRA for $1,000 or less with an employer, they are not obligated to transfer it. They may just send you the check, and then you’ll just have to pay taxes. There are more of those, and it’s really important to understand. If you want help with taxes, 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Life changes like divorce or loss can impact who inherits your assets. Dr. Friday emphasizes the importance of updating your “Paid on Death” designations to avoid unwanted beneficiaries. By simply reviewing your accounts with your bank or financial planner, you can ensure that the right person receives your assets, bypassing the need for probate court.

Transcript: G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

And I want to put this caveat: I am NOT a financial planner, but I had a client come in today, and just remember that this is a really good moment if for some reason something’s changed in your life—divorce, you’ve already lost somebody—make sure you’re looking at your “Paid on Death” situations. Because if you don’t, guess what? The person that you may not want to inherit will inherit everything. All you have to do is go to your bank, go to your financial planner. I’m a firm believer of “Paid on Death.” It eliminates having to go through the courts, but make sure you’ve got the right person listed. Go to your financial planner if you need help.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday emphasizes the need for business succession planning, highlighting its importance for S corporations, LLCs, and sole proprietorships. She urges listeners to document their plans, ensuring a smooth transition of assets and responsibilities in the event of unexpected circumstances. Proper planning can protect your family’s financial future and preserve your business. Don’t wait—make sure your succession plan is in place.

Transcript: G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

We don’t talk a lot about it but business succession planning. If you’re dealing with a tax person you should also be talking about what will happen if something happens to you, me, or whatever. Do you have a plan that’s going to go in place that says this is how this is going to go? I want this person to take over the stocks if this is an S corporation. I want them to inherit the members if it’s an LLC. If it’s a sole proprietorship, how are you going to do succession planning? Is this all documented? Remember none of us are going to be here forever. We none know when it’s gonna happen so planning is the only way you’re gonna put more money in your family’s pocket if something happens.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday discusses the significant tax changes set to take place after 2025, specifically regarding the meals and entertainment deduction. Currently, businesses can claim a 50% deduction for client meals and entertainment expenses. However, this deduction is slated to drop to zero at the end of 2025 unless the tax laws are extended. Dr. Friday advises businesses to stay informed about these changes and consider how they may affect future tax planning.

Transcript:

G’day I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I haven’t really brought up a lot about the tax changes that’s gonna happen after the end of 2025 but one of the big ones that’s actually not been extended is meals so right now you have a 50% deduction if you use meals and entertainment to take out clients at the end of 2025 that goes to zero unless you change your tax situation or unless they extend I should say that tax situation we have no control unless you think about who you’re voting for other than that you have to deal with what the tax code is again meals and entertainment will go to zero at the end of 2025 not a good tax cut.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday highlights a tax-saving opportunity for small business owners—hiring your children under 18. Sole proprietors and partnerships can pay their children up to $14,600 without owing FICA, unemployment, or income tax. This legitimate strategy allows businesses to save thousands in taxes, provided the work is real. For more details on how this loophole works, consult a tax professional.

Transcript:

G’day I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Let’s talk a little bit about hiring our children to work if you are a sole proprietorship or you are a partnership. You can have a child under the age of 18 that you can pay basically up to fourteen thousand six hundred dollars, pay no FICA, pay no unemployment, and since it’s under fourteen thousand six hundred, pay zero income tax. If you need help to understand how that’s going to work, it’s a wonderful loophole for small business owners that have young children and what they can do. It has to be a real job; it’s not them just going out and picking up pizza, but it is a doable thing, and it can save you thousands in tax dollars.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday explains the concept of the “kiddie tax,” which applies to unearned income from children’s investment portfolios. She highlights the tax thresholds—$2,300 for minors and full-time students under 24—before taxes apply. Above that amount, income is taxed at the higher rate between the child’s or parents’ tax brackets. Understanding these rules can help families manage taxes on investments for their children.

Transcript:

G’day I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Kiddie tax. Now most of us don’t really think about taxes for our children, we’re just hoping that their funds grow and they do things. But many times people will start portfolios, after-tax portfolios for their kids, or grandparents will start them, and once that happens you have a minimum you can kind of hit before you start hitting taxes. So basically you have $2,300 that you would do under the age of 18 or under the age of 24 if they’re full-time. Anything above that will be being taxed at either the higher rate of the child themselves if they’re at a higher tax bracket or the parents. Whichever is higher is the tax rate you’re going to pay on those funds.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday highlights the importance of strategic tax planning. With current tax rates at historic lows, she suggests it may be wise to pay more taxes now to potentially avoid higher rates in the future. Dr. Friday advises taxpayers to focus on long-term savings by understanding tax strategies that could put more money in their pockets over time. For more personalized tax assistance, visit her website at drfriday.com.

Transcript:

G’day I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Understanding how to strategize your taxes is important. Maybe today because you don’t want to pay taxes, you take off everything, you try to keep your taxes as low as possible, but think about it. We’re in the lowest tax bracket that we have ever had in my lifetime at least. And end of 2025, that very likely could go back up. So should you be maximizing taxes today so you can pay less later, then worrying about paying less today and then worrying about the future. You really need to understand tax strategy to make sure you’re putting more money in your pocket, not just today, but in the future. If you need help, go to our website at drfriday.com.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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October 15th marks the final day to file your 2023 taxes if you were on an extension. Dr. Friday warns that failure to file by today can lead to hefty penalties, with a 5% per month charge on any owed taxes, up to 25%. While filing on time avoids penalties, any unpaid taxes continue to accumulate interest. Don’t miss the deadline—file today to avoid extra costs!

Transcript:G’day I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

It’s a die or not die day because today is October the 15th, which means if you have not filed your 2023 taxes and you were on extension, today is the last day. Remember, if you haven’t filed taxes and you owe money, 5% per a month, up to 25% of what you owe is immediately going to be tacked on. So if you owe money, it doesn’t stop with this extension. It does help you get your paperwork on time and failure to file penalty will not happen until tomorrow. So this is a great way to make sure you file your taxes on time. You need to file 2023 by today, 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Did you know parents can gift student loan interest to their children for a tax benefit? In this episode, Dr. Friday explains how up to $2,500 in interest paid by parents can still be deducted by the student on their tax return. This tax-saving tip highlights a useful loophole for families handling student loans. Tune in to learn more about this unique strategy.

Transcript:

G’day I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Did you know that student loan interest can be gifted? That’s right, so sometimes parents are pretty cool and they take over or the loans are actually in their names when their kids go to school. But if the parents wanted to—maybe their income isn’t too high, it doesn’t qualify, or maybe they just want the child to be responsible for the interest—you can actually gift that interest to the child, and they can take up to $2,500 of interest off of their tax return, even though you as the parent may have paid it. It’s kind of a cool little loophole that’s in there, and there’s many more. So if you need help understanding tax law, you need to call us at 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday discusses the rules for deducting mortgage interest in 2024. If your mortgage exceeds $750,000, only interest on the first $750,000 is deductible, unless your mortgage predates 2018, allowing deductions up to $1 million. Dr. Friday highlights the importance of being cautious when itemizing deductions, as incorrect filings may trigger IRS audits. Get expert tax guidance at drfriday.com.

Transcript:

G’day I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

2024 interest expense. Now it’s been this way for the last couple years to be quite honest, but if you have a mortgage over $750,000 and some people do, then you can only deduct the interest up to $750. This can affect in 2018. So if your mortgage is older than that, you can take the entire thing. If it’s under that, well, I should take, you can take it up to a million dollars. If it’s over a million dollars, you can’t even take that. So make sure, because I’ve had many people have that audited by the IRS because they’re trying to itemize and it doesn’t always work. If you need help understanding how their taxes work, go to the web, drfriday.com.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday emphasizes the benefits of health insurance for the self-employed, noting that premiums are 100% tax-deductible. She also highlights the advantages of Health Savings Accounts (HSAs), which can help lower premiums and offer long-term savings benefits. Listen in to learn how to maximize your tax deductions while staying covered.

Transcript:

G’day I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Health insurance premium for the self-employed—first, always remember it’s a hundred percent deductible when you want to have health insurance, so it’s a good thing if you’re self-employed. A lot of times, we think we’re invincible, that we’re not going to need health insurance. We need it, and it’s deductible, so why not get it? Also, I’m gonna suggest—I am NOT an insurance agent—but look at the Health Savings Accounts because you can also put aside—even if it turns into an IRA later—you can put aside money into a health savings account and have a lower premium, and that makes it great because many of us, let’s be honest, don’t use our insurance like we should. If you need help, 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday, an IRS-enrolled agent, explains how she can assist with tax filing and IRS-related issues. Whether it’s handling K-1 forms, real estate sales, or unique tax situations, Dr. Friday brings the expertise and licensing necessary to help with both current and past tax filings. If you need professional tax assistance, reach out to her office or catch her live every Saturday on 99.7 WTN.

Transcript:

G’day I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I am Dr. Friday, an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. That’s what I do guys. I can help you if you have IRS issues, maybe you just need help filing taxes, maybe this year’s a little different, maybe you have a K-1 or you sold some real estate and you’re just not sure how to file it and what it’s going to do to your tax code. You need someone that that’s all they do and guess what? I am your girl. I am again, an enrolled agent, which just means I have the licenses and the experience to help you with your taxes today, past and present. If you need help, call my office at 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday discusses the challenges of deducting medical expenses. She explains how the IRS subtracts 7.5% of your adjusted gross income from medical expenses, making it harder to itemize unless you have significant costs. Dr. Friday also highlights which medical expenses, like long-term care, can be deducted and offers insight into whether itemizing is worth it for most taxpayers.

Transcript:

G’day I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Deducting your medical expenses. Now, this is not an easy thing to do. It’s not so much that you can’t track it, but keep in mind, first and foremost, they’re going to take 7.5% of your adjusted gross income. So, if you make $100,000, $7,500 of it is going to be immediately off the top of your medical. Then you still have to itemize, right? Which means, if you’re a married couple, that’s almost $29,000. So you’re losing $7,000, maybe you spent $10,000 in medical, so you’ll get a few dollars. But will it kick you over the top to actually meet itemizing? You can take off long-term care and some other things, but it’s really difficult to itemize medical.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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On this episode of the Dr. Friday Radio Show, Dr. Friday dives into key tax changes impacting small business owners, real estate transactions, disaster tax relief, and IRS updates. She also answers listener questions about capital gains, 1099 filings, and how to avoid tax penalties. Tune in to get practical tips for managing your taxes and staying compliant with the IRS.

Key Topics Covered: PayPal and Third-Party Payment Changes: Starting in 2024, businesses receiving over $5,000 via PayPal and similar platforms will receive a 1099-K. * Capital Gains on Second Homes: How selling a second home differs from selling a primary residence, including tax implications and capital gain rates. * Disaster Relief and Taxes: Tax relief for those affected by storms and terrorist attacks, including deadline extensions and loss claims. * Inheritance Tax Update: What to expect in 2026 when the estate tax threshold is projected to lower. * Tax Deadlines and Penalties: Importance of filing by October 15th for those with an extension, and understanding IRS penalties for late filing and payment. * 1099 Requirements for Small Businesses*: Clarification on when to issue 1099s and how to stay compliant with IRS rules.

Transcript00:00-00:07No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes.00:07-00:09She’s the how-to girl.00:09-00:10It’s the Dr. Friday Show.00:10-00:11If you have a question for Dr. Friday, call her now, 737-WWTN.00:11-00:12That’s 737-9986.00:12-00:12So here’s your host, financial counselor and tax consultant, Dr. Friday.00:12-00:34G’day, I’m Dr. Friday and the doctor is in the house.00:34-00:45You can join us live here in studio at 615-737-9986.00:45-00:49Phone lines will be open.00:49-00:51And then we’ll be able to get your calls.00:51-01:03We want to talk a little bit about a few things that have come down for all of you that may have those small businesses that you have been taking PayPal or some portion of merchant fees.01:03-01:18And I know that 2024 will be the first year that they will be sending those to you based on $5,000 instead of the, I think it was 200 transactions or 15 or 20,000.01:18-01:20So it was a big difference.01:20-01:25So that’s going to make a huge difference to have what you have going there.01:25-01:40So just make sure that you have that information because if you are running a business right now and you have the ability to do what you’re doing and before you really weren’t concerned.01:40-01:45So in 2023, the third party payment system was hired this year.01:45-01:54It’s going to be $5,000 in the phase out to implement the Washington follows feedback from taxpayers and tax professionals.01:54-02:00They’re basically claiming or saying that they won’t have quite so much.02:00-02:03They’re claiming that they’re not going to tie this directly into taxes.02:03-02:11They are saying that it is going to be, it was 20,200 now it’s $600 threshold enacted by the American act.02:11-02:21And that anything above that, theoretically you should be filing taxes, a 1099 K for any sale more than $600 of goods will be following on a 1099 K.02:21-02:41They’re saying the max, basically you have to be doing up to $5,000 threshold before the form will be coming out and that they will be working with taxpayers and other people to try to manage this carefully to help that the 1099 Ks are issued only to taxpayers who should be receiving them.02:41-02:45Well, we all know how well that works for the government.02:45-03:01So all I’m going to suggest is if you are a person that maybe has their own little shopping or maybe they even just do things on your you know, you have some things in the attic and you decided to sell them, anything like that.03:01-03:10And it’s been over $5,000 in the year of 2024 do not be surprised that you may get one of these.03:10-03:19And if you’re not tracking your expenses, this is probably one of the biggest questions or concepts or series because a lot of times people are like, well, this is stuff I’ve had in the attic.03:19-03:21It’s not something I’ve actually been tracking.03:21-03:34And you may end up with a situation where you, you need to pay taxes or you’re going to have to prove that the information you have is, is not taxable income.03:34-03:40Now again, if you have a little garage sale in the front of your house and you’re taking your eye, your stuff out of your home, you’ve already paid for it.03:40-03:47A t-shirt was $15 and you’re selling it for five, you know, there really is no taxable income.03:47-03:53And a lot of times most people are not holding on to their, their personal information that way.03:53-03:58They’re not holding on to every receipt that they have coming through that is just not happening.03:58-04:09So if you have that kind of situation and you’re making that kind of a zero to area, you’re going to run into a particular tax problem and we need to deal with it.04:09-04:12All right, let’s see if we can get Mark on the line.04:12-04:13Hey Mark, what’s happening?04:13-04:15Hey, how are you doing today?04:15-04:17I’m doing awesome and yourself?04:17-04:18I am fine.04:18-04:34Hey, my question is my wife and I purchased a home last year up, uh, it’s in East Tennessee and we live in middle Tennessee and, uh, we bought it because we have children and grandchildren up there and we bought it for a second home.04:34-04:47If we, if we sell that home, say next year, uh, will we have paid capital gains or how long can we have it before we don’t have to pay capital gains?04:47-04:53Second home doesn’t fall into the tax situation that you have for a primary home.04:53-04:57So you will always have capital gains on a secondary home.04:57-05:05Um, the only home that you have any kind of exclusion on or, you know, tax step is your primary home.05:05-05:06Okay.05:06-05:18So keep you up for more than a year is good because now you have longterm or you have actual capital gain tax rates, which is most likely going to be around the 15 to 18% depending on your income bracket.05:18-05:23Uh, so that would be better than if you sell it before a year in one day.05:23-05:33Cause that’s now we did a total, we completely gutted the house and I mean almost built from the ground back.05:33-05:37So can I deduct all of those calls?05:37-05:38Absolutely.05:38-05:40That was an improvement to the property.05:40-05:48So you would have the original purchase price, all the improvements that you’ve done to the home and then whatever you sell it for closing cost fees, et cetera, et cetera.05:48-05:52Then you get to your actual taxable, uh, or capital gains.05:52-05:53Okay.05:53-05:54Sounds good.05:54-05:55I appreciate you.05:55-05:56No problem.05:56-05:57Thanks for calling.05:57-05:58A great question.05:58-06:02And a lot of us have that kind of situation too, where we have multiple homes maybe.06:02-06:08And um, I have had people that have moved into their second home for over two years.06:08-06:11And they sell it and then it’s really their primary home.06:11-06:13And then they move back to their primary home.06:13-06:20And during that time you could be renting out one home versus the other, but it really depends on what you’re actually saving.06:20-06:29I mean, if, if the logic is, okay, I like both homes and I’m going to move here, I’ll live in it for two and a half years or two years and then I’ll sell it.06:29-06:33And then my other home, I’ll just either have it rented out or I’ll go back and forth.06:33-06:36Um, so that way I, you know, I don’t miss out anything.06:36-06:43So that’s a possibility, but to be quite honest, you have to prove that the home you’re living in is your primary home.06:43-06:47So if you’re not really living it, but you’re not renting it, so you’re claiming you’re living in it.06:47-06:51Uh, if audited the IRA, I mean, they could go back, look at utility bills.06:51-06:54Um, they could check and see where you’re receiving your mail.06:54-06:56Um, you know, all that kind of stuff.06:56-07:03And so it, I mean, you may be able to do it, but I’m just saying, is it really worth saving a few thousand dollars to actually have to deal with?07:03-07:04So I don’t know.07:04-07:09It depends on the amount of capital gains and where you’re actually choosing to live and do.07:09-07:13So, um, in his case, it sounds like he’s put a lot of money into that property.07:13-07:18So he may not have a lot of capital gains actually when he gets himself paid back for all of that work.07:18-07:25I will say that the IRS has announced a tax relief affecting terrorist attacks in Israel for 23 and 24.07:25-07:33So anyone that may have families, um, that have payments due, um, usually, uh, by September 30th, 2025.07:33-07:42And so they’re extending all of 23 and 24 out further for those individuals that may be living or be, um, affected directly with.07:42-07:52And of course we also have the, um, the storm that came through and we have all the people in Tennessee and in North Carolina, South Carolina, all of them that have been affected.07:52-07:56There are of course, um, tax relief, uh, for those individuals.07:56-08:06Um, right now I have a client just spoke to today and, uh, he had a second home in Florida.08:06-08:07It was flooded.08:07-08:10And so he’s dealing with, uh, the insurance.08:10-08:12He was blessed to have insurance for flooding.08:12-08:18I just heard on the news, several people in Asheville, they were never expecting to be flooded.08:18-08:19It’s not an area.08:19-08:21It’s not near a major body of water necessarily.08:21-08:23It’s never had a flood.08:23-08:30You know, the 500 year flood we had here in, uh, in Tennessee, um, I guess it’s been probably close to 15, 20 years ago.08:30-08:32I don’t know when it’s 2010 or something like that.08:32-08:37Um, but, uh, we were not, none of us expected that either.08:37-08:38We had never had any kind of major flooding.08:38-08:40So things are changing.08:40-08:52And a lot of those people, we are, uh, you know, hoping they can rebuild and do what they need to do, because again, they’re being turned down by the, uh, the insurance companies because none of their insurance covered something like this.08:52-08:54So they’re, you know, I always love that.08:54-08:56I’m not an insurance person.08:56-08:57I’m not insured.08:57-09:06I always, you know, it seems like whenever you need insurance, it never covers, you know, I had a warranty on my truck, but apparently I didn’t change an air filter.09:06-09:08Therefore, and you take it to the same shop.09:08-09:16So you think, okay, they know what’s required when it’s required and they should basically be able to tell you this, but you know, it wasn’t changed.09:16-09:18So then the whole warranties, Nolan Boyd.09:18-09:20So then, you know, you’re stuck.09:20-09:23So it just, you know, I’m not a big fan of, of insurance.09:23-09:29I have all of it just like everyone else, because if we don’t have insurance, we can’t do what we want.09:29-09:33But on the other hand, it does lead to the fact that we’re all sitting there going, this is crazy.09:33-09:39I mean, every time you, you know, when you hear that and they’re like, well, we never expected, well, you’re the insurance company.09:39-09:43You should be preempting what your clients need.09:43-09:44It’s not the client’s fault.09:44-09:49If you told them they needed something, they would have gotten it, but you didn’t tell them and now they’re not going to pay out any policies.09:49-09:53And the person now has, you know, no, no help and rebuilding.09:53-09:54And that’s just crazy.09:54-09:58Anyways, I know it’s more than nothing to do with taxes necessary.09:58-10:06The only advantage is that they will be able to report these huge losses on their tax returns because it was a federal disaster.10:06-10:09Therefore they’ll be able to claim losses.10:09-10:20So for any of you that may have family or anyone that’s in those areas, I know as hard as this is, but have them put together just like they would put together anything for an insurance company.10:20-10:38If they’re giving it to FEMA, it would be a whole packet of what they actually owned, what was lost in the flood, the damages and everything else, the cost of the original home when they had purchased it, and then what it’s valued at today, because obviously it’s been flooded and it’s going to have to be fully gutted or whatever to be rebuilt.10:38-10:52And then the difference between all that, whatever they don’t get in insurance or in some sort of non-payment, like a grant that they don’t have to pay back, they will at least be able to report on a tax return, be able to save some tax dollars.10:52-10:56Maybe those dollars can go back to helping them rebuild their life.10:56-11:07It is certainly not a great fix for the situation, but you know, there’s got to be a, somehow you got to find something good in the situation because obviously we can’t change that information.11:07-11:18So if you’ve got questions, you can join the show, 615-737-9986, 615-737-9986.11:18-11:21For all of you that may not know who I am, I am Dr. Friday.11:21-11:25I’m an enrolled agent licensed by the Internal Revenue Service.11:25-11:28I have never worked for the Internal Revenue Service.11:28-11:31I am licensed by them to do taxes and representation.11:31-11:34As an enrolled agent, that’s what we do.11:34-11:37We’re not CPAs, we’re not tax preparers.11:37-11:42All we deal with is the IRS or state offices, but we deal with taxes, right?11:42-11:50You know, CPAs, a lot of them can handle audits, they do certified financials, and some of them do great tax returns, but you know, they have different specialties.11:50-11:55As an EA, we are only licensed to do taxes and representation.11:55-12:08So you know, if you’re looking for someone that’s going to help you, if you’re getting love letters, you’re having to deal with the IRS, you might want to call someone that has actually been doing it for 25 plus years and that actually can help you actually understand.12:08-12:16Because sometimes I’ll have people come in my office, guys, and I’ll be explaining exactly what the situation is, and they’ll tell me what they’ve done.12:16-12:22And then I’m like, “Well, you can’t do this.” And they’re being, “Well, people say I should be…” There are strict rules that we have to follow.12:22-12:24I mean, there’s no making it up as we go.12:24-12:34The IRS isn’t just going to say, “Well, I’m going to offer you $30,000, even if I owe you $50,000, because that’s what I want to offer you.” It doesn’t work that way, people.12:34-12:38And we’re all talk more about how you can do that and what we can do for you after this first break.12:38-12:40This is the Dr. Friday Show.12:40-12:41We’ll be right back.12:41-12:42All righty, we are back here live in studio.12:42-12:55And if you’ve got questions, you can join us live at 615-737-9986.12:55-13:06615-737-9986, taking your calls, talking about my favorite subject, taxes.13:06-13:14And keep in mind, October 15th is the deadline for filing your tax return for 2023, if you filed an extension.13:14-13:19If you did not file an extension, then you’re late anyway.13:19-13:25So probably good to get it filed so that you don’t have to keep waiting and waiting and waiting.13:25-13:29Failure to file penalties and interest, failure to file penalties, failure to pay proper estimates, failure to make payments.13:29-13:36They have all kinds of fun failures that you can get, and every one of them can add up to quite a bit of money.13:36-13:39So you don’t want that to happen if you don’t have to.13:39-13:47So let’s try to get you back on track, figure out where you’re at, make sure we have everything we know going forward and doing all the good things.13:47-14:00So if you have questions, you can certainly join the show, 615-737-9986, 615-737-9986, talking about my favorite subject, taxes.14:00-14:13So we’ve talked a little bit about, we still have that BOI, the business owners information under FUBAR, and you just want to make sure that that’s being filed for anybody that starts a new company.14:13-14:16Best to use somebody that could actually help you with that.14:16-14:28I’m just saying whoever’s setting up the company, because sometimes people will just go to Tennessee Secretary of State, they’ll sign up for a charter, and then they’ll go to irs.gov and they’ll get a federal ID number.14:28-14:35But there’s a little bit more, you need to register that, and then you need to also make sure that you’re doing what you need to be doing to make it proper.14:35-14:38Part of that is filing for the BOI.14:38-14:43Now like I said, there’s not a proper, I mean, there’s a website, it doesn’t take much.14:43-14:49Basically you’re uploading your driver’s license and telling them about the business, and then all the owners of the business is a way for them to help track.14:49-15:03You just need to make sure you have everything you need for that in there, so that they’re not charging, because I haven’t yet seen any penalties, because it’s not really going to happen until the first of the year if there’s people that are late, but we don’t want to be playing that game if we don’t have to.15:03-15:08So avoid penalties, best thing to do is to avoid penalties.15:08-15:18So all small businesses, LLCs, corporations, partnerships, all of you have pretty much, most of you, 90% of you have an obligation to file the BOI.15:18-15:29There are a few things, if you go to that website, all you have to do is Google business owners information filings and report, and you can go right in there, and you know, it’ll walk you right through it.15:29-15:47It doesn’t require a lot, I just want to make sure that we’re not missing out on anything important that we have, so that way we can keep everybody out of trouble, and make sure that we are keeping the, well mainly the penalties, right?15:47-15:48The penalties away.15:48-15:52I don’t like penalties, no one likes penalties, you guys all hear my little girl in the background, I know.15:52-16:03She always has to give her opinion during the radio show, most of the time she’s not talking at all, and then she’ll turn around to give that so you have more time for that.16:03-16:19If you guys are anybody that is in the hurricane for Halina, the Tennessee Department of Revenue announced that any payment deadlines for taxpayers have been extended until May 1st of 2025.16:19-16:35In the wake of this storm, the IRS is also giving out some extensions that run out on October 15th, quarterly estimates that ran out for January and April, they’re giving you until May 1st, 2025.16:35-16:51So again, if you have family, they may not be able to hear or know, but you might be able to put them, because I know many people, they get pretty worked up if they can’t file their taxes on time, they’re used to getting it done, and now they’ve lost, some people have lost all that paperwork.16:51-17:05We can help them recreate, we can help them put that information together, but most importantly, we can make sure that they’re doing what they need to do to deal with, you know, their IRS issue, but take the stress off, right?17:05-17:11We don’t need to be stressing over something we can’t control, you know, and there are ways of avoiding penalties and everything else.17:11-17:42So just putting that out there that if you know someone, or hopefully not here this close, but there are some people that did get tree damage, and this is all a big federal situation, so if even in this area, if a tree came down and it was due to the storms, and you’re in the right areas and the right counties, then again, just making sure that that is something that we can give you good news on, that they do have some tax relief, you have until May 1st, 2025 to deal with 2023.17:42-17:47You don’t have to worry about the fourth quarter estimate or the first quarter estimate.17:47-17:55Right now, there’s no penalty for that, so, you know, concentrate on the important things and let the IRS or the state deal with that after the fact.17:55-18:02So if you need any help just dealing with that, you know who I am, but most importantly, just, you know, do what you have to do.18:02-18:06So let’s see, it’s October 15th, we’re getting ready.18:06-18:12Fourth quarter estimates, of course, are not due until October, I mean, January 15th, 2025.18:12-18:14That’s our last payment for the year.18:14-18:18If you have not made any, because some people are like, “I just got my taxes done.18:18-18:29I didn’t make any quarterly estimates.” First, you probably should be doing something based on even 2022, even if you haven’t gotten 23, something should be getting paid.18:29-18:34Because you can tell the IRS all you want, “I didn’t know how much, so I didn’t make anything,” but that doesn’t really make sense.18:34-18:38Every year you’ve had to pay 5,000 a quarter or some dollar amount.18:38-18:43Making an effort is going to give you a much better situation than just basically waiting.18:43-18:45Now you’ve gotten them because we finished your taxes.18:45-18:47Okay, well, it’s after October.18:47-18:50So now you have three quarters you did not make.18:50-18:55So your best bet is if nothing else, pay them faster as soon as possible.18:55-19:00Don’t wait till the January 15th, unless it’s under $500, then you don’t have to worry about it, right?19:00-19:04If it’s under $500, then we don’t care because there’s no penalty.19:04-19:10If your balance due at the end of the year is under 500, not if each quarter was under five.19:10-19:16So you want to make sure that you have that situation where you’re at.19:16-19:47And then you can deal with the penalties because the failure to … I have two people that came in last week and we finished their taxes and they turned around and said, “Hey, why … ” Actually, one, I didn’t do their tax at all, but they came in and they’re like, “Well, why is there a penalty on here?” Guys, filing … If the IRS wasn’t charging a penalty and they said you could wait till October 15th, don’t you think every single person in the world would wait till October 15th to file their taxes and then pay them?19:47-19:49Yes, there is a penalty.19:49-19:55Taxes are due and payment is due basically by April 15th, the latest.19:55-20:03But if you’re a self-employed like myself, you should have made four equal payments, last payment due on January 15th, and then sometimes due to other situation.20:03-20:12Yes, we may have, but there is a penalty between January and April if we did not pay enough in based on 20, the prior year.20:12-20:21So in this case, based on 2022 for 2023, or 2023 based on ’24, or if I made my payment late because I was out of town, whatever.20:21-20:31So if you’re filing your taxes in October, you know, you should know, and you have to write a check, there is going to be penalties.20:31-20:43Penalties could be if you did not make a proper extension, you would have failure to file on time, failure to make proper estimates if you’re self-employed, failure to pay.20:43-20:46I mean, you’re at 25% almost right there by this point.20:46-20:50So it’s going to add up quickly and you’re going to have that situation.20:50-21:01So even though we all talk about extensions, and I do an extension on myself almost every year, because I mean, my tax person, to be quite honest, isn’t going to be doing mine in the rush hours.21:01-21:03I mean, that’d be silly because I know how busy they are.21:03-21:14So I need to make sure though, I need to make sure I have paid in enough by the April 15th deadline to count for this period of delay.21:14-21:18I have it, everyone has a rough idea of what their income is.21:18-21:20And in most cases, it doesn’t change too much.21:20-21:22You might go up a little, go down a little.21:22-21:31Anything I’ve overpaid, well, at this point, if I filed yesterday, I think I did, the overpayment is just basically rolling into 2024.21:31-21:34I mean, it’s only three or four more months and we’re done with this year.21:34-21:36So I can apply that into this year.21:36-21:44And in my case, I actually won’t have to make my fourth quarter estimate because I way over estimated this time, but I’ve had years where that’s not the case.21:44-21:51So you need to make sure you understand what you have going, make sure your numbers, but you are the person responsible.21:51-21:56If you’ve got a good tax person, sure, you can pick up the phone, call them, say, Hey, this is my situation.21:56-21:57What’s my estimate like?21:57-22:07But that needs to be being done basically to be quite honest in November and December, because come January halfway, well, January 15th, you’re going to be late if you don’t know that number.22:07-22:19And if you don’t know your rough income by November and December, which most of us do, you know, unless there’s some big sale that you’re going to sell a piece of real estate, even that can be estimated.22:19-22:25So if it does close by December 31st, you already know how much you need to take out of that sale to put in.22:25-22:28And if it doesn’t close until after January, well, that’s a different year.22:28-22:31And therefore you have more time to make that estimate.22:31-22:38But it’s important for you to understand where and how, because I can’t believe two different people and one was my tax client.22:38-22:46One was not, but one was, and I’m like, you didn’t think about the fact that you would have had to already have made this payment.22:46-22:53Um, uh, you know, or, or you’ll basically be at a point where you’re like, why didn’t I make the payment?22:53-22:55What, you know, what was the theory behind it?22:55-22:57It just did not make a lot of sense to me.22:57-22:59Um, because you know, think about it.22:59-23:03Why would the government give you until October to make a payment when it was due?23:03-23:07They’re not going to give you a penny longer than you need or a moment longer than you need.23:07-23:09They’re certainly not going to give you a break.23:09-23:24Now you can, if it’s a one-time situation and you’ve made a mistake and you didn’t pay enough or you paid it late or whatever, you may have a situation where you can request a waiver for that, but you know, you don’t want to count on that.23:24-23:27You don’t always want to count because sometimes, you know, the IRS could come back.23:27-23:40I had a gentleman come in, he filed his own taxes and he, uh, he, you know, he didn’t understand why he was being charged a penalty, but he had just filed his taxes in August and he hadn’t paid them.23:40-23:48So he had a balance due, but they charged him a penalty, uh, two different penalties, failure to pay proper estimates and failure to pay on time.23:48-23:51And um, it was a little less than a thousand dollars.23:51-23:52And he’s like, well, this is crazy.23:52-23:54Why am I paying a penalty?23:54-23:56But he still hasn’t paid the dollar amount.23:56-23:58So he needs a payment plan.23:58-24:03And he, he requested a waiver, um, for this, which is a great idea.24:03-24:05I didn’t think that’s a bad idea.24:05-24:14It’s a good idea, but I probably would have waited until I had actually got the payment plan and most of the penalties have been imposed because they’re only going to waive one penalty.24:14-24:19Why not wait till the penalty is at its max versus he, you know, at the very beginning.24:19-24:23Uh, so you, you don’t always want to just jump and request for that waiver.24:23-24:30You might want to wait and see what the total penalties, cause it’s 5% per a month up to, you know, 25% on some of these.24:30-24:32So you might as well wait.24:32-24:37So the full 25% has posted before you go and do, uh, the, the situation.24:37-24:44So, um, you’ll just have to figure that one out, but, um, you know, that’s the way it works.24:44-24:45So anyways, we’re going to take a quick break.24:45-24:51If you need to join the show or if you have a question, you’re waiting 615-737-9986.24:51-24:53We’ll be right back with the Dr. Friday show.24:53-25:04I’m Dr. Friday, an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.25:04-25:11And if you have a question, you can join the show at 615-737-9986.25:11-25:13We’ve got a caller on the line, Jim from Nashville.25:13-25:17Hey, Jim, what can I do for you?25:17-25:18Thank you for taking my call.25:18-25:34I’m, I am curious if, do you know what is going to happen with the inheritance tax in 2025 or 26, whenever it comes up again for reconsideration and what percentage, uh, one might have to pay?25:34-25:37I think it’s 40% now or something.25:37-25:38Right.25:38-25:47But right now we have what, 11 million, $12 million, 13, $13 million that, uh, goes through per person.25:47-25:49So it’s, it doesn’t hit a lot of people.25:49-25:57I’m not going to say there isn’t people with much better estates, uh, but, um, the, you know, due to inflation, that’s what they’re going with.25:57-26:10The exemption is, uh, 2026 is when the new one and they’re projecting it to go down to 7 million according to the last, um, I follow a couple of newsletters on it.26:10-26:12So these are estimates, right, Jim?26:12-26:15But I had heard 5 million, so that’s a little better.26:15-26:19But even nowadays, $7 million per person, it sounds great.26:19-26:32But with inflation and things, I mean, I have number of people, their homes are worth a couple of million dollars here in Nashville and we’re talking Nashville, imagine California in places where their real estate is, you know, a lot higher than ours.26:32-26:42Um, so the tax at that point, when you get a bit, it is a 26% is what you’re going to pay right now.26:42-26:46And then it goes to, yeah, 40%, you’re absolutely correct.26:46-26:49Um, and that’s when it starts exceeding.26:49-27:00So anything over 7 million under, they’re saying the projection here, again, this is a newsletter I follow, but they’re saying 7 million in 2026 at 40% tax.27:00-27:03And how long will that stay in place?27:03-27:05Is there another time period when it will be?27:05-27:06It depends.27:06-27:11I mean, right now, all we know truly is that it’s going to expire.27:11-27:21And I believe if it expires under the current, it will revert back to the, um, uh, Obama period, which was 5 million.27:21-27:25So these people are already assuming that this is going to change.27:25-27:41And I think no matter who goes in, um, personally, I think if it’s a Republican, you’re more apt to have the higher deductible, you know, higher amount than if it’s a Democrat, but you know, they haven’t had to really do anything with it in this particular term.27:41-27:46So, you know, they, they didn’t extend anything and they, everyone knows it’s going to expire.27:46-27:49All these expire at the end of 2025.27:49-27:52So whoever we bring in right now, that’s a great question because I don’t know.27:52-28:02I mean, I know everyone’s looking at the economy, but we also need to look at what’s going to happen if it goes back down to 5 million and then 40%, it’d be good for the IRS, right?28:02-28:04Because they’re looking for ways to pay for our budget.28:04-28:12Um, but it’s a little scary for you and I, because you know, that’s going to be a big tax bill for most of us, actually.28:12-28:17And you said it will begin the beginning of 2026, January of 2025.28:17-28:18Correct.28:18-28:19Yeah.28:19-28:20Expires December 31st, 25.28:20-28:21Okay.28:21-28:22Hey, thanks a lot.28:22-28:23I appreciate your help.28:23-28:24No problem, Jim.28:24-28:25Thanks.28:25-28:26That was a good question.28:26-28:37Um, so that’s when we’re all thinking, I try not to get too much into the whole politics thing because taxes are, let’s be honest, we’ve all lived long enough to know that taxes are going to go up.28:37-28:48Taxes go down based on whoever’s in the, the white house and they all have their own causes, uh, and, and that, but for me personally, I often look at the economy because that affects me the most.28:48-28:57Um, many of us it affects, but, um, you know, we all know inflation has hit huge, huge.28:57-29:04You know, we’re, we’re talking double digit inflation and, uh, the cost of everything has went up to go with it.29:04-29:11We went to five guys the other day, got a tiny burger, a fry and a soft drink and paid $18 for, for that.29:11-29:20So, um, obviously I knew, but I’m just saying, you know, it gets a little ridiculous to eat out because you’re like, well, what’s the purpose?29:20-29:25I mean, you know, um, so it’s just, everything’s just costing so much more.29:25-29:33You don’t think about eating out, filling up your Petro or your, your fuel tank, um, you know, is three, four bucks an hour a gallon.29:33-30:01So you know, how’s that going to affect the big picture when it comes time as, as Jim was bringing up or just asking, but you know, what happens when we start looking at a state tax right now, when most people pass away, we have a step up in basis on homes and on stock if there’s annuities or 401ks or IRAs traditional, we have, um, we have to take them out now in 10 years.30:01-30:03We used to be able to take them over our lifetime.30:03-30:06Um, but you still have at least some control over that.30:06-30:09Uh, but they are taxable, right?30:09-30:18So if you inherit someone else’s IRA, you will pay tax on it and it’s got a 10 year climb clock, so you have to take everything out within that 10 years.30:18-30:34Um, but there, you know, what’s going to happen when you start saying right now, $13 million for an individual, a married couple, 26 million, you know, at least in the Tennessee area, that is a healthy estate.30:34-30:43Again, not saying there aren’t people out there that have those, but if they’ve got that kind of estate, then they’re smart enough to do grant or trust to be gifting out $13 million.30:43-30:52They’ve got all kinds of different things that they could use to help reduce the estate, um, while they’re alive so that they have some advantage to doing that.30:52-31:05But if most of your income is tied up in either stocks or real estate and things like that, where you really can’t just easily gift something to somebody, then you’re tied into what’s going to be the inheritance tax.31:05-31:0640%.31:06-31:08I mean, that’s crazy.31:08-31:11That’s 400,000 on every million dollars.31:11-31:19That’s going to really affect, and, uh, you know, they, they talk about generational wealth, um, many times.31:19-31:26And I find that to be interesting that they’re thinking about bringing something back like that because I know there’s people that sit there and say, I’ll never have a million.31:26-31:27I get it.31:27-31:38But if you’re talking middle-class America, which is what everyone wants to be protecting, I guess you would say, um, which is probably many of my listeners.31:38-31:39I mean, we’re, we’re basically middle-class.31:39-31:42My, you know, we all work every day.31:42-31:48We, we may have been fortunate to make good investments, but it was from work that we made these investments.31:48-31:52It was from doing the things we were good at and building on that.31:52-32:07So if you have that kind of situation and you built up that wealth, and now you’re talking about generational, and my parents passed away with, you know, $10,000 in the bank, no life insurance, nothing else because they had raised eight children and they’ve given us great lives.32:07-32:12That’s nothing to be said about, but the fact is they didn’t have a lot of wealth.32:12-32:15Our first generation of wealth will actually come from this generation.32:15-32:18My family, my brothers have done great.32:18-32:25My sister, you know, there’s eight of us and all of us have done what our parents had expected and given us the foundation for.32:25-32:26So we’re very blessed.32:26-32:39So now that next generation, if they’re going to have to pay a 40% tax on most everything they inherit, now you’re talking about a limited amount of wealth running to that next generation.32:39-32:44And the worst is it’s going to the government, which we know does not manage money well anyways.32:44-32:46So it’s just frustrating.32:46-32:47Okay.32:47-32:50I’m getting off track a little bit, but you know, we are getting close.32:50-32:54I think it’s November 7th that we’ll be looking at elections.32:54-32:59That is less than, almost less than two months away, I guess, or just a little over two months away.32:59-33:16So, you know, you, you need to be making, I know that if you listen to News Nation and some of the, the, I can try to say more middle of the road versus Fox or CNN, which are both one way or the other.33:16-33:19I think you’ll find that, I mean, it’s going to be a close race.33:19-33:34It’s just a matter of, they say there’s a lot of undecided, which I find that hard to believe most of us in this world, let’s be honest, we have our core beliefs, we have our core choices, and you’re going to go with those core choices, you know, no matter which way that might be.33:34-33:35So hopefully everyone will vote.33:35-33:37That’s the only way we get a fair election.33:37-33:38That’s all I’m going to say.33:38-33:42Now let’s move on to taxes.33:42-33:50As an enrolled agent, one of the things we really do great is trying to help the IRS and you basically not go to war, right?33:50-33:52We’re like a shield between you and the IRS.33:52-34:03We’re able to help you negotiate, pull off some extra time, figure out how we’re going to make a plan to be able to pay back or to get back some of the money.34:03-34:09We’re here to help get the documentation together so you can actually do your taxes.34:09-34:20That’s what our job is, is to help you get back on track because if your taxes are on track, you can apply for loans, your kids can go to college under the FAFSA.34:20-34:25You have obviously several options of what you can do to make it happen.34:25-34:28So that’s what you’re going to want to have.34:28-34:34And then of course I have a case right now where a gentleman hadn’t filed taxes in 20 years.34:34-34:44Hey, these are all people’s personal choices, but now he found out he doesn’t actually qualify for social security and he’s getting to an age where he’s thinking he might want social security.34:44-34:52So some of the choices you make as you go through, especially self-employed individuals, you don’t have W-2s, you don’t have anything.34:52-34:59And if you choose not to file taxes, and in many industries, especially construction, people are not 1099.34:59-35:03So the government has no idea how much money you’re making and what it’s going for.35:03-35:08So you are now at a place where you’re sitting there going, okay, I’m 58 years old.35:08-35:12I want to think about Medicare and social security.35:12-35:15Yet you haven’t filed taxes in 20 years.35:15-35:17There’s no record of you actually qualifying.35:17-35:27You have to have worked in the last 30 years, 10 years or 40 quarters, you have to have worked to qualify for social security.35:27-35:32Thinking Medicare too, I’m more on the social security side.35:32-35:33So that’s important, right?35:33-35:37So now you’re getting older and you’re sitting here thinking, I don’t have any insurance.35:37-35:39I’m not going to have any retirement.35:39-35:41I haven’t put any money aside.35:41-35:43Yet taxes become important.35:43-35:45So in this case, we’re having to go back.35:45-35:46We’re going to need to file.35:46-35:57I usually don’t have to go back that far, but he’s going to have to, between now and his 62nd birthday, if he’s trying to hit early, he’s got a few years, plus he’s got to go back.35:57-36:07He needs to have 10 years of taxes, which also means he owes taxes, penalties, interest, all of that, that he’s going to have to try to figure out how to pay.36:07-36:09So these are important things.36:09-36:11He may be able to do an offer and compromise.36:11-36:13He’s not doing very well at this point.36:13-36:18So that may be a blessing for the tax side, but we need to have everything filed and up to date.36:18-36:23So just saying, if this is something you know, or you’ve heard, or you’re in, we can help you get that done.36:23-36:26And maybe you too can file for an offer and compromise.36:26-36:28We can also walk our way through that.36:28-36:32If you want help on understanding that, you can certainly give us a call.36:32-36:36Number in the studio right now, in case you have some questions, this will be our last break.36:36-36:45We’ll be right back with The Dr. Friday Show.36:45-37:06I am Dr. Friday, an enrolled agent.37:06-37:15If you’ve got questions on taxes, you can join us the next few minutes at 615-737-9986.37:15-37:23During the break, I did receive an email that was someone asking about 1099s.37:23-37:28So let me go over that real quick, just to make sure everyone understands.37:28-37:40So if you have someone that does work for you, especially if it’s a rental property, or for your business, where you’re deducting that cost, you need to be issuing a 1099.37:40-37:43One of the things I can think of is your lawn person.37:43-37:58But if you have someone that does the lawn, or if you’ve got a repair person, or handyman, or whatever, those people need to be able to receive 1099s for anything over $599, or $600 or more.37:58-38:07So if you pay somebody throughout the year, not just one transaction, but even throughout the year, so maybe it’s $100 a week, but you do 12 weeks, that’s $1,200.38:07-38:15That person should receive a 1099 if it has to do especially with anything to deal with business as far as I’m concerned.38:15-38:23Now sometimes, obviously, some people will actually do it to people that do repairs on their home and things.38:23-38:26And it’s correct, you should do anybody you pay more.38:26-38:29But for the most important part is rental properties.38:29-38:33I find that so often people do not do it.38:33-38:35But that is a tax deduction.38:35-38:36You are deducting the lawn service.38:36-38:41That person needs to be picking up the income because someone’s got to pay tax on it.38:41-38:45Since you’re reducing it, you need to have somebody that’s paying the other side of it.38:45-38:50Same thing for anything like tree removals, anything it takes to maintain our rental properties.38:50-38:51Also in your business.38:51-38:54So maybe you have day labor.38:54-39:00Just because it is day labor doesn’t mean you cannot obtain that person’s legal name, address, and social security number.39:00-39:06If you’re paying them more than $600, that person needs to be dealing with that situation.39:06-39:07Right?39:07-39:08I mean, that’s the way the rules make.39:08-39:14If you have to pay taxes, then everyone else in the world should have to pay their share, as far as I’m concerned.39:14-39:17So making sure that you’re 1099-ing those individuals.39:17-39:22Now the only people you don’t have to 1099 are people that have a corporation.39:22-39:29So if their name is Dr. Friday Tax and Financial Firm, Inc., which is what it is, that person doesn’t have to receive.39:29-39:33Tax law’s a little different for a corporation because of the way we have to treat everything.39:33-39:37But if it’s an LLC, you do have to 1099 that person.39:37-39:42If it is a, well, I mean, I can put a small caveat out there.39:42-39:49LLCs can be treated as a corporation and/or as a partnership.39:49-39:54If they are being treated as a corporation, you don’t have to 1099.39:54-39:59But the only way you’re going to know that is to have them fill out a form called a W-9.39:59-40:08If you are a contractor or you are an individual that does a lot of work, then you need to keep those in your car or have an electronic one that people can fill out.40:08-40:18But somewhere where you have that being done so at the end of the year, when you’ve tracked all your payments to all of your subcontractors and individuals that work for you, then you can prepare.40:18-40:20Remember, those are basically due January 31st.40:20-40:23There’s not a lot of time from the end of the year to now.40:23-40:31So if your business has a slower period during the year, you know, theoretically mine will slow down in November and December a lot of times.40:31-40:35That’s the time to get your records in order, get everything organized.40:35-40:40So you’re ready to hit January and go ahead and get everything filed.40:40-40:45Your tax person or your bookkeeper may handle that.40:45-40:50I mean, obviously our bookkeeping firm handles that for our monthly tax clients.40:50-40:57If you do it yourself, a company, I don’t get any money, but the company I love using is e-file for biz.40:57-41:02It’s e-file and then the number four and then the word biz.com.41:02-41:03They do a great job.41:03-41:06They handle all the filings with the government.41:06-41:08All you have to do is type it in.41:08-41:11They’ll do everything and then you can print out.41:11-41:17You can even have them emailed to your individuals or you can print out, hand them out or whichever way you want to do it.41:17-41:32But it’s a great organization because a lot of times I have people that will get the forms and they’ll fill everything out, but I find out they never mailed in what we call the pink copy to social security administration or to the internal revenue service.41:32-41:42So even though they may have handed out 1099s, they didn’t do the process properly and therefore they ended up with not getting the, the IRS is still looking at them for penalties.41:42-41:47And I believe the penalty now is $500 for each 1099 you do not complete.41:47-41:51So if you’ve got, you know, a hundred of them, that can be a lot of money.41:51-41:55But if you’ve got 10, that’s still a healthy $5,000, not petty cash.41:55-41:59So you know, it’s time to start thinking about who you need to do.41:59-42:07And then if you still have, you know, if they’re still then and you haven’t gotten a W nine, now’s the time to go ahead and say, Hey, I’m going to be preparing the form soon.42:07-42:16So I need you to confirm this information and you know, and you can basically say if they don’t want to give you that information, you know, that’s fine.42:16-42:24But then you have to withhold 25% of what you’re paying them and send that to the IRS.42:24-42:29Because therefore they’re basically saying they’re not going to report it because they’re not going to give you the information.42:29-42:32Therefore, you know, they’re, they’re trying to avoid taxes.42:32-42:37Well, the government says as employers or subcontractors, we have to do something.42:37-42:50We have to then withhold 25% of what we pay to these individuals and send that as if it’s like a payroll tax to the IRS because then the people are more up to file because now they’ve got taxes in there.42:50-42:57And two, if they don’t want to, the government’s been paid what they consider at least, I guess, a fair transition.42:57-43:01And in many cases people would actually, Oh, probably less than that than what they have right there.43:01-43:05But you know, again, people will do what they can to avoid sometimes taxes.43:05-43:14So whatever, whatever that is, is important that we actually have the situation, you know, in line and you’re able to get done what you need to do.43:14-43:22So again, as someone that hires somebody else, it is your responsibility to make sure that you have filed the 1099.43:22-43:23You can’t make anyone file taxes.43:23-43:26It’s not your job, but your job is to make sure.43:26-43:35And if they will not give you that information, it is your job to withhold 25% because they’re, they’re not following the rules and therefore you could be held.43:35-43:36You could get a letter.43:36-43:42Some of you may have actually done that.43:42-43:43You may have done that.43:43-43:56And if that’s the case, then you want to make sure that you’re covering yourself because the IRS will come back to the employer, the individual that they work for first, and they could cause the fines or they can hit you with penalties.43:56-44:00So, and then misclassification is a big one right now.44:00-44:03They’ve got a whole division handling misclassification.44:03-44:08And that is people that you have working for you today that are truly employees.44:08-44:15So let’s say you have a guy that comes into work every day and you tell him where to go, what to do.44:15-44:19You know, you may even provide him a truck and all of that.44:19-44:25And then your 1099, that is not a subcontractor.44:25-44:27Subcontractor is someone that chooses to say, Hey, I’m going to come over to this house.44:27-44:28Okay.44:28-44:29I’ll repair this one.44:29-44:30No, I don’t want to drive that far.44:30-44:31I’m not going to repair that one.44:31-44:36He has his own tools, his own truck, and you’re just giving him work as he goes.44:36-44:43That’s a subcontractor and somebody that comes in your office all day and works, that is not a subcontractor.44:43-44:46You know, it’s just, you know, makes sense.44:46-44:51If you tell someone, well, from eight to five, you need to come in here and do the mail and answer the phones.44:51-44:54And, you know, I have some people that, you know, have jobs like that.44:54-45:00And I’m like, this is a W2 job, but of course people are afraid to say something to their employers because of it.45:00-45:16So that’s a choice, but keep in mind that employer is also saving a minimum of 10% when they do that, because they put the social security benefit onto you, which they would normally have to match, which is 7.65 plus unemployment and all that, which they’re not paying.45:16-45:17All right.45:17-45:19So this is a widening down to the end of the show.45:19-45:27If you want to contact my office on Monday, you can at 615-367-0819.45:27-45:34Again, 615-367-0819.45:34-45:37You can also check us out on the web, drfriday.com.45:37-45:41Our calendar is out there now for the 2024 tax season.45:41-45:44So time to start looking.45:44-45:46There is two EAs in our office, myself and Chris.45:46-45:53So if you don’t see my calendar open, look at Chris, he’s probably available and we’ll be able to do something on that.45:53-45:54Also we have Lolita coffees.45:54-45:57You guys have heard me talk about them in the past.45:57-46:02If you’re looking for a unique gift, you need to go to lolitaroasters.com.46:02-46:04Lolitaroasters.com.46:04-46:15They’ll make a custom coffee just for you or your company and bag it and package it for what you would normally play for cookies or something like that, that didn’t even have an originality.46:15-46:16This would be your brand.46:16-46:19So it’s something you really, lolitacoffee.com.46:19-46:23I’m sorry, lolitaroasters.com is the website.46:23-46:25Hope you guys are going to have a wonderful Saturday.46:25-46:27It’s a great day outside.46:27-46:32Again, if you want to reach us in our office, 615-367-0819.

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Dr. Friday highlights the 2024 mileage rates, crucial for self-employed individuals. The business mileage rate is set at 67 cents per mile, while medical and moving miles (typically for the U.S. military) are 21 cents per mile, and charity miles are 14 cents per mile. Dr. Friday emphasizes the importance of maintaining a proper mileage log, as the IRS requires accurate records to validate deductions. Tune in to Dr. Friday’s call-in show every Saturday for more tax insights.

Transcript:

G’day I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Mileage rate always important for especially a self-employed individuals that are able to deduct mileage. 67 cents per a business mile is what we’re going to get in 2024. 21 cents per a medical mile or moving mile if it applies only for the US military usually and then 14 cents for charity per a mile.

Important but we’re also going to need to make sure you’re tracking those miles properly. You can’t just look up in the sky and say oh yeah I did 25,000 miles because I run in real estate. You need the number, you need a mileage log otherwise the IRS can disallow tax deductions and that’s not right.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday explains the key difference between tax credits and tax deductions. While both reduce your taxes, credits are more valuable since they reduce your tax bill dollar for dollar. For example, a $1,000 credit lowers your taxes by $1,000, whereas a $1,000 deduction in a 22% tax bracket only saves you $220. Understanding this distinction can help maximize your tax savings. For personalized tax assistance, reach out to Dr. Friday or tune in to her live call-in show every Saturday.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Many people are always asking me, tax credit, tax deduction. What is the difference? Why do I care if it’s a credit, it’s a deduction, it’s going to reduce my taxes, right? Well, it is. That’s perfectly logical. But the other side of it is a credit is dollar for dollar. So if they say there’s a $1,000 credit, you’re going to reduce your taxes by $1,000. If it’s a deduction, and they say they’re going to deduct $1,000, and you’re at the 22% tax bracket, guess what? You’re going to have a $220 deduction, not a thousand. So deductions are good. Credits are awesome.

You need help with taxes, call me at 615-367-0819. You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3pm right here on 99.7 WTN.

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Dr. Friday breaks down the 2024 itemized deduction limits, noting that singles have a limit of $14,600, married couples $29,200, and heads of households $21,900. Those over 65 receive an additional $1,950 if single or $1,500 each if married. She emphasizes that not everyone will itemize, which might mean you’re saving money while still benefiting from a substantial tax deduction. For personalized help, reach out to Dr. Friday or tune in to her live call-in show every Saturday.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Itemized deductions for 2024. So if you are single, you’re going to have $14,600. If you’re married, $29,200 and head of household, $21,900. If you’re over the age of 65, you’re going to get an additional $1,950 if you’re single. And if you’re married, a married couple will get $1,500 for each person over the age of 65. So when thinking about itemizing, a lot of times people, you’re not going to be able to do it. Doesn’t mean a bad thing. It just means you’re not spending as much money and still getting a big tax deduction. If you need help, call us.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Dr. Friday discusses the upcoming reduction in the Child Tax Credit for 2024, highlighting that the credit will decrease to $2,000 for children under 17 and $500 for those over 17. This change means losing $1,000 per child under 17, which could impact your tax liability. Dr. Friday advises checking your budget now to avoid unexpected taxes due to this adjustment. If you need assistance, reach out to Dr. Friday’s team or tune in to her live show on Saturdays.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Child tax credit. As of 2024, it will go down to $2,000 for children under the age of 17 and $500 for children over the age of 17. So that means that you’re going to lose about $1,000 for children under and that’s going to hurt your budget. So you better make sure right now that you’re testing out to make sure if you lose a couple thousand dollars, you’re not going to owe more in taxes due to this tax adjustment. No extension has been filed on this under the tax code. If you need help, give us a holler at 615-367-0819.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this episode of the Dr. Friday Show, financial counselor and tax consultant Dr. Friday discusses various tax-related topics, provides advice on business practices, and answers caller questions about specific tax situations.

Key topics covered:

• October 15th tax extension deadline and the importance of filing on time
• Quarterly estimated tax payments and penalties for late payments
• Business Ownership Information Act requirements and potential penalties
• Health insurance deductions for self-employed individuals
• Flex spending account carryover limits for 2024 and 2025
• Social Security benefits and taxation for those still working
• Medicare enrollment considerations and potential penalties
• 1031 exchanges and capital gains tax implications
• Employing children in family businesses and associated tax benefits
• Business mileage deduction rates for 2024
• Distinguishing between legitimate businesses and hobbies for tax purposes

Transcript00:00.001 –> 00:06.640No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your00:06.640 –> 00:07.640financial woes.00:07.640 –> 00:09.920She’s the how-to girl.00:09.920 –> 00:10.920It’s the Dr. Friday Show.00:10.920 –> 00:20.120If you have a question for Dr. Friday, call her now, 737-WWTN.00:20.120 –> 00:23.880That’s 737-9986.00:23.880 –> 00:27.640So here’s your host, financial counselor and tax consultant, Dr. Friday.00:27.640 –> 00:36.960G’day, I’m Dr. Friday, and the doctor is in the house on this very rainy day.00:36.960 –> 00:48.720If you want to join the show, you can at 615-737-9986, 615-737-9986, taking your calls, talking about00:48.720 –> 00:50.360my favorite subject, taxes.00:50.360 –> 00:54.700Right now, we’re in the midst of finishing up the 2023 tax returns.00:54.700 –> 00:57.280They are due October 15th.00:57.280 –> 01:02.180If you filed an extension, if you are not on extension, you’re late.01:02.180 –> 01:03.860So probably makes no difference.01:03.860 –> 01:08.740But if you are on extension, you do need to file that return so you don’t get failure01:08.740 –> 01:10.920to file on time penalties.01:10.920 –> 01:13.300It does not extend the money.01:13.300 –> 01:17.340After all these years, it seems like I’ve said this a lot, but you need to realize it01:17.340 –> 01:20.480doesn’t extend the money that you owe.01:20.480 –> 01:26.500If you owe money and when you file in October, that money is going to have to be something01:26.500 –> 01:31.540that you should have paid back in April or even May quarterly throughout the time to01:31.540 –> 01:33.140do what you needed to do.01:33.140 –> 01:38.860So it’s not something that you can just say, “Hey, everybody would extend it to October01:38.860 –> 01:40.22015th if we didn’t have to pay.01:40.220 –> 01:44.060I mean, everyone would wait to the very last minute to make that payment.”01:44.060 –> 01:46.220So obviously, that’s not the case.01:46.220 –> 01:50.660So I just want to make sure everyone understands that the situation is if you’re going to owe01:50.660 –> 01:54.500money to the IRS, you should have paid it already.01:54.500 –> 02:01.140And it should have been paid obviously by April 15th thereabouts or even estimates quarterly02:01.140 –> 02:03.020throughout the year.02:03.020 –> 02:04.100We’re just about through.02:04.100 –> 02:09.660Well, we’ve already had our third quarterly, so we only have one left for the year of 2024.02:09.660 –> 02:16.300And if you’re filing your taxes right now in October, then you basically haven’t made02:16.300 –> 02:20.620and if you haven’t just went ahead and at least estimated based on the prior year to02:20.620 –> 02:25.300the best of your ability, you’re now three payments behind on the current year.02:25.300 –> 02:29.500So you haven’t actually paid your 2023 yet possibly all of it.02:29.500 –> 02:34.140You also waited until that return was completed to make your quarterlies and you should have02:34.140 –> 02:39.540been making them in April, June, September, and now January will be the last one.02:39.540 –> 02:42.020So you need to catch all those up as well.02:42.020 –> 02:46.260It’s not just, “Well, if I have it, I can do it,” or whatever.02:46.260 –> 02:48.300It is a mandate as far as I’m concerned.02:48.300 –> 02:54.140There are penalties that are assessed if you do not file quarterly estimates for anyone02:54.140 –> 02:58.460that owes money or has owed money in the past.02:58.460 –> 03:04.060So let’s say you filed your 2022 taxes and if you waited until October, whatever, and03:04.060 –> 03:10.080you owed $5,000, that means it automatically says that you are going to need to make quarterly03:10.080 –> 03:12.780estimates for 2023, right?03:12.780 –> 03:15.940Because you owe 5,000, you’re supposed to be paying this as you go, not wait till the03:15.940 –> 03:18.260end of the year and then make the payment.03:18.260 –> 03:22.780Even if you paid it in full, there would have been a sweet little love letter that you would03:22.780 –> 03:27.860have received that said, “Failure to make timely estimated payments.”03:27.860 –> 03:31.100Now if it was your first year and that was the first time it happened, you may not have03:31.100 –> 03:36.500received it, but if you’re a person that every year you file, every year you owe, then the03:36.500 –> 03:37.620quarterlies are there.03:37.620 –> 03:41.740Even if you’re W-2, we always assume that quarterlies really only has to do with the03:41.740 –> 03:42.740self-employed.03:42.740 –> 03:43.740That’s not true.03:43.740 –> 03:47.380It’s the people that are retired that have to do quarterly estimates.03:47.380 –> 03:52.300Now if we do it right, we can have the money coming out of their retirements in different03:52.300 –> 03:56.660ways, so they don’t physically have to make those estimated payments because it can be03:56.660 –> 03:58.380a real pain in your derriere.03:58.380 –> 04:02.900But one way or the other, you do need to make sure that you’re paying in this money and04:02.900 –> 04:07.080not waiting until October of the following year to make those payments.04:07.080 –> 04:11.380You are giving the IRS penalties and interest and that’s just the way it is, right?04:11.380 –> 04:13.260I mean, it is the way it is.04:13.260 –> 04:17.660So if you haven’t done it, you know, I’m all about, let’s try to pay as little amount of04:17.660 –> 04:20.420penalties and or interest than we can.04:20.420 –> 04:22.620I just don’t want to give the money if I don’t have to.04:22.620 –> 04:23.620All right.04:23.620 –> 04:27.020So if you’ve got questions, maybe you’ve got a situation where maybe you’ve got something04:27.020 –> 04:33.020that’s maybe a one-time situation or you’ve inherited something or you’re selling something,04:33.020 –> 04:36.620then you might want to be able to see how that’s going to work and you can do that.04:36.620 –> 04:45.220You can call here 615-737-9986.04:45.220 –> 04:48.180Let’s go to the phones and hit Mark and see if he can add.04:48.180 –> 04:50.460Hey Mark, what can I do for you?04:50.460 –> 04:51.460Hey, Dr. Freddie.04:51.460 –> 04:54.060I look forward to hearing your show every week.04:54.060 –> 04:55.060Got a question.04:55.060 –> 05:02.580My wife and I filing jointly, I always had a small business on the side, Schedule C kind05:02.580 –> 05:04.820of a thing.05:04.820 –> 05:09.420Now she has her own little business on the side.05:09.420 –> 05:16.940Would it be better for us to be married separately and she does hers and then I do mine or will05:16.940 –> 05:24.300they take two side businesses on the married joint and 40?05:24.300 –> 05:25.460That’s actually a great question.05:25.460 –> 05:27.300I don’t think I’ve ever been asked that Mark.05:27.300 –> 05:30.060And it’s a good question because you know, you don’t think about it.05:30.060 –> 05:33.220The answer is yes, you can both, you can stay as married.05:33.220 –> 05:37.580And in most cases, and again, I don’t know your personal tax situation and it depends05:37.580 –> 05:39.260on how much money you’re each making.05:39.260 –> 05:43.020If there’s any kind of marriage penalty, but married filing separately is going to have05:43.020 –> 05:45.460more penalty than married filing jointly.05:45.460 –> 05:49.140So bottom line is it’s most likely still going to be better.05:49.140 –> 05:53.580But that being said, I would, and I do this all the time for my clients that are both05:53.580 –> 05:54.740self-employed.05:54.740 –> 06:00.420I calculate the tax to the best of my ability to be able to say, this is how much Mark would06:00.420 –> 06:02.780owe and this is how much the spouse would owe.06:02.780 –> 06:06.900So you’re each making sure you’re paying in based on your own business, your business06:06.900 –> 06:10.460of success when you’re paying your taxes is along with everything else.06:10.460 –> 06:11.460Right?06:11.460 –> 06:15.200So you don’t want, I mean, it’s all maybe the family money when it’s all said and done,06:15.200 –> 06:18.440but it’s still good for a business to carry its own weight.06:18.440 –> 06:24.460So I think at least, so at least that way you both can actually pay in your own quarterly’s.06:24.460 –> 06:26.540You can pay them under your own social security numbers.06:26.540 –> 06:29.940Then it would all merge together at the end of the year and you’d be good to be able to06:29.940 –> 06:31.260do the other side of it.06:31.260 –> 06:32.260Yes.06:32.260 –> 06:37.100I would still most likely, I mean, again, you might want to, if you want a free consult06:37.100 –> 06:41.940or whatever, we may just want to look at your numbers to make sure, but under most circumstances,06:41.940 –> 06:45.820married filing jointly is still a better package than married filing separately.06:45.820 –> 06:46.820Great.06:46.820 –> 06:47.820Thank you so much.06:47.820 –> 06:48.820Thanks for the call.06:48.820 –> 06:49.820I appreciate that, Mark.06:49.820 –> 06:50.820All right.06:50.820 –> 06:51.820Really quick.06:51.820 –> 06:52.820Let’s take Kelly and see if I can help.06:52.820 –> 06:53.820Hey, Kel.06:53.820 –> 06:54.820Hey, Dr. Farhadi.06:54.820 –> 06:55.820How are you?06:55.820 –> 06:56.820I am doing awesome.06:56.820 –> 06:57.820How about yourself?06:57.820 –> 06:58.820Hey, great.06:58.820 –> 06:59.820Just wanted to let you know.06:59.820 –> 07:01.220Hey, great.07:01.220 –> 07:02.220Just got off of work.07:02.220 –> 07:03.220I’m on the lot.07:03.220 –> 07:04.220I enjoy your show.07:04.220 –> 07:05.220I have a quick question.07:05.220 –> 07:06.220Sure.07:06.220 –> 07:19.620I’m building a shop at my residential, at my home, and I’m using a local company and07:19.620 –> 07:26.060I was going to borrow $40,000 from my daddy and he was just going to write me a check07:26.060 –> 07:30.180and I was going to deposit it into my bank account.07:30.180 –> 07:36.060So I got to thinking, well, I don’t know if that’s a good idea to deposit that much money.07:36.060 –> 07:40.580I mean, I didn’t really know what, what are your thoughts?07:40.580 –> 07:41.580What should I do?07:41.580 –> 07:42.580Should I do that or is that where I have to pay taxes?07:42.580 –> 07:43.980I don’t think you have to worry about it.07:43.980 –> 07:49.580It’s not like you’re taking $40,000 in cash because when you hear about issues, the bank07:49.580 –> 07:53.340may have some questions if someone walked in with $40,000 cash and say, “Well, where07:53.340 –> 07:56.540did you get the money? Who gave it to you?” under the money laundering laws.07:56.540 –> 07:58.740But with a check, there’s no problem.07:58.740 –> 07:59.860He’s got a bank account number.07:59.860 –> 08:00.860You’ve got one.08:00.860 –> 08:05.260They know who it is and you can either consider, daddy can consider it a gift alone.08:05.260 –> 08:06.260It doesn’t make any difference.08:06.260 –> 08:07.260That’s between you and him.08:07.260 –> 08:11.820There’s no tax on that $40,000, at least not from your standpoint.08:11.820 –> 08:15.680And there’s none from your father’s as long as he’s already paid tax on it.08:15.680 –> 08:20.020So it’s really outside the tax code, but there’s no issue with you putting that money in the08:20.020 –> 08:21.620bank and then using it.08:21.620 –> 08:26.820The biggest question would be is how you depreciate the building when the time comes.08:26.820 –> 08:30.300Because obviously it’s a work building, but it’s also on your primary property, which08:30.300 –> 08:32.080we have some exclusions.08:32.080 –> 08:33.900So we just have to figure out what’s going to be.08:33.900 –> 08:37.980You may have some recapture of depreciation when you sell the house and that may be years08:37.980 –> 08:44.060from now, but the building definitely needs to be added to your schedule C or E or D or08:44.060 –> 08:46.100whatever you’re filing your business under.08:46.100 –> 08:47.100Okay.08:47.100 –> 08:53.500Well, I was just under the impression that like if I deposited over $10,000, I had to08:53.500 –> 08:56.140report it to the IRS and all that stuff.08:56.140 –> 08:58.900And that’s only if it’s cash, just so you know.08:58.900 –> 09:02.340So if it’s a check, they already got your daddy’s information.09:02.340 –> 09:03.340Okay.09:03.340 –> 09:04.340Oh, okay.09:04.340 –> 09:05.340Great.09:05.340 –> 09:06.340Well, thank you so much.09:06.340 –> 09:07.340I really do appreciate it.09:07.340 –> 09:08.340No problem.09:08.340 –> 09:09.340Thanks for listening.09:09.340 –> 09:10.340I appreciate it.09:10.340 –> 09:11.340Yes, ma’am.09:11.340 –> 09:12.340Have a good day.09:12.340 –> 09:13.340You too.09:13.340 –> 09:14.340All right.09:14.340 –> 09:15.340So those were awesome questions actually.09:15.340 –> 09:17.540I mean, I think that’s the easiest way to do it.09:17.540 –> 09:21.660And I can’t tell you how many times people have asked, especially about, I mean, we all09:21.660 –> 09:25.780know if we put $10,000 in a bank, they’re going to say, who’s it from or whatever.09:25.780 –> 09:28.600We don’t always understand how that exactly works.09:28.600 –> 09:34.260And with new businesses, of course, we have the business ownership information act that09:34.260 –> 09:40.260came out where if you own a business, basically the simplest way is any business owner that09:40.260 –> 09:44.860is an LLC, a corporation, a partnership, anything registered with the state, you need09:44.860 –> 09:50.460to now register with the foreign banking, which is also the same people that deal with09:50.460 –> 09:54.220banking laws as far as money laundering.09:54.220 –> 09:57.300And they’re just trying to find out from my understanding, I’m being a couple of different09:57.300 –> 10:02.820calls because I’m like, why do we need to upload people’s driver’s licenses onto a website10:02.820 –> 10:06.700where the government already has a lot of this information?10:06.700 –> 10:11.140And we’re being told that basically it’s all coming down to, again, it’s money laundering10:11.140 –> 10:15.060laws as well as foreign investors.10:15.060 –> 10:19.300They’re trying to basically be able to figure out what the foreign investors are, where10:19.300 –> 10:23.740they’re going and what that’s going to mean to people.10:23.740 –> 10:28.420So again, don’t forget if you have a business and you’ve been in business for years, you10:28.420 –> 10:29.420have to do this.10:29.420 –> 10:33.180If you’ve just started the business in the last 60 days, you have to do this.10:33.180 –> 10:39.740There are some exclusions if you’re into the insurance or different regulations, but for10:39.740 –> 10:42.900most of us, they’re just ordinary businesses.10:42.900 –> 10:46.220We’re required by this new law to do this.10:46.220 –> 10:50.780And the worst is, and I haven’t seen any yet because the deadline hasn’t happened, but10:50.780 –> 10:56.820the paperwork that they’re putting out is saying if you don’t comply with this business10:56.820 –> 11:02.580owners information act, that they’re going to charge you $500 a day penalty for not doing11:02.580 –> 11:03.580it.11:03.580 –> 11:06.100So it’s one of those deals where a lot of people are like, what?11:06.100 –> 11:07.260I don’t know anything about it.11:07.260 –> 11:08.620How do I do it?11:08.620 –> 11:14.900You can pretty much Google business information act or business owners information act, and11:14.900 –> 11:18.340you can find out there’s a website that has to go in there.11:18.340 –> 11:24.060But it is something that if you run a business, not a sole proprietorship, those are not required,11:24.060 –> 11:29.140but if you run a single member LLC, any of the others, most of those are coming out as11:29.140 –> 11:31.980we do need to file this information.11:31.980 –> 11:33.180So I’m just putting it out there.11:33.180 –> 11:37.340So you make sure, you know, you don’t just kind of let it go by and you might be up in11:37.340 –> 11:38.780the business for 50 years.11:38.780 –> 11:40.180I don’t need to do this.11:40.180 –> 11:41.460Yes, you do.11:41.460 –> 11:42.700All of us have to do it.11:42.700 –> 11:47.140If again, if it’s an entity type, if it’s a sole proprietorship, no, you do not have11:47.140 –> 11:48.140to do it.11:48.140 –> 11:50.660All right, we’re going to get ready to take our first break.11:50.660 –> 12:02.140You can join the show if you want at 615-737-9986, 615-737-9986, taking your calls.12:02.140 –> 12:06.740We’re also start talking about some unique holiday gift ideas for your clients.12:06.740 –> 12:12.020We have a company called Lolita Roasting offering some really cool, special personalized coffee12:12.020 –> 12:14.020roasting just for your company.12:14.020 –> 12:15.020That’s right.12:15.020 –> 12:20.140They will roast your own brand of coffee just for you to be able to then customize this12:20.140 –> 12:22.380and send it out to your clients.12:22.380 –> 12:26.540And it’s a great way for you to have your own unique brand.12:26.540 –> 12:28.980And we’re all talk a little bit more about that, but let’s take our quick break.12:28.980 –> 12:32.740We’ll be right back with the Dr. Friday show.12:32.740 –> 12:39.180All righty, we are back here live in studio.12:39.180 –> 12:49.660You can join us live at 615-737-9986, 615-737-9986.12:49.660 –> 12:53.660Let’s talk about a few things you can take off your taxes, especially the entrepreneur.12:53.660 –> 12:58.500Entrepreneurs, did you know a self-employed individual may deduct 100% of their health12:58.500 –> 13:01.820insurance premium as an above the line deduction.13:01.820 –> 13:07.420It will not reduce your self-employment tax, but it will be a 100% deduction against ordinary13:07.420 –> 13:09.380income tax.13:09.380 –> 13:14.020So making sure that you have that kind of situation is always good.13:14.020 –> 13:17.420FAFSA, the permit to carry over unused amounts.13:17.420 –> 13:22.860That’s the flex spending account that some people will have at work, or you may have13:22.860 –> 13:26.260your own individual, more of a plan of the health savings account.13:26.260 –> 13:30.900But the flex spending account, you have to roll, you can only roll a portion.13:30.900 –> 13:33.180So we’re getting announced the last quarter.13:33.180 –> 13:39.180If you have money in that account, you can roll over $640 that can be carried over into13:39.180 –> 13:41.9802025.13:41.980 –> 13:48.700And for unused amounts in 23, the maximum amount you can carry over into 24 was 61013:48.700 –> 13:50.020permitted to carry over.13:50.020 –> 13:53.820So into 2024, you had 610.13:53.820 –> 13:54.980They’ve upped that now.13:54.980 –> 14:01.140So in 2024 to roll it over into 2025 is $640.14:01.140 –> 14:05.940So if you have more than that sitting in a flex savings account, you need to go spend14:05.940 –> 14:09.700it because you’re going to lose it or have to pay tax on it.14:09.700 –> 14:13.020Either way, we don’t want to do either of those if it’s possible.14:13.020 –> 14:17.500So your best plan would be is to be able to take those and move that money into where14:17.500 –> 14:19.740you want it to go.14:19.740 –> 14:22.940Also if you, a lot of people look, start looking now at donations.14:22.940 –> 14:24.740I know I just actually cleaned my closet.14:24.740 –> 14:27.780I got two big bags for charity.14:27.780 –> 14:33.060Remember that you can contribute up to $250 more, but you have to have proof that those14:33.060 –> 14:35.460donations are for more than that.14:35.460 –> 14:40.260So if you just have a big old bag and you’re not itemizing it, you don’t have an appraisal14:40.260 –> 14:45.580or anything like myself, you cannot deduct more than $250 even if you feel it’s worth14:45.580 –> 14:46.700more than that.14:46.700 –> 14:49.420All right, let’s go to Lenny in Brentwood.14:49.420 –> 14:50.420Hey Lenny.14:50.420 –> 14:51.420Hey, thanks for taking the call.14:51.420 –> 14:53.420I’ve got a question.14:53.420 –> 14:59.300I’m self-employed, have a business, been working all my life since I’ve been 14 years old.14:59.300 –> 15:03.340So I’m 66, I’ll be 67.15:03.340 –> 15:07.740If I take Social Security or can I take Social Security while I’m still actively employed15:07.740 –> 15:10.580and making good income?15:10.580 –> 15:11.580Perfect answer.15:11.580 –> 15:14.820And I will tell you what, I am not, first caveat, I’m not a financial planner.15:14.820 –> 15:16.720I’m going to give you my two cents on it.15:16.720 –> 15:19.980You probably need to talk to someone that actually thinks a little bit more.15:19.980 –> 15:23.340My opinion is yes, I mean absolutely you can.15:23.340 –> 15:27.140As soon as you hit your full retirement, you can take your, I mean you can always take15:27.140 –> 15:29.100it early but there’s limitations, right?15:29.100 –> 15:32.940But once you hit the full, they can’t take back any of your Social Security.15:32.940 –> 15:36.980You’re going to pay tax on up to 85% of whatever it is.15:36.980 –> 15:43.780So if they give you $10,000, you’re going to pay tax on 8,500 of it if you’re making15:43.780 –> 15:44.780decent money.15:44.780 –> 15:47.220But who says you won’t pay tax anyways?15:47.220 –> 15:51.380So just put that in the budget so you might as well pull it in.15:51.380 –> 15:59.340Also you’re also possibly now on Medicare so you have to, oh you’re not, you still have15:59.340 –> 16:00.340your own health insurance.16:00.340 –> 16:01.340I do, yeah.16:01.340 –> 16:05.980So you’re saying to me, I’m going to ask you a question, you’re saying that Social Security16:05.980 –> 16:09.220is taxable even though, that’s crazy.16:09.220 –> 16:15.500I know my friend, trust me, as one of my largest pet peeves in life, we paid tax going in and16:15.500 –> 16:18.380now we’re going to pay tax coming out.16:18.380 –> 16:21.380Only way it’s not taxable is if you have no income, right?16:21.380 –> 16:25.260I mean if you make $10,000 or less, then you wouldn’t have to pay tax on it.16:25.260 –> 16:26.780But you said you had a successful business.16:26.780 –> 16:30.860So I’m assuming this is just gravy on top of what you’re already working and making16:30.860 –> 16:32.420a decent income.16:32.420 –> 16:37.620But some people say you can wait till 70 and you’ll make 8% per year in growth so it’ll16:37.620 –> 16:39.500keep going up.16:39.500 –> 16:43.440But the problem with that in my family tree is we don’t have longevity.16:43.440 –> 16:47.100We don’t make it to 80 hardly in the last four generations.16:47.100 –> 16:52.260So it’s like 85 before you even break even to doing something like that.16:52.260 –> 16:55.340So you have to know a little bit more about your family tree and stuff to actually make16:55.340 –> 16:56.340it worth it.16:56.340 –> 17:00.660And to me, I’d rather take my Social Security and leave more of my other retirement because17:00.660 –> 17:03.100people can inherit it than Social Security.17:03.100 –> 17:08.300If I leave it on the table, no one’s going to get it besides the government.17:08.300 –> 17:09.780So that’s my two cents on that one.17:09.780 –> 17:14.480But yeah, but Lenny, don’t you at 65, didn’t you have to sign up for Part B or there’s17:14.480 –> 17:16.160a penalty, isn’t there?17:16.160 –> 17:19.360I think there is, but I just, I don’t go to doctors.17:19.360 –> 17:20.360I don’t.17:20.360 –> 17:23.440Oh, I hear you my love, but you paid for Medicare already.17:23.440 –> 17:25.360I mean, it’s not like something new.17:25.360 –> 17:29.120I mean, it’s something you throughout your whole life when you work, you’ve been paying17:29.120 –> 17:30.960into Medicare tax.17:30.960 –> 17:33.000So you might want to look into it.17:33.000 –> 17:34.000I mean, why not?17:34.000 –> 17:35.680I mean, you know, it’s up to you.17:35.680 –> 17:40.460I’m not, again, not an insurance salesman, but theoretically I think at 65 we’re supposed17:40.460 –> 17:42.260to all register for it.17:42.260 –> 17:48.980And then at 67 or there between 66, 67, depending on your age, birth date, you can start taking17:48.980 –> 17:49.980your Social Security.17:49.980 –> 17:50.980Okay.17:50.980 –> 17:51.980Well, that’s the answer I wanted to hear.17:51.980 –> 17:52.980Thank you.17:52.980 –> 17:53.980No problem.17:53.980 –> 17:54.980Thanks for calling Lenny.17:54.980 –> 17:55.980I appreciate it.17:55.980 –> 17:56.980Thanks.17:56.980 –> 17:57.980Thank you.17:57.980 –> 18:02.260And that’s a conversation we’ve all been having a lot of times.18:02.260 –> 18:03.260Yeah.18:03.260 –> 18:08.560Is, is, I mean, in meetings and things is when do people take, and I will tell you,18:08.560 –> 18:14.120financial planners have these algorithms and different things that they will use.18:14.120 –> 18:16.280Part of it is how long is your family tree?18:16.280 –> 18:18.960What’s your, you know, what’s the longevity, what’s your expectation?18:18.960 –> 18:22.280I have clients that their parents have lived past a hundred.18:22.280 –> 18:27.080I mean, you know, so they have lots of longevity and theoretically if you’re working and you’re18:27.080 –> 18:31.680successfully doing them, I mean, I hope to be working into my eighties to be quite honest,18:31.680 –> 18:33.960if I can make it.18:33.960 –> 18:37.720But you know, if you’re working and you’re making money, taking your Social Security,18:37.720 –> 18:40.760let it grow by 8%, it’s better than what you’re going to get in the bank.18:40.760 –> 18:42.520So why not?18:42.520 –> 18:47.560But for many of us, personally speaking, I think take the Social Security, you can reinvest.18:47.560 –> 18:50.160I mean, some of us, we have SEPs and things like that.18:50.160 –> 18:54.400So we can theoretically turn that money back into retirement that would then not really18:54.400 –> 18:55.720make it so taxable.18:55.720 –> 18:58.400There are some games you can play like that.18:58.400 –> 19:02.520And then, you know, take it in and then it’s in your name, not the government giving it19:02.520 –> 19:04.040to you, but you’ve already paid for it.19:04.040 –> 19:06.560So just again, I am a firm advocate.19:06.560 –> 19:08.200The government has already taken it out.19:08.200 –> 19:11.580I’ve paid a lot of money into Social Security and Medicare.19:11.580 –> 19:16.840So when the time and the age and everything comes up, I will be the first in line to take19:16.840 –> 19:20.680it at the age, I think mine’s 67 at this point.19:20.680 –> 19:23.120And so I will be the first one there saying, yep, it’s time.19:23.120 –> 19:25.560I don’t care what my income is.19:25.560 –> 19:28.320There’s no reason not to take that.19:28.320 –> 19:31.440Now there will be Medicare is means tested.19:31.440 –> 19:34.800That’s the reason I was trying to get Lenny, but he’s he obviously is not worried about19:34.800 –> 19:35.840that side of things.19:35.840 –> 19:40.560But if you sign up for Medicare at 65 and I’m not an expert, it’d be interesting to19:40.560 –> 19:41.560find out.19:41.560 –> 19:43.900But what if I have my own health insurance?19:43.900 –> 19:48.680I think I have to sign up for it at age 65 or there’s a penalty for not doing it.19:48.680 –> 19:54.160But yet they will charge me more money because my income is more than one hundred and eight19:54.160 –> 19:56.520dollars or whatever you’re allowed to have.19:56.520 –> 19:58.680And then they means test it for anything above that.19:58.680 –> 20:03.160So, you know, it’s going to be interesting to see how that all works, because, you know,20:03.160 –> 20:07.000if I don’t have to sign up for it and I can just keep to my own health insurance, I think20:07.000 –> 20:10.520personally speaking, I would rather that than signing up for Medicare.20:10.520 –> 20:14.720But I don’t want to lose out because obviously, you know, you don’t want to leave money on20:14.720 –> 20:15.720the table.20:15.720 –> 20:16.760So that’d be a question.20:16.760 –> 20:19.440Maybe I can get someone on here that can talk a little bit about Medicare.20:19.440 –> 20:22.140I know it’s very confusing for a lot of my clients.20:22.140 –> 20:27.000And I have some great sales people and reps that have been doing insurance sales as long20:27.000 –> 20:28.840as I’ve been doing taxes.20:28.840 –> 20:31.880And we may get them to come back on and do a show and ask some questions.20:31.880 –> 20:32.880All right.20:32.880 –> 20:37.320So we oh, before the last break, and I want to go through this one again.20:37.320 –> 20:42.820If you are looking for a unique holiday gift for your clients, this is mainly for businesses,20:42.820 –> 20:46.120but also if you’re having a wedding, a big family reunion.20:46.120 –> 20:47.120Think about this.20:47.120 –> 20:48.900Lolita Roasters offer something special.20:48.900 –> 20:53.240It’s a personalized coffee roast made just for your company.20:53.240 –> 20:57.960So they’re going to put a bunch of testing questions and say about different things.20:57.960 –> 21:01.640And they’ll say, hey, this kind of coffee, maybe it’s a dark roast, a light roast.21:01.640 –> 21:05.680Maybe it’s Colombian, maybe it’s Irish, you know, all the different things.21:05.680 –> 21:10.480And they’re going to make a custom roast that shows your clients that you went the extra21:10.480 –> 21:11.480mile, right?21:11.480 –> 21:14.860That you actually took the time and you’re not just going and buying some cookies at21:14.860 –> 21:15.900a cookie place.21:15.900 –> 21:19.400You went the extra mile and made something memorable.21:19.400 –> 21:24.600Each holiday box includes your custom coffee and a thank you note, memorable and personal.21:24.600 –> 21:26.000It’s a gift you won’t forget.21:26.000 –> 21:30.440So this year, if you’re looking for something that’s just totally different, something that21:30.440 –> 21:33.140you’re like, Hey, my customers love coffee.21:33.140 –> 21:34.440My customers love coffee.21:34.440 –> 21:37.120Um, it’d be something that we’re actually doing.21:37.120 –> 21:38.800And, and that’s why I got this idea.21:38.800 –> 21:43.240I’m like, wait, if I find this to be a totally cool idea, why not tell other people?21:43.240 –> 21:44.720Because it’s kind of a small branch.21:44.720 –> 21:52.480So visit Lolita Roasters, L O I’m sorry, L O L I T A roasters.com and you can get your21:52.480 –> 21:53.480order.21:53.480 –> 21:54.800You can get on there and start putting your form.21:54.800 –> 21:56.400There’s gonna be a bunch of questions.21:56.400 –> 21:59.160Um, they put you through and they actually give you some sample roasts.21:59.160 –> 22:01.760So I think it’s actually a really unique idea.22:01.760 –> 22:05.160So I thought I’d share it with you guys again, lolitaroasters.com.22:05.160 –> 22:10.880Um, and then, uh, just let them know that Dr. Friday referred you and we’ll see how22:10.880 –> 22:11.880that goes for you.22:11.880 –> 22:13.780And again, we’re doing it ourselves.22:13.780 –> 22:19.000So I think it’s a unique way of just celebrating the holidays instead of just the typical,22:19.000 –> 22:23.160we do a lot of the cookies or we do a lot of the different, uh, big brand stuff this22:23.160 –> 22:24.160time.22:24.160 –> 22:25.240I thought it’d be something just different.22:25.240 –> 22:26.240I liked the idea.22:26.240 –> 22:30.080So, um, if you have that again, lolitaroasters.com.22:30.080 –> 22:33.240So we’re going to be coming back after this next break and we’re going to talk a little22:33.240 –> 22:35.240bit about more of the things.22:35.240 –> 22:37.600October 15th is almost here.22:37.600 –> 22:41.740We’re going to be done with 2023, but at that point we only have a few more months to look22:41.740 –> 22:47.160at 2024 and we’ve all talked a little bit about all of you that like to run out and22:47.160 –> 22:52.240buy new big vehicles and how that may change in 2024.22:52.240 –> 22:56.740If you’ve already done it, you may find out it may not be quite the tax advantage that22:56.740 –> 22:58.240you had in the past.22:58.240 –> 23:00.880And there’s some pros and cons to that.23:00.880 –> 23:05.640So you’re going to make sure that you understand what you have and if you need to think about23:05.640 –> 23:10.880that and we’re also going to keep talking about the BOIR, which again was the business23:10.880 –> 23:16.640owners information act, because if they’re charging $500 a day and you haven’t registered23:16.640 –> 23:22.440and done what you need to do on the website, then that’s going to be a crazy amount of23:22.440 –> 23:25.640penalties just because you’re going to say, I didn’t know.23:25.640 –> 23:28.480And none of my listeners are going to be able to say that because I’m going to say, I’ve23:28.480 –> 23:30.280been saying it for months now.23:30.280 –> 23:34.240Um, so I want to make sure that you understand that that’s really important.23:34.240 –> 23:38.840It’s basically just something that the government is using to track foreign investors, but they23:38.840 –> 23:41.400don’t know if you are or aren’t until you sign up for this.23:41.400 –> 23:42.400All right.23:42.400 –> 23:45.520So when we get back from the break, we’re going to take your phone calls.23:45.520 –> 23:46.520615-737-9986.23:46.520 –> 23:55.760I am an enrolled agent licensed by the internal revenue service to do taxes and representation.23:55.760 –> 23:56.760That’s what I do.23:56.760 –> 23:59.000I’ve been doing it for almost 30 years here.23:59.000 –> 24:02.000And so if you have questions, do you want to know how this is going to work?24:02.000 –> 24:03.100I’m your girl.24:03.100 –> 24:04.760You can also go on our website.24:04.760 –> 24:08.560We’re going to be opening up our calendar so you can start making your tax appointments.24:08.560 –> 24:11.680If you’re already an existing client, you should have already had that opportunity,24:11.680 –> 24:13.860but if not, you’ll be able to go in there.24:13.860 –> 24:15.400Make sure you have that going on.24:15.400 –> 24:18.400We’re going to be right back with the Dr. Friday show.24:18.400 –> 24:19.400All right.24:19.400 –> 24:31.200We are back here live in studio and thank goodness we’ve got a few people.24:31.200 –> 24:32.200So we’ve got, it looks like Mickey.24:32.200 –> 24:33.200Let’s go with Mickey and see what I can help with.24:33.200 –> 24:34.200Hey Mickey.24:34.200 –> 24:41.200I’ve got your Medicare question.24:41.200 –> 24:43.760So I just retired last year.24:43.760 –> 24:46.320I’m a full age of 66 and a half.24:46.320 –> 24:49.160I kept working until January of this year.24:49.160 –> 24:52.520You do not have to sign up for Medicare as long as you have a qualified medical plan24:52.520 –> 24:53.520through your employer.24:53.520 –> 25:00.200The penalty comes in, the penalty comes in is if you don’t have a plan and you wait,25:00.200 –> 25:03.000then they start charging a penalty for however long you wait.25:03.000 –> 25:07.360You’re going to pay more of a premium each month and each year, but your employer will25:07.360 –> 25:11.600send you a, they have some kind of document they send you that says, Hey, our plan meets25:11.600 –> 25:15.720all the specifications and qualifications of, of the, of a Medicare.25:15.720 –> 25:18.920You do not have to sign up for it until you quit your job.25:18.920 –> 25:19.920Thank you very much.25:19.920 –> 25:20.920Seriously.25:20.920 –> 25:24.840I, it’s not my expertise and I know that I have two clients that I can think of that25:24.840 –> 25:30.400actually both have to pay that penalty and I guess it’s for the rest of their lives.25:30.400 –> 25:34.760So I’m always like, well, I don’t think they, anyone told them that, you know?25:34.760 –> 25:35.760Yeah.25:35.760 –> 25:40.200As long as you’re working and your employer will send you a document that says, Hey, this25:40.200 –> 25:43.040is a qualified plan and you’re good to go.25:43.040 –> 25:44.040Cool.25:44.040 –> 25:45.040Thank you very much for calling.25:45.040 –> 25:46.040Seriously.25:46.040 –> 25:47.040I appreciate that.25:47.040 –> 25:48.040Thanks Mickey.25:48.040 –> 25:49.040Have a great day.25:49.040 –> 25:50.040Bye.25:51.040 –> 25:52.040And that’s good to know.25:52.040 –> 25:53.240Cause again, most of us are kind of winging it sometimes.25:53.240 –> 25:55.520All right, let’s hit Jim and see if I can help Jim.25:55.520 –> 25:56.520Hey Jim.25:56.520 –> 25:57.520Hi.25:57.520 –> 25:58.520Hey Dr. Briney.25:58.520 –> 26:00.520What can I do for you, sweetie?26:00.520 –> 26:01.520Yes, sir.26:01.520 –> 26:02.520Yes, ma’am.26:02.520 –> 26:09.400I’m about to be quit clean deeded a large piece of prop, pretty valuable piece of property26:09.400 –> 26:14.400from a corporation that I helped put another piece, part of the property together.26:14.400 –> 26:20.120It was, I helped them get, acquire this property and through the process and everything.26:20.120 –> 26:24.640And it was just, um, and part of the problem is part of my compensation.26:24.640 –> 26:26.880They’re giving me part of the property.26:26.880 –> 26:29.640Now I don’t really want to keep this piece of property.26:29.640 –> 26:35.040I want to quit claiming it into another piece of property that I own that I want to buy.26:35.040 –> 26:36.040Okay.26:36.040 –> 26:41.160I have been told by my CPA that I have to keep it for a certain amount of time before26:41.160 –> 26:42.160I can quit claiming it.26:42.160 –> 26:46.600I mean before I can 1031 it into another piece of property.26:46.600 –> 26:50.920And I’ve had other CPA say, no, there’s no law that says how long you have to keep it26:50.920 –> 26:52.520before you can 1031 it.26:52.520 –> 26:53.520What is your opinion?26:53.520 –> 26:54.520Yeah.26:54.520 –> 26:55.520I’ve never heard.26:55.520 –> 26:59.440I mean, to be quite honest, I’ve never heard that there was a time now once you’ve done26:59.440 –> 27:03.560a 1031 exchange, sure you have to hold it for two years I believe before you can do27:03.560 –> 27:06.800something like re redo another one or whatever.27:06.800 –> 27:09.100But I’ve never heard a quick claim.27:09.100 –> 27:13.200It’s an interesting concept, but I’ve never heard of a quick claim that you couldn’t turn27:13.200 –> 27:15.000into a 1031 exchange.27:15.000 –> 27:17.680I mean, obviously we’re just delaying the taxes.27:17.680 –> 27:22.240So I mean, eventually you’ll have to pay the taxes or somebody will if it’s inherited or27:22.240 –> 27:23.240whatever.27:23.240 –> 27:28.680Um, you know, I, I’ve never heard, I mean, it’d be something I would have to, to really27:28.680 –> 27:29.680look into.27:29.680 –> 27:35.440I’ve never had someone do it to be honest, but I don’t remember any tax law that says27:35.440 –> 27:38.420that that there’s a time period on a quick claim.27:38.420 –> 27:43.280There’s only a time period of a, on a 1031 you can’t turn around and buy a 1031 and then27:43.280 –> 27:45.840turn around and sell it and buy another one.27:45.840 –> 27:50.080There is rules on that one, but yeah, nothing as far as I know, right off the top of my27:50.080 –> 27:51.960head that falls into that.27:51.960 –> 27:57.240So I don’t, I think you, um, I, if you want, you can call my office Jim on Monday.27:57.240 –> 28:02.720I have a 1031 attorney I use when I do mine and we can actually get the answer or, you28:02.720 –> 28:05.720know, you’d be more than glad to help us.28:05.720 –> 28:13.880I just want to make sure you understand they’re about to quit claiming to me this week and28:13.880 –> 28:17.600I got another piece of property that I want to 1031 it into.28:17.600 –> 28:21.320Now you don’t own the other property yet, do you?28:21.320 –> 28:23.200No, I’m getting ready to quit.28:23.200 –> 28:28.320No, no, but I’ve identified it, you know, and I’m going to put it under contract and28:28.320 –> 28:32.600then when I get this property, I’ve already got it sold to someone else, but I’m going28:32.600 –> 28:35.080to take the money and put it in my attorney’s thing.28:35.080 –> 28:36.080Do the 1031.28:36.080 –> 28:39.520So basically you’ve got a, you’ve got a quick claim.28:39.520 –> 28:42.640Just to recap, Jim, you’ve got a quick claim that’s going to happen sometime this week28:42.640 –> 28:46.760or thereabouts, and you’ve already got a new buyer for that property.28:46.760 –> 28:51.520So you’re going to sell that property and do a 1031 into a piece of property that you’ve28:51.520 –> 28:54.320already identified, but you do not own right now.28:54.320 –> 28:55.320Correct.28:55.320 –> 28:56.320Okay.28:56.320 –> 28:58.440Then, I mean, all of that is a hundred percent.28:58.440 –> 29:04.000So the only question you have is can you take a quick claim and immediately turn around,29:04.000 –> 29:07.120sell it and make it into a 1031 exchange?29:07.120 –> 29:11.680I’m not an attorney, but from the tax code, I don’t remember there being any limitations29:11.680 –> 29:16.840on a quick claim turning it into a 1031 that I remember.29:16.840 –> 29:17.840Right.29:17.840 –> 29:18.840Okay.29:18.840 –> 29:19.840I’ll call your office Monday.29:19.840 –> 29:20.840Yeah.29:20.840 –> 29:24.000We’ll see if we can get an attorney that handles that directly.29:24.000 –> 29:25.000He’ll know the answer.29:25.000 –> 29:26.000Okay.29:26.000 –> 29:27.000Thank you, ma’am.29:27.000 –> 29:28.000Appreciate it.29:28.000 –> 29:29.000Thanks, bud.29:29.000 –> 29:30.000Have a good day.29:30.000 –> 29:31.000Sure.29:31.000 –> 29:32.000Thanks.29:32.000 –> 29:33.000It’s an interesting situation.29:33.000 –> 29:34.000You don’t hear too many times that kind of situation.29:34.000 –> 29:38.400So I always love something new in tax law and how it’s going to work.29:38.400 –> 29:41.160All right.29:41.160 –> 29:43.840So if you want to join the show, you can.29:43.840 –> 29:44.840615-737-9986.29:44.840 –> 29:54.320615-737-9986 is the number here in the studio.29:54.320 –> 29:59.160And if you’ve got questions like that, I mean, sometimes, you know, obviously tax law is29:59.160 –> 30:02.460like the size of 10 King James Bibles.30:02.460 –> 30:06.540No one’s going to know all of them, every law, but you know what?30:06.540 –> 30:10.120It’s who you know and the people that specialize in each of these departments.30:10.120 –> 30:14.960So I would definitely suggest getting the expert.30:14.960 –> 30:20.320The attorney, Notestein, is who I always use, and he will be able to at least tell us if30:20.320 –> 30:24.120there’s anything that would hold that up.30:24.120 –> 30:28.440I can’t imagine why it would make any difference to the IRS if it was quick claimed and then30:28.440 –> 30:29.440turned into a 1031.30:29.440 –> 30:34.960Now the 1031 he’s buying will have to be held for a number of years, but that’s a whole30:34.960 –> 30:35.960different conversation.30:35.960 –> 30:36.960All right.30:36.960 –> 30:43.960So if you’ve got questions, you can join us here in the studio, 615-737-9986.30:43.960 –> 30:47.200615-737-9986.30:47.200 –> 30:50.840For all of you, I had someone just did a quick text, says, “What’s a 1031?”30:50.840 –> 30:55.120Sorry, a lot of times we just assume sometimes, and you guys, I mean, why did you assume you30:55.120 –> 30:56.120know tax law?30:56.120 –> 30:57.120It’s not your thing.30:57.120 –> 31:02.7601031 exchange is a like kind of exchange, so it exists that he’s going to be receiving31:02.760 –> 31:08.920a piece of land or a house or dirt or whatever, let’s call it real estate, and he can then31:08.920 –> 31:15.360turn around and instead of paying the taxes today, he can reinvest that money into something31:15.360 –> 31:21.560like kind, be another piece of real estate, and now the capital gains and all that that31:21.560 –> 31:27.200he would normally have had to pay, because his basis in this original piece of land is31:27.200 –> 31:28.200zero, right?31:28.720 –> 31:34.720I mean, he has no basis because they’re gifting him this basically this piece of land for31:34.720 –> 31:37.720services that he did for them.31:37.720 –> 31:43.360So when he does that and then they convert it over, you know, at some point that’s when31:43.360 –> 31:47.080it will turn into a taxable situation.31:47.080 –> 31:51.320There could be some gray area, thinking out loud, where if they’re using this land as31:51.320 –> 31:56.720a way of not paying him for his time, there may be some gray area there, but I’m not his31:56.720 –> 31:58.560attorney or his accountant.31:58.560 –> 32:00.400So at this point, we’ll be able to go.32:00.400 –> 32:03.000Let’s hit Lisa and Franklin real quick before the break.32:03.000 –> 32:04.000Hey, Lisa.32:04.000 –> 32:05.000Hi there.32:05.000 –> 32:06.000What can I do for you?32:06.000 –> 32:13.000So I own a piece of property that has a business as well as a house on the property.32:13.000 –> 32:18.640There’s about one acre that’s dedicated to the business, and I’m in, fortunately, in32:18.640 –> 32:24.120the process of divorcing, and he’s going to quick claim deed me his portion, and what32:24.120 –> 32:29.440I want to be able to do is turn around and sell the business that’s attached to the property,32:29.440 –> 32:35.640but I’m curious how the capital gains work if I make money off of selling that one acre32:35.640 –> 32:38.400and keep the other portion of the property.32:38.400 –> 32:43.080What kind of capital gains might I be looking at, or how does that work?32:43.080 –> 32:48.120So I mean, bottom line is you guys jointly own this property.32:48.120 –> 32:51.560I’m going to use some numbers, Lisa, that may not apply, but they’ll be basic numbers.32:51.560 –> 32:56.160So let’s say when you guys purchased this, you paid $100,000 for everything, because32:56.160 –> 32:59.920it sounds like it was all purchased at one time together.32:59.920 –> 33:06.400So whatever that is, you’re going to have to get a split so that you can actually get33:06.400 –> 33:12.380a basis for the one acre in the business compared to the house and whatever remaining acres33:12.380 –> 33:14.680might be tied to that.33:14.680 –> 33:17.160So you’re going to have to take the original amount.33:17.160 –> 33:22.440Because he’s quick claiming his share over, you would have 100% of the purchase, the original33:22.440 –> 33:28.280purchase price of this total property, whatever that was.33:28.280 –> 33:29.800So I’m using 100,000.33:29.800 –> 33:35.440So let’s just say that the business and the acres is worth 50% of whatever it was.33:35.440 –> 33:39.920So let’s just say $50,000, and now you sell it for $500,000.33:39.920 –> 33:44.040You have $450,000 capital gains.33:44.040 –> 33:47.440I have not, at least, but you know the basic math here.33:47.440 –> 33:49.080So it sounds good.33:49.080 –> 33:54.720But if you have two options, I mean, one, if you’re getting it just so you can replenish33:54.720 –> 33:59.880the bank account, because divorce is never easy, then you’re going to want to pay the33:59.880 –> 34:00.880capital gains.34:00.880 –> 34:04.760And you’re probably going to need to sit down once you know those numbers, once we can figure34:04.760 –> 34:09.440out what roughly the basis for that one acre in the building is.34:09.440 –> 34:12.360And you guys have treated it as a rental, right?34:12.360 –> 34:13.740In the past?34:13.740 –> 34:17.520Is it on your guys’ personal tax return as a rental property or no?34:17.520 –> 34:19.640Yeah, it’s not.34:19.640 –> 34:20.800Okay.34:20.800 –> 34:24.200I was just trying to find something that may have had depreciation scheduled for you to34:24.200 –> 34:25.200work with.34:25.200 –> 34:26.920Nothing’s ever that easy.34:26.920 –> 34:31.040Well, whatever that is, you’re going to need to figure out what you can sell for, what34:31.040 –> 34:33.360our basis, and then we can calculate.34:33.360 –> 34:40.560Theoretically, it’s up to almost 23.8% tax if it’s a very successful over 600,000 profit.34:40.560 –> 34:46.320If it’s under, you’re looking at between 15 and 18%.34:46.320 –> 34:51.280And so it’s just a matter of how much we’re looking at as far as the gain, because I don’t34:51.280 –> 34:52.840know how long you’ve owned it.34:52.840 –> 34:57.580If it’s, you know, you may have gotten a really good deal and now it’s worth quite a bit,34:57.580 –> 34:58.580you know what I mean?34:58.580 –> 35:00.640It has a lot of appreciation in it.35:00.640 –> 35:04.000But anyhow, the first thing is to find out whatever.35:04.000 –> 35:07.760And when he quick claims it to you, in the perfect world, Lisa, I would have him quick35:07.760 –> 35:14.880claim it to you for the value, his share of whatever the value was originally.35:14.880 –> 35:15.920That’s for zero.35:15.920 –> 35:17.960People love to put zero on quick claim.35:17.960 –> 35:18.960Okay.35:18.960 –> 35:20.960Do you know what I’m saying?35:20.960 –> 35:24.560So if you, again, if you paid a hundred thousand for the whole thing, have him quick claim35:24.560 –> 35:26.720his share is 50,000 because you were married.35:26.720 –> 35:33.480So each 50, 50 assuming, so you have his, and then you already retained yours otherwise.35:33.480 –> 35:36.440And he wouldn’t have to pay the tax because that’s the basis he had.35:36.440 –> 35:37.560So it’d be zero for zero.35:37.560 –> 35:43.360I mean, in essence, a 50,000 for 50,000, it wouldn’t be any taxable implication to him,35:43.360 –> 35:46.960but that way you have something that shows what his share was.35:46.960 –> 35:50.000And then the original documents hopefully showing what you had.35:50.000 –> 35:51.000Okay.35:51.000 –> 35:52.000That’s a very good idea.35:52.000 –> 35:53.920I hadn’t thought about that.35:53.920 –> 35:54.920Thank you.35:54.920 –> 35:55.920No problem.35:55.920 –> 35:58.680And then if you get the rest of the information, you can always give me a holler and I can35:58.680 –> 36:02.200always give you, I’m not necessarily on the radio, but you know, give you an idea of what36:02.200 –> 36:03.880to set aside for taxes.36:03.880 –> 36:05.200Okay.36:05.200 –> 36:06.200Thank you very much.36:06.200 –> 36:07.200Thanks for the phone call.36:07.200 –> 36:08.200Thanks, Lise.36:08.200 –> 36:09.200You’re welcome.36:09.200 –> 36:10.200All right.36:10.200 –> 36:12.560We’re going to take our last break here.36:12.560 –> 36:18.320So if you want to join the show now, it’d be the time 615-737-9986.36:18.320 –> 36:19.320615-737-9986.36:19.320 –> 36:24.320We’ll be right back with the Dr. Friday show.36:24.320 –> 36:32.640All right, we are back here live in studio.36:32.640 –> 36:37.840You can join us if you want 615-737-9986.36:37.840 –> 36:42.840615-737-9986.36:42.840 –> 36:47.560Something I, I talked to a lot of individuals, small business owners, my bread and butter,36:47.560 –> 36:48.560right?36:48.560 –> 36:52.160And one thing I don’t hear a lot of, or it seems like they’re not too sure how it works36:52.160 –> 36:54.360is employing your children.36:54.360 –> 36:59.400I don’t know about you, but my father had an accounting firm my entire life.36:59.400 –> 37:03.920Probably why I went into it as youngest of eight kids and all of us worked with our father.37:03.920 –> 37:06.400I mean, we added up receipts.37:06.400 –> 37:13.040Some people entered information and big old binders because this was pre Excel spreadsheets37:13.040 –> 37:15.040for a period of time.37:15.040 –> 37:18.400We would double check the math on tax returns.37:18.400 –> 37:19.840We had an assembly line.37:19.840 –> 37:22.760My father, you know, did, did taxes on the side.37:22.760 –> 37:25.200He worked as a chief financial officer.37:25.200 –> 37:30.120So we had a, all he said, a small bookkeeping firm, you know, raising eight children wasn’t37:30.120 –> 37:31.120cheap.37:31.120 –> 37:35.160So all of us worked with our parents and I’m not sure, I mean, I’m pretty sure it’s the37:35.160 –> 37:36.160same nowadays.37:36.160 –> 37:41.560If you own a business, a lot of times you will take your kids with you to do it.37:41.560 –> 37:46.120And there’s a big tax advantage for taking your teenage son or daughter to work.37:46.120 –> 37:50.520Wages paid to the children are fully deductible as a business expense for sole proprietor37:50.520 –> 37:55.340or partner in a partnership, a family held partnership in which only you and your spouses37:55.340 –> 37:56.720are partners.37:56.720 –> 38:01.720You do not have to pay FICA, that’s social security and Medicare on wages.38:01.720 –> 38:06.640If the child is under the age of 18, nor do you have to pay unemployment insurance for38:06.640 –> 38:09.600children under the age of 21.38:09.600 –> 38:15.480Child’s wages may be subjected to a lower tax rate there, or if you give them $12,00038:15.480 –> 38:20.760a year, they’re going to pay zero tax on the ordinary income.38:20.760 –> 38:25.800I’ve actually found it to be a great way for kids to start finding out how much it’s costing38:25.800 –> 38:30.160for them to do their, um, let’s say they have a sports, right?38:30.160 –> 38:32.160They’re cheerleaders, they’re baseball players, whatever.38:32.160 –> 38:34.280Bats are like $250.38:34.280 –> 38:35.640You pay them a fair wage.38:35.640 –> 38:38.360Now keep in mind, you have to have a true job.38:38.360 –> 38:42.560These children have to work, they have to have hours, they have to be paid just as any38:42.560 –> 38:43.740other employee.38:43.740 –> 38:46.960You just don’t have to withhold some of those taxes, but you have a job.38:46.960 –> 38:51.400You can’t say, well, Hey, I’m going to pay him $500 a month or something like that.38:51.400 –> 38:52.400They have to work.38:52.400 –> 38:55.960Then you turn around, you pay them, they put the money in the bank and then they can then38:55.960 –> 39:00.640pay for their private lessons, their education, their whatever out of the money that you’re39:00.640 –> 39:01.640paying.39:01.640 –> 39:04.320Also Roth IRA is a great idea for that age.39:04.320 –> 39:05.640I’m not a financial planner.39:05.640 –> 39:11.400I am saying my personal opinion is if you have a child and you can put $6,000, $7,00039:11.400 –> 39:17.480a year into a Roth and it will grow even just from 15 to 21 while they’re still working39:17.480 –> 39:22.840or 15 to 18 that money, if they don’t contribute any more, that’s going to grow throughout39:22.840 –> 39:24.680their lifetime and it’s a tax free.39:24.680 –> 39:26.640It will grow tax free.39:26.640 –> 39:30.080So these are great things you need to consider.39:30.080 –> 39:37.640Theoretically in 2024, $14,600 would be zero, zero tax, zero social security, zero Medicare.39:37.640 –> 39:45.360I had a family that came in and they have six children from the age of 12 to 18.39:45.360 –> 39:50.120And you know, all of those kids are doing something within the firm and the youngest39:50.120 –> 39:53.280is actually handling the QuickBooks, the accounting side.39:53.280 –> 39:57.260And then some of the other ones are going out and helping in the, in the projects and39:57.260 –> 39:58.920things that they’re doing.39:58.920 –> 40:00.620There’s no reason you can’t have this.40:00.620 –> 40:06.000You just have to treat it as a legitimate employee and legitimate situation.40:06.000 –> 40:09.520You can’t just say, well, I’m going to give Johnny $5,000 here.40:09.520 –> 40:13.760And you know, he didn’t, he didn’t do because they have court cases after court cases where40:13.760 –> 40:15.800parents did that kind of thing.40:15.800 –> 40:18.760And then they disallowed the entire expense.40:18.760 –> 40:20.260That’s a lot of money to be disallowed.40:20.260 –> 40:22.120So you want to make sure you do it right.40:22.120 –> 40:27.420Again, employing your children is a wonderful thing and it teaches them what does mom and40:27.420 –> 40:28.420dad really do?40:28.420 –> 40:29.800How hard is it to make a living?40:29.800 –> 40:34.160I mean, you know, what’s the difference of you working for you versus going to work at40:34.160 –> 40:35.360the fast food joint.40:35.360 –> 40:38.200Now some people will say they’d rather have their children working there because they40:38.200 –> 40:40.120don’t want to have to deal with it.40:40.120 –> 40:44.640But a person that doesn’t have children is advising you to employ your children so you40:44.640 –> 40:46.240can take that.40:46.240 –> 40:49.600It’s great tax advice set up properly.40:49.600 –> 40:54.480It is a wonderful way for you to be able to do things and for them to learn how to make40:54.480 –> 40:57.440money, how to spend money, how to invest money.40:57.440 –> 41:01.440And let’s be honest, it’s always better if you have that in your wheelhouse as we get41:01.440 –> 41:05.240older because some of us, you know, to be quite honest, I didn’t even know what the41:05.240 –> 41:07.040stock market was when I was younger.41:07.040 –> 41:10.240I mean, it wasn’t something brought up and it wasn’t something easy.41:10.240 –> 41:15.480But nowadays you can easily invest from your cell phone on a Charles Schwab account and41:15.480 –> 41:19.960you can teach the next generation to be even more efficient with their money than what41:19.960 –> 41:20.960we were.41:20.960 –> 41:22.040All right.41:22.040 –> 41:23.440So the next thing was miles.41:23.440 –> 41:28.280I just want to cover that in 2024 it’s 67 cents per a mile.41:28.280 –> 41:30.000That’s business miles.41:30.000 –> 41:31.000Right.41:31.000 –> 41:35.520And then if you’re military, you will get 21 cents per mile for moving.41:35.520 –> 41:39.840Only people that qualify for moving expense are people in the military.41:39.840 –> 41:42.820We do not have it for anyone else.41:42.820 –> 41:45.640Medical expenses, 21 cents and charity is 14.41:45.640 –> 41:49.960So if you work, maybe you do things at the church, you deliver things, you help out when41:49.960 –> 41:53.920you’re looking at your charitable contributions, add the miles.41:53.920 –> 41:58.440It’s a great way of making sure that you have what you need and where you need to go.41:58.440 –> 42:00.960Another thing we have to talk about a business.42:00.960 –> 42:05.120What is a business is a business just because you’re out there and you’re like, okay, well,42:05.120 –> 42:06.120you know what?42:06.120 –> 42:11.600Once or twice a year I go out and I try to sell some art or something like that.42:11.600 –> 42:14.800And every year you’ve been having on your tax returns and you’ve lost money.42:14.800 –> 42:18.680You’ve spent more money every year in trying to be in business than if you are.42:18.680 –> 42:23.960The IRS is saying, wait a second, business losses, big old difference.42:23.960 –> 42:25.200You can have an NOL.42:25.200 –> 42:30.680You can carry your loss forward, but you have to do three out of five year thinking.42:30.680 –> 42:37.520So if I’ve lost money in the last three years and this year, 2024 will be the fourth year.42:37.520 –> 42:41.920Is it truly a business or is it a hobby in which you’re trying to say, well, I was a42:41.920 –> 42:45.680real estate agent, but I didn’t sell anything in three years.42:45.680 –> 42:49.200This is the fourth year and you still didn’t sell anything.42:49.200 –> 42:51.920And but you have a real job, you have a W2 job.42:51.920 –> 42:56.320And so, you know, the IRS is saying, no, you’re not really trying to make it a job.42:56.320 –> 42:57.320It’s a hobby.42:57.320 –> 43:00.320You may keep your license, you can do all that, but you can’t write it off your taxes43:00.320 –> 43:01.360anymore.43:01.360 –> 43:06.160So you need to be able, and this is probably one of the hardest things in my world, because43:06.160 –> 43:09.840when I see tax returns, I mean, usually when you come in, we’ll all see two, three years43:09.840 –> 43:14.000in a row and you see these losses every year.43:14.000 –> 43:18.600It’s, it’s, it’s kind of obvious that you’re using it for the purpose of a loss.43:18.600 –> 43:22.160The IRS is going to come back and bite you and they’re going to say, wait, we’re disallowing43:22.160 –> 43:23.160all this.43:23.160 –> 43:27.080And there’s a reason for that because no one can afford to be in business for three years43:27.080 –> 43:32.420and lose 20, $30,000 a year, even five or $6,000 a year, depending on your income.43:32.420 –> 43:37.280Who wants to be in business the three years now, that being said, there are some farms43:37.280 –> 43:42.640that I have had a loss for eight, 10 years because farming sometimes it takes them eight43:42.640 –> 43:47.240years to even develop the first crop with certain plants and trees and different things43:47.240 –> 43:48.880like that.43:48.880 –> 43:52.200But normal business owners, we don’t go in and we say, Hey, we’re going to sell this43:52.200 –> 43:56.920product and for three years we keep losing money.43:56.920 –> 44:01.800And then it turns into a situation where it’s really not a viable business.44:01.800 –> 44:06.840So I just want to put that out there because more of the cases we take on as an enrolled44:06.840 –> 44:10.900agent, many of the cases I take on as representation in front of the IRS.44:10.900 –> 44:15.480So you’ve got a love letter, they’ve come up with a problem and you don’t agree with44:15.480 –> 44:16.480it.44:16.480 –> 44:19.480And then we go in and we handle the audit, which is fine.44:19.480 –> 44:24.080But sometimes let’s be honest, you knew you were pushing it.44:24.080 –> 44:29.200Maybe you’ve listened to me for the last 14, 15 years on the radio or, or the tax person44:29.200 –> 44:31.800that you had just kind of put numbers on a tax return.44:31.800 –> 44:34.120They didn’t have this conversation with you.44:34.120 –> 44:36.200It’s important to have those conversations.44:36.200 –> 44:37.200It looks great.44:37.200 –> 44:38.200You got a refund.44:38.200 –> 44:41.160Everyone’s happy until the IRS comes back and questions it.44:41.160 –> 44:42.600Now sometimes you’ll get letters.44:42.600 –> 44:44.960I got a client, they got a letter today.44:44.960 –> 44:49.400They get a letter and says, Hey, we’re changing your 2022 tax return.44:49.400 –> 44:53.080But everything on that 22 tax return was already on the 22.44:53.080 –> 44:57.040So just because you’ve gotten a letter that says things are changing, doesn’t mean the44:57.040 –> 44:58.920IRS is correct.44:58.920 –> 45:02.460What it means is you need to evaluate what the situation is.45:02.460 –> 45:03.680How can we deal with it?45:03.680 –> 45:07.920Is there a problem and what do we need to do to make it, you know, in a sense, go away,45:07.920 –> 45:08.920right?45:08.920 –> 45:09.920What do we need to do?45:09.920 –> 45:12.800So, you know, if it’s, if everything like in this particular case, they’ll send you45:12.800 –> 45:13.800a change.45:13.800 –> 45:16.200Do you think you need to change your tax return?45:16.200 –> 45:18.760Do you really think you need to change it or not?45:18.760 –> 45:20.440And if they do, then we need to deal with it.45:20.440 –> 45:21.440All right.45:21.440 –> 45:23.200It looks like the show is winding up.45:23.200 –> 45:28.360You can reach us at 615-367-0819.45:28.360 –> 45:32.680615-367-0819.45:32.680 –> 45:37.320You can always email Friday at drfriday.com.45:37.320 –> 45:40.120Again Friday at drfriday.com.45:40.120 –> 45:43.840If you have no idea who I am and you just were driving in your car, it’s rainy and you45:43.840 –> 45:46.400turn the radio on and you’re like, Hey, who is this person?45:46.400 –> 45:47.960You can always check me out on the web.45:47.960 –> 45:48.960It’s just drfriday.com.45:48.960 –> 45:53.640D R F R I D A Y.com.45:53.640 –> 45:56.000Easy and that way drive safely.45:56.000 –> 45:57.000You can always remember it.45:57.000 –> 45:58.480It’s pretty much rhymes.45:58.480 –> 46:02.400And then you can always contact us if you’ve got questions.46:02.400 –> 46:07.040Try to contact us before you go do something because afterwards it’s very hard to correct46:07.040 –> 46:08.040anything.46:08.040 –> 46:10.600If you’re going to sell something, you’re going to do something like that.46:10.600 –> 46:13.240You need to know the information before it happens.46:13.240 –> 46:17.480Try not to wait till after and then then we’re really just telling you what the taxes are.46:17.480 –> 46:19.640There’s not a lot that we can do to help you out.46:19.640 –> 46:25.880We hope that you guys are enjoying this extremely rainy weekend, but it’s been a good Saturday.46:25.880 –> 46:30.160I appreciate all the phone calls and I think that when you need help, you just need to46:30.160 –> 46:31.160pick up the phone.46:31.160 –> 46:38.880It’s 615-367-0819.46:38.880 –> 46:39.880Call.46:39.880 –> 46:39.880See you later.

View Details

In this episode of the Dr. Friday Radio Show, tax expert Dr. Friday discusses various tax-related topics, focusing on inheritance, property sales, retirement accounts, and tax planning strategies. She provides valuable insights and answers caller questions on a range of financial matters.

Key Topics Covered:

• Selling inherited property and capital gains considerations
• Handling inherited homes among multiple siblings
• Spousal IRA inheritance rules and Required Minimum Distributions (RMDs)
• Cryptocurrency taxation and reporting requirements
• Tax implications of selling rental property
• First-time homebuyer credit repayment ending in 2023
• Importance of tax planning and adjusting W-4 forms
• Penalties and interest for underpayment of taxes
• Benefits of Qualified Charitable Distributions (QCDs) for seniors
• Tax deductions for medical expenses and charitable miles
• Importance of organizing tax documents throughout the year

Transcript

00:00.001 –> 00:07.640No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes.00:07.640 –> 00:09.920She’s the how-to girl.00:09.920 –> 00:10.920It’s the Dr. Friday Show.00:10.920 –> 00:20.120If you have a question for Dr. Friday, call her now, 737-WWTN.00:20.120 –> 00:23.880That’s 737-9986.00:23.880 –> 00:27.400So here’s your host, financial counselor and tax consultant, Dr. Friday.00:27.400 –> 00:35.760Good day, I’m Dr. Friday and the doctor is in the house.00:35.760 –> 00:40.320Just so you know, guys, I cannot see the screen for the callers.00:40.320 –> 00:43.640I’m in there, but it’s just a black screen.00:43.640 –> 00:46.360So if you want to join the show, you certainly can.00:46.360 –> 01:00.520We take our phone calls live, 615-737-9986, 615-737-9986, talking about my favorite subjects, which is taxes.01:00.520 –> 01:01.520Perfect.01:01.520 –> 01:02.880You did great.01:02.880 –> 01:17.120And we’re going to be dealing with any questions you might have when it comes to dealing with taxes or inheritance, or maybe you’re thinking about selling a piece of real estate, be that your primary home or a piece of rental property.01:17.120 –> 01:24.800How’s that going to affect your taxes or your Medicare if you’re actually over the age of 65 and receiving Medicare?01:24.800 –> 01:29.560Any of those kinds of questions may come in and it’s a great time to at least get you on the right track.01:29.560 –> 01:35.160Make sure that you’re at least asking the right questions and most importantly, is it going to be taxable or not?01:35.160 –> 01:39.240And if it’s taxable, have you set enough money aside to deal with it?01:39.240 –> 01:45.960Because nothing worse than filing your taxes, thinking you had everything in control, then find out you owe more money.01:45.960 –> 01:46.960Nothing worse than that.01:46.960 –> 01:47.960All right.01:47.960 –> 01:48.960Well, we’re lucky.01:48.960 –> 01:49.960JR is already on the line.01:49.960 –> 01:50.960So, hey, JR, what’s happening?01:50.960 –> 01:51.960Hey, good afternoon, Dr. Friday.01:51.960 –> 01:52.960Enjoy your show, believe it or not.01:52.960 –> 02:04.080I have a question about selling rental property.02:04.080 –> 02:18.280As I understand it, when you can sell rental property without capital gain, if you’ve lived in it for the last two out of five years, which I have not done, but I have an option of moving back there.02:18.280 –> 02:20.480It’s my old house.02:20.480 –> 02:28.600I could move back into it and stay for two years and then sell it and avoid, I guess, capital gains.02:28.600 –> 02:31.200You could, yes.02:31.200 –> 02:32.480How could that all work?02:32.480 –> 02:37.560And I’ve also depreciated the house over the past 15 years.02:37.560 –> 02:41.640Great question, JR, because that’s something that people do or do not understand.02:41.640 –> 02:56.280Obviously, even if you can avoid the capital gains, if you decide to move back in, so two out of the last five years you’ve lived in it, you’ve turned it into your primary for those two years, you then turn around and sell it, there’d be no capital gain.02:56.280 –> 03:03.320But there would be recapture of depreciation, which is ordinary income, not capital gains anyways.03:03.320 –> 03:13.360So, you would still have to pay tax on that recapture, but it would still possibly, I mean, I guess sometimes I think, I’ve had clients that’s done this.03:13.360 –> 03:25.560I’ve had clients that we’ve crunched the numbers and it comes down to, you know, so you make $100,000 in capital gains and let’s say that you’re in what I consider the middle.03:25.560 –> 03:30.120So let’s just say you’re going to pay 20% tax, you’re on the higher side.03:30.120 –> 03:38.240It’s $20,000 in tax versus none, but you know, you have to turn your life upside down for two years to do that.03:38.240 –> 03:42.480And assuming the market’s going to be as good in two years or better than it is today.03:42.480 –> 03:47.520I mean, there’s a lot of unforeseen questions in there.03:47.520 –> 04:01.400So I guess the question is another alternative is also JR is doing a 1031 if you want to stay in the rental business, you could do a 1031 exchange and take all that money reinvested into another property.04:01.400 –> 04:03.680And again, that’s some people that’s not an option.04:03.680 –> 04:08.440They just want to get out of the real estate business that, you know, they’re ready to move on to other things.04:08.440 –> 04:19.600But if you want to stay in it, then you could do that and just, you know, sell one and buy multiples or downsize them so that they’re not all worth maybe the higher end that you may be at at this time.04:19.600 –> 04:28.200But yeah, I don’t have a problem moving back into it because this is going to be the result of a divorce settlement.04:28.200 –> 04:31.000So I could move back into it.04:31.000 –> 04:43.240And how do I know if I recapture my depreciation, how do I know how much I’ve depreciated over 15 years?04:43.240 –> 04:48.760Well you would have on your tax return, there would be a depreciation schedule.04:48.760 –> 04:56.080Whoever does your taxes or if you do them yourself through like TurboTax or something, there should be a depreciation schedule every year.04:56.080 –> 04:57.600It just accumulates.04:57.600 –> 05:11.440Otherwise, you know, we depreciate based on almost 30, 29 and a half years divided by, you know, you’d be halfway through the value of whatever the house was when you purchased it or listed it in your rental if it’s been 15 years.05:11.440 –> 05:12.440Okay, great.05:12.440 –> 05:19.000And then I’d recapture that at whatever tax bracket I’m in at the time.05:19.000 –> 05:20.000You got it.05:20.000 –> 05:21.000100 percent.05:21.000 –> 05:22.000Yes.05:22.000 –> 05:23.000Okay.05:24.000 –> 05:25.000I understand, doctor.05:25.000 –> 05:26.000Thank you.05:26.000 –> 05:27.000Perfect.05:27.000 –> 05:28.000Thank you.05:28.000 –> 05:29.000Thanks for calling.05:29.000 –> 05:30.000I really appreciate it.05:30.000 –> 05:31.000All right.05:31.000 –> 05:34.000If you want to join the show, you can at 615-737-9986.05:34.000 –> 05:42.880615-737-9986 is the number directly here in the studio.05:42.880 –> 05:52.500And wanting to make sure if you’ve got questions concerning taxes or divorce, unfortunately that often leads to tax questions or tax issues.05:52.500 –> 05:54.280So it’s another one of those situations.05:54.280 –> 06:00.200And of course, inheritance is also one of those situations that sometimes we don’t always have a lot of control.06:00.200 –> 06:04.360I had a client that his sister had passed away and left him many things.06:04.360 –> 06:10.520And he was in the process of selling her house and he did not realize he wasn’t going to have to pay capital gains.06:10.520 –> 06:13.620He was all prepared to try to plan that out and do it.06:13.620 –> 06:15.680So we’ll talk a little bit about that.06:15.680 –> 06:18.080But we’ve got Randy and Franklin on an inheritance.06:18.080 –> 06:20.280Hey, Randy, what can I do for you, sweetie?06:20.280 –> 06:21.280Yes.06:21.280 –> 06:22.280Just have a question.06:22.280 –> 06:28.920About a year ago, mom passed away and they left me and my sibling a house.06:28.920 –> 06:31.740And we’re finally getting around to where we’re…06:31.740 –> 06:34.400But my brother wants to live in the house.06:34.400 –> 06:39.000So he is going to give me half the value of the house.06:39.000 –> 06:45.400We had a competitive market analysis done six months ago.06:45.400 –> 06:48.440And so he was going to give me half the value of that.06:48.440 –> 06:54.600Is that something that now that six months later, been over a year, is that a problem?06:54.600 –> 06:55.800Not tax wise so much.06:55.800 –> 07:00.800I mean, obviously, depending on where the house is, theoretically, it’s an agreement between you and your brother.07:00.800 –> 07:04.920The biggest thing is mom passed away a year ago, right?07:04.920 –> 07:05.920Right.07:05.920 –> 07:07.600A little over a year ago.07:07.600 –> 07:13.040So whatever the house was worth when she passed away will be our basis or your basis.07:13.040 –> 07:23.400So if that analysis six months ago was more than what it was worth when mom passed away, then you will be looking at a small potential capital gain situation.07:23.400 –> 07:27.160If it was pretty much the same, when mom passed away, it was worth $200,000.07:27.160 –> 07:34.600The analysis came back in, it was worth $200,000 or even a little less, depending on how old the house is and everything.07:34.600 –> 07:37.360It could have depreciated a little bit.07:37.360 –> 07:49.400But if it’s more, it was worth $200,000 when mom died and you’re getting $150,000, then you would have a hundred basis and $150,000 to $50,000 capital gains that you’d have to look at paying taxes on.07:49.400 –> 07:50.400Got it.07:50.400 –> 07:51.400That makes sense?07:51.400 –> 07:52.400That makes sense.07:52.400 –> 08:05.440Is that something if they are, so they’ll, will they ask on the tax form, like the houses that I have to have proof that the house is worth X at certain time, we need to keep that analysis I guess is back.08:05.440 –> 08:06.440Right.08:06.440 –> 08:14.080It’d be good for your tax records if they were, I mean, honestly, I’ve never in 30 years had someone come back, but I mean it can.08:14.080 –> 08:20.960So you should keep the analysis just so you have some justification of how you guys worked out your, your prices.08:20.960 –> 08:21.960Okay.08:21.960 –> 08:22.960Got it.08:22.960 –> 08:23.960Okay.08:23.960 –> 08:24.960Thanks Randy.08:24.960 –> 08:25.960Thank you.08:25.960 –> 08:26.960Bye.08:26.960 –> 08:27.960All right.08:27.960 –> 08:33.960So again, if you want to join the show, you can 615-737-9986.08:33.960 –> 08:43.200And Randy’s situation seems to be a fairly typical one that we see in our office.08:43.200 –> 08:53.900Often where multiple children may inherit said property, but one of them wants to either keep it or live in it or whatever.08:53.900 –> 08:59.000So usually they’ll come to a fair price of what the property is worth.08:59.000 –> 09:01.180And then that way they can get brought out.09:01.180 –> 09:05.000Most of the time it’s used at whatever value it was at the time of passing.09:05.000 –> 09:08.740So that way, theoretically, the other spouses will pay no tax.09:08.740 –> 09:12.940And then that person then owns it outright and they can do what they need to do.09:12.940 –> 09:15.060So I mean, at least it works out.09:15.060 –> 09:18.060Hopefully some families, they can’t agree on anything.09:18.060 –> 09:29.740I will say if you have a big family, personal opinion, leaving anything, even a house that you’re, you know, leave it all in trust where you dictate exactly what you want done.09:29.740 –> 09:44.620Because I have one case where there was like, I think 18 family members and there was a farm to this day, five, six years later, we are still playing with the idea that the farm someone to sell some don’t want to sell.09:44.620 –> 09:52.740And of course you can’t, you know, it would have been better if they had taken and given each person so many acres or, or said a majority wins or something.09:52.740 –> 10:03.220I’m not an attorney, but I’m sure there’s something that could have been written instead of having all these people inherit and then no one agreeing basically to be able to get in or out of this situation.10:03.220 –> 10:06.580And that’s I’m sure that wasn’t what was meant to be.10:06.580 –> 10:14.860But you know, people sometimes forget inheritance is truly a gift, not something that you are, in my opinion, entitled to.10:14.860 –> 10:19.660So you know, looking that gift in the face is, is, you know, the best way to do it.10:19.660 –> 10:22.380What’s best for everyone, not just always what’s best for yourself.10:22.380 –> 10:29.380But thank goodness I did not go into law and I went into taxes and therefore I don’t have to worry about that once it’s decided.10:29.380 –> 10:33.140In this case, the property is appreciating.10:33.140 –> 10:40.860So all of them that may have wanted to sell it five years ago will now have capital gains, which I guess is a good thing to worry about.10:40.860 –> 10:45.540If you, if you’re going to go that way, at least it’s not depreciating, which is not a good thing.10:45.540 –> 10:50.620All right, we’re going to be heading here in a minute into our first break.10:50.620 –> 10:53.220For all you that have never heard me, I am Dr. Friday.10:53.220 –> 10:56.380I’m an enrolled agent licensed by the Internal Revenue Service.10:56.380 –> 10:59.060No, I do not work for the Internal Revenue Service.10:59.060 –> 11:04.980I am licensed by them to do offer and compromise, basically to represent and to do taxes.11:04.980 –> 11:05.980That’s what I do.11:05.980 –> 11:17.460So if you’ve got questions concerning taxes or if you’re getting love letters from the IRS or you’re trying to figure out how can, I mean, I had a gentleman that called me and he’s like, well, I can’t afford to pay the IRS.11:17.460 –> 11:25.980But yet, you know, he was sitting on a fairly healthy dollar amount in his bank account along with a house that was completely debt free.11:25.980 –> 11:46.020In those kinds of situations, even though you may not feel you can afford it, theoretically you have the means to pay off the IRS and they will pretty much, they can mandate you to borrow or make your life pretty miserable, seize your bank, seize bank accounts and stuff because you don’t feel that you can afford it, but you can.11:46.020 –> 11:59.980So you know, there are ways of negotiating and having those conversations and really just getting the IRS off your back, which is what we like to do so you can move forward, build your wealth, build your, you know, your stability and not have the IRS in it.11:59.980 –> 12:08.100And that’s always the problem is sometimes people just kind of play that ostrich thing where they put their head in the sand and they’re just, you know, ignoring it.12:08.100 –> 12:09.100All right.12:09.100 –> 12:12.740So if you’ve got questions, you can join the show after this break.12:12.740 –> 12:21.500We’re live at 737-9986-615-737-9986 is the number here in the studio.12:21.500 –> 12:22.500We’re going to take a quick break.12:22.500 –> 12:24.300When we get back, we’ll get to your phone calls.12:24.300 –> 12:25.300We’ll be right back.12:25.300 –> 12:26.300All righty.12:26.300 –> 12:27.300We are back here live in studio.12:27.300 –> 12:28.300And again, you can join us live if you want.12:28.300 –> 12:29.300737-9986-615-737-9986.12:29.300 –> 12:30.300We’re live at 737-9986-615-737-9986.12:34.300 –> 12:55.300We’re live at 737-9986-615-737-9986.12:55.300 –> 13:17.940We’re live at 737-9986-615-737-9986.13:17.940 –> 13:39.620We’re live at 737-9986-615-737-9986.13:39.620 –> 13:45.300So first thing is, was he old enough to take what we call RMDs or required minimum distribution?13:45.300 –> 13:53.580Yes, he just started taking it the previous year because he had retired at 23.13:53.580 –> 13:57.900But he was in his 80s.13:57.900 –> 13:58.900Perfect.13:58.900 –> 13:59.900Okay.13:59.900 –> 14:06.780So you’ll need to make sure that he did take his RMD for 2024 before anything has happened.14:06.780 –> 14:16.420And then what’s going to happen is you have time then, there will be taxes if you decide to cash it all out, you would have to pay ordinary income tax, first thing.14:16.420 –> 14:21.220Since you’re a spousal versus an inherited IRA, there are some different rules.14:21.220 –> 14:28.620And I’m not going to say I am a total expert, but I do know that basically you’re going to roll that over into yours.14:28.620 –> 14:40.380I don’t believe, and I’m trying to take a quick look here, I think you normally under the current law for most IRA inherited, you have 10 years to cash it out.14:40.380 –> 14:47.660I am pretty sure that a spouse does not have to live with that same limitations.14:47.660 –> 14:55.820You will be required to start taking RMDs even if you’re not old enough, you’ll have to take them because of his life expectancy.14:55.820 –> 15:02.460But it will roll over to you and then you will continue to be able to take that off.15:02.460 –> 15:14.620So I don’t believe Lynn, and I may have to double check that unless somebody is listening that as a financial advisor, Lynn would need to know, does she have the typical 10 years to cash that out?15:14.620 –> 15:15.620I don’t think so.15:15.620 –> 15:17.280I think inherited IRAs, yes.15:17.280 –> 15:23.060I think spousal IRAs, you have your lifetime to continue to take that off.15:23.060 –> 15:27.220But you would have to start taking your RMDs even if you wouldn’t normally.15:27.220 –> 15:29.100Does that help?15:29.100 –> 15:39.900Even if I’m still working and not taking my RMDs, I’m still contributing, I’ve got to withdraw the RMD that he would have taken, correct?15:39.900 –> 15:41.100That is my understanding.15:41.100 –> 15:42.380That is correct.15:42.380 –> 15:49.420Once we inherit, we have to continue to take the RMDs under the life expectancy of the prior, not yourself under the current.15:49.420 –> 16:03.140So yes, I think even though you’re still working and under yourself contributing to a 401(k) or IRA, you will have to take the RMDs out of that account is my understanding.16:03.140 –> 16:08.260The IRS is doing their best to make us take out the money as fast as possible.16:08.260 –> 16:15.400But I believe with the inherited limitations, you are not locked into some of them than you would normally.16:15.400 –> 16:21.060It says, “Keep an inherited delay begins distribution until employer would have,” but that’s an inherited IRA.16:21.060 –> 16:35.860So I will find out from my financial planner, Lynn, and I may, if you keep listening or if you want to contact my office on Monday, I feel like there might be some other limitations or advantages I should say.16:35.860 –> 16:45.960Spousal IRAs are so much better if there’s got to be a good and bad in this conversation than like an inherited IRA because they give you guys a little bit more freedoms.16:45.960 –> 16:52.960So I believe you’re going to have to take RMD and I believe you’re going to have to start taking it out.16:52.960 –> 16:56.680I don’t believe you have to do it all in 10 years, but that’s my thing.16:56.680 –> 16:58.160I need to double check that.16:58.160 –> 16:59.360Be not an expert, Lynn.16:59.360 –> 17:01.240I don’t want to lead you on the wrong path.17:01.240 –> 17:08.980But if you want to call me on Monday or just text the phone number that you hear me give out the 615-367-0819.17:08.980 –> 17:10.880That’s my direct line.17:10.880 –> 17:14.080I’ll be more than glad to communicate you with anything.17:14.080 –> 17:22.080I may not be completely leading you in the perfect direction and I don’t want you to think, “Oh, Dr. Friday said this,” and then I completely change my story on you.17:22.080 –> 17:23.880So I want to make sure I give you good advice.17:23.880 –> 17:24.880Okay?17:24.880 –> 17:25.880I appreciate that.17:25.880 –> 17:28.320I will have to do something with it, right?17:28.320 –> 17:30.240I can’t just leave it there.17:30.240 –> 17:31.240No, 100%.17:31.240 –> 17:34.880It has to be converted into a spousal inherited IRA.17:34.880 –> 17:35.880That part I know.17:35.880 –> 17:36.880Gotcha.17:36.880 –> 17:37.880Okay.17:39.880 –> 17:40.880All right.17:40.880 –> 17:41.880Thank you, sweetheart.17:41.880 –> 17:42.880Okay.17:42.880 –> 17:43.880Bye-bye.17:44.880 –> 17:45.880All right.17:45.880 –> 17:48.080I will have to check on that for Lynn.17:48.080 –> 17:51.200I’ll make you a note here and see if I can find out better.17:51.200 –> 17:58.240Because again, I know inherited IRAs, I deal more with inherited IRAs than I do with spousal.17:58.240 –> 18:00.240But I do know there are certain limitations.18:00.240 –> 18:05.160But I believe there’s also some rules that she can get away with.18:05.160 –> 18:10.080I know she has to put it into her name under a spousal IRA.18:10.080 –> 18:13.600But for some reason, I mean, some of these rules change, guys.18:13.600 –> 18:16.200So hopefully someone might know the answer.18:16.200 –> 18:25.680Or I can get to Hank Parrott, who is my financial advisor, and get a better answer for Lynn on what she should and shouldn’t be doing with that.18:25.680 –> 18:29.200Especially since she’s still working and doing all of that.18:29.200 –> 18:31.000So we’ll make sure we get her a good answer.18:31.000 –> 18:32.000All right.18:32.000 –> 18:35.280Let’s go to Doug in Nashville and see if I have a little better answer.18:35.280 –> 18:37.160Hey, Doug, what can I do for you?18:37.160 –> 18:38.160Oh, common theme.18:38.160 –> 18:40.760And I hear a puppy dog.18:40.760 –> 18:41.760Yeah.18:41.760 –> 18:42.760Sorry.18:42.760 –> 18:45.760Those Great Danes have pretty big mouths and they’re right outside the door here.18:45.760 –> 18:47.440But anyways, we’ll pretend they’re not here.18:47.440 –> 18:48.440Go for it, Doug.18:48.440 –> 18:49.440Another inherited home.18:49.440 –> 18:53.880I have inherited a home along with my three brothers.18:53.880 –> 18:57.240What are the options for retaining the home?18:57.240 –> 18:59.720We want to keep the house.18:59.720 –> 19:01.080What’s the option?19:01.080 –> 19:05.000So you’re all wanting to retain the home or just you?19:05.000 –> 19:08.120Well, all of us.19:08.120 –> 19:11.600We have title and all four options, please.19:11.600 –> 19:12.600Yeah.19:12.600 –> 19:23.280Well, I mean, the good news about that is if all of you guys are on the same page and you’re wanting to all stay, you know, keep the home, are you going to think about keeping it as just like a family property?19:23.280 –> 19:26.000Just out of curiosity, or will we be turning it into a rental?19:26.000 –> 19:27.960Mostly the former.19:27.960 –> 19:31.520We each live there occasionally when we’re in town.19:31.520 –> 19:33.480I mean, we don’t all live in the same town.19:33.480 –> 19:37.760So when we’re there, we have holiday meals there, blah, blah, blah.19:37.760 –> 19:38.760Right.19:38.760 –> 19:46.080So, well, I mean, obviously the nice thing about having any property that you have would be nice if we can even just like Airbnb it enough to take care of it.19:46.080 –> 19:47.080Right.19:47.080 –> 19:49.280It doesn’t have to be rented every day or every weekend, but just enough.19:49.280 –> 19:52.320And then you guys could use it when you come into town or whatever.19:52.320 –> 20:11.360So what the biggest thing is when you guys inherited it, whenever that was, you guys need to get some comps or an appraisal, something from a real estate or appraisal person that will say, this is the value of the home because five years from now, 10 years from now, you guys may decide you’re ready to sell it.20:11.360 –> 20:14.760And we need to know what that basis is to know.20:14.760 –> 20:18.760I mean, most likely it will appreciate, you know what I mean?20:18.760 –> 20:21.640So it’ll be worth more five years from now than it is today.20:21.640 –> 20:41.160So if it’s worth 200,000 when the parents or whoever passed away that you received the house from, and then, you know, that way we know you’re one third of that, that’s your basis and then if you guys have to put some money into it, all that, if we’re not renting it, then that will add to basis or the repairs, you know, major repairs at least.20:41.160 –> 20:51.280That’s the nice thing about being a rental is that you guys could split it three ways and have the utilities and different things that are maintaining in that property to do.20:51.280 –> 20:59.800But yeah, so the biggest thing is, is getting that appraisal or at least comps, something that gives you the value of that home when that person passed away.20:59.800 –> 21:02.640And then you guys all need to save that.21:02.640 –> 21:03.640Got the appraisal.21:03.640 –> 21:06.000The problem is two of my brothers are not numbers people.21:06.000 –> 21:10.360And what about property taxes and insurance, which could be substantial each year?21:10.360 –> 21:14.200Should we set up a thinking fund or something?21:14.200 –> 21:15.200That’s my confusion.21:15.200 –> 21:16.200Yeah.21:16.200 –> 21:23.800I mean, ideally you guys set up a house fund and then you calculate roughly kind of like our mortgage companies do, right?21:23.800 –> 21:25.480They say, well, here’s your escrow account.21:25.480 –> 21:29.760So you sit down and say, this is roughly how much each of us will have to put.21:29.760 –> 21:51.760Somebody kind of just puts that in there and then you can auto draft the property taxes, the insurance, the basic repairs and maintenance, the utilities and try to, I mean, the first year will be the hottest in some ways because you’re not absolutely sure what, I mean, be nice to actually have a little bit of a fund that you could build up because sooner or later something big may need to be repaired.21:51.760 –> 21:54.120A roof heating and air conditioning.21:54.120 –> 21:55.400Those are always for my rentals.21:55.400 –> 21:57.560The big ones that, you know, the surprises.21:57.560 –> 22:00.320But the best thing would be just to have a joint bank account.22:00.320 –> 22:05.920All three of you guys put money in and then anything that goes with that house goes out.22:05.920 –> 22:10.000So that way you can track, you know, whatever’s just for that home.22:10.000 –> 22:14.680Not, you know, versus someone just giving you so much money and you run it through your personal account.22:14.680 –> 22:17.720This way everyone can see what went in and out of that account.22:17.720 –> 22:19.360Cause all three of you would have signing privileges.22:19.360 –> 22:22.480Even if they don’t want to go in and out, they still have the ability to.22:22.480 –> 22:23.480Gotcha.22:23.480 –> 22:26.000Sounds, that’s what I need to hear.22:26.000 –> 22:27.000I appreciate it.22:27.000 –> 22:28.000Hey, no problem.22:28.000 –> 22:29.000Good luck on that, Doug.22:29.000 –> 22:30.000Okay.22:30.000 –> 22:31.000Thank you.22:31.000 –> 22:32.000Thanks.22:32.000 –> 22:33.000All right.22:33.000 –> 22:35.840We’re going to get ready to take our second break here for the show.22:35.840 –> 22:41.640And if you want to join the show again, 615-737-9986.22:41.640 –> 22:46.600615-737-9986.22:46.600 –> 22:49.320Sounds like my girl has stopped talking in the background.22:49.320 –> 22:52.360Always nice for a live radio show.22:52.360 –> 22:55.560But if you have questions, inherited, those are always great question.22:55.560 –> 23:00.360Cause sometimes they’re not always as black and white as we like to think.23:00.360 –> 23:09.320And then again, I want to make sure Lynn, if you want to call or text this number, 615-367-0819.23:09.320 –> 23:10.680That’s my direct number.23:10.680 –> 23:11.680615-367-0819.23:11.680 –> 23:27.200I will definitely get you any information that’s needed, at least for making sure that you handle the transition of your husband’s loss, you know, from his IRA to you the best that we can.23:27.200 –> 23:29.760Then what else do we have here?23:29.760 –> 23:34.820We want to make sure we’re also covering anything for first time buyers.23:34.820 –> 23:46.000Back in 2008, I’ve been doing a number of back taxes this last week or two, and I’ve had two and the people forgot all about it because let’s be honest, they kind of forgot about filing their taxes.23:46.000 –> 23:50.600So they didn’t think too much about telling me about the first time home buyers.23:50.600 –> 23:59.240Remember that was a 15 year, $500 a year situation, which I believe is ending in the 2023 year.23:59.240 –> 24:03.180But up until then you had $500 each year that you had to pay.24:03.180 –> 24:06.440So in there, they’re making changes to these tax returns.24:06.440 –> 24:13.840So if you, for all of you that may have gotten that, you should be done hopefully with that situation.24:13.840 –> 24:20.680So that will be good news for all of you that had the first time home buyers back in 2008 and had to pay it back.24:20.680 –> 24:22.440All right, we’ll take our second break.24:22.440 –> 24:25.560We’ll be right back with the Dr. Friday Show.24:25.560 –> 24:36.400All righty, we are back here live in studio.24:36.400 –> 24:39.640Sometimes I have to really watch that.24:39.640 –> 24:51.040And we will be taking your call 615-737-9986, 615-737-9986 live here in studio.24:51.040 –> 24:58.320So if you have any questions, keep in mind the 15th of September is the due date for all corporate and partnership returns.24:58.320 –> 25:02.880So if you have not filed it, you are basically announced the last eight days.25:02.880 –> 25:08.240I believe it’s the 16th actually Monday that we have to actually file them.25:08.240 –> 25:10.200But just keep it simple.25:10.200 –> 25:16.600So if you have not filed, and this is only for individuals that have filed extensions.25:16.600 –> 25:21.000If you have not filed an extension on your business, well, then you’re late anyways.25:21.000 –> 25:25.680And the sooner you fit the button, the sooner you’ll be at least back in compliance.25:25.680 –> 25:27.680So very important.25:27.680 –> 25:31.520Also I had an email during the break and they wanted to know about cryptocurrency.25:31.520 –> 25:38.600And again, cryptocurrency is just like any other kind of property, stocks, anything you have.25:38.600 –> 25:43.280The difference is with crypto, you have to convert it back into US dollars.25:43.280 –> 25:50.000So when I buy IBM stock or Tesla stock, I’m buying in a currency, the US currency.25:50.000 –> 25:53.680Therefore in my case, if I sell it, I’m selling it.25:53.680 –> 26:16.200So the biggest conception or misconception with crypto or lithium or any of the other crypto, Bitcoin is that if you’re buying it, and let’s say you’ve converted your US currency into Bitcoin, then you take Bitcoin and you buy, you know, lithium or one of the other brands, then you’ve already converted.26:16.200 –> 26:22.960So when you converted Bitcoin into lithium, then you now have a purchase.26:22.960 –> 26:28.520And then when you sell lithium to go buy something else, there’s a sale, right?26:28.520 –> 26:33.600So you sold Bitcoin to buy lithium, there’s a sale price, there’s a lithium to something else as a sale.26:33.600 –> 26:48.680And then you have to convert that back to US dollar as you’re doing it and report that onto your schedule D. So in any sense of the word, you really do want to track it as much or as currently as you would any kind of stock purchases.26:48.680 –> 26:53.960Like I say, a lot of times people are thinking, well, no one really knows that I don’t, you know, no one’s tracking.26:53.960 –> 26:57.640So I brought this and then I sold this and I did it all in the world of crypto.26:57.640 –> 27:00.320So no one really knows that I brought and sold.27:00.320 –> 27:08.400I like to think that you’re correct, but I’m also seeing more and more audits that are leading due to the fact of cryptocurrency.27:08.400 –> 27:17.200The IRS has really put a whole team of people out there dealing with cryptocurrency and trying to find out, you know, who’s got it, where it’s at.27:17.200 –> 27:21.120More and more companies are releasing information.27:21.120 –> 27:24.680So again, it’s not so much they do or don’t know.27:24.680 –> 27:28.800It’s a lot like when people come up and say, well, how does anyone know I gifted somebody money?27:28.800 –> 27:33.840Well, it’s only when someone gets audited that it’s often known.27:33.840 –> 27:43.400You know, I mean, if you go walk and give someone $10,000 cash and that person receives as a gift and you took it out of your bank, no, probably not.27:43.400 –> 27:47.480But if you go give that person $100,000 cash, that may wave some flags.27:47.480 –> 27:49.400Hey, how did you get the cash out of the bank?27:49.400 –> 27:51.040Was it something that was reported?27:51.040 –> 27:53.560Then it triggered somebody else looking at it.27:53.560 –> 27:58.280Normally the biggest reason that people get audited, a lot of that is lifestyle.27:58.280 –> 28:09.440So you know, you report that you’re making 30, 40, $50,000 a year, but yet you have two houses, you have four cars, you’ve got two kids in private school.28:09.440 –> 28:13.440Lifestyle can tell a lot to the IRS and almost all of that is reported in.28:13.440 –> 28:17.000When you buy a car, your car is reported in license.28:17.000 –> 28:18.500Licensing gets reported to the IRS.28:18.500 –> 28:22.120When you buy a house, that information is reported to the IRS.28:22.120 –> 28:26.240I don’t know about private schooling, but I have had it come up in audits.28:26.240 –> 28:32.320So I’m going to make a guess that there is something in there, either a way of them running it under social security numbers.28:32.320 –> 28:33.320I don’t know.28:33.320 –> 28:42.800I do know all your bank accounts and any kind of investment accounts, anything with our social security numbers on them has that ability to be tracked by the IRS.28:42.800 –> 28:44.240So we’re not hiding.28:44.240 –> 28:59.880So you know, you could get away with something, but you know, I’ve always been the kind of person to be quite honest with you, no matter what, I always like to pretty much not have to worry about tomorrow in a sense, Hey, I don’t want to be doing something that I have to look back and be, Oh my God, this is going to happen.28:59.880 –> 29:02.600Oh my gosh, this is, you know, they could catch this.29:02.600 –> 29:04.560It’s easier to just do it and then move forward.29:04.560 –> 29:16.320I mean, again, like I was saying, sometimes people worry about saving money and I think money saving is great, but also you have to put into consideration how much are you really saving?29:16.320 –> 29:20.240You’re going to turn your world upside down or you’re going to do something.29:20.240 –> 29:28.720Now I’m not an advocate guys for paying off your mortgages by cashing out your 401k, but I mean, I do understand cashflow.29:28.720 –> 29:39.400And sometimes if you do that over a four or five year, maybe a bigger, but keep you into a 22% tax bracket or something and paying it off before retirement, I can relate to that.29:39.400 –> 29:40.400I’m not a financial planner guys.29:40.400 –> 29:41.400I’m not an attorney.29:41.400 –> 29:49.020So I’m not saying that’s the best thing to do, but I can say that there are ways of trying to keep the price down and then paying off big chunks to your mortgage.29:49.020 –> 30:00.920So when you hit retirement, you don’t have a mortgage payment that would make life a lot easier and your cashflow would be so much easier than having to have, you know, a couple thousand dollars a month having to go out for a mortgage.30:00.920 –> 30:04.400So you know, I mean, common sense comes into play with that.30:04.400 –> 30:05.400That’s all I’m saying.30:05.400 –> 30:13.800So understanding how it works and how money’s tracked through is perfect, but let’s also make sure that you’re doing the best you can with keeping as much money in your pocket.30:13.800 –> 30:20.400Again, I know financial planners are sitting there basically probably stretching their head saying no, no, no.30:20.400 –> 30:21.400And I get it.30:21.400 –> 30:31.600I mean, if you’re earning 6% and you got a mortgage at 4%, why would you want to cash out the account when it’s making 6% to pay something off at 4?30:31.600 –> 30:35.600Why not just take enough every year to pay your mortgage?30:35.600 –> 30:37.080You know, and use that.30:37.080 –> 30:39.760So there is two sides to all of that.30:39.760 –> 30:42.560So I mean, each person has to do what’s best for themselves.30:42.560 –> 30:47.840So anyways, that’s often had a couple people come in this last month wanting to talk about that kind of stuff.30:47.840 –> 30:54.520So wanted to bring it up and make sure that you were trying to track your information the best way you can.30:54.520 –> 30:58.120Also if you’ve had, I mean, we’re already what, through, we’re in the September.30:58.120 –> 30:59.680So we’re through August into September.30:59.680 –> 31:02.640Have about four months left of the year.31:02.640 –> 31:09.040And one of the things you do need to consider when you filed your taxes, and some of you may not have filed your taxes yet.31:09.040 –> 31:13.060You have until October 15th for individuals that filed extensions.31:13.060 –> 31:17.200So if you haven’t filed your taxes yet, you won’t be able to answer this.31:17.200 –> 31:33.720But if you have filed your taxes and you owed money, I had a gentleman come in just the other day and the last couple of years I keep telling him to adjust his W-2 so that more taxes are coming out because he’s big in investing and he has got a number of rental real estates and all these different things.31:33.720 –> 31:40.720But when we just do his taxes based on his W-2 and his wife’s W-2, they’re already short.31:40.720 –> 31:49.520And it’s like, you know, you need to be paying in enough on your actual earned income before we worry about all your exterior situations.31:49.520 –> 31:51.880And that can be done with estimating if you want.31:51.880 –> 31:55.880But he ends up writing a pretty healthy check and then pays penalties, right?31:55.880 –> 31:57.340Because he’s not paying enough.31:57.340 –> 32:06.720So you know, this last time, just this on Thursday or Friday last week, I’m like, you need to consider go in and put single and zero and pay in enough taxes.32:06.720 –> 32:08.840We’re already what, eight months into the year.32:08.840 –> 32:11.800We’re not going to do any good for 24 anyways.32:11.800 –> 32:13.760And he’s still waiting to file 23.32:13.760 –> 32:16.040But we need to get a head start on all this.32:16.040 –> 32:17.040No, don’t get me wrong.32:17.040 –> 32:18.920He always pays the taxes.32:18.920 –> 32:25.120I just don’t like paying penalties that can be controlled with at least being enough money coming out.32:25.120 –> 32:30.040So if you’re looking at your tax situation every year, you have to write a healthy check.32:30.040 –> 32:32.600Consider how much money you’re paying in penalties and interest.32:32.600 –> 32:38.600And right now the IRS interest rate is almost 12%, 12% people.32:38.600 –> 32:41.880So I mean, there’s, it used to be for a while there.32:41.880 –> 32:45.960So my clients are like, well, Hey, I can make more money when I didn’t pay that.32:45.960 –> 32:50.560I didn’t pay my quarterlys cause I can earn six, eight, 10% on that money.32:50.560 –> 32:52.760But now you’re paying interest alone.32:52.760 –> 32:53.760That’s not the penalties.32:53.760 –> 32:57.080This is interest alone, almost 12% to the IRS.32:57.080 –> 32:58.640You can’t earn that.32:58.640 –> 33:00.720I don’t think, at least I can’t.33:00.720 –> 33:07.120So put that in your, your cap and think about that and figure out what you’re going to do and how you’re going to manage it.33:07.120 –> 33:19.120But paying quarterlys estimates as we like to refer to them, estimated quarterlys for individuals that are self-employed or individuals that are retired and or employees that choose not to pay enough taxes.33:19.120 –> 33:26.560And anybody that owned more than $500 theoretically is required to file estimates for the next year.33:26.560 –> 33:31.360Now if it was a one-time situation, something happened, you had a big stock sale or you sold something.33:31.360 –> 33:33.520And then the next year, that’s not going to happen.33:33.520 –> 33:34.520I get it.33:34.520 –> 33:39.600You’re not going to make estimates based on that, but they do base our quarterlies in our estimates on the prior year.33:39.600 –> 33:44.160So whatever happened in 2023, whatever you owed is total taxes.33:44.160 –> 33:49.440The IRS is expecting you to pay that much in again in 2024 without penalty.33:49.440 –> 33:52.400Now if you pay too much, then obviously that’s not a problem.33:52.400 –> 33:55.520If you underpay, then there’s penalties and interest.33:55.520 –> 33:57.920Penalties can be as much as 25%.33:57.920 –> 34:01.080I was looking at gentleman’s transcripts.34:01.080 –> 34:07.440He owed $215,000 in 2016 for some taxes.34:07.440 –> 34:13.060And now 2024, he owes $560,000.34:13.060 –> 34:20.200He owes more now twice than he owed back in the time when he actually would have had to pay the taxes.34:20.200 –> 34:28.760So again, keep in mind, penalties and interest can add up and bigger the dollar amount, obviously bigger the penalties and interest.34:28.760 –> 34:42.240So this is the kind of things you need to understand if you’re going to make the decision not to pay the IRS on a quarterly, even a monthly basis, then understand that there will be also consequences of penalties and interest.34:42.240 –> 34:45.280And a lot of people are like, well, we can get that waived.34:45.280 –> 34:47.760You can only get so many penalties waived.34:47.760 –> 34:56.280You cannot get interest waived unless you can prove the IRS did something wrong, which honestly in most cases, you didn’t pay the taxes.34:56.280 –> 34:57.280You didn’t do it.34:57.280 –> 34:58.720The IRS didn’t do anything wrong.34:58.720 –> 35:01.200Therefore the issue is you can’t get that waived.35:01.200 –> 35:03.600All right, we’re all get ready to take our last break.35:03.600 –> 35:13.160If you want to join the show, maybe you’ve got a question or a situation, 615-737-9986 is the number here in the studio.35:13.160 –> 35:20.280We’re going to get back to taking some of your calls.35:20.280 –> 35:28.080I am an enrolled agent licensed by the Internal Revenue Service to do taxes and representation, which is just what I do guys.35:28.080 –> 35:29.680I talk about taxes all the time.35:29.680 –> 35:33.000I do my best to get you guys at least to be thinking about it.35:33.000 –> 35:36.280Keep in mind, no one person’s situation is the same as another.35:36.280 –> 35:40.720So the advice you’re hearing is just typical standard advice.35:40.720 –> 35:45.260You need to talk to your tax person to get the exact numbers, that situation.35:45.260 –> 35:51.300You may have something different than the person that called in, so the information may change, but the advice is there.35:51.300 –> 35:54.960You want to be thinking about taxes before you go do something, then after.35:54.960 –> 35:56.560Afterwards, we can’t fix it, right?35:56.560 –> 36:01.400I mean, if you sell the house, we can’t do a 1031 after you’ve already received the money.36:01.400 –> 36:05.240You can’t go backwards and not sell the house.36:05.240 –> 36:08.320So now you need to think about those things.36:08.320 –> 36:18.240If you inherit, if you’re going to deal with something, all of that is a perfect idea, but doing it in advance versus waiting till something happens doesn’t work very well from the tax standpoint.36:18.240 –> 36:24.800Again, number here in the studio, 615-737-9986.36:24.800 –> 36:27.580Taking the calls here live, inheriting questions.36:27.580 –> 36:33.800If you’ve got questions on not filing taxes for the last five, six, 10, 12, 15 years, I can help you with that.36:33.800 –> 36:34.800It’s not that complicated.36:34.800 –> 36:38.520We’re going to be right back with the Dr. Friday Show.36:38.520 –> 36:45.840All righty, we are back here live in studio.36:45.840 –> 36:48.800I did want to put a quick note out.36:48.800 –> 36:55.960If Lynn, you are still listening, I did get a quick text from a friend that is a financial advisor.36:55.960 –> 37:05.200They said that as a spouse, the most common thing for you to do from an inherited is to transfer those funds to your own IRA.37:05.200 –> 37:18.280So a spouse passed away, you can transfer those funds into your own IRA, or you can assume it and then continue to take the IRA RMDs once that has done.37:18.280 –> 37:38.560Either way, again, I would definitely suggest probably talking to a financial planner or whoever’s the custodial of your husband’s IRA to just make sure that all of that’s being done correctly because the biggest thing is I know from the tax standpoint, if RMDs are not taken properly, they can take 50% of that RMD as penalty.37:38.560 –> 37:40.800That is something we don’t want to have happen.37:40.800 –> 37:43.480So I just want to make sure that that part is correct.37:43.480 –> 37:48.560And I do know about that as far as what’s the best step for you and your IRA.37:48.560 –> 37:51.360I think probably talking to a good financial advisor.37:51.360 –> 37:55.200Hank Parrott is a great one in case you don’t have one and you can always call my office.37:55.200 –> 37:57.520I’ll be more than glad to refer you to some.37:57.520 –> 37:58.520Okay.37:58.520 –> 38:01.120So if you have a question, you can certainly join us here in studio.38:01.120 –> 38:15.880We have about, oh, five, six minutes left at 615-737-9986, 615-737-9986, taking phone calls, talking about my favorite subject, taxes.38:15.880 –> 38:17.160All right.38:17.160 –> 38:18.760So we’re going to be looking at tax planning.38:18.760 –> 38:25.000One of the things you want to do is obviously check out your W-4 form, making sure you’re doing that in accordance.38:25.000 –> 38:33.100If you have an expected income that is not subjected to withholding, such as obviously social security, a lot of people do not take out taxes.38:33.100 –> 38:34.480Sometimes they’ll take out money.38:34.480 –> 38:39.760Then doing the quarterly estimate is the best thing or adjusting other ones.38:39.760 –> 38:49.000Like sometimes I’ll have people that have maybe a small pension, but then they take money out of their RMDs or they have social security.38:49.000 –> 38:58.240Social security will take out taxes, but sometimes it’s just easy to calculate it and have it coming out of one source and controlling it versus having everything paying in 15%.38:58.240 –> 39:00.440You may be paying way too much in in taxes.39:00.440 –> 39:03.520I’m not an advocate for the IRS to be my banker.39:03.520 –> 39:07.080I want them to have enough that keeps them from doing any kind of penalties.39:07.080 –> 39:15.640I do not want them holding on to … I mean, I have people, a new client that came in and she … I don’t know how she’s … She is very up and down.39:15.640 –> 39:20.960She’s very vested into the market, so she can have high or low capital gains.39:20.960 –> 39:30.320But in all honesty, you don’t want them holding $50,000, $60,000 just as an overpayment to me.39:30.320 –> 39:31.680That is just a little too much.39:31.680 –> 39:37.760As long as you’re meeting the criteria of estimated taxes, that is all you need to be doing.39:37.760 –> 39:41.000Again, if you have questions, you can join us here.39:41.000 –> 39:46.640You can also call my office at 615-367-0819.39:46.640 –> 39:50.920That will get you right to me and we can talk about setting up a question if you have one.39:50.920 –> 39:59.160If you need help making sure that you are dealing with the right kind of tax advice for yourself.39:59.160 –> 40:06.720Also dealing with if you’ve got real estate and you want to sell it, maybe talking about the 1031 as an option.40:06.720 –> 40:14.640Also wanted to bring up, obviously some of you guys are at the age of taking RMDs, required minimum distributions.40:14.640 –> 40:21.080Always talk to your financial advisor about qualified charitable deductions, QCDs.40:21.080 –> 40:30.640Those are, in my opinion, one of the best tax deductions for seniors because you guys are always good about giving to charities, giving to help others.40:30.640 –> 40:36.520There’s nothing wrong of doing that through your RMD money versus taking it directly from your bank account.40:36.520 –> 40:39.360The big difference is you’re losing money.40:39.360 –> 40:51.480If you take it from your RMD, you do what’s called a charitable qualified deduction, then that would be perfect and you can do what you need to do with that.40:51.480 –> 41:04.340If you are taking it, putting the money in your bank and then you are writing the check to your charity, now you’re hoping to itemize and many of you don’t meet the standard deduction.41:04.340 –> 41:07.140You’re not getting any deduction for all of that charity.41:07.140 –> 41:10.600If you do it through your RMD, we get dollar for dollar.41:10.600 –> 41:17.040If you give $5,000, you’re going to reduce your income by $5,000.41:17.040 –> 41:22.920It’s a much simpler, much cleaner situation than the other way.41:22.920 –> 41:29.000Just making sure that you’ve done it and you’re tracking it and all that is going the right direction is such an easy way.41:29.000 –> 41:30.560It’s such a great way for you.41:30.560 –> 41:37.540You can even give more money to charity if you want to be tracking the advantage or not, but really no one gives for the tax advantage.41:37.540 –> 41:50.200I get that, but what’s the difference of taking the RMD, putting it in your bank account, turning around and writing a check or having your custodial write the check out of your RMD and saving those tax dollars?41:50.200 –> 41:52.840It doesn’t make any sense to me.41:52.840 –> 41:55.120Make sure you talk to your financial advisor about it.41:55.120 –> 41:56.580They’ll all know what it is.41:56.580 –> 41:57.840It’s not a hard thing.41:57.840 –> 42:01.440It really starts at anybody at the age of 70.42:01.440 –> 42:05.120QCDs start at the age of 70, not 73.42:05.120 –> 42:15.000You theoretically could start doing your required minimum distributions and giving to your qualified charitable deductions at the age of 70.42:15.000 –> 42:18.820So again, just putting that out there, making sure that you’re on the right page.42:18.820 –> 42:22.880Every dollar saved is another dollar you can do something fun with.42:22.880 –> 42:24.620Let’s see, what else do we need to think about?42:24.620 –> 42:42.120So you have basically what you’re going to do if you do have loved ones in a continued care hospice, any of that, keep in mind that sometimes you’re having to cash out retirement accounts to cover that.42:42.120 –> 42:46.440And in those cases, most of them will give you a number, but those are deductible.42:46.440 –> 42:56.180If you’re in a hospital, I mean, if you’re in a hospice or something, it’s because you’re unable to take care of yourself, usually two or three out of the five main things.42:56.180 –> 43:04.120And so if that is meeting those criteria, that is a medical situation that is not just the housing situation.43:04.120 –> 43:09.160And therefore you can make sure that you’re not paying taxes before you get that deduction.43:09.160 –> 43:12.760And in most people you’ll be able to itemize because it’s such a large amount.43:12.760 –> 43:18.780I mean, sometimes people have 30, 40, $50,000 deductible for that allowance.43:18.780 –> 43:25.640So just saying you want to make sure you have that set aside for yourself and just tracking it.43:25.640 –> 43:31.960And if you are a person that itemizes, also don’t forget your charitable miles and your medical miles.43:31.960 –> 43:37.080If you’re able to take medical miles or medical expense, then you can actually add in.43:37.080 –> 43:45.320And every time you had to go to the pharmacist, every time you go to the chiropractor, every time you go see a doctor, all of those are going to be tax deductible for you.43:45.320 –> 43:48.440So again, win-win situation, you’re already maximizing.43:48.440 –> 43:54.660Why not take those last couple steps and make sure you get every dollar that you can be entitled to.43:54.660 –> 43:57.620So if the show’s going to be winding down here in about two minutes.43:57.620 –> 44:09.740So if you want to reach my office, you can Monday morning at 615-367-0819.44:09.740 –> 44:13.380We will be getting ready soon to open up our calendar.44:13.380 –> 44:19.760We also have brought in some additional, another additional EA in our office that we’ll be introducing.44:19.760 –> 44:23.680He’s going to be taking on a couple of the basic tax returns.44:23.680 –> 44:30.980So we’ll be able to help a few more people here and hopefully get your taxes done in the way they should be and answer all your questions.44:30.980 –> 44:32.900So we’ll be covering more of that.44:32.900 –> 44:40.260But if you want to get in and review your taxes before the next year and make sure we’re all set up to help you out, you can.44:40.260 –> 44:50.400First thing you do is call 615-367-0819.44:50.400 –> 45:06.060You can also check out the web, drfriday.com, D-R-F-R-I-D-A-Y.com and check and see what we have going on and we’ll be again, very soon we’ll be uploading the newest tax organizer for us.45:06.060 –> 45:08.460So we’ll be able to help you get organized.45:08.460 –> 45:18.420If you are, I mean, we’re eight months in, you guys should have a nice big manila envelope, nothing probably tax wise coming in yet for 2024.45:18.420 –> 45:27.680But I would suggest on the outside of that envelope, if you’re receiving interest from banks, write down the names of the banks that you expect or you want to check.45:27.680 –> 45:48.120If you have investment advisors from TD Ameritrade or just a company, you know, one of Dave Ramsey’s people or Hank Parrott or any of them, make sure that you have that wrote down on the outside because you’re most likely going to have some statements, 1099B especially from investments, interest statements.45:48.120 –> 45:49.880And then also your retirements, right?45:49.880 –> 45:57.680So social security, if you have a pension, if you took money out of an RMD, start putting all of that on the outside of that envelope.45:57.680 –> 46:01.440So that way when the documents come in, you can just check them off.46:01.440 –> 46:06.320And then, because so many times nowadays, most of these companies will be doing through email, right?46:06.320 –> 46:10.520They don’t do it through the good old fashioned way, which was mail or anything else.46:10.520 –> 46:11.960A lot of them will send emails.46:11.960 –> 46:16.960And then we’ve had a couple of them this last year where things were not sent in the year.46:16.960 –> 46:20.560And then they later found out that there was something they should have been reporting.46:20.560 –> 46:25.120And that just creates a lot of headache more than anything else.46:25.120 –> 46:29.200So we want to make sure that that’s all taken care of and moving forward properly.46:29.200 –> 46:37.240So if you just take the time now when it’s quiet, write down where you’re getting your money every month, who’s paying it, where you should be getting.46:37.240 –> 46:40.400And then that way, when it comes time, you can put all those in there.46:40.400 –> 46:43.600Because a lot of times there’s miscellaneous stocks that you’ve owned for years.46:43.600 –> 46:47.400And every year they may send you a small dividend check, whatever it might be.46:47.400 –> 46:50.800You just want to make sure you’re tracking that information to stay organized.46:50.800 –> 46:55.040Staying organized will make tax season so much smoother for you, trust me.46:55.040 –> 46:57.000All right, so this is the end of the show.46:57.000 –> 47:06.400So if you want to reach us in the office, 615-367-0819.47:06.400 –> 47:11.600You can also email me directly, Friday@DRFriday.com.47:11.600 –> 47:21.080That’s Friday@DRFriday.com or check us out on the web at DRFriday.com.47:21.080 –> 47:23.120I hope you guys are enjoying this Saturday.47:23.120 –> 47:25.760And as we love to say in Australia, call.

View Details

In this episode of the Dr. Friday Radio Show, financial counselor and tax consultant Dr. Friday answers caller questions and provides valuable insights on various tax-related topics. From business deductions to property sales and retirement accounts, Dr. Friday offers expert advice to help listeners navigate complex tax situations.

Topics covered:

• Business deductions for new entrepreneurs, including mileage tracking and equipment depreciation
• Tax implications of selling a primary residence, including capital gains exclusions
• The importance of keeping receipts for home improvements and their impact on taxes
• Self-directed Roth IRAs used for real estate investments
• Required Minimum Distributions (RMDs) and their applicability to different retirement accounts
• The new Business Owners Information Act (BOI) filing requirements
• Annual reporting requirements for businesses and nonprofits
• The importance of maintaining compliance with tax laws and regulations

Transcript

00:00.001 –> 00:07.760No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes.00:07.760 –> 00:10.000She’s the how-to girl.00:10.000 –> 00:11.000It’s the Dr. Friday Show.00:11.000 –> 00:22.000If you have a question for Dr. Friday, call her now, 737-WWTN.00:22.000 –> 00:23.960That’s 737-9986.00:23.960 –> 00:26.960So here’s your host, financial counselor and tax consultant, Dr. Friday.00:26.960 –> 00:38.280G’day, I’m Dr. Friday and the doctor is in the house on this absolutely beautiful Saturday.00:38.280 –> 00:43.880And if you have questions, I’m an enrolled agent licensed with the Internal Revenue Service to do taxes and representation.00:43.880 –> 00:46.480I do not work for the IRS.00:46.480 –> 00:52.320I am just licensed by them to help represent taxpayers in front of the IRS.00:52.320 –> 01:09.000So if you have IRS issues, if you’re thinking about doing some, I don’t know, selling property, you inherited property, you’re in a transition in your world and you’re thinking about changing things around a little bit and how is that going to affect your taxes is always a big question.01:09.000 –> 01:20.480And sometimes people just kind of make decisions or they think, I can’t tell you how many times I think that people think that they sell their primary home is they’ve got two years to reinvest the money, which was a tax code that was back.01:20.480 –> 01:24.560Gosh, it had to be in the early two thousands, if not earlier.01:24.560 –> 01:26.960And now we don’t have that code on the books right now.01:26.960 –> 01:41.640It’s if you sell your primary home, you have an exclusion of 250,000 for a single person and 500,000 for a married couple above the purchase price or, and adding any major improvements that may have appreciated the property.01:41.640 –> 01:44.680That’s why you need to understand how it’s going to work for you.01:44.680 –> 01:59.300So if you want to join the show, 615-737-9986, 615-737-9986 is our number here in the studio and you can give us a call and ask questions concerning about that.01:59.300 –> 02:09.240Maybe you have someone that you know that hasn’t filed taxes in a number of years and you’re concerned that, well, I mean, one of the biggest things I’ve had two clients, you know, we’re not getting any younger.02:09.240 –> 02:13.840And at some point you’re thinking, I’m going to want Medicare.02:13.840 –> 02:17.240I’m going to want to get onto social security.02:17.240 –> 02:40.740Some people, you know, something happens in life and maybe early social security or disability, but you do realize that if you haven’t actually participated in filing taxes, especially for the self-employed, but even for individuals, they use those taxes to find out how many quarters you have actually participated and that you have to have 10 years or 40 quarters to qualify for social security as far as I know.02:40.740 –> 02:50.480So you want to be able to make sure that you are filing and I had a gentleman who had to file like eight years just to get his social security benefits because he hadn’t filed taxes in a number of years.02:50.480 –> 02:57.000He was self-employed, so there wasn’t anything that he needed, but he didn’t think about it until he needed it.02:57.000 –> 02:58.960Same thing with college and different things.02:58.960 –> 03:04.920So if you’ve got questions like that, give us a holler, 615-737-9986.03:04.920 –> 03:07.320Let’s go to James in Greensbrier.03:07.320 –> 03:08.320Thanks for calling, James.03:08.320 –> 03:09.320What can I do for you?03:09.320 –> 03:10.320Yes, I had a question.03:10.320 –> 03:19.040I just started business or got my business license yesterday.03:19.040 –> 03:21.240I didn’t know what all I could write off.03:21.240 –> 03:24.520I have a drone service.03:24.520 –> 03:32.320I didn’t know mileage, estimates, going to and from, what is the best.03:32.320 –> 03:33.320That’s a great question, James.03:33.320 –> 03:36.320What kind of business did you say you had?03:36.320 –> 03:39.440Excuse me?03:39.440 –> 03:42.200What kind of business did you say you had?03:42.200 –> 03:43.200It’s drones.03:43.200 –> 03:44.200Drones, okay.03:44.200 –> 03:45.200Drones, D-R-O-N-E.03:45.200 –> 03:46.200Yeah.03:46.200 –> 03:54.600So what you basically, I’m assuming your home office is where you are keeping your drones plus if there is any invoicing you have.03:54.600 –> 03:57.680Do you have an office in your home or not really?03:57.680 –> 03:58.880Yes.03:58.880 –> 03:59.880Okay.03:59.880 –> 04:03.480So that would be our point of work.04:03.480 –> 04:14.040So theoretically in yours, let’s say you come out to my 15 acres and I ask you to do some overhead shots or mark property lines, whatever, whatever you do.04:14.040 –> 04:15.440Trying to wing that a little bit.04:15.440 –> 04:34.840But so from your home to my property and back you would track miles plus whatever warrants here you would depreciate the drone and then if you have like Wi-Fi service or whatever you might use for software, if there’s a monthly or annual dues, that would be deductible.04:34.840 –> 04:40.000So that would be right off cell phone most likely because you probably would use your cell phone for your business.04:40.000 –> 04:43.000At least a portion of it might be deductible.04:43.000 –> 04:45.760So that would be some of the starting things I could think of.04:45.760 –> 04:46.760Okay.04:46.760 –> 04:53.040And I didn’t know, I looked at, I think it was QuickBooks, they track your mileage.04:53.040 –> 04:58.760I didn’t know if you had a suggestion on what to use or.04:58.760 –> 04:59.960Right no, that’s a great question.04:59.960 –> 05:01.520We’re certified QuickBooks advisors.05:01.520 –> 05:03.600So we use a lot of QuickBooks products.05:03.600 –> 05:08.220There’s also a free one that you can put on your phone called mileage IQ.05:08.220 –> 05:15.840So depending on where you are in your business, you may not want to be paying 30, $40 a month yet for accounting software.05:15.840 –> 05:18.860Maybe just until you get it up and going.05:18.860 –> 05:27.120But the business gets to a point I would definitely suggest using an accounting software because everything’s going to kind of set up a separate bank account for the business.05:27.120 –> 05:34.600Even if you’re a sole proprietor, always cleaner to have a separate bank account, run all your business expenses only through that.05:34.600 –> 05:44.520And then you can take money out or put money in personally through the account, but it’d be easiest in the big picture to get used to keeping your business expenses separate from your personal.05:44.520 –> 05:45.520Well, thank you very much.05:45.520 –> 05:46.520Thanks.05:46.520 –> 05:47.520That was a great question.05:47.520 –> 05:48.520Appreciate it, James.05:48.520 –> 05:51.760Good luck in the business as well.05:51.760 –> 05:52.760All right.05:52.760 –> 05:54.520If you have a question, you can join the show.05:54.520 –> 05:55.520615-737-9986.05:56.520 –> 06:06.680Always making sure that when you start a business too, there was a cost.06:06.680 –> 06:07.920He got a business license.06:07.920 –> 06:09.680He purchased a drone.06:09.680 –> 06:13.200All of those would be tax deductible in the first year.06:13.200 –> 06:20.880So even if you didn’t make a lot of money, you made the attempt to start a business, that would be a tax deduction as long as you tried to start the business.06:20.880 –> 06:28.040So if you’ve got questions again, you know, dealing with taxes, obviously something I enjoy, but most people don’t.06:28.040 –> 06:41.560So if you’re not sure about something that you are doing either in your business, cause you’re a small business and maybe you don’t have an accountant or tax person, especially when we all started out, we didn’t really have the finance or it wouldn’t have been cost efficient.06:41.560 –> 06:49.960But if you, you know, best idea is to keep either monthly envelopes or just a spreadsheet with copies of your receipts.06:49.960 –> 06:51.560Always put all of it together.06:51.560 –> 07:01.600Maybe you’re not too sure if you purchased, maybe you went and took a class that covered drones or, you know, took some sort of webinars or any of that.07:01.600 –> 07:09.360Keep all of that because it all led to the business that actually is now generating income for you in his case, but it’s also the same in other cases.07:09.360 –> 07:17.280Now I will say a lot of times people like to try to take off a vacation and call it a business deduction.07:17.280 –> 07:18.280Very popular.07:18.280 –> 07:22.600Um, couple of catches to that one, the IRS is kind of onto that too.07:22.600 –> 07:25.000So if you’re going to Florida, think about it.07:25.000 –> 07:40.880Um, and you’ve taken your wife and kids and you said, well, Hey, I went there and I was checking out houses because I’m a real estate agent and you know, you’re not licensed in the state or maybe you even are licensed in the state, but you have no other real estate there.07:40.880 –> 07:46.440Going and looking at houses for any real estate person is not a tax deduction unless you purchase it.07:46.440 –> 07:48.560So hunting is not a tax deduction.07:48.560 –> 07:55.080The intent to want to go by not a tax deduction, only a tax deduction is when you purchase it.07:55.080 –> 08:00.940So if you’re driving around neighborhoods all day trying to find a house to buy, that will not be a tax deduction.08:00.940 –> 08:11.560If you’re ever audited, I’m not saying that people aren’t claiming it, but you’d have to have some really good tax documentation showing that you went to this house, you, you talked to the owners, you did this.08:11.560 –> 08:14.600You’d have to have something because miles become quite the situation.08:14.600 –> 08:15.600All right.08:15.600 –> 08:18.160I think it’s Judy in my town, Spring Hill.08:18.160 –> 08:20.920What do you have going for me, Judy?08:20.920 –> 08:26.280We purchased our home in 99 for around $250,000.08:26.280 –> 08:30.800We sold it last year for around $950,000.08:30.800 –> 08:41.800So we made over what the IRS is going to allow my husband and I, I need to know how specific is the IRS going to become tax time next year.08:41.800 –> 08:46.000I’m not going to have to show receipts for those 20 years worth of improvements.08:46.000 –> 08:51.320Am I, if I give a list and the amount, is that enough or what will they need?08:51.320 –> 09:08.680If you’re actually audited, you would have to have documentation showing that you put a pull in the backyard may have been 20 years ago, but you know, ideally you have something and I agree with you because even myself, I mean, sometimes the improvements we do on our own home, we don’t really think of as a rental.09:08.680 –> 09:11.400I keep every receipt because I know it’s a rental and I can write it off.09:11.400 –> 09:15.400But for my primary, I don’t think about the improvements I do in my home.09:15.400 –> 09:23.000And I will say I’ve not yet in 30 years had an IRS come back and audit that to that extent.09:23.000 –> 09:31.840You know, so you are, I mean, if you paid 250,000, so the question is, did you do another $200,000 worth of improvements on that house?09:31.840 –> 09:33.080I don’t know the answer, Judy.09:33.080 –> 09:38.400And that’s what, you know, because right now, 250 plus the 500 exclusion makes it 750.09:38.400 –> 09:39.960You sold it for 950.09:39.960 –> 09:48.200You’ll have closing cost fees, but in real estate and all that, but you’re still around $200,000 capital gains as of right now.09:48.200 –> 10:00.080But I’m assuming you may have, since that was an older home, you said 99, you may have gutted the house and not gutted, but you know, redid the kitchen, put new floors versus the old carpet.10:00.080 –> 10:01.380You may put wood floors in.10:01.380 –> 10:05.800I don’t know if that’s the case, but that’s the kind of stuff that would have increased the value of the home.10:05.800 –> 10:19.000So if I just give a list and I say, so we remodeled this bathroom and that cost was around $6,000 and I add up that list over 20 years.10:19.000 –> 10:20.000Right.10:20.000 –> 10:26.000Just remember, if you put two air conditioner units in the 20 years, you can’t write them both off, right?10:26.000 –> 10:30.480It’s only what was at the end that actually increased the value.10:30.480 –> 10:31.480Okay.10:32.480 –> 10:34.560I didn’t know that.10:34.560 –> 10:39.160And the depreciation of just the area, that doesn’t even matter at all.10:39.160 –> 10:42.400No, that was a good investment for you.10:42.400 –> 10:47.200But the answer is no, that doesn’t, it’s all about the dollar amount, right?10:47.200 –> 10:53.280So yes, sit down, really sit down and figure out, Hey, you know what, five years ago, we threw a new roof on the house.10:53.280 –> 10:58.040We did all the bathrooms, we upgraded from linoleum to wood.10:58.040 –> 11:03.200I don’t know, you know, just saying those kinds of things, which would have increased the value of the home.11:03.200 –> 11:04.200Right.11:04.200 –> 11:05.200Okay.11:05.200 –> 11:06.200That’s what I need to know.11:06.200 –> 11:07.200I appreciate your help.11:07.200 –> 11:08.200Thanks, Judy.11:08.200 –> 11:09.200I appreciate it too.11:09.200 –> 11:11.720All right, guys, we’re going to take our first break in the second here.11:11.720 –> 11:16.200If you want to join the show, you can at 615-737-9986.11:16.200 –> 11:17.200615-737-9986.11:17.200 –> 11:26.720Again, I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.11:26.720 –> 11:30.320That’s why we’re talking about taxes because that’s what I love and do.11:30.320 –> 11:34.600I’ve been doing it for almost 30 years here in the Tennessee area.11:34.600 –> 11:42.480So if you have questions concerning taxes, I’ll do my best to give you at least the right guidelines or how you want to go about doing something.11:42.480 –> 11:47.680Remember anything you have here on the radio, you might want to double check with your own tax person.11:47.680 –> 12:01.640If you need a tax person, you can give us a call at our office, but you want to make sure I do a little bit more generic on overall situations, giving you basic percentages because I don’t have all of your personal information.12:01.640 –> 12:13.840Don’t need it to do the radio show, but just keep in mind that the information I’m giving you is to get you on the right track, to make sure you have the right choices before you go and do something and then find out it could cost you something in the background.12:13.840 –> 12:15.440Okay, so we’re going to take a quick break.12:15.440 –> 12:21.520When we get back, we’ll take your phone calls at 615-737-9986.12:21.520 –> 12:23.760We’re going to be right back with the Dr. Friday Show.12:23.760 –> 12:45.840Alrighty, we are back here live in studio and if you want, let’s join the show at 615-737-9986 and let’s go to Teresa in Columbia.12:45.840 –> 12:48.800Hey, whoops, I think we just lost her.12:48.800 –> 12:53.040Okay, well when she calls back, we’ll be back in, I think.12:53.040 –> 12:54.760So we’ll be good there.12:54.760 –> 13:01.520All right, so if you want to plan on your taxes for 2024, which is what we’re in, right?13:01.520 –> 13:02.880We’re almost in the fourth quarter.13:02.880 –> 13:05.300We’re in the third quarter right now, heading towards fourth.13:05.300 –> 13:08.880We only have a deadline on all the tax people.13:08.880 –> 13:12.080Is she online or did it drop?13:12.080 –> 13:15.260Okay, I’ll wait and see it, let you tell me.13:15.260 –> 13:22.580So you really want to basically look, okay, first we’ve got to finish 2023 for all those corporations, partnerships, and individuals that have it.13:22.580 –> 13:27.440We have until September 15th for businesses, October 15th for individuals.13:27.440 –> 13:32.640And at that point then we’ll be able to go for and get everything going on that.13:32.640 –> 13:35.680So now we got Teresa back on the line.13:35.680 –> 13:36.680Sorry about that girl.13:36.680 –> 13:37.680What happened?13:37.680 –> 13:38.680What do we got for you?13:38.680 –> 13:39.680All right, I have a question.13:39.680 –> 13:49.280My question is the lady that just called in, we’re talking about upgrades on her home for 20 years and if she would need receipts.13:49.280 –> 13:58.920When we bought our first house, I started saving all receipts on everything we did and I dug them out one year for something and realized half of them had faded out.13:58.920 –> 14:01.120You couldn’t even read them.14:01.120 –> 14:02.120Yeah.14:02.120 –> 14:06.160And I’ve had that for audits on businesses I’ve dealt more with than individuals.14:06.160 –> 14:15.480I would suggest in any big case, I even suggest scanning them in, but we didn’t even have that until like 2002 or something.14:15.480 –> 14:16.480You know what I mean?14:16.480 –> 14:17.920I’m just saying that most of us, you know.14:17.920 –> 14:22.960So yeah, and that’s why I say the IRS, I honestly haven’t ran into a situation.14:22.960 –> 14:33.520I think it would be, you know, if someone said they brought a house and then they completely gutted it and then, you know, redid it in an amazing way or something, I think there would be more qualifications.14:33.520 –> 14:39.560Most of us that do something, we redo our kitchen, we redid a bathroom, we did the floors, you know, new roof.14:39.560 –> 14:46.920So I don’t really think they have any misconception that in 20 years or whatever that that kind of stuff happened.14:46.920 –> 14:49.640You’re absolutely correct, Teresa.14:49.640 –> 14:57.160You know, you can produce a receipt, but most of our receipts basically fade in about five years, especially on the paper that a lot of them are written on.14:57.160 –> 14:58.720So good point.14:58.720 –> 15:04.760So she’s like, well, hey, if you do save them like I did, it’s still not any value if I have to go back 20 years.15:04.760 –> 15:05.760Right.15:05.760 –> 15:06.760Yeah.15:06.760 –> 15:11.600The only thing I can suggest is scanning them in in the future.15:11.600 –> 15:12.600Yep.15:12.600 –> 15:13.600Okay.15:13.600 –> 15:14.600All right.15:14.600 –> 15:15.600Well, thank you so much.15:15.600 –> 15:16.600Thanks, Teresa.15:16.600 –> 15:17.600Thanks for the call.15:17.600 –> 15:18.600Thanks.15:18.600 –> 15:19.600And she is correct.15:19.600 –> 15:20.840Again, I know myself.15:20.840 –> 15:33.960We have a lot of times when audits happen, people have to go back three, four or five years and people will bring in envelopes of receipts that justify their mileage or their petro or their office supplies.15:33.960 –> 15:37.880And they’re on that basic ribbon that most most offices use.15:37.880 –> 15:41.000And it fades, I swear to you, in like 24 months.15:41.000 –> 15:42.680It’s almost gone.15:42.680 –> 15:46.720Even the gasoline ones, we’ve had them fade before the end of a year.15:46.720 –> 15:49.480So it’s important.15:49.480 –> 15:57.160Any important documents I personally personally, personally, I think that all of that nowadays under the new technology, as Teresa brought up back in.15:57.160 –> 16:11.520I mean, I don’t think we started scanning documents in this office until 2002, because we before that had all the filing cabinets had all and it took us a number of years to really and I can’t even tell you to this day that I’m totally paperless.16:11.520 –> 16:15.080But basically at the end of the day, we do scan everything and shred it all.16:15.080 –> 16:17.200We don’t keep filing cabinets worth.16:17.200 –> 16:23.440And I would say any kind of important documents that you might have always a good idea nowadays to scan it in.16:23.440 –> 16:24.440Two reasons.16:24.440 –> 16:40.080One would be, you know, gosh forbid there is a fire or flood or something happens and then all your emergency documents, birth certificates, papers, ownership of documents, different things like that are either run or or hard to read.16:40.080 –> 16:42.960So this way you’d have a digital copy of them.16:42.960 –> 16:48.800And then obviously if you’re purchasing homes now, even your purchase papers come electronically almost.16:48.800 –> 16:50.560They don’t like to give you paper copies of anything.16:50.560 –> 16:59.580So it’s another good way of putting together that organizer is what I would like to think of it as a way of keeping our lives somewhat.16:59.580 –> 17:17.680Because if something happened to you, you’d want all those documents someplace where somebody, your custodian, you know, beneficiaries, whoever’s going to be dealing with your situation or like I said, an emergency somewhere, you know, where you you need someone to be able to access those documents.17:17.680 –> 17:21.320So think about having all of those, even though it’s good to have those papers.17:21.320 –> 17:27.280Normally, most people probably put all the important stuff in a safe or a safe deposit box.17:27.280 –> 17:35.840But if you’re not that kind of individual, then at least taking pictures, saving them offsite, you know, you can use a, you can even use your phone.17:35.840 –> 17:42.960I mean, scan it or any of those are out there where you can do it for free, scan them in, put them onto, you know, carbonite.17:42.960 –> 17:47.680I’m a huge carbonite person, but you can use whatever you want to, to make it work.17:47.680 –> 17:51.440But it’s important that you have some sort of backup, right?17:51.440 –> 17:56.600I know when we travel a lot, I love my pastime in life is traveling.17:56.600 –> 18:03.800And one thing my sister always makes sure before we go overseas, anytime we do, of course, we’ve got photos of all of our important documents.18:03.800 –> 18:14.000But my brother here, who’s always in the office, he has copies of those documents in case something happens and we’ve lost our passport or we, you know, some sort of document that we’ll need.18:14.000 –> 18:15.000He always has a copy.18:15.000 –> 18:17.920So that way we’ve got lots of copies in case of an emergency.18:17.920 –> 18:19.360And that’s what we have all those.18:19.360 –> 18:20.360Okay.18:20.360 –> 18:21.360So taxes are the same way.18:21.360 –> 18:28.120Remember, a lot of times people want to know the IRS theoretically has seven years, unless they consider it fraud.18:28.120 –> 18:30.960And then theoretically the door is open.18:30.960 –> 18:37.180But most people to be quite under, under the current tax laws, you’re really going to be looking at three years.18:37.180 –> 18:42.040They’re going to audit the year that you’re in, possibly go back a year or go forward a year.18:42.040 –> 18:48.300So there’s basically the three years is what they’re usually looking at under a normal standard audit.18:48.300 –> 18:56.200Unless some reason, like I say, fraud or some major issue comes up, they will not go past that.18:56.200 –> 19:00.520So if you’re scanning or keeping your tax documents, I still go with the old rule.19:00.520 –> 19:01.520Seven years.19:01.520 –> 19:11.840You don’t need more than seven unless it is a piece of property, some sort of deed, something that you have, let’s say stock certificates, right?19:11.840 –> 19:18.680Or, or, uh, cashiers or anything that you have that bonds, uh, any kind of certificates, right?19:18.680 –> 19:22.440Anything that we give us your basis or when you purchase something is very important.19:22.440 –> 19:27.800Life insurance policies and all of that also an important thing to, to have in there.19:27.800 –> 19:33.080Um, so just keep in mind that anything other than that, you can pretty much go with the basics.19:33.080 –> 19:35.080All right, let’s hit Ron in Manchester.19:35.080 –> 19:40.360Hey Ron, what can I do for you, bud?19:40.360 –> 19:41.840How can you hear me?19:41.840 –> 19:44.480I can hear you now.19:44.480 –> 19:45.480Okay.19:45.480 –> 19:53.400So people buy these trucks, uh, they give 80 to a hundred thousand dollars for them.19:53.400 –> 19:58.040Uh, I’m, I’m a tax preparer too down here in Manchester.19:58.040 –> 19:59.040Cool.19:59.040 –> 20:02.640But I don’t know as much as you do.20:02.640 –> 20:16.280They buy these trucks for 80 to a hundred thousand dollars and then they, they, they look at us to try to get the government to pay for all of this.20:16.280 –> 20:17.960Uh, yeah.20:17.960 –> 20:36.800And, uh, they, um, in the first place you can generally come out, uh, by taking actual expenses and then prorating it by the number of miles that they log for business.20:36.800 –> 20:46.120Uh, but once you do that, uh, are you stuck with doing that or can you convert to, to, to mileage?20:46.120 –> 20:51.880Because after the first year, the mileage generally gives a bigger deduction.20:51.880 –> 20:55.360Well, Ron, you are a smart man, seriously.20:55.360 –> 21:02.920So no, you can’t, whatever the vehicle is, we have to stick with actual or miles for the lifetime of that vehicle.21:02.920 –> 21:07.880Because obviously miles covers a portion of the vehicle’s usage and the cost.21:07.880 –> 21:23.760Well, in the first year they section 179 the truck, you know, I, I’ve never been a huge, I mean, obviously if you have a business, you’re in a plumber and you need to have a truck and you’ve got that going and you buy new ones, you know, bigger crews or whatever.21:23.760 –> 21:24.760Yes, there is.21:24.760 –> 21:31.320And after you have more than three vehicles in any business, you’re stuck with actual, you can’t take miles after three vehicles.21:31.320 –> 21:34.800Now you’re, you have to take the actual expense and depreciate.21:34.800 –> 21:39.200So, uh, for fleets or anything, they consider anything more than three, a fleet.21:39.200 –> 21:47.740But that being said, I think a lot of people look at their taxes and they say, okay, I’m going to go spend a hundred grand and I’m in the 20% tax bracket.21:47.740 –> 21:53.800So now I’m going to save $20,000 on a hundred thousand dollar vehicle.21:53.800 –> 21:59.400To me, that’s not necessarily a great investment unless you really need that vehicle to make money.21:59.400 –> 22:13.640So, you know, I mean, so I like miles because also you and I also know to do pr, do true depreciation, you need to be using that vehicle 100% for business.22:13.640 –> 22:25.040And you know, again, some people there, it’s pretty obvious their trucks are business trucks, but I’ve got a lot of people that go out and buy an F three 50 and you know, they’re just driving it and it’s a regular, it’s not wrapped.22:25.040 –> 22:27.420It doesn’t have anything and it’s their main car.22:27.420 –> 22:33.680They don’t have a second vehicle that’s not going to qualify for a section one 79, you know?22:33.680 –> 22:43.600So I think sometimes people hear about spending money on trucks or, or anything over 6,000 pounds, but I don’t always think that people do that.22:43.600 –> 22:51.800And I’ve had more than one audit where they’ve come back on that and said, you know, that the expenses were not justified.22:51.800 –> 22:55.560So it is an area that we need to document pretty good for us.22:55.560 –> 23:08.220And then after the first year, unless they turn the vehicle in, they have to continuously buy a hundred thousand dollar truck every few years to really, you know, cause then you have to recapture, sell it, all that.23:08.220 –> 23:09.340It’s not a clean action.23:09.340 –> 23:13.020So it’s an, it’s a good for a one-time situation, I suppose.23:13.020 –> 23:19.060But a longterm, I believe, like you said, miles is almost always a better and cleaner situation.23:19.060 –> 23:20.060If you can get it.23:20.060 –> 23:21.060Thank you for taking my call so much.23:21.060 –> 23:25.580You confirmed what I suspected all along.23:25.580 –> 23:28.580Thank you so much.23:28.580 –> 23:29.580Yeah.23:29.580 –> 23:30.580Thanks, Rod.23:30.580 –> 23:31.580Thank you for listening.23:31.580 –> 23:32.580I appreciate it.23:32.580 –> 23:33.580Yeah.23:33.580 –> 23:36.100And I think any tax person, we’re good there.23:36.100 –> 23:42.620Any, anybody that does what we do, obviously, especially for the number of years that we’ve all done it.23:42.620 –> 23:54.180I think, you know, the taxpayer is looking at us sometimes because they’ve heard, or they’ve seen a YouTube video or their friends told them, this is what I should do.23:54.180 –> 23:59.660And I get that a lot, but what works for your friend isn’t going to always work for you.23:59.660 –> 24:03.260And what your friend is doing isn’t always the right thing.24:03.260 –> 24:15.760So sometimes you just need to really find a good tax person that you know is going to be there, not only just to put some numbers on a tax return, but to also make sure that you’ve got the right numbers in the right boxes on the right tax form.24:15.760 –> 24:16.760Very important.24:16.760 –> 24:17.760All right.24:17.760 –> 24:18.760Well, thanks for the break.24:18.760 –> 24:22.900If you want to join the show, you can 615-737-9986.24:22.900 –> 24:25.940We’ll be right back with the Dr. Friday show.24:25.940 –> 24:26.940Alrighty.24:26.940 –> 24:32.620We are back here live in studio.24:32.620 –> 24:36.460This is the Dr. Friday show.24:36.460 –> 24:44.140You can join us live 615-737-9986, 615-737-9986.24:44.140 –> 24:45.540And Jack has given us a call.24:45.540 –> 24:46.780Let’s see if I can help him out.24:46.780 –> 24:49.140Hey, Jack, what’s happening?24:49.140 –> 24:52.300I got a question.24:52.300 –> 24:56.260Probably a pretty unusual situation.24:56.260 –> 24:59.260Hold on.24:59.260 –> 25:03.140Excuse me.25:03.140 –> 25:12.940I’m a self-employed individual and I am in real estate and I have say 21 rental properties.25:12.940 –> 25:20.580Now of those properties, I have no other income except for some social security.25:20.580 –> 25:29.140So of those 21 properties, about 14 of them are owned by a Roth IRA.25:29.140 –> 25:30.140A Roth IRA?25:30.140 –> 25:33.140A Roth IRA.25:33.140 –> 25:36.100And the remainder are taxable.25:36.100 –> 25:43.540The other nine properties I have to pay tax on every year.25:43.540 –> 25:47.540And I’m coming up to age — I’m 71.25:47.540 –> 25:58.700And I’m coming up — I decided a couple of months ago that I was close enough to 73 that I better start to become familiar with the required disbursement.25:58.700 –> 26:00.340What’s the right term?26:00.340 –> 26:01.340Required minimum distribution?26:01.340 –> 26:02.340Right.26:02.340 –> 26:05.420Or required distributions.26:05.420 –> 26:31.940And in trying to understand what I could find out reading myself online, it looks like — and I’m hoping that you can verify — it looks like all the income coming in from the — within the Roth IRA bubble does not fall under required distributions.26:31.940 –> 26:32.940That is correct.26:32.940 –> 26:34.380That’s the beautiful thing about a Roth.26:34.380 –> 26:36.820Because you pay tax when it went in.26:36.820 –> 26:38.660So it grew tax-free.26:38.660 –> 26:42.860That’s why I was surprised that you had a self-directed IRA with a Roth.26:42.860 –> 26:44.540Nothing wrong with that.26:44.540 –> 26:46.380You did say it was a unique situation.26:46.380 –> 26:48.740And it is a unique situation.26:48.740 –> 26:58.380Because in a self-directed IRA, I mean, the nice thing is all of that profit and capital gains, growth of those properties are growing tax-free.26:58.380 –> 27:02.060Where my 12 rentals are not doing that.27:02.060 –> 27:08.660Kind of like your other remaining eight or seven properties, whatever you have, that are outside of that.27:08.660 –> 27:15.220Those are obviously — if you decide to sell, you have to pay capital gains or do a 1031, whatever.27:15.220 –> 27:16.220So it’s an interesting concept.27:16.220 –> 27:17.220I had never heard.27:17.220 –> 27:18.540But you are not required.27:18.540 –> 27:24.300I mean, there is no RMDs or required minimum distributions for Roths.27:24.300 –> 27:26.260Because it really is your own money.27:26.260 –> 27:39.740Now, I do believe that when you pass away, God forbid it ever happens, that whoever inherits those properties will have the 10 years to have to take it out.27:39.740 –> 27:40.740But who cares?27:40.740 –> 27:41.740It’s all tax-free.27:41.740 –> 27:50.140I mean, you know, I mean, it would — only reason to keep it in there would be to let it grow for 10 more years before they distribute it to themselves, you know.27:50.140 –> 27:58.620But you don’t have to worry about — other people that do self-directed IRAs usually do it in a traditional SEP or IRA.27:58.620 –> 28:13.860And then when they hit 73, which is what you were aiming towards, when you hit that, then you would have had to start taking cash out equivalent to the required minimum distribution, which is like 3% of the gross per year or whatever.28:13.860 –> 28:15.340And you’re fine.28:15.340 –> 28:17.660You can let it ride, Jack, as long as you want.28:17.660 –> 28:21.260There’s nothing there that you have to do with that unless you want.28:21.260 –> 28:35.660But the person who turned me on to a Roth IRA and the fact that it can be used to own a real estate really made my — I was not — I’m a failed songwriter in that field.28:35.660 –> 28:39.300You made some good investments to buy 21 properties, my love.28:39.300 –> 28:44.220Well, this was back when properties cost $40,000 to $60,000.28:44.220 –> 28:45.220Yeah.28:45.220 –> 28:49.820Well, still, now they’re worth 10 times that in some areas, you know what I mean?28:49.820 –> 28:50.820That’s true.28:50.820 –> 28:51.820Yeah.28:51.820 –> 28:53.940So you’ve done good in growing it.28:53.940 –> 28:56.220I’m simply saying I did work hard.28:56.220 –> 29:02.100I did make some sacrifices, but I’m not claiming to be a brilliant tactician.29:02.100 –> 29:05.340It just happened to turn out that way.29:05.340 –> 29:09.380Well, I think it was a good plan.29:09.380 –> 29:10.380I’m sorry.29:10.380 –> 29:11.380Go ahead.29:11.380 –> 29:12.980You were going to ask how?29:12.980 –> 29:18.860I was going to say, so, okay, I’ve got these other — I haven’t got the figure in front of me.29:18.860 –> 29:21.660I’ve got 21 minus 14.29:21.660 –> 29:28.900So I’ve got like seven or eight taxable properties that I pay income tax on every year.29:28.900 –> 29:32.220How will that work?29:32.220 –> 29:47.100I don’t own — I mean, everything I own is in property, real property, with the exception of the income that’s produced by the rental, rentals on those properties.29:47.100 –> 29:58.740How do I figure for those eight properties that are taxable and that I pay tax on every year, how they’re going to be subject to the required distribution?29:58.740 –> 29:59.740Are they not?29:59.740 –> 30:00.740No, no, no.30:00.740 –> 30:01.740They’re not in an IRA.30:01.740 –> 30:02.740Yeah, yeah.30:02.740 –> 30:04.900You figured it out before I even said the words.30:04.900 –> 30:09.100No, because those are just in active after-tax dollars.30:09.100 –> 30:13.060I mean, you purchased them or paid the mortgage or whatever, but you have them.30:13.060 –> 30:25.780So no, you have — unless you have a traditional SEP or a traditional IRA, you don’t have anything that will be meeting the needs of an RMD.30:25.780 –> 30:28.420That’s one good thing.30:28.420 –> 30:29.420Yeah.30:29.420 –> 30:30.420It’s wonderful.30:30.420 –> 30:31.420Well, okay.30:31.420 –> 30:35.140I appreciate you making that clear to me.30:35.140 –> 30:40.580I have a tax attorney, but I haven’t been able to get with him recently.30:40.580 –> 30:44.540So I thought I’d give you a call and see what you had to say.30:44.540 –> 30:46.260Well, I appreciate the phone call, Jack.30:46.260 –> 30:48.300It was an interesting situation.30:48.300 –> 30:49.300Thank you.30:49.300 –> 30:50.300Okay.30:50.300 –> 30:51.300Well, you take care now.30:51.300 –> 30:52.300You too.30:52.300 –> 30:53.300All right.30:53.300 –> 30:56.300So if you want to join the show, you can.30:56.300 –> 30:57.300615-737-9986.30:58.300 –> 31:03.620The number here in the studio.31:03.620 –> 31:12.020And again, I am not a financial planner, but whoever Jack was working with, looking at the big picture, not a bad idea.31:12.020 –> 31:18.300You know, I mean, using your Roth money and then buying into real estate because, I mean, it’s the same situation.31:18.300 –> 31:27.340I suppose if you — person that loves real estate myself, I like the idea that dirt and buildings are a little more secure than the stock market.31:27.340 –> 31:29.620Not saying you shouldn’t diversify into all things.31:29.620 –> 31:33.220I’m sure a good financial planner will have something to say about that.31:33.220 –> 31:36.780But it’s an interesting self-directed self.31:36.780 –> 31:48.940I’ve had a number of clients that have self-directed IRAs that they use for buying businesses, buying real estate, which are great when you’re middle-aged or in the middle.31:48.940 –> 31:57.300But when you’re starting to get close to the age of 70 or at this point 73, you now have to start taking those RMDs.31:57.300 –> 32:07.300And if you have, I don’t know, a million dollar business or money in that retirement and now you have to draw 30,000, it’s all tied up in real estate.32:07.300 –> 32:13.580You have to eventually either sell some of the real estate to create a taxable cash fund.32:13.580 –> 32:14.580Otherwise you’re in trouble.32:14.580 –> 32:19.020So it’s really important to make sure that, you know, investing is not my strong suit.32:19.020 –> 32:31.980I do like to invest into real estate like Jack apparently because it’s something I think I can somewhat control, at least to the point that I — it’s, you know, it’s tangible versus buying stocks and other things.32:31.980 –> 32:38.060I don’t always have the ability to deal with that.32:38.060 –> 32:40.140But it’s still, no matter what, you should diversify.32:40.140 –> 32:49.980But if you’re going to do it in a stock portfolio or IRA, Roth IRA, SEPs, really good to reach out and try to think of some of these other options.32:49.980 –> 33:08.980That was a really interesting one I’ll have to ponder a little bit about because if you think about it, if you’re going to hold real estate, putting it into a Roth isn’t necessarily a bad idea because when you get older, it will then become tax free and you could cash it out and it won’t affect your RMDs.33:08.980 –> 33:29.140So if Jack decided to sell one of his regular real estate, one of the seven that he had outside of his normal real estate, and let’s say he makes a profit of, I don’t know, $100,000 above his normal income, he could end up being penalized with his Medicare because Medicare is means tested.33:29.140 –> 33:44.780And so it’s one of those deals where it’s great to have, I suppose, Medicare, but on the other hand, they penalize you if you actually make more than, I think it’s like 110 for a single person and 220 for a married couple once you’re in retirement.33:44.780 –> 33:48.380And that’s 100% of your social security, not just the taxable portion.33:48.380 –> 33:59.300So again, if you want to join the show, you can 615-737-9986.33:59.300 –> 34:03.280I did want to repeat that taxes for 2023 are almost here.34:03.280 –> 34:08.420So if you’ve got a business and you haven’t filed it, you really need to make sure it’s filed.34:08.420 –> 34:09.580It’s due September 15th.34:09.580 –> 34:12.140We’re almost at the end of August people.34:12.140 –> 34:15.820And then if you have a personal return, it’s due October 15th.34:15.820 –> 34:18.920And a little over a month away from us now.34:18.920 –> 34:24.540So it’s very important that if you haven’t filed them and you did file an extension, then you’re in good shape.34:24.540 –> 34:26.980If you didn’t file an extension, you’re late anyway.34:26.980 –> 34:35.620So filing today or filing a year from now, pretty much, well, penalties and stuff could be more, but pretty much now up to that situation.34:35.620 –> 34:40.420So it’s just really important that if you’re going to file your taxes, file them on time.34:40.420 –> 34:42.780It’s always more important to file them.34:42.780 –> 34:47.140And because the penalty for failure to file is fairly hefty.34:47.140 –> 34:53.740It’s 5% per a month up to 25%, which is a lot when you owe a thousand dollars.34:53.740 –> 35:01.820Now you owe $250 for just that penalty besides failure to make proper estimates, failure to pay proper estimates and all the other things that come with a self-employed.35:01.820 –> 35:06.220And yes, estimates are not something that we just want to do.35:06.220 –> 35:08.240It is a mandate in tax law.35:08.240 –> 35:10.720You have a penalty if you don’t do it.35:10.720 –> 35:12.940Sometimes people are like, well, why do I have to pay it?35:12.940 –> 35:17.140As long as I pay it by the April 15th deadline, because you’re late.35:17.140 –> 35:20.420Basically all your money should be paid in by January 15th.35:20.420 –> 35:30.580If you’re self-employed, if the employees obviously get their money out every single week, biweekly, monthly, whenever they get their paychecks, they want the self-employed to be somewhat the same way.35:30.580 –> 35:38.500They don’t want you waiting to that last minute to write a check for 50,000 be just because you have it, but it’s still not something they want you to do.35:38.500 –> 35:41.520They want it quarterly based on the prior year.35:41.520 –> 35:50.120And then if you owe more money, then you know, you can make that on the April 15th deadline, but you need to be paying in at minimum of a hundred, 110% of the year before.35:50.120 –> 35:52.920So that way you don’t end up with penalties.35:52.920 –> 35:54.200I hate penalties.35:54.200 –> 35:57.320Penalties are waste of hard good, our hard earned money.35:57.320 –> 35:58.520So we don’t want to have that.35:58.520 –> 36:01.440All right, we’re going to be going into the last part of our show.36:01.440 –> 36:04.760So if you have been listening and you’re like, Oh, I really want to have asked question.36:04.760 –> 36:11.000Now will be the time to call 615-737-9986.36:11.000 –> 36:14.800615-737-9986.36:14.800 –> 36:17.680We’re going to take your calls when we get back from this break.36:17.680 –> 36:18.680This will be the last break.36:18.680 –> 36:19.880So now it’ll be the time to do it.36:19.880 –> 36:27.660I’m Dr. Friday with the Dr. Friday show and enrolled agent licensed by the Internal Revenue Service to do taxes and representation.36:27.660 –> 36:31.240So we’re going to be able to help you straighten out your taxes.36:31.240 –> 36:34.960Also understand what the tax law is when it comes to your situation.36:34.960 –> 36:35.960We’ll be right back with.36:35.960 –> 36:36.960All righty, we are back.36:36.960 –> 36:37.960Final part of our show.36:37.960 –> 36:38.960We had about eight minutes and there abouts left to be able to take our calls.36:38.960 –> 36:49.960We had the Dr. Friday show and you can basically join us here live in studio at 615-737-9986.36:49.960 –> 36:50.960615-737-9986.36:50.960 –> 37:02.480Take your calls.37:02.480 –> 37:12.800Hopefully lead you in the right direction or find out some really interesting other situations that come up when it comes to filing different things.37:12.800 –> 37:49.280I did want to bring up if you do have a business, not a sole proprietorship, but a business that is licensed with the state, so that would actually be single member LLCs, multi-member LLCs, corporations, limited liability partnerships, anything that requires you to be limited, then you are going to have to do the Business Owners Information Act, which is on FinCEN or the financial banking site for crime that the IRS has set up or is basically out of the banking side.37:49.280 –> 37:51.300But remember that is due.37:51.300 –> 37:59.840So just if you have a new company, you only have 30 days to file on that site.37:59.840 –> 38:05.000I don’t think enough information is being submitted out there for new companies to know this.38:05.000 –> 38:13.840A lot of times people just go on to the Secretary of State, file a charter, and then they don’t continue on to filing the BOI.38:13.840 –> 38:20.840So it’s very important to make sure that you have filed the BOI on the Business Information Act.38:20.840 –> 38:23.040It really isn’t overly complicated.38:23.040 –> 38:29.800It really is a matter of having a driver’s license and making sure that that information has been submitted.38:29.800 –> 38:45.440Now there are some businesses that are not required, but if you’re not too sure or if you’re just, you know, go right on, just go into Google, guys, and type in Business Owners Information or BOI, you will find a bunch of information.38:45.440 –> 38:51.680There are companies that can help you and you can do it yourself, but it’s very important that that is filed.38:51.680 –> 38:54.520They’re telling us, and again, this is new.38:54.520 –> 39:04.120It’s not something that we have to do every year as far as I know, unless there is a change to your company, then you will only have to do this a one-time situation.39:04.120 –> 39:08.720But the penalty is something like $500 a day if it’s not filed properly.39:08.720 –> 39:18.960I’ve not yet seen any kind of notice or collection or anything on that yet, but since most of my clients that have been in business for more than a year, so they’re not required.39:18.960 –> 39:22.640I mean, the penalty won’t start till January of next year.39:22.640 –> 39:26.920Let’s hope and pray that that doesn’t happen because no one likes penalties.39:26.920 –> 39:32.920So making sure, but a lot of people are new businesses and I don’t think that anyone is sending out.39:32.920 –> 39:40.000A lot of times people don’t even realize they have to register for franchise excise in business on 10 tap or the annual reports.39:40.000 –> 39:51.720I keep getting clients that are sending me one of the things our tax and bookkeeping doesn’t really do is the annual reports that we’ll file them if someone gives us the paperwork, but it’s not something we do on a normal basis.39:51.720 –> 40:03.760And then the people get the love letters from the state saying, we’ve now dissolved your partnership or your corporation and you can get it reinstated, but it’s just one of those deals where you really don’t want to have.40:03.760 –> 40:05.080And it’s a pretty easy thing.40:05.080 –> 40:07.560You go online, you fill it in and it paid the money.40:07.560 –> 40:12.080They’re $20 or $300 depending if it’s a partnership or a corporation.40:12.080 –> 40:15.320And then it’s all good for another year.40:15.320 –> 40:41.400So it’s also good to make sure your email address is good because they basically are emailing these notices, making sure that your mailing address is good, making sure that your phone number is good because if they can’t contact you, then obviously you’re not going to get the dissolution information and then you’re going to be in trouble because theoretically, I think if it’s been basically over a year or two, I’ve had one client lose their name after a dissolution.40:41.400 –> 40:52.600After that, I’ve never, I mean, I’ve never really seen, I’ve had some people that have been dissolved for a couple of years, but I have had some people that one situation where the name had been taken as soon as the dissolution almost happened.40:52.600 –> 41:00.040So I mean, you know, you reason we all register our names and do what we do because we want to have that protection.41:00.040 –> 41:09.920So you don’t want to have something where, you know, you, you built your brand and then, you know, you didn’t renew the charter and next thing you know, you’ve got yourself in a situation.41:09.920 –> 41:14.960So again, all these kinds of things are things that are easy enough to track.41:14.960 –> 41:21.160Most everything that we talk about honestly has a due date of basically April of every year.41:21.160 –> 41:22.160Your annual reports are due in April.41:22.160 –> 41:23.860Your business license are due in April.41:23.860 –> 41:26.440Your franchise excise is due in April.41:26.440 –> 41:29.200Obviously your personal tax returns are due in April.41:29.200 –> 41:35.760Only thing that might be due in March is your business returns, LLCs, 1065s, 1120s.41:35.760 –> 41:37.520Those are both due at that time.41:37.520 –> 41:40.560But other than that, you don’t really have too much you have to worry about.41:40.560 –> 41:44.240All right, let’s see if we can get Greg on and that way we’ll have him through the end.41:44.240 –> 41:45.240Hey Greg.41:45.240 –> 41:46.240Hey, good afternoon.41:46.240 –> 41:49.920I have a question on what you’re just speaking about.41:49.920 –> 41:57.640Does this requirement happen for both for profit and non-for-profit organizations?41:57.640 –> 41:59.120You know, that’s a great question.41:59.120 –> 42:17.440I don’t do a ton of nonprofits so that I’m assuming the answer is yes, only to the extent that you know, it’s a good question because it is listed like our nonprofits are, I have charters right with the state.42:17.440 –> 42:22.440So do, do nonprofits have to do BOI filings?42:22.440 –> 42:35.760I’m going to have to find out if you want to either text or call my office or yeah, if you want to text my, my office number, the 615-367-0819 is the number.42:35.760 –> 42:43.040And I can find out from the platform if it tells us that we actually have to file for nonprofits.42:43.040 –> 42:44.040It’s something I should know myself.42:44.040 –> 42:46.400We only do a handful of nonprofits in this office.42:46.400 –> 42:52.120So it’s not something I do a lot, but that’s a great question because it could.42:52.120 –> 43:00.520Now this is, this is in addition to the annual filing of the corporate report with the secretary of state, right?43:00.520 –> 43:08.520That one, that one, we all know you have to file, pay the $20 and that most nonprofits are corporations pay the $20 and you’re good shape.43:08.520 –> 43:09.520Yeah.43:09.520 –> 43:13.680This is a new business owners information act that they have.43:13.680 –> 43:16.640The reason I’m questioning it, a corporation is not a big deal.43:16.640 –> 43:22.640All the shareholder or all the corporation as long as it’s not on the stock market, you’d have to have driver’s license.43:22.640 –> 43:27.640But a lot of times for nonprofits, people are board members, not owners.43:27.640 –> 43:28.640Right.43:28.640 –> 43:29.640Correct.43:29.640 –> 43:33.000So it’d be interesting to see how that, that washes out.43:33.000 –> 43:46.960But I’m going to guess since they’re trying to basically, I think the whole purpose in this conversation is for them to find out if people are actually us citizens because they requiring driver’s license or passports.43:46.960 –> 43:55.480And I think they’re just trying to figure out how many people, you know, who’s invested in what companies do it outside, I think.43:55.480 –> 44:00.480So in this case, we’d have to, we’d have to identify, for example, corporate officers.44:00.480 –> 44:02.360Yeah, that’s what I’m thinking.44:02.360 –> 44:08.200I think you’d have to have the officers, the president, the secretary, the treasurer, whatever you have those.44:08.200 –> 44:11.120And then they’d have to provide their driver’s license front and back.44:11.120 –> 44:12.880And then we upload those to the site.44:12.880 –> 44:18.040I mean, that’s really how simple it is.44:18.040 –> 44:22.720And once again, existing corporations have to file by when?44:22.720 –> 44:29.160Existing ones we have as long as they opened up before the first of this year, they have until December 31 of this year.44:29.160 –> 44:30.160Okay.44:30.160 –> 44:31.160All right.44:31.160 –> 44:32.160Very good.44:32.160 –> 44:35.560Well, I’m glad I caught your show because I was completely unaware of this.44:35.560 –> 44:37.560And I’ll be the guy that has to file it.44:37.560 –> 44:38.560No problem.44:38.560 –> 44:39.560Well, I know how that feels.44:39.560 –> 44:40.560Yeah.44:40.560 –> 44:45.400So if you want, just send that text and I will look that up for you because I don’t know the answer.44:45.400 –> 44:48.120But I do need to know that answer because there’s a lot of them out there.44:48.120 –> 44:49.120Okay.44:49.120 –> 44:50.120Thanks, Greg.44:50.120 –> 44:51.120Thanks.44:51.120 –> 44:52.680That was a good question.44:52.680 –> 44:58.320Because I’m thinking most board members only are on the board for five years or whatever.44:58.320 –> 45:02.360And so it’s just going to be interesting to see if a nonprofit really would qualify.45:02.360 –> 45:06.320I’m thinking no, but then I’m always surprised with those things.45:06.320 –> 45:08.080So we will find out for Greg.45:08.080 –> 45:09.080That was a good question.45:09.080 –> 45:10.280Making me think about it.45:10.280 –> 45:11.280All right.45:11.280 –> 45:13.800So here’s winding down to the end of the show here.45:13.800 –> 45:15.840So let’s cover the basic information.45:15.840 –> 45:21.560My office number again is 615-367-0819.45:21.560 –> 45:27.800You can text that number 615-367-0819.45:27.800 –> 45:32.720Or you can check us out on the web, which is drfriday.com.45:32.720 –> 45:36.880And you can find out what we do, our services, all those kinds of situations.45:36.880 –> 45:38.120So we can get you set up.45:38.120 –> 45:41.480We’ll be putting the calendar out for taxes soon.45:41.480 –> 45:49.400If you’re an existing client and you have not already received the calendar, please contact our office by either email, text, or call.45:49.400 –> 45:51.160And we will get you on the calendar.45:51.160 –> 45:57.560We have opened up the 2024 tax season calendar for our existing clients so we can get all of them on first.45:57.560 –> 46:03.520And then we’ll open it up to all new clients so we can make sure everyone gets an appointment.46:03.520 –> 46:08.480Also if you want, you can always email Friday@drfriday.com.46:08.480 –> 46:09.480Friday@drfriday.com.46:09.480 –> 46:16.480Again, as an enrolled agent, I am licensed by the Internal Revenue Service to do taxes and representation.46:16.480 –> 46:20.280I keep saying that because a lot of times people aren’t exactly sure.46:20.280 –> 46:27.400Sometimes they interpret that as I work for the IRS or I may do something other than taxes and representation.46:27.400 –> 46:30.120Pretty small little click I have there.46:30.120 –> 46:40.960You know, bottom line is if you have love letters, if you’ve been dealing with the IRS, if you have a need to set up a payment plan or you don’t even know where to go because you’re like, “I haven’t filed for 10 years.46:40.960 –> 46:47.200I don’t know what I need, but I need to get back on track.” We can help you figure out all of those steps.46:47.200 –> 46:57.400Something we’ve done, something we’re really good at, something we can help you achieve when it comes to actually doing taxes and making sure that those are up to date, in compliance.46:57.400 –> 46:58.400That’s the words you want to do.46:58.400 –> 46:59.400You want to be in compliance.46:59.400 –> 47:00.400All right.47:00.400 –> 47:01.920This has been an awesome Saturday.47:01.920 –> 47:04.440I hope that you guys enjoy the weather.47:04.440 –> 47:06.620I know I’m going to go outside and have some fun.47:06.620 –> 47:08.480As we say in Australia, “Cop you later.”

View Details

In this episode of the Dr. Friday Show, financial counselor and tax consultant Dr. Friday covers a range of important tax-related topics, from recent IRS updates to practical advice for taxpayers. She addresses several caller questions and provides valuable insights on various tax situations.

Topics covered:

• Employee Retention Tax Credit: Second chance program for improper claims, deadline November 22nd
• Beneficial Ownership Information (BOI) reporting requirements for businesses
• Tax implications of selling inherited property
• Estimated tax payments for self-employed individuals and investors
• Impact of large financial transactions on Medicare premiums (IRMA)
• 1031 exchanges for reinvesting property sales proceeds
• Capital gains tax considerations for retirees
• Qualified Charitable Distributions (QCD) from IRAs for tax-efficient giving
• Importance of proper payroll tax management for small businesses
• Upcoming tax filing deadlines for extensions (September 15th and October 15th)

Transcript:

00:00.001 –> 00:06.800No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your00:06.800 –> 00:07.800financial woes.00:07.800 –> 00:10.040She’s the how-to girl.00:10.040 –> 00:11.040It’s the Dr. Friday Show.00:11.040 –> 00:17.040If you have a question for Dr. Friday, call her now, 737-WWTN.00:17.040 –> 00:18.040That’s 737-9986.00:18.040 –> 00:23.040So here’s your host, financial counselor and tax consultant, Dr. Friday.00:23.040 –> 00:36.160G’day, I’m Dr. Friday and the doctor is in the house.00:36.160 –> 00:40.600And we got a couple things we’re going to want to really cover today, which sometimes00:40.600 –> 00:51.240in phone lines are open, 615-737-9986, 615-737-9986.00:51.240 –> 00:56.560So let’s start with the state of Tennessee, or I should say the Internal Revenue Service,00:56.560 –> 00:59.920but the employee retention tax credit.00:59.920 –> 01:02.480Many of you guys maybe applied for it.01:02.480 –> 01:07.480There is a second chance for programs for people with improper claims.01:07.480 –> 01:14.560They have until November 22nd to refile for those claims.01:14.560 –> 01:17.240I’m going to put a little caveat out there.01:17.240 –> 01:22.480We are in the midst of having several people that have come to my office that did go after01:22.480 –> 01:25.560this employee retention and now they’re being audited.01:25.560 –> 01:27.680I’m not going to say that you will be audited.01:27.680 –> 01:31.960I’m not saying that I wasn’t a part of the original filing, so we’re just dealing with01:31.960 –> 01:33.840the issue at this point.01:33.840 –> 01:39.000But they will be auditing a large number of people that did get the employee retention01:39.000 –> 01:41.320tax credit.01:41.320 –> 01:45.840Some people got audited prior to, meaning the IRS found some issue and then they rejected01:45.840 –> 01:47.180the claims.01:47.180 –> 01:51.760Other people may have gotten the money and now the IRS is coming back and looking at01:51.760 –> 01:54.800that information to see if it was properly done.01:54.800 –> 02:01.400But if you did or should have received the employee retention tax credit, then you do02:01.400 –> 02:07.760have until November 22nd to refile that claim if you were rejected or if you’re in the process02:07.760 –> 02:10.160of still dealing with that.02:10.160 –> 02:16.100The more important subject today is going to be the beneficial ownership information,02:16.100 –> 02:23.020BOI, FinCEN, that’s the Treasury Financial Crime Enforcement Network.02:23.020 –> 02:27.060They have passed a ruling, and this has been going on for a while.02:27.060 –> 02:31.100When I started really looking into it, I’ll be honest, I didn’t hear a lot about this02:31.100 –> 02:34.900until the 1st of 2024.02:34.900 –> 02:37.820And that’s partly because that’s when it came into effect.02:37.820 –> 02:43.660So basically, they have been working on this since October of 2022.02:43.660 –> 02:48.940Actually I think when I read into it, it said in January of ’21, it was designed and set02:48.940 –> 02:54.200up for targeting tax fraud, terrorism, money laundering by any U.S. foreign corporation02:54.200 –> 03:00.260limited liability company, certain foreign corporations that report in the United States.03:00.260 –> 03:04.060The FinCEN’s certainly information about the beneficial owners.03:04.060 –> 03:11.500So what they’re looking for and what we must comply with as business owners that have corporations,03:11.500 –> 03:18.440partnerships, LLCs, basically any organization that has to file something with the Secretary03:18.440 –> 03:19.680of State.03:19.680 –> 03:21.180That’s how they’re ruling it.03:21.180 –> 03:27.520So mainly corporations and LLCs will be the big one.03:27.520 –> 03:38.180So basically all members, owners, shareholders that own more than 25% and/or have a controlling03:38.180 –> 03:39.800activity.03:39.800 –> 03:44.600So if you only own 10%, but you are the treasurer that writes all the checks, they’re going03:44.600 –> 03:46.660to consider you an active member.03:46.660 –> 03:52.900Therefore, you are going to need to be, they refer to as a beneficial owner, but bottom03:52.900 –> 03:56.880line is you will need to do some reporting on that.03:56.880 –> 04:02.340The final ruling exempts certain companies, large operations with 20 or more full-time04:02.340 –> 04:06.240employees, more than 5 million in sales.04:06.240 –> 04:11.240Those are certain exclusions that do come along, but most of them because of the fact04:11.240 –> 04:15.960that those larger companies have already had to do it through other sources.04:15.960 –> 04:21.980So if you’ve never reported the owners other than on a tax return, you may want to consider04:21.980 –> 04:26.760the fine on this if you don’t do it by, and this is for, let me backtrack.04:26.760 –> 04:34.080So if you own a company and it was opened prior to January 1st, 2024, so anytime in04:34.080 –> 04:41.48021, 22, like my company back in 1995, any of those companies you have until January04:41.480 –> 04:44.8201st, 2025 to comply.04:44.820 –> 04:51.280The steps are relatively simple and I won’t say they’re non-intrusive because they basically04:51.280 –> 04:58.960require you to upload your driver’s license along with your date of birth or passport04:58.960 –> 05:02.920to basically then set up a FinCEN ID.05:02.920 –> 05:09.920So maybe you’re like myself where I have multiple companies and I invest in some other companies.05:09.920 –> 05:15.240Therefore I would be required to do this multiple times on different entities.05:15.240 –> 05:24.280But by setting myself up and getting a FinID or FinCEN ID, then you can put that ID number05:24.280 –> 05:28.240in multiple times and then that way every ownership you have in every company that you05:28.240 –> 05:32.020may be a part of is a very simple way of setting it up.05:32.020 –> 05:38.280So if you are an investor in multiple entities or if you only have one company, you do need05:38.280 –> 05:41.360to go in and set yourself up.05:41.360 –> 05:45.800You need to set up your company and yourself so that way you don’t have to worry about05:45.800 –> 05:49.840this being everything is done online.05:49.840 –> 05:53.840Again the reason we’re pushing this because I’ve had probably six or seven conversations05:53.840 –> 05:57.240this last week where people are like, “What is this?05:57.240 –> 06:00.760We’ve just sent out notices to all of our companies saying, ‘Hey, we’re going to be06:00.760 –> 06:01.760filing these things.06:01.760 –> 06:03.360This is what we need.’06:03.360 –> 06:05.160And again, what is this?”06:05.160 –> 06:08.200And I know we’ve talked about it, but I want to make sure everyone understands because06:08.200 –> 06:11.640this is going to become a major penalty situation.06:11.640 –> 06:14.520It’s my knowledge of this.06:14.520 –> 06:16.080There will not be waivers.06:16.080 –> 06:18.320I don’t really know.06:18.320 –> 06:20.480This is not an IRS situation.06:20.480 –> 06:27.680This is something being done by the Treasury of Finance and basically Crime Division that06:27.680 –> 06:28.920is handling this.06:28.920 –> 06:32.880So you as a business owner have a responsibility.06:32.880 –> 06:39.240If you own a corporation, an LLC or a version of where you have to be listed with the Secretary06:39.240 –> 06:49.080of State in your state, then you need to go on and you can just Google BOI or F-I-N-C-E-N,06:49.080 –> 06:53.780BOI whatever business beneficial owners information.06:53.780 –> 06:55.240You can type any of those things in.06:55.240 –> 06:57.240It’s going to come up.06:57.240 –> 06:58.760It’s the Treasury website.06:58.760 –> 06:59.840It’s not a hard one.06:59.840 –> 07:03.920Like I said, it’s going to basically walk you through the process.07:03.920 –> 07:10.560If you don’t take the time and do it immediately, then you are going to run into penalties.07:10.560 –> 07:16.640Also, if you have any changes in your entity, let’s say that somebody sells out and then07:16.640 –> 07:21.360you buy, you know, buy someone else comes in as a new partner, you sell your shares07:21.360 –> 07:22.760or whatever.07:22.760 –> 07:27.600Anytime that has, you only have 30 days to update this report.07:27.600 –> 07:32.640Again, this is something that none of us in the last almost 30 years of doing all this,07:32.640 –> 07:35.080I had no idea this existed.07:35.080 –> 07:39.080Like I said, January of this year is when it kind of came to my knowledge.07:39.080 –> 07:42.600And that was only because they were sending out these things saying, if you don’t do this07:42.600 –> 07:46.720by January 1st, you’re going to end up with a $500 a day penalty.07:46.720 –> 07:54.440And then if you opened a company now, currently those companies only have, I think it’s 6007:54.440 –> 07:56.740or 90 days to do the reporting.07:56.740 –> 08:01.640So if you open a company in January, you only had until April, you are not in compliance08:01.640 –> 08:03.880if you haven’t done it.08:03.880 –> 08:08.880I know a lot of attorney firms, even though that they’re doing the corporate setups, I08:08.880 –> 08:11.160know many of them are not doing this.08:11.160 –> 08:16.440There was a big conversation I had with someone recently about it and they basically said,08:16.440 –> 08:20.640yeah, they, I mean, it’s not part of their process, even though it should be, if you’re08:20.640 –> 08:26.840opening a company, this should now be part of the company’s process of making sure everything08:26.840 –> 08:28.260is in compliance.08:28.260 –> 08:34.800So again, you are going to want to make sure that everything is in, because if you make08:34.800 –> 08:41.240a mistake, if you don’t know what you’re doing, or, you know, and if you’re not a US citizen,08:41.240 –> 08:42.800it will accept passports.08:42.800 –> 08:45.160It’s not something that you have to have.08:45.160 –> 08:49.440They prefer driver’s license and the driver’s license has to be current.08:49.440 –> 08:52.160It can’t be an expired driver’s license.08:52.160 –> 08:56.880And then of course, you know, other alternatives is a passport if you don’t have a driver’s08:56.880 –> 08:57.880license.08:57.880 –> 09:03.680They did make this, this is a true enactment of Congress.09:03.680 –> 09:06.440So we don’t have a lot of options.09:06.440 –> 09:11.080Again, the final reporting ruling began January 1st, 2024.09:11.080 –> 09:17.000Companies created a register before January 1st, 2024 will have until January 1st, 202509:17.000 –> 09:21.320for this initial reporting while reporting companies created or registered after January09:21.320 –> 09:24.9201st, 2020, oh, we’ll have 30 days to do this.09:24.920 –> 09:29.880So if you opened your company January, you only had until February 28th or whatever,09:29.880 –> 09:33.62030 days from the date you open it to create your registration.09:33.620 –> 09:37.860If you have not reported this, you need to do it ASAP.09:37.860 –> 09:40.800You need to make sure that you are in compliance.09:40.800 –> 09:45.640This is nothing to do with your tax returns or your state filing.09:45.640 –> 09:51.320This is an additional filing done by FinCEN or the Treasury Financial Crime Enforcement09:51.320 –> 09:52.320Network.09:52.320 –> 09:53.680Very important guys.09:53.680 –> 09:56.600I can’t say how many times I just wanted to make sure we covered that.09:56.600 –> 10:02.240If you’ve got questions, if you run a company or you have a small business or I’m assuming10:02.240 –> 10:06.920larger, bigger companies and like the ones on the stock market, I know do not have to10:06.920 –> 10:07.920comply.10:07.920 –> 10:12.000They’re already registered basically, but most of, none of my companies basically are10:12.000 –> 10:14.120on the, are in the market like that.10:14.120 –> 10:19.080They’re all small business owners and we all just basically run it through our normal system.10:19.080 –> 10:31.040So if you have questions on that, you can certainly call the show 615-737-9986, 615-737-9986.10:31.040 –> 10:36.040And if someone is actually, I will not say I’m an expert on this.10:36.040 –> 10:40.080I have become more and more knowledgeable about it, but if I’m missing something, if10:40.080 –> 10:43.280there’s something important that we need to make sure the listeners know, please feel10:43.280 –> 10:44.280free to call in.10:44.280 –> 10:50.280Again, I want to make sure that this is being in compliance because we were down to a few10:50.280 –> 10:55.600months before this is going to start really hitting a lot of my clients besides the fact10:55.600 –> 11:00.440that I really need to go back and make sure if you start a company in 2024, if you haven’t11:00.440 –> 11:02.920done it, you need to do it ASAP.11:02.920 –> 11:13.240Again, if you’ve got questions or you just want to join the show, 615-737-9986, 615-737-9986.11:13.240 –> 11:16.720For some of you who have never heard me before, my name is Dr. Friday.11:16.720 –> 11:22.560I am an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.11:22.560 –> 11:26.720So if you’ve got love letters, if you haven’t filed taxes in a number of years, or if you’re11:26.720 –> 11:28.520just like, I don’t know where to start.11:28.520 –> 11:32.640I don’t even know if I have IRS issues or if I don’t, where do I do?11:32.640 –> 11:36.480Do I need to go back and file all 20 years I haven’t filed or is there something else11:36.480 –> 11:37.480I can do?11:37.480 –> 11:39.640I can answer those questions.11:39.640 –> 11:41.320I can help you get it all resolved.11:41.320 –> 11:45.120It may turn out like some of my clients that walk out the door and they’re like, yeah,11:45.120 –> 11:48.840I left some money on the table, but I’m all caught up and now I’ve got my refunds for11:48.840 –> 11:51.320the last three years, which is huge.11:51.320 –> 11:54.520And you could be that way, or it could be that you have to make a payment plan.11:54.520 –> 11:56.920Nothing’s going to be impossible or an offer in compromise.11:56.920 –> 12:01.220And maybe that your tax bill is too big and you have to resolve it that way.12:01.220 –> 12:03.040We can help you handle all of that.12:03.040 –> 12:07.760All you have to do is call my office when you have a moment and we’ll set up a free12:07.760 –> 12:12.520consultation to make sure that everything you need to know we can explain to you and12:12.520 –> 12:14.620then see if we can help you move forward.12:14.620 –> 12:18.400But for today, if you have a question or if you have a friend or just want to bring up12:18.400 –> 12:27.040a topic, you can at 615-737-9986.12:27.040 –> 12:29.320We’ll be right back with the Dr. Friday Show.12:29.320 –> 12:41.800We are back live here in studio.12:41.800 –> 12:52.920And if you want to join the show, you can very easily 615-737-9986, 615-737-9986.12:52.920 –> 12:55.800Taking your calls, talking about my favorite subjects.12:55.800 –> 12:59.840Well, actually mostly my favorite subject, taxes are my favorite subject, which we’re12:59.840 –> 13:04.880going to convert to a little bit because we are getting closer and closer to the tax deadline13:04.880 –> 13:07.200for those who filed extensions.13:07.200 –> 13:08.200That’s right.13:08.200 –> 13:14.920So September 15th for again, corporations, that’d be 1120S, 1065s.13:14.920 –> 13:21.360Those are due on 9/15, that gives you 30 days enough time to go file your own personal taxes,13:21.360 –> 13:24.360which are due on 10/15.13:24.360 –> 13:29.520So if you have filed an extension, this is going to be your due dates.13:29.520 –> 13:36.140Now I want to reiterate that that did not extend any money you may have had due.13:36.140 –> 13:42.360So if you have a corporation and you owed money through the corporation, then that is13:42.360 –> 13:45.040something that you should have paid.13:45.040 –> 13:51.440Or if you’re a sole individual and you extended your taxes, you extended the paperwork.13:51.440 –> 13:53.280You did not extend the money due.13:53.280 –> 13:57.720So expect that if you owe money, you’re going to have penalties and interest.13:57.720 –> 13:58.720It’s that simple.13:58.720 –> 14:01.880Because I know a lot of times when people come in and we’re working on the taxes and14:01.880 –> 14:08.600we think, okay, well we got close, but if we ended up with a situation where there was14:08.600 –> 14:11.600money due, you are going to owe some penalties and interest.14:11.600 –> 14:15.680Now if you’re a first time offender, you probably can get the penalties waived.14:15.680 –> 14:20.280Anyone that tells you that interest can be waived is wrong.14:20.280 –> 14:23.760The only time interest is waived is when they reduce the penalty and the interest that they14:23.760 –> 14:26.720charge them that that would be reduced.14:26.720 –> 14:30.080But all in all, interest is not a waivable situation.14:30.080 –> 14:33.840So again, making sure that you’re estimating your taxes.14:33.840 –> 14:37.840Now I have also people who have come in and say, well, I don’t actually really have to14:37.840 –> 14:39.320pay quarterlies, right?14:39.320 –> 14:40.360It’s just a choice.14:40.360 –> 14:44.720It’s something I can choose to do, but it’s not something that I have to do.14:44.720 –> 14:48.920Now why would any of us choose to want to pay quarterlies if we didn’t have to?14:48.920 –> 14:50.960I mean, think about that.14:50.960 –> 14:54.880I’d rather hold on to my money as long as possible and then just send them a big check14:54.880 –> 14:59.920in April saying that the last day of April, if I file an extension, I can just send in14:59.920 –> 15:02.120what I think I’m going to owe them one time.15:02.120 –> 15:07.480Yeah, that’s not the real world and what you have to do, and there is penalties if you15:07.480 –> 15:08.920do not pay quarterlies.15:08.920 –> 15:18.360There’s 6% per, basically 5%, 0.5% per a month, 6% a year for not making proper quarterlies.15:18.360 –> 15:20.400So some people say that’s enough.15:20.400 –> 15:23.440I don’t need, you know, they just pay the penalty and they’re happy with it.15:23.440 –> 15:27.800I prefer not to pay a dollar more to the IRS than I have to, penalty interest or anything15:27.800 –> 15:28.800else.15:28.800 –> 15:30.520So I do pay proper quarterlies.15:30.520 –> 15:36.440Quarterlies being paid properly is basically taking whatever happened in 23 and I, whatever15:36.440 –> 15:41.320that dollar amount do, since I am self-employed, I would take that money and divide it by four15:41.320 –> 15:46.760and send in four equal payments so that I have paid in as much as I owed the year before.15:46.760 –> 15:51.360And then if my year is better or worse, I may make adjustments, usually not until the15:51.360 –> 15:54.760last one, which is January 15th of the next year.15:54.760 –> 16:00.080Because again, I don’t know for sure what my year is going to be unless I’ve almost16:00.080 –> 16:01.080got through it.16:01.080 –> 16:05.080So usually come October, November, we have a good idea where we’re on target or if we’re16:05.080 –> 16:06.760above or less.16:06.760 –> 16:08.400That’s also a good time to make determinations.16:08.400 –> 16:14.400Are you going to upgrade your computer system, buy a new tax software, do something that’s16:14.400 –> 16:20.240going to actually count for a true good tax deduction, or are you just going to pay?16:20.240 –> 16:25.360Because again, going and spending money isn’t saving you dollar for dollar as far as I’m16:25.360 –> 16:26.360concerned.16:26.360 –> 16:32.360If I go spend $10,000 and I’m in the 30% tax bracket, I’m going to save $3,000 in taxes16:32.360 –> 16:35.920and I had to spend $10,000 to do that.16:35.920 –> 16:42.760So if you’re truly counting your true money, it’d be better to give the government $3,00016:42.760 –> 16:45.600and keep the other seven unless you need that.16:45.600 –> 16:48.280For example, I can’t do taxes without tax software.16:48.280 –> 16:54.440So buying it in the current year versus the beginning of the next year may be a determination.16:54.440 –> 16:59.600And since my software is something that is every year updated and new, I write it all16:59.600 –> 17:00.600off in one year.17:00.600 –> 17:04.640You don’t need to amateurize something that is a one year period.17:04.640 –> 17:09.600So you need to figure out in your numbers how you’re going to do it.17:09.600 –> 17:13.200But yes, you must pay estimated taxes.17:13.200 –> 17:14.800And this isn’t just for the self-employed.17:14.800 –> 17:18.760I often bring that up because they’re usually the larger dollar amount.17:18.760 –> 17:25.760But this is also for people maybe that are into investing, people that have rentals.17:25.760 –> 17:30.360I have many people that have retired, but because they get their money in so many different17:30.360 –> 17:36.560ways, they need to make estimates every quarter because otherwise they wouldn’t have enough17:36.560 –> 17:37.560paid in.17:37.560 –> 17:42.040So, you know, Social Security is basically 85% of that is taxable.17:42.040 –> 17:45.520So you could either have taxes come out, but some people say it’s not as easy as you think17:45.520 –> 17:47.080to get that set up.17:47.080 –> 17:52.520And then of course, you’ve got IRAs and annuities and pensions and all these things that come17:52.520 –> 17:53.520along.17:53.520 –> 17:57.680And if you’re on the railroad, Social Security versus the regular Social Security, different17:57.680 –> 17:59.040types of taxation.17:59.040 –> 18:04.120So you really need to understand how all that works so that you can make sure you’re paying18:04.120 –> 18:05.120in enough.18:05.120 –> 18:08.240Now, I’m not asking you to go and pay in a lot extra.18:08.240 –> 18:13.880I’ve got some people that I think way overpay every year, but they’re either so fearful18:13.880 –> 18:20.360that they will underpay and the penalty will be ridiculous or they just, they estimate18:20.360 –> 18:21.360themselves.18:21.360 –> 18:25.920They don’t use the rule, whatever happened in 23, I’m going to pay for 24 and then 24.18:25.920 –> 18:29.880If you have a good year, one year, you could only end up way overpaying.18:29.880 –> 18:33.160But if every year you have to normally make quarterlies anyways, you can adjust the next18:33.160 –> 18:36.080year and roll over that overpayment.18:36.080 –> 18:39.600So that way you don’t have to worry about waiting for the money to come back and make18:39.600 –> 18:41.520deposits again and things like that.18:41.520 –> 18:45.380So it’s really just making sure that you have that information.18:45.380 –> 18:50.560Also I want to bring up this last week, we had three cases of individuals getting love18:50.560 –> 18:57.120letters from the IRS that says the IRS has changed their 2022 tax returns.18:57.120 –> 19:01.640And almost every single one of them was because of stock portfolios.19:01.640 –> 19:06.880So they didn’t know, they didn’t realize that they had sold stocks.19:06.880 –> 19:12.280They didn’t even remember in one case that they even had a stock portfolio.19:12.280 –> 19:18.160And then one of them, they had turned in two, but they didn’t really, they had three accounts19:18.160 –> 19:19.160apparently.19:19.160 –> 19:22.520So they had missed one of their portfolios.19:22.520 –> 19:23.520Very important.19:23.520 –> 19:29.160And so the IRS, obviously when they sent the love letter, sent it based on gross sales,19:29.160 –> 19:30.160right?19:30.160 –> 19:36.200So your sales were, they, even though it may tell them how much the cost of goods are on19:36.200 –> 19:40.080these letters, they don’t take into account when they’re calculating the tax due.19:40.080 –> 19:44.680That way they basically can terrify you that you owe money.19:44.680 –> 19:47.280In most of the cases, there was a very small adjustment.19:47.280 –> 19:49.780In one case, they actually got a bigger refund.19:49.780 –> 19:55.240So it wasn’t necessarily the world’s worst situation, but make sure when you’re filing19:55.240 –> 20:02.600your taxes or even in this case, when I, when they came in, we also went and looked at 2023.20:02.600 –> 20:05.560And in one case, one of them had also missed that year as well.20:05.560 –> 20:10.560And correcting it now versus waiting for the IRS to send them another love letter.20:10.560 –> 20:15.720Because again, we get into that whole penalties and interest where you didn’t intend to do20:15.720 –> 20:16.720this.20:16.720 –> 20:17.720You, you didn’t mean to make the mistake.20:17.720 –> 20:21.880And in some cases, the one person’s like, I didn’t even know I had it.20:21.880 –> 20:29.280Actually they did, but you know, things happen, life gets busy and sometimes we forget.20:29.280 –> 20:33.740And when that happens, you know, your best bet is to review the information.20:33.740 –> 20:39.080I almost always do a worksheet or a minute return to find out how it truly would come20:39.080 –> 20:43.640out because then on these love letters, they always say, well, if you agree, sign here.20:43.640 –> 20:45.600And if you disagree, sign here.20:45.600 –> 20:50.200And in most cases, especially on these, since the basis wasn’t reported, we didn’t agree20:50.200 –> 20:51.280with their information.20:51.280 –> 20:52.800We didn’t agree that this was correct.20:52.800 –> 20:57.480So we were able to resubmit the information, waiting for them to deal with that and to20:57.480 –> 21:00.480correct the information and then ask for forgiveness.21:00.480 –> 21:06.000If you haven’t had a problem in the past, that’s always the wonderful thing, but you21:06.000 –> 21:08.960can only really do that one time.21:08.960 –> 21:13.000And then, or at least once every, let’s say 40 months or something like that.21:13.000 –> 21:17.320And once every three to four years, you can ask for forgiveness, but they, they really21:17.320 –> 21:21.240don’t like to, if, if you keep making the same mistake, obviously at that point, you21:21.240 –> 21:25.800get your, or a repeat offender, um, and you’re creating more problems.21:25.800 –> 21:31.400So just making sure that you are reporting everything, take a breath, stick back, go21:31.400 –> 21:34.520back and look, double check with your financial planners.21:34.520 –> 21:39.080Cause in this case, the one she had everything with one financial planner, but the problem21:39.080 –> 21:44.720was they emailed everything and she didn’t see the email and it’s just a simple mistake.21:44.720 –> 21:48.980And since it was a new account, there was no history of it in her taxes.21:48.980 –> 21:52.940So when she was looking at what she’s supposed to have and all that, she didn’t have it because21:52.940 –> 21:56.560it wasn’t in there at that time with what they were doing.21:56.560 –> 22:00.720So it’s very important that you just take that time, make sure you know what you’re22:00.720 –> 22:05.720doing, make sure you’ve got everything you need to, to balance things out and go from22:05.720 –> 22:06.720where you’re at.22:06.720 –> 22:18.720So if you need help with that, you can 615-367-0819, 615-367-0819 is the number for my office.22:18.720 –> 22:31.080If you want to join the show today, 615-737-9986, 615-737-9986 is the number here in the studio.22:31.080 –> 22:36.160So if you have a question concerning either working on your taxes, dealing with tax issues22:36.160 –> 22:42.560or just trying to figure out what the best way to deal with a particular tax situation,22:42.560 –> 22:52.200all you have to do is pick up the phone, call us here in the studio at 615-737-9986.22:52.200 –> 22:55.200Let’s see if we can get John on really quick before the break.22:55.200 –> 22:56.200Hey John.22:56.200 –> 22:58.160Hello, how are you?22:58.160 –> 22:59.160I am great.22:59.160 –> 23:00.160How are you bud?23:00.160 –> 23:01.160I’m doing good.23:01.160 –> 23:07.080I’ve got a question about, I’ve got a piece of property that I’ve had for about 30 years.23:07.080 –> 23:12.160Half of the property was given to me by a relative and the other half, it was dual ownership23:12.160 –> 23:13.160when I got it.23:13.160 –> 23:18.760The other half I bought the other relative’s half out for a very small amount of money.23:18.760 –> 23:26.480So I’m considering selling that piece of property and just curious what the tax liability may23:26.480 –> 23:28.160be on that.23:28.160 –> 23:35.120So make sure I reiterate, you inherited it first and then you brought out the other family?23:35.120 –> 23:37.360It was actually given to us.23:37.360 –> 23:39.560The relative was still alive.23:39.560 –> 23:40.560Oh.23:40.560 –> 23:42.640All right, so that creates a little bit more.23:42.640 –> 23:48.880So theoretically, if they were gifted to you or given to you, then the basis you had would23:48.880 –> 23:52.880have been what they paid for it originally, which is never easy to find out.23:52.880 –> 23:57.280At least the portion that you received and then whatever you paid for on the other side,23:57.280 –> 23:58.280right?23:58.280 –> 24:02.480That one we know what the basis is because you physically wrote a check for it or whatever24:02.480 –> 24:05.200you did to pay off that other person.24:05.200 –> 24:09.320But you’re going to need to try to find out how much that property was purchased that24:09.320 –> 24:14.160back when whoever this person that gave it to you received it.24:14.160 –> 24:17.400Either they inherited it or they purchased it.24:17.400 –> 24:20.920They inherited it many, many years before that.24:20.920 –> 24:21.920Yeah.24:21.920 –> 24:27.520So unfortunately, you’re going to have to go back and find out if possible when that24:27.520 –> 24:29.320happened.24:29.320 –> 24:33.520And I don’t know if this person’s even around, but hopefully you have some maybe connection24:33.520 –> 24:39.280because otherwise the IRS would say your basis is zero for what it was given to you.24:39.280 –> 24:42.560But I don’t like zero, John.24:42.560 –> 24:48.360So I’d do a little more legwork and find out when he or she inherited it.24:48.360 –> 24:52.000You might be able to go back and look at property taxes, get something that we can use as a24:52.000 –> 24:57.800government or official value of what it was worth at the time of inheritance.24:57.800 –> 25:02.120So we have something to at least justify the numbers.25:02.120 –> 25:08.400And if I am at zero and the property’s worth 500,000, what would my tax liability be on25:08.400 –> 25:09.400that?25:09.400 –> 25:10.400Safe bet would take 18%.25:10.400 –> 25:11.40018%.25:11.400 –> 25:12.400Okay, great.25:12.400 –> 25:13.400Thank you very much.25:13.400 –> 25:14.400All right, John.25:14.400 –> 25:15.400Thanks.25:15.400 –> 25:20.320All right, we’re going to take a quick break and we get back, we get some more of your25:20.320 –> 25:29.280phone calls at 615-737-9986.25:29.280 –> 25:31.480We’ll be right back with the Dr. Friday Show.25:31.480 –> 25:43.600All righty, we are back here live in studio.25:43.600 –> 25:56.960And if you want to join us, you can very easily pick up the phone 615-737-9986, 615-737-9986,25:56.960 –> 26:01.960making your calls at, maybe you’re in the process of, maybe you’ve inherited something26:01.960 –> 26:08.400or you’ve got some question about if you’re going to do conversion, how that can affect26:08.400 –> 26:11.800not only your taxes, but your IRMA.26:11.800 –> 26:16.260And so making sure that when you’re making some of these decisions, even like selling26:16.260 –> 26:20.720that land, I don’t know the gentleman that had called in, but if you have a piece of26:20.720 –> 26:26.720land and you’re already on Medicare, selling that piece of land will affect your IRMA if26:26.720 –> 26:29.080it’s over the, what is it now?26:29.080 –> 26:33.820I think it’s like a hundred thousand for a single and 200,000 for married.26:33.820 –> 26:39.020Anything above that can affect your IRMA, which makes your Medicare more expensive.26:39.020 –> 26:44.080So a lot of times when people are looking at taxes, they look at the federal taxes,26:44.080 –> 26:46.600which is of course what I usually talk about.26:46.600 –> 26:52.960But we do want to make sure that if you are 65 and older and on Medicare, any decisions26:52.960 –> 26:58.560that you’re making concerning selling something, unless it’s your primary home, that will not26:58.560 –> 26:59.740have an effect.26:59.740 –> 27:08.040But rental properties, land, doing conversions, taking money out of forms of retirement, if27:08.040 –> 27:12.640it’s enough, combined with your other income, again, if you have basically, I think a hundred27:12.640 –> 27:17.840thousand for a single person, 200,000 for a married couple, anything above that will27:17.840 –> 27:22.600affect your IRMA, which means you’re going to pay higher Medicare for the next year.27:22.600 –> 27:26.200It almost feels like more than a year, but at least for 12 months.27:26.200 –> 27:30.320And then once the new tax year rings around and you refile, they’ll base it on the new27:30.320 –> 27:31.320tax return.27:31.320 –> 27:32.800And, but you are penalized.27:32.800 –> 27:37.920So making sure you understand when you’re making those decisions, because I know I have27:37.920 –> 27:41.880a large number of, well, a number of clients, maybe not large, a number of clients that27:41.880 –> 27:48.280really do try to work hard on trying to get their, their Roths converted.27:48.280 –> 27:53.800So every year they make sure they do conversions and sometimes, you know, you’re saving taxes27:53.800 –> 27:55.800to do it on a big spread.27:55.800 –> 27:59.640And then sometimes it’s smarter to just bite the bullet and do it one time.27:59.640 –> 28:03.640Cause then your IRMA is not effective versus doing your IRMA for multiple years.28:03.640 –> 28:10.040Again, it’s not huge, not as much as it would probably cost in taxes and some other cases,28:10.040 –> 28:16.040but it’s enough to make sure you have it in your consideration when you’re making these28:16.040 –> 28:17.080decisions.28:17.080 –> 28:21.880You know, if you are that same gentleman, I’m just using him as an example because he’s28:21.880 –> 28:23.920the one that called so far today.28:23.920 –> 28:27.920But if that same gentleman wanted to go buy another investment, let’s say he wanted to28:27.920 –> 28:32.880go buy some rental real estate or a farm or whatever.28:32.880 –> 28:36.720He could do a 1031 exchange, which would then not affect his IRMA.28:36.720 –> 28:41.760He could sell that piece of land, reinvest into another piece of land or like kind property,28:41.760 –> 28:47.280keeping the investment going and still not have to worry about his taxes.28:47.280 –> 28:51.640But he’d have now an investment that may be able to generate more income or whatever.28:51.640 –> 28:56.760I mean, again, I don’t know what the situation is, so I’m using that as an example.28:56.760 –> 29:00.720But if you have a question on that or other questions, you can certainly join the show29:00.720 –> 29:12.480today, 615-737-9986, 615-737-9986, taking your calls.29:12.480 –> 29:17.160I got a text over the break and the person just said, “Am I a sole proprietorship?29:17.160 –> 29:19.760Do I have to do that BOI?”29:19.760 –> 29:21.080And the answer is no.29:21.080 –> 29:25.160It’s only entities that are registered with the state.29:25.160 –> 29:29.400In Tennessee, to be a sole proprietorship, you do need to obtain a business license with29:29.400 –> 29:32.440the county or city, but we don’t register with the state here.29:32.440 –> 29:35.920So you are not required to file this report.29:35.920 –> 29:41.240It is only entities, that’s what I’m going to refer to, that are required to do that.29:41.240 –> 29:50.680Again, 1065s, corporations, either 1120, 1120s, or variations, hybrids of those.29:50.680 –> 29:53.120But those are the main three forms that you’d be looking at.29:53.120 –> 29:59.320So just making sure that you have that information because I don’t want people to be stressing29:59.320 –> 30:03.760but on the other hand, we’re getting to the last quarter almost of the year and if you30:03.760 –> 30:09.360haven’t done this, you really do need to just take it into, take you a little while, make30:09.360 –> 30:16.920sure you have digital copies of people’s, other partners’ and people’s IDs and then30:16.920 –> 30:19.120you’ll have no problem in getting that done.30:19.120 –> 30:24.320If you do need some help or you have a conversation, you need to join the show, that would be awesome,30:24.320 –> 30:35.600737-9986-615-737-9986, where I’ll take your calls if you want to join in.30:35.600 –> 30:38.880And again, you can also email Friday@DRFriday.com.30:38.880 –> 30:44.320I do monitor those during the radio show just to see if there’s anything I need to be able30:44.320 –> 30:45.320to answer.30:45.320 –> 30:49.920I know not everybody enjoys calling a radio show, but I do appreciate it, it makes it30:49.920 –> 30:50.920so much easier.30:50.920 –> 30:55.760So like Donna in Clarksville, let’s see if I can get her on the line and see if I can30:55.760 –> 30:56.760help her.30:56.760 –> 30:57.760Hey Donna.30:57.760 –> 30:59.560– Hey, how are you?30:59.560 –> 31:01.620– I am awesome, thank you for calling.31:01.620 –> 31:03.120What can I do for you?31:03.120 –> 31:12.840– Well, my sister and I sold a piece of property that we inherited in July.31:12.840 –> 31:16.280It was an old family home cabin.31:16.280 –> 31:27.320Each of us netted right at $49,000 each, wondering what kind of taxes I’ll have to pay on that.31:27.320 –> 31:30.040– So when did you inherit this property, Donna?31:30.040 –> 31:35.400– When our mother died in 2000.31:35.400 –> 31:36.640– Okay.31:36.640 –> 31:44.400So theoretically, whatever the house was worth in 2000, I don’t know what the value is, but31:44.400 –> 31:47.680whatever, was there a mortgage and things on the house, Donna?31:47.680 –> 31:48.680– No.31:48.680 –> 31:53.720Well, we had a HELOC mortgage on it that we paid off.31:53.720 –> 32:00.200So that left a net of $100,000.32:00.200 –> 32:03.560So we split that difference, yeah.32:03.560 –> 32:06.760– Basically what you need to do is the person that sold that real estate for you, they’re32:06.760 –> 32:09.240very happy because they got their money.32:09.240 –> 32:14.160You might want to ask if they can pull some comps around the time your mom passed away.32:14.160 –> 32:18.080Because whatever the house was worth at that point, let’s just say it was worth $100,00032:18.080 –> 32:23.000and you sold it for $150,000, just example, not reality.32:23.000 –> 32:29.120Then each of you would have $25,000 taxable capital gains, or just that $50,000, because32:29.120 –> 32:34.200the $100,000 would be a deduction, split in half, $50,000 by two is $25,000 each.32:34.200 –> 32:37.520So you would pay tax on $25,000.32:37.520 –> 32:43.440And in most cases, I don’t know, how much would you say without this happening, Donna,32:43.440 –> 32:46.840how much is your basic ordinary income that comes in the house?32:46.840 –> 32:47.840Just ballpark it.32:47.840 –> 32:52.000You don’t have to be specific.32:52.000 –> 32:56.680– I’m retired on Social Security and small retirement.32:56.680 –> 33:01.440So, 35, 40,000 a year.33:01.440 –> 33:02.440– Okay.33:02.440 –> 33:10.320So theoretically, you can earn about $58,000 and have zero capital gains.33:10.320 –> 33:11.320Okay?33:11.320 –> 33:14.480Because part of your Social Security is not going to be taxed.33:14.480 –> 33:20.800So you may be, depending on how close the original balance of the mom, what the home33:20.800 –> 33:23.440was worth back in 2000, it may have been 50,000.33:23.440 –> 33:24.520You may pay tax on 50.33:24.520 –> 33:27.080I don’t know.33:27.080 –> 33:29.320But whatever that difference is.33:29.320 –> 33:33.000So anything above that in your case would be about 15%.33:33.000 –> 33:40.360So again, really finding out how much the house was worth in 2000 would be my suggestion.33:40.360 –> 33:45.720Then you would split, take the total gross sales, back out all fees that you had to pay.33:45.720 –> 33:52.120And then, and not the line of credit, but like the agents or property taxes or insurance,33:52.120 –> 33:53.960any of the things that they may have hit you with.33:53.960 –> 33:58.760The HELOC, unfortunately, is not a part of your basis.33:58.760 –> 34:07.800So again, if it was worth 100,000 and you guys sold it for 150, you would pay tax on34:07.800 –> 34:08.80025.34:08.800 –> 34:14.160In simple math.34:14.160 –> 34:18.680And depending on your income, it could be…34:18.680 –> 34:19.680You’re breaking up.34:19.680 –> 34:21.400I’m sorry, Donna, that overwhelmed me with my wisdom.34:21.400 –> 34:23.040Oh, I’m so sorry.34:23.040 –> 34:27.040No, I understood that, except you were breaking up some.34:27.040 –> 34:34.160So is the value of the house in 2000, would that depend on the tax appraisal amount?34:34.160 –> 34:38.040What we pay taxes on in 2000 for the property?34:38.040 –> 34:41.000It’s probably the easiest.34:41.000 –> 34:43.960The comps might be better than the property taxes.34:43.960 –> 34:48.600So if the real estate person can give you a comp of something similar in that area,34:48.600 –> 34:51.000it may be higher than the property taxes.34:51.000 –> 34:52.000Okay.34:53.000 –> 34:54.000All right.34:54.000 –> 35:01.720Well, I think I’ll have to seek one who is very knowledgeable about this when I’m ready35:01.720 –> 35:02.720to file.35:02.720 –> 35:03.720Hello?35:03.720 –> 35:04.720You got it.35:04.720 –> 35:05.720No problem, sweetheart.35:05.720 –> 35:06.720I appreciate you.35:06.720 –> 35:07.720Hopefully, she can hear me.35:07.720 –> 35:16.320We’re going to get ready to take a quick…35:16.320 –> 35:17.320Thank you, Donna.35:17.320 –> 35:18.320I appreciate it.35:18.320 –> 35:19.320Thank you so much.35:19.320 –> 35:20.320Thank you.35:20.320 –> 35:21.320We’re breaking up.35:21.320 –> 35:22.320Sorry, I’m breaking up.35:22.320 –> 35:23.320Okay.35:23.320 –> 35:24.320All right.35:24.320 –> 35:25.320Why don’t we take a quick break?35:25.320 –> 35:28.320And then when we come back, I will see if…35:28.320 –> 35:32.360Hopefully it’s not my internet again, but we’ll take a break a little bit early.35:32.360 –> 35:41.440We’re going to be right back with the Dr. Friday Show.35:41.440 –> 35:44.200We are back here live in studio.35:44.200 –> 35:45.880And if you want to join the show, you can.35:45.880 –> 35:47.360We’re almost at the end of the show.35:47.360 –> 35:51.040So if you’ve been holding your breath and you’re like, “Oh, I really need to ask something,”35:51.040 –> 35:54.040but you didn’t, well, now’s the time to do it.35:54.040 –> 35:55.040615-737-9986.35:55.040 –> 36:03.640What’s 615-737-9986 is the number here in the studio.36:03.640 –> 36:06.440Taking your calls, talking about all things taxes.36:06.440 –> 36:10.320Hopefully, Donna was able to understand that the best thing…36:10.320 –> 36:12.440I think she walked away with the right idea.36:12.440 –> 36:19.200She needs to get somebody to give her the comps for the year of 2000, right around the36:19.200 –> 36:23.560time when her mom passed away, where they inherited the property.36:23.560 –> 36:28.320So that way, whatever that value is, is what they would subtract from what they sold it36:28.320 –> 36:33.360for, along with the real estate fees and all the little fees that come out.36:33.360 –> 36:35.820And then split that in half with her sister.36:35.820 –> 36:40.640So each of them will have that as their remaining taxable amount.36:40.640 –> 36:42.400And then determine if it’s enough to…36:42.400 –> 36:46.600Hopefully, it’d be great if she could actually be under the dollar amount that’s required36:46.600 –> 36:49.200to be able to file for zero capital gains.36:49.200 –> 36:51.800Keep in mind, it is a fairly low dollar amount.36:51.800 –> 36:59.080It’s like $58,000 for a single person, 116 or 124 married couple.36:59.080 –> 37:03.280And it’s not always easy, but it does exist.37:03.280 –> 37:05.360So if you…37:05.360 –> 37:10.920I had a client that would do a conversion every year when he started, I don’t know,37:10.920 –> 37:13.760he hit retirement early, so it’s like 62.37:13.760 –> 37:14.880And he had like 10 years.37:14.880 –> 37:20.040And every year, he’d do a conversion to the dollar amount that would keep him under the37:20.040 –> 37:22.000standard deduction every year.37:22.000 –> 37:23.240So he didn’t have much…37:23.240 –> 37:27.480He had saved up a lot of cash, so he didn’t really need to have any reportable income.37:27.480 –> 37:29.800And he wasn’t on social security yet.37:29.800 –> 37:34.280So he would just take that 30 or 20,000 or whatever, and they would convert it every37:34.280 –> 37:41.960year and it was zero tax, which you put it in at zero and because you got deferred and37:41.960 –> 37:43.760you take it out, it doesn’t happen very often.37:43.760 –> 37:46.680And it’s always nice when it does happen.37:46.680 –> 37:50.360But it’s one of those situations where if you sit down and you really start looking37:50.360 –> 37:55.400at planning your own taxes, that’s one of those things you should do.37:55.400 –> 37:58.120Look and see if there’s any kind of little loophole.37:58.120 –> 38:01.360Sometimes you can sell something in multiple steps to make it work better.38:01.360 –> 38:06.560So maybe you sell off something over two or three years instead of doing it all at one38:06.560 –> 38:07.560time.38:07.560 –> 38:13.600Again, that’s always one of those situations where I’m not an attorney and I’m certainly38:13.600 –> 38:17.320not an investment advisor.38:17.320 –> 38:22.320So I don’t know if selling something over a period of time is smart or not based on38:22.320 –> 38:23.320the investment.38:23.320 –> 38:25.200I’m saying it’s based on taxes.38:25.200 –> 38:29.800You really do need to make sure that you are communicating with someone that actually is38:29.800 –> 38:32.280handling your portfolio, hopefully.38:32.280 –> 38:35.360So that way they’ll be able to take advantage of those.38:35.360 –> 38:39.560The other thing I do want to put out there, we are getting close to our third or we’re38:39.560 –> 38:42.560in third quarter going into fourth quarter.38:42.560 –> 38:48.080And if you are a person that is on required minimum distribution, it’s basically after38:48.080 –> 38:54.960the age of 70, even though you’re not required to take RMD, you can start taking a required38:54.960 –> 38:59.760minimum distribution and using it for QCD, qualified charitable deductions.38:59.760 –> 39:04.640I like to always put that out there because a large number of people that are at that39:04.640 –> 39:10.680age still like to take the money out of their bank, give it to the charity that they’ve39:10.680 –> 39:13.600chose to do and make that a good thing.39:13.600 –> 39:14.640There’s nothing wrong with that.39:14.640 –> 39:15.640I will be honest with you.39:15.640 –> 39:18.200There is absolutely nothing, but you’re not going to get the tax savings.39:18.200 –> 39:24.880So if you give to your church and you usually tie three or $4,000 or more, and you’re not39:24.880 –> 39:27.680going to itemize because the standard deduction is too high.39:27.680 –> 39:32.200So giving to charity will be a zero effect on your taxes.39:32.200 –> 39:39.160But if you use it through the QCD, it will reduce your 1099R by that charity and therefore39:39.160 –> 39:42.440a hundred percent tax deductible.39:42.440 –> 39:47.720And so it’s, it becomes a wonderful way of giving to charity and at the same time not39:47.720 –> 39:49.720costing you any money.39:49.720 –> 39:56.480And again, I have many clients that use their RMDs or their IRAs as a way of giving to charity39:56.480 –> 40:00.200or portion of to the charity instead of taking it out of their bank.40:00.200 –> 40:04.720Cause if you take it out of the bank, you’re not likely unless you are giving, you know,40:04.720 –> 40:10.40020 or $30,000 a year, then yes, you’ll, you’ll be able to use that and exceed.40:10.400 –> 40:15.040Assuming that your income is high enough, you’ll be able to use that as a standard deduction40:15.040 –> 40:19.200or exceed the standard and start itemizing your deduction.40:19.200 –> 40:23.200Not most individuals, especially if you’re on a retirement and that you’re not going40:23.200 –> 40:28.320to have quite as much to give away and therefore doing something in that system is going to40:28.320 –> 40:30.120make it a bit harder.40:30.120 –> 40:34.620So I’m just saying, make sure that if you are, if you can find a way of giving money40:34.620 –> 40:41.000away, why not give it away at a way that you could save taxes at the same time?40:41.000 –> 40:43.640There’s nothing wrong with win-win situations.40:43.640 –> 40:47.480So if you have any questions about that, you can certainly call our office.40:47.480 –> 40:50.220But the other side of that is talk to your financial advisor.40:50.220 –> 40:54.720They should be telling you this anyways, but talk to them because they’re going to know40:54.720 –> 40:57.300where your investments are, what’s the best way to do it.40:57.300 –> 41:02.200If it’s a good solid investment plan, it’s just something that you can take to your financial41:02.200 –> 41:08.880person and have that conversation to make sure that you’re maximizing your taxes is41:08.880 –> 41:12.160at the same time.41:12.160 –> 41:14.920You’re not paying tax on money that you’re giving away.41:14.920 –> 41:16.720It’s very hard to itemize anyways, right?41:16.720 –> 41:19.160So it makes it very difficult to make it work.41:19.160 –> 41:21.880So we’re going to be winding down on the show again.41:21.880 –> 41:25.040If you have a quick question, there’s about five minutes left of the show.41:25.040 –> 41:29.920You can call us at 615-737-9986.41:29.920 –> 41:30.920615-737-9986.41:30.920 –> 41:39.280We’re going to recap a couple of the situations we have.41:39.280 –> 41:40.960I’m going to talk about the BOI.41:40.960 –> 41:43.560You’re going to probably hear a lot of that over the next few months.41:43.560 –> 41:47.700That is again, the beneficial ownership information.41:47.700 –> 41:52.000If you are a person that is in business, maybe even have a small LLC, you and your husband41:52.000 –> 41:54.920or you and a friend, keep in mind, this applies to you.41:54.920 –> 41:57.720You are registered with the state.41:57.720 –> 42:02.000Therefore you are required to file this.42:02.000 –> 42:06.640So even if the business isn’t making money, it doesn’t nothing to do with income.42:06.640 –> 42:14.080This has zero to do with income, everything to do with who owns the company and how many42:14.080 –> 42:18.960people and where’s the address and all of that kind of stuff.42:18.960 –> 42:19.960You need to make sure.42:19.960 –> 42:25.760Also, if for some reason you did not get the employee retention tax credit, there’s a voluntary42:25.760 –> 42:30.520disclosure program, a program for improper claims.42:30.520 –> 42:33.440I really think this is going to turn into some pretty big audits.42:33.440 –> 42:35.760Like I said, we’ve had a number of people come in.42:35.760 –> 42:41.800I think that if you got employee retention tax credit and you’re not sure that you did42:41.800 –> 42:44.760it properly, you might want to have it reviewed.42:44.760 –> 42:50.840One of the reasons we didn’t get into it as a payroll situation, we do have payroll in42:50.840 –> 42:55.880our office, but we use it outside payroll service for all of our clients for that reason,42:55.880 –> 43:02.240for making sure all of that information is being properly registered and properly reported.43:02.240 –> 43:05.640Payroll is probably the number one thing for small business to get in trouble with, to43:05.640 –> 43:08.220be honest, because the penalties are higher.43:08.220 –> 43:14.360They give you less time to pay off back taxes versus an individual or a corporation.43:14.360 –> 43:20.760You’re going to end up with more apt to have more problems because it’s a fiduciary situation.43:20.760 –> 43:25.880When you take out money from someone’s paycheck that’s supposed to go to the IRS on behalf43:25.880 –> 43:30.320of their social security, Medicare and federal withholdings, and you fail to do that, they’re43:30.320 –> 43:34.520more apt to come after you for that than anything else as far as I’m concerned.43:34.520 –> 43:40.120If you do have payroll issues, if you haven’t filed or made everything properly done, my43:40.120 –> 43:42.800suggestion is definitely get into our office.43:42.800 –> 43:49.400The easiest way to do that is to call our office on Monday, 615-367-0819.43:49.400 –> 43:53.280We can set up an appointment, get a list of what you need to put together, make sure that43:53.280 –> 44:00.080you’re in compliance not only with the IRS, but also with social security administration.44:00.080 –> 44:05.000If you haven’t filed your W-2s, there are some big penalties that can come up with that44:05.000 –> 44:09.600kind of situation, and they are not waiving a lot of those penalties.44:09.600 –> 44:15.840So again, 615-367-0819 is the number here in our office.44:15.840 –> 44:19.880You can give us a call on Monday, and we’ll be more than glad to set up a time.44:19.880 –> 44:24.080If you’re an existing tax client, hopefully you’ve received our calendar.44:24.080 –> 44:27.260We are opened up for making our tax appointments.44:27.260 –> 44:31.200If you haven’t received, please feel free to email us, and we will make sure we update44:31.200 –> 44:36.960your email address so you can go ahead and book your tax appointment for returning clients.44:36.960 –> 44:44.920And if you need help filing this or some other forms, again, our office is available to help44:44.920 –> 44:50.840you with the B-A-O-I or just helping to deal with other IRS issues, or maybe something44:50.840 –> 44:55.200like when Donna called and she needs help with someone helping her estimate and get44:55.200 –> 44:57.140her taxes filed properly.44:57.140 –> 45:00.520That’s what we do all the time, so we’ll be more than available to help you with filing45:00.520 –> 45:05.560your taxes to make sure you stayed in compliance and that you’re doing everything you can.45:05.560 –> 45:10.880So that way, and you might want to work it up just to find out if you need to make any45:10.880 –> 45:12.000kind of estimated payment.45:12.000 –> 45:15.140You have about 90 days from the date of any kind of transaction like that to at least45:15.140 –> 45:20.520make an estimated payment so that you don’t owe a huge tax bill and possibly with some45:20.520 –> 45:25.160penalties or interest and things going on.45:25.160 –> 45:27.620So if you don’t know who I am, I am Dr. Friday.45:27.620 –> 45:35.700I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.45:35.700 –> 45:39.420It’s that simple.45:39.420 –> 45:44.820It’s pretty much all taking care of making sure people stay in compliance, dealing with45:44.820 –> 45:50.740the state or the Fed as far as any kind of situation that comes up for taxes.45:50.740 –> 45:54.860And so if you need someone that really understands how that all works, been doing this for a45:54.860 –> 45:58.920very long time, so you can feel free to give our office a call.45:58.920 –> 46:09.420The easiest way to set up an appointment is to call 615-367-0819.46:09.420 –> 46:11.300You can also go to email.46:11.300 –> 46:14.300It’s a Friday@drfriday.com.46:14.300 –> 46:23.860Friday is my first name for all of you that may not know that.46:23.860 –> 46:26.460So it is something that’s a bit different.46:26.460 –> 46:31.220That’s why Dr. Friday versus Dr. Buck.46:31.220 –> 46:34.620And then you can also check us out on the web at drfriday.com.46:34.620 –> 46:40.020Again, if you need any kind of help or you’re just getting ready to maybe relocate here46:40.020 –> 46:44.920from out of state, we are licensed in all states so we can help with out of state tax46:44.920 –> 46:46.700filings as well.46:46.700 –> 46:50.420Anything that’s going to make life a bit easier on you.46:50.420 –> 46:53.740And if you need to sit down prior, now’s a good time, especially if you’re going to46:53.740 –> 46:58.260be new to our office, to set up a pre-consult to make sure we’re all on the same page and46:58.260 –> 47:03.780that we’d be able to help you get your taxes filed on time and stay compliant with the47:03.780 –> 47:04.820IRS.47:04.820 –> 47:09.540If you need help, 615-367-0819.47:09.540 –> 47:10.340Call you later.

View Details

In this episode of the Dr. Friday Show, financial counselor and tax consultant Dr. Friday discusses various tax-related topics, including recent changes to tax laws, retirement contributions, and inheritance issues. She also takes calls from listeners, addressing their specific tax concerns and questions.

Topics covered:

• Changes to tax brackets and standard deductions after 2025
• The end of the “stretch IRA” and new rules for inherited IRAs
• Business Owner Information (BOI) filing requirements
• Cryptocurrency reporting for businesses
• Contributions to 401(k)s and SEPs for individuals over 70
• Inheritance and basis step-up for inherited property
• Dealing with IRS payment issues and correspondence
• Tax implications for retirees and Social Security recipients
• Planning for tax changes when filing status changes due to spouse’s death

Transcript:

00:00.001 –> 00:06.760No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your00:06.760 –> 00:07.760financial woes.00:07.760 –> 00:10.040She’s the how-to girl.00:10.040 –> 00:11.040It’s the Dr. Friday Show.00:11.040 –> 00:19.040If you have a question for Dr. Friday, call her now, 737-WWTN.00:19.040 –> 00:20.040That’s 737-9986.00:20.040 –> 00:27.040So here’s your host, financial counselor and tax consultant, Dr. Friday.00:27.040 –> 00:35.440Good day, I’m Dr. Friday and the doctor is in the house.00:35.440 –> 00:38.240It is an awesome Saturday going on outside.00:38.240 –> 00:40.360Hopefully you’re able to enjoy it.00:40.360 –> 00:42.840But it’s time to talk a bit about taxes.00:42.840 –> 00:44.240You know how I love taxes.00:44.240 –> 00:46.960We’ve been doing this about 15 years together, guys.00:46.960 –> 00:49.800So it is something we have a good time doing.00:49.800 –> 00:54.440If you have a question, maybe you’ve inherited some properties or maybe you want to convert00:54.440 –> 00:59.720or you have converted some 401ks or something along those lines, thinking about selling00:59.720 –> 01:02.960out some stock, how will that affect your taxes?01:02.960 –> 01:04.600I can give you some rough ideas.01:04.600 –> 01:07.280Remember the information I’m giving to you is an outline.01:07.280 –> 01:11.480You need to go to your tax professional and make sure the information is appliable to01:11.480 –> 01:12.480you.01:12.480 –> 01:16.840But I will do my best to lead you in the right direction so that you don’t make decisions.01:16.840 –> 01:20.400Always better to ask these questions before you go and do them.01:20.400 –> 01:24.880If you’ve purchased some land and now you decide you want to turn around and sell that01:24.880 –> 01:29.000land, it may be a good time to think if this is not a primary home, maybe I should be doing01:29.000 –> 01:31.520a 1031 so you’re not paying taxes.01:31.520 –> 01:36.520Or maybe you’d rather pay the taxes and get the IRS out of your investments.01:36.520 –> 01:39.920There is all kinds of trains of thoughts, but I can help you with how the tax changes01:39.920 –> 01:41.040are happening.01:41.040 –> 01:42.560We are in 2024.01:42.560 –> 01:48.060And remember, the Tax Cut and Job Act ends at the end of 2025.01:48.060 –> 01:52.040So we are at the last year and a half or so of the current tax code.01:52.040 –> 01:56.520No one has any idea what’s going to happen after this election and probably depends on01:56.520 –> 01:58.680who wins this election.01:58.680 –> 02:03.440But we need to always take into account that we know that there are some things that could02:03.440 –> 02:07.600happen and we’re going to cover some of those things that may come into effect and when02:07.600 –> 02:08.880it’s going to change.02:08.880 –> 02:14.340The end of 2025 was when the current tax code sunsets, right?02:14.340 –> 02:16.560And so there are several different things.02:16.560 –> 02:19.420One of the big ones is the federal tax brackets, right?02:19.420 –> 02:26.220We go from the current 12% back up to 15, the current 22 back up to 25.02:26.220 –> 02:29.900Our highest is 37 and we’re going to go up to 39.02:29.900 –> 02:37.620So across the board, everybody is going to be hit with a higher amount of tax come January02:37.620 –> 02:41.180of 2026, which isn’t too far off, guys.02:41.180 –> 02:53.500If you’ve got a question, sorry, you can join the show at 615-737-9986.02:53.500 –> 02:57.620Also one of the things that will change is our standard deduction.02:57.620 –> 03:02.520As we know, the standard deduction doubled when this tax act came into play.03:02.520 –> 03:05.180Pretty much increased it from like 12, it’s 24 now.03:05.180 –> 03:11.760We’re almost at 30,000 for a single, I’m sorry, for a married couple and 15, 16,000 for a03:11.760 –> 03:13.520single individual.03:13.520 –> 03:18.940So that could go back to what it was prior, which means that the standard deduction would03:18.940 –> 03:26.040pretty much split in half and then more people would have to go back to trying to itemize.03:26.040 –> 03:28.560Don’t know if this is going to happen, but it’s on the table.03:28.560 –> 03:33.180It will sunset at the end of 2025.03:33.180 –> 03:37.560So it will also increase the SALT tax, the mortgage interest.03:37.560 –> 03:39.120Some of those have changed.03:39.120 –> 03:42.740So some of those will be better for some, especially some of the people come from other03:42.740 –> 03:45.240states that have higher income tax.03:45.240 –> 03:47.400Tennessee, we’ve been very lucky.03:47.400 –> 03:52.560We’ve managed to keep the state income tax out of our situation.03:52.560 –> 03:57.360And so we don’t pay as much, but if you come from California, New York, or any of the state03:57.360 –> 04:02.400bearing tax issues, then you probably would like to see that change because my brother04:02.400 –> 04:10.920lives in California and he probably lost about $30,000 off of his itemizing when that changed04:10.920 –> 04:13.520because of his state income tax.04:13.520 –> 04:16.760So that’s a big chunk.04:16.760 –> 04:21.360So if you’re from those areas, you probably are looking forward to that.04:21.360 –> 04:26.640The good news is the stock position change for the Secure Act increased the IRA caps,04:26.640 –> 04:28.160the 529 plan.04:28.160 –> 04:34.920So we also have the Secure Act of 2.0, which did some things to help us catch up on if04:34.920 –> 04:37.040we hadn’t been doing retirement.04:37.040 –> 04:44.080If you hadn’t put money aside earlier in your life because life was not easy, then it could04:44.080 –> 04:45.320change.04:45.320 –> 04:53.800So the tax act of 2023 or whatever, lowered the capital gains rates.04:53.800 –> 04:57.960It separated tax brackets, assets held for long-term qualified.04:57.960 –> 05:00.360It went to zero, 15 and 20.05:00.360 –> 05:03.560It also retained the 3.8 net investment tax.05:03.560 –> 05:07.760Guys, I can’t tell you how many individuals come in and they have sold something.05:07.760 –> 05:10.240They’ve got something and they’ve got a big chunk, right?05:10.240 –> 05:16.800They made 400,000 profit or even anything over about 250 for a married couple, anything05:16.800 –> 05:19.440over 200, including your income.05:19.440 –> 05:23.120There is never, because when people think of capital gains, they don’t think of the05:23.120 –> 05:26.240net investment tax, but you should.05:26.240 –> 05:30.640Because the net investment tax is almost tied directly to capital gains.05:30.640 –> 05:37.160So anytime you have a larger gain situation or you happen to be in a higher income bracket05:37.160 –> 05:43.560and you do have capital gains, the likeliness is you could get hit instead of the 15% tax05:43.560 –> 05:50.180bracket, it’s actually going to be 18.8 instead of the 20% tax bracket for capital gains.05:50.180 –> 05:58.900You could be 23.8 and that 4% almost 3.8% when it’s on a higher dollar amount, it throws05:58.900 –> 05:59.900people.05:59.900 –> 06:04.220I mean, I had a guy that came in and he did not have $16,000 difference and he did not06:04.220 –> 06:06.100ever been told about this.06:06.100 –> 06:09.540He obviously hadn’t been listening to my radio because let’s be honest guys, I’ve talked06:09.540 –> 06:10.740about this across the board.06:10.740 –> 06:12.220I don’t even quote basically.06:12.220 –> 06:19.500I always say 15, 18.8 and 23.8 because there really isn’t a difference as far as I’m concerned.06:19.500 –> 06:22.340There are certain things that may not go quite so high.06:22.340 –> 06:28.780The 0% capital gains rate is wonderful, but it really only applies to a single person06:28.780 –> 06:34.780that has $55,000, including all their other income in there or a married couple of about06:34.780 –> 06:37.880110, again, including all of your other income.06:37.880 –> 06:42.660So it’d have to be a fairly small capital gains or you happen to not have a lot of other06:42.660 –> 06:43.660income.06:43.660 –> 06:49.340So you’re able to maximize that situation when it comes into play.06:49.340 –> 06:52.800So that’s the wonderful situation.06:52.800 –> 06:54.100So let’s see here.06:54.100 –> 06:57.140So actually here, 2023 capital gains.06:57.140 –> 07:05.780So in 2024, if you’re single, you can make up to 47 plus the standard deduction of 14.07:05.780 –> 07:12.140So that is $61,000 basically you can do.07:12.140 –> 07:19.820And a married couple, they can have 94 and 28, so 22, 122.07:19.820 –> 07:21.660So that’s a little shy.07:21.660 –> 07:22.980But you can have the zero.07:22.980 –> 07:28.740And then the 15% actually goes all the way up to 518 for a single person.07:28.740 –> 07:34.260And here’s the marriage penalty and 583 for a married.07:34.260 –> 07:38.060So single 518, married 583.07:38.060 –> 07:44.380But keep in mind when you went from 47 roughly as a single person to 200, everything above07:44.380 –> 07:47.940that 200 now has that 3.8.07:47.940 –> 07:49.740Same thing for a married couple, anything.07:49.740 –> 07:56.500So you can have zero and then you have the 15% up from 47 to 250, then everything above07:56.500 –> 08:01.260that is going to be 18.8.08:01.260 –> 08:05.860And then, you know, obviously once you get over those numbers, you start getting into08:05.860 –> 08:08.740the 20% tax bracket.08:08.740 –> 08:14.300Let’s see here, under age 17, they still have the $2,000 for the child.08:14.300 –> 08:18.020That is in the year that your child turns 17.08:18.020 –> 08:24.440So if your child on December 31st turns 17, that means you’re no longer, that child is08:24.440 –> 08:27.780over the age of 17 or 17 and older.08:27.780 –> 08:36.460So you will get $500 versus if that child is, I would say 16 and under, you get $2,000.08:36.460 –> 08:37.700I never understood that one guys.08:37.700 –> 08:41.620It’s not something I’m going to be able to justify because to me, most children don’t08:41.620 –> 08:45.020graduate high school at the earliest is 17.08:45.020 –> 08:47.360Most of the time, and sometimes it’s 18.08:47.360 –> 08:51.660So if the child is still your dependent, and even after that, they’re likely to be your08:51.660 –> 08:52.660dependent.08:52.660 –> 08:59.020So the IRS, I actually asked this at a meeting, gosh, years ago of a revenue officer.08:59.020 –> 09:00.340I said, what’s the difference?09:00.340 –> 09:05.620Why not make that 18, you know, in the year in which you turn 18 instead of 17?09:05.620 –> 09:11.260And their answer to me was the age of a 17 year old, they have the ability to go to work.09:11.260 –> 09:14.580Therefore, they can participate in helping the family.09:14.580 –> 09:17.860I don’t know about that, but that’s the answer that that was given.09:17.860 –> 09:21.700So that’s important for everyone, I guess.09:21.700 –> 09:26.420Don’t forget, we still have available the catch up for your HSA and your IRAs, right?09:26.420 –> 09:31.140So you in a health savings account, if you’re 50 and older, you can play catch up and add09:31.140 –> 09:33.960an additional $1,000.09:33.960 –> 09:38.060And then on a IRA, I believe it’s the same thing, an additional $1,000.09:38.060 –> 09:43.020So if you’re 50 and older, you can play catch up or you can just contribute more money to09:43.020 –> 09:48.180retirement, trying to help you maximize what you have and where you’re going with that.09:48.180 –> 09:53.500So these are important changes or really just what’s coming down in 2024.09:53.500 –> 09:56.940We want to make sure that we are maximizing what we have.09:56.940 –> 09:58.980I am not a financial advisor.09:58.980 –> 10:02.780I want to put that out there because I get a lot of emails for people that say, well,10:02.780 –> 10:05.180I want to convert my IRA.10:05.180 –> 10:09.140And I understand in those situations, if you’re converting your IRA, you do want to talk to10:09.140 –> 10:13.020a tax person because you want to know how much money is it going to cost if I decide10:13.020 –> 10:14.580to convert this.10:14.580 –> 10:19.220But I don’t give advice at all on what kind of investment, who should contribute to a10:19.220 –> 10:22.820standard IRA or a Roth IRA.10:22.820 –> 10:25.460That is for an expert that’s in financial planning.10:25.460 –> 10:27.980I am not that individual.10:27.980 –> 10:31.540So also want to bring up the fact that in 20…10:31.540 –> 10:37.700Remember when we had the SECURED Act in 2019, it eliminated the so-called stretch IRA.10:37.700 –> 10:44.500So when you inherit an IRA, there is 10 years that you have to take all of your money out,10:44.500 –> 10:48.580you have to take the requirement on distribution, but you don’t have to clean it out to the10:48.580 –> 10:51.140last day of the 10 years.10:51.140 –> 10:55.500Used to be that it used to stretch over your lifetime and it would then go to the next10:55.500 –> 10:59.180person inherited and they would stretch it over their lifetime.10:59.180 –> 11:04.740And it was a way of inheriting money, but you wouldn’t have to actually take it out.11:04.740 –> 11:08.180The IRS is now basically saying we want all of our money.11:08.180 –> 11:13.940And keep in mind in a traditional IRA, in the idea of the stretch, the IRS would very11:13.940 –> 11:17.260rarely get all of their money in anyone’s lifetime, right?11:17.260 –> 11:21.020Because it was stretching over and smart families just allowed it to keep rolling over and you11:21.020 –> 11:23.820kept having an inherited IRA.11:23.820 –> 11:26.280But the IRS is, well, money hungry, right?11:26.280 –> 11:28.140So they’re having enough troubles paying their bills.11:28.140 –> 11:32.140So one of the things they said is, “Oh, wait, let’s get all the people that have IRAs and11:32.140 –> 11:33.140they pass away.11:33.140 –> 11:35.920Within 10 years, we’re going to get our taxes.”11:35.920 –> 11:41.020So I mean, that’s millions if not billions and trillions of dollars that they would be11:41.020 –> 11:45.660actually be getting because I mean, a lot of people have IRAs or 401ks or any of those11:45.660 –> 11:48.020kind of traditional situations.11:48.020 –> 11:52.340So it’s just really important to make sure you understand that when you leave this to11:52.340 –> 11:55.820your children, they will be locked into having to take that money out.11:55.820 –> 12:00.420So talking to a good financial planner that might turn around and say, “Hey, you know12:00.420 –> 12:01.420what?12:01.420 –> 12:06.860Maybe we should do a conversion or maybe we should do something now to try to leave that12:06.860 –> 12:10.180tax burden to your family member would be a good idea.”12:10.180 –> 12:12.660All right, we’re getting ready to take our first break.12:12.660 –> 12:15.380Again, if you want to join the show, you can.12:15.380 –> 12:16.380615-737-9986.12:16.380 –> 12:24.420615-737-9986 is the number here in the studio.12:24.420 –> 12:29.420We’ll be right back with the Dr. Friday Show.12:29.420 –> 12:36.300All righty.12:36.300 –> 12:38.140We are back here live in studio.12:38.140 –> 12:39.140Sorry.12:39.140 –> 12:40.140I didn’t hear the break.12:40.140 –> 12:41.140That was my fault.12:41.140 –> 12:42.140All right.12:42.140 –> 12:49.140So if you want to join the show, you can at 615-737-9986.12:49.140 –> 12:53.260615-737-9986.12:53.260 –> 12:58.140Taking your calls, talking about all important things when it comes to taxes.12:58.140 –> 13:02.180And probably one of the biggest things starting in 24, you might want to start thinking about13:02.180 –> 13:05.860a state tax and creating a gifting plan.13:05.860 –> 13:12.100Because without any further legislation, if Congress follows the sunset of the Tax Act,13:12.100 –> 13:19.580the state tax exclusion will revert to its previous levels of 5.6 million for current13:19.580 –> 13:24.180level, which is 12.92 for a single individual.13:24.180 –> 13:25.180That’s kind of huge, right?13:25.180 –> 13:32.500I mean, if your state is already close to 5 million, let’s just say, and with homes13:32.500 –> 13:36.700and real estate and investments, it’s certainly not outside.13:36.700 –> 13:40.94012 million would be difficult for a lot of us, but 5 million, not necessarily.13:40.940 –> 13:46.180And so if you don’t have a good plan, and this is when I talk to individuals that really13:46.180 –> 13:49.180should go to a financial planner.13:49.180 –> 13:50.180They’re going to know these things.13:50.180 –> 13:53.900They’re also going to talk to you about maybe the gifting, what you need to be doing about13:53.900 –> 13:55.740gifting each year.13:55.740 –> 13:58.860It increased 2024, it’ll be 18,000.13:58.860 –> 14:05.780So right now you’re able to give up to $18,000 to anyone actually.14:05.780 –> 14:11.940But let’s say that you want to help one of your kids or your child to buy a house.14:11.940 –> 14:16.780I had one just recently where the parents, they put the down payment on the house and14:16.780 –> 14:19.040they did it through a gifting.14:19.040 –> 14:24.740And so the 18,000 that each of them can give their son was $36,000.14:24.740 –> 14:30.140The difference, the amount above that, all we have to do is file a gift tax return.14:30.140 –> 14:34.660And then that money will come out of their lifetime of gifting.14:34.660 –> 14:36.540And so it’s not taxable.14:36.540 –> 14:41.260The only person that would ever pay tax on gifting is the person that is giving it.14:41.260 –> 14:45.820So if you were to go take money out of your IRA, you’re going to have to pay tax first14:45.820 –> 14:49.180and then gift it to whoever you want to do.14:49.180 –> 14:54.460If you win the lottery, here’s an example of a client I know, won the lottery and was14:54.460 –> 15:02.740so thankful he started gifting the money out to his family before he paid Uncle Sam.15:02.740 –> 15:06.800Not the best plan in the world because he pretty much gave it all away.15:06.800 –> 15:12.140So he put himself into a really tight, unexpected situation.15:12.140 –> 15:15.460So do not, I mean, there’s nothing wrong with doing that.15:15.460 –> 15:20.420It’s just make sure you pay Uncle Sam before you turn around and have to pay the taxes.15:20.420 –> 15:25.620Well, nothing worse than waking up and thinking you’ve done this wonderful thing.15:25.620 –> 15:32.420And then Uncle Sam says, “Oh, you owe us $128,000 and you did not set that aside or15:32.420 –> 15:33.420pay that.”15:33.420 –> 15:36.580And everyone thinks when you win the lottery that the government comes in and they just15:36.580 –> 15:37.980take all their money.15:37.980 –> 15:40.580They took some, but it wasn’t enough.15:40.580 –> 15:44.380And therefore he had thought because they had come in and taken some of the money, he15:44.380 –> 15:46.360had it calculated as taxes.15:46.360 –> 15:51.620And therefore he just thought he had it all in control and it wasn’t quite in control15:51.620 –> 15:53.040as he thought.15:53.040 –> 15:57.260So again, making sure you understand how that works.15:57.260 –> 16:02.700And then there are several new rules involving cryptocurrency and other digital assets that16:02.700 –> 16:03.700are still involving.16:03.700 –> 16:07.720We know that, you know, things are transactions involving that may affect your tax planning16:07.720 –> 16:08.820this year.16:08.820 –> 16:12.760If you’re a freelancer, sole proprietor, small business owner, and you receive 10,000 or16:12.760 –> 16:18.680more cryptocurrency in a single transaction, you may need to be reporting that to the Department16:18.680 –> 16:20.320of Treasury on the 8300 form.16:20.320 –> 16:22.660Now a lot of people may not have known that.16:22.660 –> 16:27.500We as business owners, especially ones, I will say my business does not generate that16:27.500 –> 16:32.420kind of cash, but let’s say you’re a restaurant owner or trying to think of something, something16:32.420 –> 16:34.560that generates a lot of cash.16:34.560 –> 16:41.180And so you want to go to the bank and put $10,000 in the bank and you need to provide16:41.180 –> 16:43.660the bank basically where you received the money from.16:43.660 –> 16:46.460It could be cash from the sales in a restaurant.16:46.460 –> 16:48.180It could be from selling a vehicle.16:48.180 –> 16:53.340If you’re a used car guy and maybe someone brings in cash to you, you then turn around16:53.340 –> 16:54.520deposit it in the bank.16:54.520 –> 16:57.900There’s nothing wrong with it, but there is a form that has to be completed every time16:57.900 –> 17:01.740we have $10,000 in a one transaction in cash.17:01.740 –> 17:05.540Now if it’s a check or if it’s some other format, then normally we don’t have to worry17:05.540 –> 17:08.100about it because it has to go through the banking system.17:08.100 –> 17:14.580But they’re saying now if you are an individual that is accepting cryptocurrency in your business,17:14.580 –> 17:18.460I mean I know everyone thinks that because they’re doing cryptocurrency that somehow17:18.460 –> 17:24.900it’s not going to be trackable, that it’s cash in essence, that no one’s going to know,17:24.900 –> 17:26.580but it’s digital currency.17:26.580 –> 17:32.900A, it’s definitely not cash, at least with cash we know that the currency isn’t probably17:32.900 –> 17:38.980trackable until that person puts it in the bank, or I will say the IRS also does means17:38.980 –> 17:39.980testing.17:39.980 –> 17:44.980So if you’re living in a different manner, prime example is a lot of times the IRS will17:44.980 –> 17:48.980actually do spot checks on audits and they’ll drive by the people’s house.17:48.980 –> 17:54.180And if that person lives in a mansion with three or four sports cars and they say that17:54.180 –> 17:59.660they don’t have enough money to pay the IRS, one hand is it, how did you afford all this?17:59.660 –> 18:02.740And yet you say you’re only making $25,000 a year.18:02.740 –> 18:05.940You know, I mean the numbers don’t match up.18:05.940 –> 18:09.340So that’s the same problem that people are going to have with cryptocurrency.18:09.340 –> 18:14.200No, the IRS may not have all of the access to the wallets yet.18:14.200 –> 18:16.540That’s obvious in some of the situations.18:16.540 –> 18:22.020But if your lifestyle, if you’re out buying and selling and trading and using that money18:22.020 –> 18:26.820to do something, and then you as the small business owner like myself, if I were to have18:26.820 –> 18:34.000one transaction that is $10,000 or more, I have to report that even though it’s cryptocurrency.18:34.000 –> 18:36.940Because if I don’t, the IRS audits me.18:36.940 –> 18:39.620Now they’re going to see that there was unreported income.18:39.620 –> 18:43.540Even if you report it, you didn’t report it properly in the way it was.18:43.540 –> 18:46.860This reporting for digital is somewhat similar to the cash.18:46.860 –> 18:48.820It’s a banking law.18:48.820 –> 18:52.980And I do want to bring up the BOI, the business owner information.18:52.980 –> 18:58.820Don’t forget as any kind of small business, I mean, I guess all business, 1120, 1120s18:58.820 –> 19:04.700and 1065s, which would be limited liability companies as well as partnerships, corporations,19:04.700 –> 19:06.900all of them, you have a responsibility.19:06.900 –> 19:13.100It goes also under the foreign banking, the foreign banking center or whatever, but as19:13.100 –> 19:14.620part of the IRS.19:14.620 –> 19:21.420And that is required for anyone that opened a business prior to this year, you have until19:21.420 –> 19:26.500December 31st, basically to, to file this report.19:26.500 –> 19:28.020It’s not a hard report.19:28.020 –> 19:31.060It’s a little bit time consuming, but it’s not a hard report.19:31.060 –> 19:34.820Basically you have to have every partner’s driver’s license or passport.19:34.820 –> 19:37.180Most of the information is on those.19:37.180 –> 19:38.920And you’d be able to file this.19:38.920 –> 19:47.580If you don’t, the penalty is $500 a day, a day people, this isn’t a one-time penalty.19:47.580 –> 19:48.580It is a day.19:48.580 –> 19:52.900Now I’m sure that’s may or may not be hold up at court, but it doesn’t make a difference.19:52.900 –> 19:54.380We prefer to avoid those.19:54.380 –> 20:01.940So make sure that you have filed the BOI business ownership information by that time.20:01.940 –> 20:06.740If you haven’t, then you need to, you know, you can call our office, we’re filing them20:06.740 –> 20:10.180or if you need assistance or whatever, but it’s really, really important.20:10.180 –> 20:13.860This is one of those that you don’t want to be late to the party kind of situation.20:13.860 –> 20:17.580Because to my knowledge, there’s no waiver available for that.20:17.580 –> 20:24.060If you have opened the company in this year, you only have 30, 60 days, I believe 60 days,20:24.060 –> 20:26.820maybe it’s 90 thereabouts to file this form.20:26.820 –> 20:29.100So it needs to be filed ASAP.20:29.100 –> 20:33.000Pretty much as soon as you open the company, you should be filing the BOIs.20:33.000 –> 20:34.000It’s that simple.20:34.000 –> 20:39.600That way it’s just like getting your secretary of state, federal ID number, getting your,20:39.600 –> 20:41.620you know, franchise excise numbers.20:41.620 –> 20:45.900That should be the same time that you get all that, that you’re also getting this file20:45.900 –> 20:46.900form.20:46.900 –> 20:48.780To my knowledge, it’s a one-time situation.20:48.780 –> 20:50.260We don’t have to file it every year.20:50.260 –> 20:52.540It’s not like an annual report.20:52.540 –> 20:57.340At the moment, it’s easily falling under just the situation that you want to be able to20:57.340 –> 20:59.540do what you’re doing now.20:59.540 –> 21:04.060So just, you know, putting it out there, keeping it real for you guys.21:04.060 –> 21:11.420If you have any questions, you can certainly join the show at 615-737-9986.21:11.420 –> 21:20.260Taking your calls, talking about all the funny things.21:20.260 –> 21:25.300Tax code, just so you know, in 2024, you’re going to basically have a single filers that21:25.300 –> 21:30.740will make up to probably tax brackets.21:30.740 –> 21:31.740Here we go.21:31.740 –> 21:42.98022% starts at $47,150 for a single person and $94,300 for a married and 24%, $100,00021:42.980 –> 21:46.520for a single person, $200,000 for a married.21:46.520 –> 21:52.100Penalty tax penalty really doesn’t start kicking in until the 37% tax bracket.21:52.100 –> 21:58.380At that point, it’s a single person will do better than a married couple at that rate.21:58.380 –> 22:02.540But other than that, it’s pretty much, you know, 100 here, 200 for married, which makes22:02.540 –> 22:03.540sense.22:03.540 –> 22:04.820All of those are important.22:04.820 –> 22:08.700Don’t forget to step up if you have a 401k and you’re over 50 years old.22:08.700 –> 22:11.820You also have the additional 7,000 that you can put in.22:11.820 –> 22:14.500So that’s pre-taxed.22:14.500 –> 22:17.980Always tell people if you’re dealing with anything where maybe you’re getting money22:17.980 –> 22:22.420from one side and you really just want to roll more money into retirement, play the22:22.420 –> 22:23.420game.22:23.420 –> 22:31.340If you inherit $20,000 and maybe it’s an IRA where it’s taxable, increase your 401k22:31.340 –> 22:36.380so that 20 grand will come out on your check and therefore your payroll taxes or your actual22:36.380 –> 22:40.480tax bill will not be much higher than what it would have normally been.22:40.480 –> 22:43.660Make sure your withholding stays up to what the standard is.22:43.660 –> 22:47.820But it is a way of, and then now your money’s in a tax deferred just like it was when you22:47.820 –> 22:50.740inherited and you’re not really changing your lifestyle.22:50.740 –> 22:54.100It just makes life a little simpler in that situation.22:54.100 –> 22:57.900So again, making sure that you have that health savings account.22:57.900 –> 23:04.600Like I said, if they’re eligible to catch up $1,000 if you’re 55 or older and not enrolled23:04.600 –> 23:10.140in Medicare, remember a health savings account, you have to stop contributing to when you23:10.140 –> 23:11.740start Medicare.23:11.740 –> 23:18.580So usually that’s 65 unless you’re disabled or you have some other situation where you’re23:18.580 –> 23:20.780on disability or something like that.23:20.780 –> 23:21.780So we’ll have that.23:21.780 –> 23:24.780All right, while we get ready, we’re going to take another quick break here.23:24.780 –> 23:27.140When we get back, we’ll get to the phone lines.23:27.140 –> 23:29.860If Dan can hold through, that would be awesome.23:29.860 –> 23:42.820You can reach us here live in the studio at 615-737-9986.23:42.820 –> 23:43.820We’ll take your calls.23:43.820 –> 23:46.900We’ll try to do our best to get this information.23:46.900 –> 23:51.940I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.23:51.940 –> 23:53.100That’s what I do.23:53.100 –> 23:58.420So if you have tax issues, you have love letters coming, just also keep always in mind that23:58.420 –> 24:03.580when we are dealing with a resolution situation, it is not going to be a fast resolution.24:03.580 –> 24:08.100Unfortunately, I’ve got cases that have been open for a number of years.24:08.100 –> 24:10.020So just stay tuned and we’ll keep up.24:10.020 –> 24:12.340We’ll be right back with the Dr. Friday Show.24:12.340 –> 24:16.260All righty, we are back here live in studio.24:16.260 –> 24:18.700We’re going to be thankful that Dan held through that break.24:18.700 –> 24:21.860And let’s go ahead and go live to Dan and see if I can help him out.24:21.860 –> 24:22.860Hey, Dan.24:22.860 –> 24:23.860Hey there, Freddie.24:23.860 –> 24:24.860Thanks for taking the call.24:24.860 –> 24:27.860Quick question, and I’ll take it off the air if you need me to.24:27.860 –> 24:28.860I’m driving.24:28.860 –> 24:30.860I’ll be turning 73 next year, but I’m still working.24:30.860 –> 24:35.940Can I still contribute to my 401k while I’m also taking RMDs?24:35.940 –> 24:38.900Yeah, it’s a crazy world, huh?24:38.900 –> 24:40.220So yes, you’re not…24:40.220 –> 24:44.180For one, if the 401k is with the company you’re still working with, you’re not even required24:44.180 –> 24:48.860to take an RMD on it and you can still contribute under the current laws.24:48.860 –> 24:49.860I’m self-employed.24:49.860 –> 24:52.420You’re self-employed, so that’s a SEP.24:52.420 –> 24:58.100And so as long as you will, I think you still have to take RMDs on a SEP, but you can still24:58.100 –> 25:03.020contribute to a SEP at 73 because you are still working.25:03.020 –> 25:04.020Great.25:04.020 –> 25:05.020Good to hear.25:05.020 –> 25:06.020Thank you.25:06.020 –> 25:07.020No problem, mate.25:07.020 –> 25:08.020Thanks for the phone call.25:08.020 –> 25:09.020Appreciate it.25:09.020 –> 25:10.020All right.25:10.020 –> 25:11.020Cheers.25:11.020 –> 25:12.020Thanks, babe.25:12.020 –> 25:13.020And we got Mac in Nashville.25:13.020 –> 25:14.020Let’s see if I can help Mac.25:14.020 –> 25:15.020Hey, thank you for taking my call.25:15.020 –> 25:16.020I got a question about the BOI.25:16.020 –> 25:27.860I’ve had my business for like 21 years, so I never filed a BOI.25:27.860 –> 25:34.540No, this is a brand new law that came in effect last year and they gave us until December25:34.540 –> 25:36.020of this year to make…25:36.020 –> 25:39.060Well, actually it came in effect January or February of this year.25:39.060 –> 25:40.700Time flies when I’m having fun.25:40.700 –> 25:44.020Because they basically gave us 12 months to make this happen.25:44.020 –> 25:45.020So agreed.25:45.020 –> 25:46.500We never had a BOI.25:46.500 –> 25:47.900We’ve never had to deal with it.25:47.900 –> 25:51.740I’ve been in business almost 30 years, never filed one before.25:51.740 –> 25:53.860This is something to do with foreign banking.25:53.860 –> 25:58.020I think they’re looking, my personal opinion, because when filling out these forms, they’re25:58.020 –> 26:04.660trying to prove that the people that are claiming these K-1s are US citizens or that they’re26:04.660 –> 26:10.780claimed properly on the K-1s because you have to have a passport or a driver’s license.26:10.780 –> 26:17.780So basically is it for sole proprietor or just LLC?26:17.780 –> 26:20.620No, 1060, yeah, it has to be an entity.26:20.620 –> 26:26.260So 1065 form, 1120 form or 1120S, sole proprietors do not have to do it.26:26.260 –> 26:28.500Okay, that was my question.26:28.500 –> 26:31.180Okay, so it’s just LLC and corporations.26:31.180 –> 26:32.180Right.26:32.180 –> 26:35.180So it has to be a multi-member LLC, not a single member.26:35.180 –> 26:36.180Copy that.26:36.180 –> 26:37.180Thank you so much.26:37.180 –> 26:38.180We love your show.26:38.180 –> 26:39.180Thanks, Mac.26:39.180 –> 26:40.180I appreciate it.26:40.180 –> 26:41.180Thank you for calling.26:41.180 –> 26:42.180All righty.26:42.180 –> 26:44.020So those were great questions.26:44.020 –> 26:48.500And I know the whole BOI, in my opinion, never knew what it was.26:48.500 –> 26:51.180Wasn’t even thinking we were going to have to do anything with it because I’m thinking26:51.180 –> 26:53.580it’s not really an accounting thing.26:53.580 –> 26:57.900But most of my clients are the same as myself, which basically means we’re pushing it to26:57.900 –> 27:00.620someone that hopefully understands it.27:00.620 –> 27:04.140A lot of them are like, “Well, what if we don’t want to do it?”27:04.140 –> 27:08.960I don’t believe, in my opinion, maybe there’s someone listening that knows more of this.27:08.960 –> 27:11.140I don’t think we have an option.27:11.140 –> 27:12.500I think we have to file it.27:12.500 –> 27:18.200There are a few industries that are not required to file it, mostly financial insurance where27:18.200 –> 27:22.580I think their licensing usually already covers this information, so they’re not required27:22.580 –> 27:23.900to have to do this.27:23.900 –> 27:29.340But most small businesses or medium or large businesses, whatever, do have to do this kind27:29.340 –> 27:30.340of thing.27:30.340 –> 27:33.660I think on the stock market, you’ve already filed a lot of this information because public27:33.660 –> 27:37.620trading requires certain exposure.27:37.620 –> 27:42.580But most of the companies I deal with are privately owned, small business, and therefore27:42.580 –> 27:44.140you have…27:44.140 –> 27:45.140We’ve never did this.27:45.140 –> 27:47.540We never had to do this information.27:47.540 –> 27:51.620And it may be also another way of somehow then matching up if money is coming in and27:51.620 –> 27:53.220out from overseas.27:53.220 –> 27:54.460I really don’t know.27:54.460 –> 27:59.180It has to do with the foreign banking, so it has to have something to do with foreign27:59.180 –> 28:04.340government of some sort.28:04.340 –> 28:08.100The FUBAR is what we called it, federal banking, foreign banking.28:08.100 –> 28:12.500We do file that for individuals that have bank accounts in other places like Australia28:12.500 –> 28:14.300or Canada mainly.28:14.300 –> 28:18.700I’ve got one in Australia, one in Canada, and a couple over in India.28:18.700 –> 28:23.140And so we have to file that mostly reporting information that if we earn any interest or28:23.140 –> 28:27.780dividends that money has to be taxed here in the United States on your US tax return.28:27.780 –> 28:34.940So those are important things, but we’ve never had that same reporting unless you have a28:34.940 –> 28:37.080foreign banking account in a business.28:37.080 –> 28:41.460But again, that doesn’t apply to any client that I know of in my world.28:41.460 –> 28:42.580Doesn’t mean that it’s not out there.28:42.580 –> 28:47.100So again, just be careful because the penalties can add up on these things.28:47.100 –> 28:51.300And a lot of times people are like, “Oh, I never heard of it, so I don’t want my people28:51.300 –> 28:52.300to say that.”28:52.300 –> 28:55.540I don’t want you to basically say, “Oh my gosh, I didn’t know there was this thing and28:55.540 –> 28:58.780now you got a letter in the mail and you’re sitting there going, ‘How am I going to get28:58.780 –> 28:59.780this?'”28:59.780 –> 29:05.500And they’re not sending out letters at this time saying, “Well, you are required to file.”29:05.500 –> 29:10.780Like Tennessee Department of Revenue, I know a lot of you guys got that whole franchise29:10.780 –> 29:15.740excise and the whole, “You should be able to get a refund.”29:15.740 –> 29:18.380And to be quite honest, I have found some.29:18.380 –> 29:22.580Yeah, some of my clients have, but a large number of them did not qualify because they29:22.580 –> 29:28.060had already basically paid the minimum amount or the change was minimal and it wasn’t a29:28.060 –> 29:32.340change in taxes because they hadn’t reported their net worth, but yet they reported the29:32.340 –> 29:33.340Schedule G.29:33.340 –> 29:38.260So when you reported it the other way, it really had zero to no change on it.29:38.260 –> 29:44.460So again, but if you are, and remember that has to be filed by November.29:44.460 –> 29:53.500If you need to file the amendment 2020 through 2023 for the new tax law that was passed here29:53.500 –> 29:59.620in Tennessee for franchise excise, many people took away from that, that there is no franchise29:59.620 –> 30:00.620excise.30:00.620 –> 30:02.140That is completely wrong.30:02.140 –> 30:08.860All that happened was they eliminated the Schedule G from the franchise and excise report.30:08.860 –> 30:11.540Franchise and excise is still going strong, people.30:11.540 –> 30:13.220It has not changed.30:13.220 –> 30:15.020You will still need to make your quarterly.30:15.020 –> 30:16.540You still need to pay it.30:16.540 –> 30:20.860The difference is you may be paying a little less if you were actually doing it.30:20.860 –> 30:24.020Like some of my clients, the ones that have the large refunds is because they had the30:24.020 –> 30:30.460net worth and the Schedule G fully completed and therefore they were being taxed too high30:30.460 –> 30:32.340on those situations.30:32.340 –> 30:38.700If the business is closed, you can still go back to ’22, ’21, ’22, whatever year it was,30:38.700 –> 30:41.540and apply for those rebates.30:41.540 –> 30:48.700You will need a balance sheet for the final reconciliation, the IRS, or a copy of your30:48.700 –> 30:53.300business return if a balance sheet was completed on that.30:53.300 –> 30:56.740That’s what we’re using a lot of because some of my clients don’t actually have balance30:56.740 –> 30:58.020sheets.30:58.020 –> 30:59.300That’s easy for them to prepare.30:59.300 –> 31:02.980Many of them have profit and loss, but not active balance sheets.31:02.980 –> 31:05.300The tax returns we’ve created will have them.31:05.300 –> 31:06.500That is something.31:06.500 –> 31:08.660That is an important part of doing everything.31:08.660 –> 31:13.420Again, if you have any questions, you need to know something, you can certainly call31:13.420 –> 31:18.900our office Monday morning and we’d be more than glad to try to help you understand where31:18.900 –> 31:19.900we’re going.31:19.900 –> 31:22.540Again, I am called Dr. Friday.31:22.540 –> 31:24.180That’s actually my first name is Friday.31:24.180 –> 31:25.620My last name is Burke.31:25.620 –> 31:31.980I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.31:31.980 –> 31:36.900If you need help filing taxes, you haven’t filed taxes for a number of years, maybe you’re31:36.900 –> 31:40.300relocated a lot and you don’t even know where to start.31:40.300 –> 31:41.620Maybe you’ve received some love letter.31:41.620 –> 31:45.420Maybe you’ve never received a love letter from the IRS, but you know you haven’t filed31:45.420 –> 31:48.980taxes and therefore you might have a problem.31:48.980 –> 31:55.220This couple that just came in this last couple of weeks, they came in because their son is31:55.220 –> 32:00.860at an age where they’re going to have to do FASFA, which is just opening up or something.32:00.860 –> 32:02.460They hadn’t filed taxes.32:02.460 –> 32:07.900In this case, it was not a good thing because they had refunds every year, but they kind32:07.900 –> 32:12.540of didn’t want to deal with the government and everyone’s got their own keen way of doing32:12.540 –> 32:13.540things.32:13.540 –> 32:16.580I mean, you know, I mean they didn’t want anything from the government as long as they32:16.580 –> 32:17.580paid in enough.32:17.580 –> 32:18.580They were happy.32:18.580 –> 32:20.220They didn’t care about the rest.32:20.220 –> 32:25.220Only reason they’re doing it is because their son needs to file for FASFA to get his college32:25.220 –> 32:30.180straightened out, which pretty cool parents, but in the same way, they had left quite a32:30.180 –> 32:35.340bit of money on the table throughout the last number of years they had to file.32:35.340 –> 32:36.700So that could be you.32:36.700 –> 32:40.340I will tell you that’s happened more times than I like to say, because a lot of times32:40.340 –> 32:46.700people that don’t file taxes are W-2 individuals, so they’re paying in taxes and you know, they32:46.700 –> 32:52.580sometimes don’t worry about, but remember we can only get refunds for three years, 21,32:52.580 –> 32:54.22022, and 23.32:54.220 –> 32:56.220That is it.32:56.220 –> 33:02.580If you filed an extension on 20, you may qualify if you get it in or out, a legal extension,33:02.580 –> 33:05.280but basically they give you three years.33:05.280 –> 33:11.100So in three years, if you haven’t filed them, they’ll take your return.33:11.100 –> 33:13.180They’ll keep the refund.33:13.180 –> 33:16.460And then, you know, in some cases, of course they may have assessed something and we can33:16.460 –> 33:21.220zero that out so you don’t owe anything, but it’s not going to be a situation where you’re33:21.220 –> 33:22.460going to get that money back.33:22.460 –> 33:28.180I’ve had people leave thousands of dollars on the table, especially when 20, because33:28.180 –> 33:32.0202020 was a COVID year where a lot of money was coming from the government and some of33:32.020 –> 33:34.580these people did not qualify for the stimulus.33:34.580 –> 33:39.220I mean like they hadn’t filed 17, 18, or 19, so they weren’t on the list, so they never33:39.220 –> 33:40.580received it.33:40.580 –> 33:44.300So 21 is almost off the table.33:44.300 –> 33:50.500So that’s kind of important as well is to make sure that you, you know, if 21 also had33:50.500 –> 33:58.540stimulus money and you want to really make sure that you have this all done now to, you33:58.540 –> 34:03.900know, to deal with, because if you wait, if you don’t, if you don’t do anything, it’s34:03.900 –> 34:06.480going to happen and you’re just going to leave the money on the table.34:06.480 –> 34:07.740It’s really that simple.34:07.740 –> 34:12.060So you don’t have that big a window to get 2021.34:12.060 –> 34:15.300And like I said, the last stimulus check came in 2021.34:15.300 –> 34:20.700So if you didn’t get your 2020s and you’re still wanting to see if you can qualify, then34:20.700 –> 34:23.7402021 will be the last year you qualify for that.34:23.740 –> 34:24.740All right.34:24.740 –> 34:31.620If you’ve got a question, you can reach us live here in studio at 615-737-9986.34:31.620 –> 34:37.500615-737-9986 is the number here in the studio.34:37.500 –> 34:41.940We like to take your calls, hopefully at least give you the right basic information so that34:41.940 –> 34:45.980you can go forward, make sure you understand what your options are.34:45.980 –> 34:46.980Who knows?34:46.980 –> 34:52.380You know, if nothing else, I just want you to be able to know when you go make a decision,34:52.380 –> 34:54.180what’s that going to be a tax on?34:54.180 –> 34:57.860If it’s even taxable, is it something you need to be saving a portion?34:57.860 –> 35:01.380Because there’s nothing worse than when you prepare someone’s taxes and then at the end35:01.380 –> 35:05.740of the year, they turn around and say, I have to say, well, you owe $10,000.35:05.740 –> 35:07.620And they’re like, oh my gosh, you know, why?35:07.620 –> 35:08.620Or whatever.35:08.620 –> 35:14.820And that’s because there was no planning done prior to the whole organizing of this situation.35:14.820 –> 35:15.820Right?35:15.820 –> 35:19.740I mean, they didn’t have any idea where they’re at, what they’re doing or anything else.35:19.740 –> 35:24.540So it’s important that you basically know how much money something’s going to cost.35:24.540 –> 35:31.580So if you inherit or if you have traditional trading or if you sell a piece of real estate,35:31.580 –> 35:37.340your primary home, whatever it might be, it’s important that you understand what that is,35:37.340 –> 35:40.740how it’s going to happen and where it’s going to come through, because that’s the important35:40.740 –> 35:41.740conversation.35:41.740 –> 35:46.300You don’t want to just sit there and say, oh my gosh, and then get hit back a tax time35:46.300 –> 35:50.380when you’ve already reinvested or put that money into some sort of situation where you35:50.380 –> 35:54.820may not have the ability to actually get it out without penalties.35:54.820 –> 35:55.820That’s a problem.35:55.820 –> 35:56.820All right.35:56.820 –> 35:59.340Teresa and Tim, if you can hold through this last break, we’ll have plenty of time to answer35:59.340 –> 36:02.500your questions when we come back to the show.36:02.500 –> 36:09.220If you want to join us on the phone before the end, 615-737-9986.36:09.220 –> 36:13.980615-737-9986.36:13.980 –> 36:17.220As an enrolled agent, the IRS has requirements.36:17.220 –> 36:18.380We have to take license.36:18.380 –> 36:21.660We have to keep current with all the tax laws.36:21.660 –> 36:26.660That’s what makes us different than CPAs or tax preparers is that all we do is taxes.36:26.660 –> 36:29.620So we’ll be right back with the Dr. Friday Show.36:29.620 –> 36:34.860For tax services, planning, business, and IRS negotiation, visit drfriday.com.36:34.860 –> 36:35.860All righty.36:35.860 –> 36:47.380We are back live here in the studio and we’ve got a few people on the phone line.36:47.380 –> 36:51.860So let’s hit Teresa and see if I can help her with her question.36:51.860 –> 36:53.420Hey, Teresa.36:53.420 –> 36:54.420Yes.36:54.420 –> 37:03.740My question is, my mother passed away last year in 2023 and I inherited the property.37:03.740 –> 37:08.660And I’m going to sell that property, but the way property is selling now, it’s not selling37:08.660 –> 37:09.660all that fast.37:09.660 –> 37:17.580So I’m wondering how long do I have to sell it before I have to revert back to their basis?37:17.580 –> 37:19.260There’s no time clock.37:19.260 –> 37:20.660You inherited it from them.37:20.660 –> 37:25.700So whatever the basis was at the time they passed away, whatever the value of the home37:25.700 –> 37:31.220was when they passed away, Teresa, will always be your basis now and forever.37:31.220 –> 37:37.860So I was under the impression that it would revert back after about three years.37:37.860 –> 37:40.900And I thought, man, that’s huge capital gains.37:40.900 –> 37:41.900Yeah.37:42.900 –> 37:44.080And it’s almost impossible to know.37:44.080 –> 37:47.820That’s one of the reasons they put that law is because it’s impossible for us to know37:47.820 –> 37:48.820how much the parents…37:48.820 –> 37:51.100Some people are good at paperwork, but some are not.37:51.100 –> 37:54.600But anyways, you have no time limit on that, Teresa.37:54.600 –> 38:00.020Whatever it was, whatever the appraisal came in at or comps or whatever you’re using, whatever38:00.020 –> 38:06.260that is, is what you want to keep on file so that when you do sell or turn into rental,38:06.260 –> 38:09.420whatever you decide to do, it will always be that dollar amount.38:09.420 –> 38:10.420Okay.38:10.420 –> 38:15.620Do I have to have a professional appraisal of that or…38:15.620 –> 38:20.100Really it’d be a nice appraisal or at least a real estate person that’s giving you like38:20.100 –> 38:22.820kind comps, something that’s documented.38:22.820 –> 38:25.420So that way you have some true basis.38:25.420 –> 38:26.420Okay.38:27.420 –> 38:28.420That’s what I needed to know.38:28.420 –> 38:29.420Perfect.38:29.420 –> 38:30.420All right.38:30.420 –> 38:31.420Thank you.38:31.420 –> 38:32.420Thank you for holding.38:32.420 –> 38:33.420Thanks.38:33.420 –> 38:34.420Thank you.38:34.420 –> 38:35.420Let’s get Tim from the IRS.38:35.420 –> 38:36.420Tim, about my favorite people.38:36.420 –> 38:37.420Hey, Tim, what’s happening?38:37.420 –> 38:38.420Yes, ma’am.38:38.420 –> 38:44.860I went ahead and back in my file, my 2023 taxes.38:44.860 –> 38:45.860I paid them.38:45.860 –> 38:46.860Their payment plan got submitted.38:46.860 –> 38:53.380However, I went ahead and wrote the IRS a check for the payment amount and I’ve got38:53.380 –> 38:56.380a canceled copy of the canceled check.38:56.380 –> 39:01.540But they keep sending me letters telling me I owe them this much more money.39:01.540 –> 39:06.160What kind of suggestions have you got that I might do to fix this problem?39:06.160 –> 39:07.160So there’s two.39:07.160 –> 39:09.980One is the different penalties and interest.39:09.980 –> 39:13.740Have they posted your payment and they’re just looking for additional money or are they39:13.740 –> 39:16.660not posted the payment you made?39:16.660 –> 39:21.500I don’t believe they recognize the payment that was made at all or one part of the IRS39:21.500 –> 39:22.500has not.39:22.500 –> 39:28.740So your best bet is to get a copy of the front and back of that check, attach it to the last39:28.740 –> 39:33.140love letter and say, please look a bit on the back of the check when you’re looking39:33.140 –> 39:35.140at the banking stuff.39:35.140 –> 39:42.340A lot of times you’ll see some dates like 12/31/2023.39:42.340 –> 39:48.100They may have put it into 2024 because you paid it in the year of 24 and there was nothing39:48.100 –> 39:50.340on the check telling him it should be for 23.39:50.340 –> 39:52.860It happens all the time, Tim.39:52.860 –> 39:56.740So it may be that the money is just sitting in the wrong year.39:56.740 –> 40:00.180Another thing to do would be just to try to call the 1-800 number.40:00.180 –> 40:04.260I know it’s going to be tedious, but if you call that, you might find out that the person’s40:04.260 –> 40:06.580good enough on the phone that, oh yeah, I see that payment.40:06.580 –> 40:07.580We posted it here.40:07.580 –> 40:08.780We’ll move it.40:08.780 –> 40:13.500But either way, you’re probably looking at the payment might be posted in the wrong year.40:13.500 –> 40:14.500Okay.40:14.500 –> 40:19.180So again, just get a copy of the front and the back of the canceled check and send it40:19.180 –> 40:24.540back with the love letter or just call them and talk it through with them.40:24.540 –> 40:25.540Right.40:25.540 –> 40:28.540And I would probably still have a copy of that check because that way you know you’ve40:28.540 –> 40:30.840got proof in front of you that the payment cleared.40:30.840 –> 40:34.140You know that, but this way you’ve got the proof and you can read that information on40:34.140 –> 40:37.900the back of the check to the person and they should be able to find it because it would40:37.900 –> 40:41.860have your social security number, the date, and that way it’s probably just missed the40:41.860 –> 40:42.860sign.40:42.860 –> 40:43.860It happens a lot.40:43.860 –> 40:44.860Yes, ma’am.40:44.860 –> 40:45.860All right.40:45.860 –> 40:46.860Thank you so much.40:46.860 –> 40:47.860I appreciate your help.40:47.860 –> 40:48.860Enjoy your show too.40:48.860 –> 40:49.860Thanks, Tim.40:49.860 –> 40:50.860I appreciate you.40:50.860 –> 40:51.860Let’s hear it.40:51.860 –> 40:52.860Val in my town, Spring Hill.40:52.860 –> 40:53.860Hey, Val.40:53.860 –> 40:54.860Hey, Dr. Friday.40:54.860 –> 41:02.300I have a question that’s probably not too complex, but I need a little advice.41:02.300 –> 41:06.180I retired first full year of retirement.41:06.180 –> 41:17.300We took a small payment out of the IRA and I make about $10,000 in interest from investment.41:17.300 –> 41:25.820So I think our total income is going to be about $18,000 maybe between my wife and I.41:25.820 –> 41:26.820How about social security?41:26.820 –> 41:33.700If I can owe money, we make about $5,200 a month in social security.41:33.700 –> 41:39.780But your total other income would be totally 18K before that, right?41:39.780 –> 41:40.780Correct.41:40.780 –> 41:45.460My wife and I jointly.41:45.460 –> 41:51.220And I’m not sure if I have to send a payment in or how to do that.41:51.220 –> 41:56.420So about 50% of your social security is going to be taxed.41:56.420 –> 42:01.860So theoretically, you’re going to have about $50,000 and we’re going to take off 30.42:01.860 –> 42:06.660So you are looking at about, and this is a rough number, mate, you know, just working42:06.660 –> 42:14.700but 20,000 at 12% and 12% of probably like you’re probably looking at about 2000.42:14.700 –> 42:16.500So I mean, it’s still petty.42:16.500 –> 42:20.540I mean, I don’t mean but it’s still a low dollar amount, but I would expect for you42:20.540 –> 42:25.540to owe somewhere between two to $3,000 when you file your taxes.42:25.540 –> 42:30.860Okay, now do I have to, you know, you were going to answer that, I was like, do I send42:30.860 –> 42:33.700that now or just wait till I file my taxes?42:33.700 –> 42:34.700Yeah.42:34.700 –> 42:40.700So the good news is I’m going to, well, the bad news in 2023, when you filed your taxes,42:40.700 –> 42:42.180you probably were still working.42:42.180 –> 42:43.980So your income was higher.42:43.980 –> 42:44.980Yes.42:44.980 –> 42:46.380I’m guessing.42:46.380 –> 42:53.420So my answer is you’d want to at least send the least to send like $2,000 before the January42:53.420 –> 42:59.18015th final payment, because theoretically, we have to pay 100% of the year before or42:59.180 –> 43:00.300the amount due.43:00.300 –> 43:03.580So you can make that choice how you want to do it.43:03.580 –> 43:05.460Because I don’t want to pay a penalty.43:05.460 –> 43:08.660That’s really why I’m just having you send the money early because otherwise they could43:08.660 –> 43:11.060try to penalize us if you wait till April 15th.43:11.060 –> 43:15.540Okay, so but I could do at the end of the year be fine.43:15.540 –> 43:18.540How do you even do that?43:18.540 –> 43:21.540I mean, I’ve never made a payment.43:21.540 –> 43:24.540I mean, I’m going to send you an email.43:24.540 –> 43:25.540So go to irs.gov.43:25.540 –> 43:27.620You’re going to click on the word pay.43:27.620 –> 43:29.140And you have two options.43:29.140 –> 43:31.860I always do ACH because it’s free.43:31.860 –> 43:34.420But you can also use a credit card.43:34.420 –> 43:37.660And so you just choose I would choose ACH.43:37.660 –> 43:41.140And then the first page it comes up, it asks you three questions.43:41.140 –> 43:46.100It’s going to be a 1040 ES, which is estimated voucher.43:46.100 –> 43:54.220It’s going to be and then it’s going to automatically pull up the 2024 and the tax form is a 1040.43:54.220 –> 43:57.980It’s going to ask what type of tax form and then it’s going to ask you this and the tax43:57.980 –> 43:58.980years for 2024.43:58.980 –> 43:59.980Okay, that sounds good.43:59.980 –> 44:00.980Thank you so much.44:00.980 –> 44:01.980No problem.44:01.980 –> 44:02.980Thanks, Val.44:02.980 –> 44:03.980All right, let’s see if Rita can get on really quick.44:03.980 –> 44:04.980We’ve only got about three minutes left.44:04.980 –> 44:05.980Rita, talk fast.44:05.980 –> 44:06.980Okay, my husband and I have been married jointly for 36 years.44:06.980 –> 44:07.980And we’ve been married for the last three years.44:12.980 –> 44:16.220And my husband and I filed jointly for 36 years.44:16.220 –> 44:18.740He passed away in January.44:18.740 –> 44:21.820And I understand I will file jointly again this year.44:21.820 –> 44:23.780Yes, because it was within the year.44:23.780 –> 44:26.180But next year, I’ll be filing as a single person.44:26.180 –> 44:30.140I need to know how hard that’s going to hit me.44:30.140 –> 44:31.380It’s going to hit you a little bit.44:31.380 –> 44:34.860But you’re also your income might have dropped because you might have built if you were both44:34.860 –> 44:39.380retired, you may have been receiving more income when he was when you were both alive.44:39.380 –> 44:40.380Exactly.44:40.380 –> 44:42.460That’s exactly right.44:42.460 –> 44:43.460That’s right.44:43.460 –> 44:44.460That’s for sure.44:44.460 –> 44:49.700Yeah, so it may not hit you as much as you think because what you lost in income you44:49.700 –> 44:52.340lost in content in deductions.44:52.340 –> 44:54.780So it may may make a very small difference.44:54.780 –> 44:59.320But what I would suggest doing is, if you do your own taxes, or if someone does them,44:59.320 –> 45:04.540you might want them when you finish 2024, have them convert and just make a few changes45:04.540 –> 45:08.300and just see how much so that way you can make sure you might be in a little bit of45:08.300 –> 45:10.300a higher tax bracket to be honest.45:10.300 –> 45:14.300So you might want to have 10% coming out instead of 5%.45:14.300 –> 45:19.260So I use my do my own taxes with TurboTax, but I can figure it with a pencil and see45:19.260 –> 45:20.780the difference, right?45:20.780 –> 45:21.780Exactly.45:21.780 –> 45:25.340So the biggest thing is you’re going to have a smaller standard deduction, right?45:25.340 –> 45:28.620You’re going to go in half, that’s gonna be your biggest, but you also are going to be45:28.620 –> 45:32.300reducing half of the Social Security, maybe some of the pensions or whatever.45:32.300 –> 45:35.820So when you see the difference, it may not be enough to worry about.45:35.820 –> 45:40.880But I think it’s great Rita that you’re thinking about it, because it’s never good news when45:40.880 –> 45:45.540you don’t think about it, and then you get hit with again, with having to pay taxes.45:45.540 –> 45:48.980And next year it might be I might have to pay quarterly, right?45:48.980 –> 45:54.300You might have to or adjust your withholdings on your IRAs or Social Security or something45:54.300 –> 45:55.780so it covers it for you.45:55.780 –> 45:56.780Okay, thank you.45:56.780 –> 45:57.780Thanks, Rita.45:57.780 –> 45:58.780I appreciate it.45:58.780 –> 46:02.160All right, guys, we have hit the end of the show.46:02.160 –> 46:15.640So if you want, you can give my office a call on Monday morning at 615-367-0819.46:15.640 –> 46:19.240I want to appreciate all of you guys calling, makes my show so much more exciting than me46:19.240 –> 46:22.040trying to figure out what people might be interested in.46:22.040 –> 46:23.840So again, thank you for calling.46:23.840 –> 46:29.280And then if you want to email, it’s easy, Friday@DRFriday.com.46:29.280 –> 46:37.200If you haven’t filed taxes, you’re not too sure, maybe you’ve got a friend or a family46:37.200 –> 46:40.200member and you’re like, what can we do next?46:40.200 –> 46:43.800The next thing you should do is set up a free consult with my office.46:43.800 –> 46:49.760We’re local, we’re here to help you, and we will help you resolve what issues we can if46:49.760 –> 46:52.200it’s something that is even something we need to deal with.46:52.200 –> 46:57.440It may be that there’s no issue at all, maybe that you have a large dollar amount to deal46:57.440 –> 47:01.400with and we need to try to find some sort of resolution.47:01.400 –> 47:05.680We do all initial meetings are free because unlike some of the companies that you call47:05.680 –> 47:08.800on the phone, the first thing they’re doing is selling you something.47:08.800 –> 47:13.120What we want to do is make sure that we can actually help you before we tell you or deal47:13.120 –> 47:14.720with the money side.47:14.720 –> 47:19.360Because if I can’t do any kind of resolution, what’s the purpose in billing somebody?47:19.360 –> 47:20.640They don’t believe that.47:20.640 –> 47:25.220So if you need to have help with that, or if you need help just building your business47:25.220 –> 47:29.360and you need to have someone help you with the accounting or tax issues that you’re dealing47:29.360 –> 47:33.600with, and it can be payroll tax issues, state unemployment issues, we can help you with47:33.600 –> 47:39.280any and all of those, making sure that everything is filed and trying to stay within compliance.47:39.280 –> 47:54.280Again, if you want to join us or call us, 615-367-0819, 615-367-0819, or Friday at drfriday.com, or47:54.280 –> 47:57.800on the web, drfriday.com.47:57.800 –> 48:03.320I hope you guys have an awesome Saturday, and as we always like to say from Australia,48:03.320 –> 48:05.320we’re going to say, “Cop!

View Details

In this episode of the Dr. Friday Radio Show, financial counselor and tax consultant Dr. Friday covers a range of important tax topics, from capital gains to inheritance issues, and provides valuable information about the current tax-free weekend in Tennessee.

Topics Covered:

• Capital gains tax rates and thresholds
• Inheritance and step-up basis for real estate
• Tax implications of gifting property vs. inheriting
• Health Savings Accounts (HSAs) and contribution limits
• Electric vehicle tax credits
• Retirement account contribution limits for 2024
• Tax-free weekend in Tennessee: eligible items and restrictions
• Early Social Security withdrawal penalties
• 1031 exchanges for real estate
• Handling unsold business inventory for tax purposes

Transcript

00:00.001 –> 00:07.760No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl00:07.760 –> 00:10.040It’s the Dr. Friday show00:10.040 –> 00:16.880If you have a question for Dr. Friday call her now 737-WWTN00:16.880 –> 00:20.280That’s 737-998600:20.280 –> 00:26.320So here’s your host financial counselor and tax consultant Dr. Friday00:29.440 –> 00:35.760G’day, I’m Dr. Friday and the doctor is in the house this beautiful Saturday afternoon00:35.760 –> 00:41.060And we’re gonna cover a couple things that we need to prepare for I’ve gotten quite a few phone calls with00:41.060 –> 00:43.720individuals either selling real estate or00:43.720 –> 00:49.680inheriting real estate and selling that real estate and wanting to know a little bit more about what the00:49.680 –> 00:57.400exclusion or thresholds for capital gains had someone call me and thought that if their income was below a certain dollar amount which it’s00:58.440 –> 01:00.92047,025 or less for individuals01:00.920 –> 01:05.600And then if if they would be at the zero percent capital gains01:05.600 –> 01:12.460But the one thing that you have to remember in that conversation that would have to include your capital gains01:12.460 –> 01:17.120So if your total income including your capital gains is under01:17.120 –> 01:23.32047,025 for an individual then you will not pay any tax on that capital gains01:23.600 –> 01:30.700But if that is just your normal income and then you have fifty thousand dollars or whatever of capital gains now01:30.700 –> 01:33.400You’re in a different situation. You’re looking at 15%01:33.400 –> 01:41.700roughly and the and again when people are quoting capital gains rates whenever I’m looking at the the ones on the01:41.700 –> 01:45.160Internet or whatever. They always seem to miss that01:45.160 –> 01:47.5203.8 of01:47.520 –> 01:50.120investment tax that we have anyone that makes a01:50.520 –> 01:54.600Mer any individual over 200 any married couple over 250?01:54.600 –> 01:59.200so what you’ll see is 15% from the 47,000 up to01:59.200 –> 02:04.240518 and then above that 518 it goes to 20%02:04.240 –> 02:10.600And if you’re looking totally at the fact that capital gains tax the term capital gains tax that is true02:10.600 –> 02:17.120But we have an investment tax and that kicks in for anyone that has investments that exceed 200 or 25002:17.120 –> 02:19.960depending if you’re married or single02:20.080 –> 02:21.840And that kicks in again02:21.840 –> 02:29.100So even though it you don’t pay the 20% until after 518 for an individual you do pay02:29.100 –> 02:31.72018.8 anything above02:31.720 –> 02:36.520250 for a married couple or 200 for a single individual02:36.520 –> 02:40.160So that is one of those areas where yes02:40.160 –> 02:47.120I mean technically you can say capital gains tax or rates are these but there is that other one and it can make a big02:47.120 –> 02:53.880Difference it’s almost 4% especially if you’re on the higher end of those numbers and you’re calculating that you’re only gonna pay 1502:53.880 –> 02:55.880And then your tax person comes up with02:55.880 –> 03:01.68018.8 you didn’t set enough taxes aside to offset it now. You’re not going to be happy03:01.680 –> 03:08.360So I’m just making sure you understand how that works. And then of course with the inherited side of things03:08.360 –> 03:10.720We also have what’s called a step-up in basis03:10.720 –> 03:14.680You want to make sure that you have proper?03:15.360 –> 03:22.640Proper appraisals basically is obviously the best way to go but at least cops comps or something like that that will help you03:22.640 –> 03:30.120understand how much the value of that piece of real estate you either inherited and there’s a huge difference everyone between03:30.120 –> 03:32.000inherited and03:32.000 –> 03:38.040gifted if your parents just signed over their house to you while they were still alive because03:38.040 –> 03:41.600Normally, the biggest fear is they don’t want to lose it into03:42.400 –> 03:49.160Healthcare, right if we get as we get older, we’re worried that we’re end up in the Medicare situation maybe and they just don’t want03:49.160 –> 03:54.600To lose the house. It’s their biggest asset. They’re always afraid so they add their children and03:54.600 –> 04:00.240Basically quick claim it to them. That is not the world’s greatest idea04:00.240 –> 04:04.920Just sharing with you from sure from the attorney side. I’m and I’m not an attorney04:04.920 –> 04:06.920I’m only talking from the tax side04:07.040 –> 04:15.280But even from the tax side Medicare has a five-year look-back and they also have the ability of asking. Have you ever transferred?04:15.280 –> 04:23.000Assets over during this time period and I’ve been told that they actually ask that for bigger periods not just the five years04:23.000 –> 04:26.560But I’m again, I’m not an expert on this but from the tax standpoint04:26.560 –> 04:32.080You know if you do it now and 20 years later your parents end up in a situation where they are04:32.080 –> 04:35.120not having to worry about04:35.560 –> 04:38.880You know if they went to housing or Medicare, that’s that’s fine04:38.880 –> 04:42.260But you’ve also missed out on the step-up in basis04:42.260 –> 04:48.560So if it’s 20 years later or 10 years later, and and now the house is available to sell04:48.560 –> 04:53.080Then you know you would have to pay the capital gains04:53.080 –> 04:58.260Other than what the basis and the basis is what your parents paid for that house04:58.260 –> 05:03.260And that’s a very hard thing to prove in some ways too because a lot of times people are sitting there going well05:03.260 –> 05:05.260I don’t know what my parents paid for the house05:05.500 –> 05:07.860All you can do is go back and in many cases05:07.860 –> 05:15.220Property taxes are the only thing we have to rule them because the parents or the grandparents actually built the house05:15.220 –> 05:19.860So there wasn’t like a closing or something that we might be able to track down in most cases05:19.860 –> 05:22.780They purchased the dirt and then they built the houses on it05:22.780 –> 05:26.700So you’re gonna end up with the lowest dollar amount and if you can’t justify anything05:26.700 –> 05:30.100Then you’re gonna end up with the zero base and I’ve seen that happen05:30.100 –> 05:34.660So you pay capital gains on all the money that you might get from that property05:34.660 –> 05:36.100so very05:36.100 –> 05:43.020Important to establish that basis not to just quick claim and there are ways of shielding property to a point05:43.020 –> 05:45.940Again, I would definitely suggest in the state attorney05:45.940 –> 05:51.580Russ cook Jack McCann any of those guys that really do do a great job in helping us shield05:51.580 –> 05:58.260What we can and what you know, and sometimes you think you’re shielding something and you find out it doesn’t happen05:58.260 –> 06:01.060If you want to join the show you can at six one five06:01.060 –> 06:04.620seven three seven nine nine eight seven06:04.620 –> 06:11.700six six one five seven three seven nine nine eight six taking your calls talking about taxes06:11.700 –> 06:16.380We have two things going obviously, we still have the 2023 tax returns being completed06:16.380 –> 06:19.460individuals have until October 15th06:19.460 –> 06:22.060businesses partnerships06:22.060 –> 06:24.420corporations they have until06:24.420 –> 06:29.420September 15th so sooner versus later you want to get those numbers done06:29.420 –> 06:32.880You can’t really do your personal unless you’ve done the business returns06:32.880 –> 06:37.300Because we have to have those k1s to process the personal tax return06:37.300 –> 06:45.460So again capital gains is something a lot of people you still have the health savings accounts. Those are still wonderful06:45.460 –> 06:50.660the annual contribution is somewhere between for individuals about06:50.660 –> 06:53.9004,150 with the maximum out-of-pocket06:54.940 –> 07:00.340About 550 and then for families you can put in eight thousand three hundred and fifty07:00.340 –> 07:03.060And and that’s pretty good07:03.060 –> 07:03.820Think about it07:03.820 –> 07:06.260Many of us are blessed to the point that you know07:06.260 –> 07:10.340You want to be using your health savings account when you don’t need to be using it?07:10.340 –> 07:14.420So every year just like adding to your retirement you would add07:14.420 –> 07:19.900The four thousand or the eight thousand if you’re married or single to that account and you may not use it07:19.900 –> 07:22.320So that’s the whole point. You don’t use your IRAs07:22.320 –> 07:28.700You don’t use and then that number can accumulate and then when you really do have some need or when you get over the age07:28.700 –> 07:32.140Of 65 you can no longer contribute once you’re on Medicare07:32.140 –> 07:36.380but you can spend those funds to help you make it through those times when07:36.380 –> 07:43.500Medicare or the secondary insurance or whatever may not cover the procedures it we have a tax-free account07:43.500 –> 07:49.620Basically that you can spend for medical and then when you pass away it basically turns into an IRA07:49.620 –> 07:56.940In fact at 73 you have to start taking RMDs from your HSA because it is considered basically a deferred account07:56.940 –> 08:02.860So when you’re looking at all your deferred earnings and all that that’s kind of important to understand08:02.860 –> 08:11.380Right now the family member dies in 2024. The basic exclusion is 13.6 million. That means that most of us08:11.380 –> 08:16.160Won’t have to worry about a state tax or inheritance tax08:16.940 –> 08:19.840And you can actually gift family members08:19.840 –> 08:24.06018,000 this year 2024 went from 17 to 1808:24.060 –> 08:26.540So that is a very nice08:26.540 –> 08:33.460Increase and that you don’t if it’s 18 or less you do not have to file any kind of gift tax returns08:33.460 –> 08:35.920Now it doesn’t mean that you cannot08:35.920 –> 08:40.220Gift somebody more money. It happens all the time08:40.220 –> 08:46.700A lot of people help their children with down payments on their homes do estate planning with different situations08:46.700 –> 08:54.260But then you do need to file a gift tax return just documenting the importance of that money and where it’s going and08:54.260 –> 08:56.620You know taking it from your lifetime08:56.620 –> 08:59.620contribution so that is08:59.620 –> 09:05.700kind of an important situation if you are buying or looking at the electric cars and they09:05.700 –> 09:08.960Qualify because it has to be an EV. There still is the09:08.960 –> 09:11.020$7,50009:11.020 –> 09:16.740Exclusion had a case last year in 2023 where one of mine did go and buy but they claimed09:16.740 –> 09:21.760It’s one of those situations where I guess it was more. It wasn’t a full EV09:21.760 –> 09:25.180Even though that wasn’t what they thought they were buying09:25.180 –> 09:29.300IRS required you to come back in certain situations. So09:29.300 –> 09:31.900Make sure you get the proper documents09:31.900 –> 09:32.700That’s what I’m gonna say09:32.700 –> 09:34.700the documents have to show09:34.700 –> 09:41.260What kind of vehicle has to have the fin number on it has all the details and if that boxes are checked as used?09:41.260 –> 09:43.340or something else and09:43.340 –> 09:46.140It isn’t that was the car we have with this one09:46.140 –> 09:50.500Then you know again it comes back down to if it’s not a used vehicle09:50.500 –> 09:53.260It shouldn’t say used that therefore you get the full credit in this case09:53.260 –> 09:59.620That did say used and it wasn’t but we’re still having to get the car lot to make the proper09:59.620 –> 10:02.060adjustments to that situation10:02.660 –> 10:05.980So you have all the important things you want on that in10:05.980 –> 10:13.6602024 taxpayers can increase their contributions take advantage of tax savings the contributions for employees for10:13.660 –> 10:15.980401k or 403 be increased to10:15.980 –> 10:22.700$23,000 up from 22 to 5 and over the age of 50 you can add an additional10:22.700 –> 10:25.2607,500 so that would be10:25.260 –> 10:27.30030,500 can be deferred into10:27.300 –> 10:29.340your10:29.340 –> 10:33.660IRA I mean sorry in year 401k an IRA in 2024 is10:33.660 –> 10:36.7807,000 and if you’re over the age of 50, it’s10:36.780 –> 10:44.1408,000 and then it that’s an increase from 65 to 7,500. So those are important numbers10:44.140 –> 10:48.340Certain standard deductions obviously have changed10:48.340 –> 10:55.660Those are always fluctuating but basically for example the maximum credit for an adoption this year is up to10:57.380 –> 10:59.420710 that’s up from 15 910:59.420 –> 11:05.460And keep in mind if you if you do adopt and you don’t use all that money in the first year11:05.460 –> 11:09.620Because some of it does doesn’t always require full return full11:09.620 –> 11:17.260Credit, it’s some of it’s a deduction. It will roll over to the next year. I’ve had a number of people who will be able to11:17.260 –> 11:19.860Take advantage of that11:19.860 –> 11:24.460earned income credits have increased so if you are a11:24.740 –> 11:27.980Single person and you have one dependent11:27.980 –> 11:33.780You can collect up to the limit for that married filing jointly is11:33.780 –> 11:36.62056,000 a head of household or single person11:36.620 –> 11:40.34049,000 and you still qualify maximum credit is11:40.340 –> 11:45.3604213 for two kids. It’s 69 60 maximum credit11:45.360 –> 11:51.100The income is 55 7 and married couple 62 688 3 or more11:51.680 –> 11:56.200They do go up to three or more still seventy eight thousand seventy eight hundred and thirty dollars11:56.200 –> 12:01.080So again, the but those are all based totally on basic income12:01.080 –> 12:05.760That you’re earning head of household or single obviously have a lot more than a married couple12:05.760 –> 12:10.040Able to basically earn. All right, so we’re getting ready to take our first break12:10.040 –> 12:17.200If you want to join the show, you can six one five seven three seven nine nine eight six six one five seven three seven12:17.200 –> 12:20.800Nine nine eight six, we’ll take a quick break when we get back12:20.800 –> 12:24.400We’ll get some of your questions and phone calls. We’ll be right back12:24.400 –> 12:30.680With dr. Friday will return in a moment on super talk 99 7 WTF12:30.680 –> 12:42.600Right we are back here live in studio12:42.600 –> 12:49.040And if you want to join the show you can six one five seven three seven nine nine eight six six one five12:49.240 –> 12:55.440Seven three seven nine nine eight six. We’re still running through some of the changes. We’re halfway through 2412:55.440 –> 12:58.780So some of these in for this information is going to be vital for you12:58.780 –> 13:03.280Especially if you’re trying to calculate your tax brackets or your standard deductions13:03.280 –> 13:11.360So again, everything usually increases from one year to the next so 23 standard deduction was 13 850 for a single now13:11.360 –> 13:13.920It’s gonna be 14 6 married couples13:15.280 –> 13:19.400Where’s 27 7 now, we’re at 29 to head of household13:19.400 –> 13:24.00020,800 up from 20. I’m sorry going up to 21 913:24.000 –> 13:28.280So that is basically if you make as a single person if you make13:28.280 –> 13:35.040$14,600 and a w-2 or or anything basically for ordinary income tax13:35.040 –> 13:37.880You will pay zero13:37.880 –> 13:42.040Ordinary income now if you’re self-employed, we’ll still pay our self-employment tax13:42.720 –> 13:47.100But that is kind of the important part of that question13:47.100 –> 13:53.240And also when I was giving those numbers for capital gains, it was actually subtracting13:53.240 –> 13:55.840so when I said13:55.840 –> 14:01.68047,000 and some change that you could actually have 47 25 you would add if you were14:01.680 –> 14:07.440Married or single or whatever you would add your standard deduction to those numbers. So that way it’s almost14:08.720 –> 14:13.56050,000 55,000 you can have tax-free before you actually end up with any capital gains14:13.560 –> 14:17.840In those and the same thing almost double that first for a married couple14:17.840 –> 14:25.720So again, there is always these little twists and turns that you want to make sure you add if you’re actually over the age of 6514:25.720 –> 14:27.480You’re gonna add another14:27.480 –> 14:34.940$1,500 so here’s a question that had come in and I thought was an interesting one because a lot of times there many times14:34.940 –> 14:39.760I have clients that are grandparents that are actually raising their grandchildren14:39.760 –> 14:48.160due to other reasons and things that have happened in life and one of the things that you find out very quickly and14:48.160 –> 14:56.800Unfortunately, this is kind of the bad news, but from age 25 to 65 you can qualify for earned income credits14:56.800 –> 15:00.240repeat 25 to 6515:00.840 –> 15:07.700After that you do or before that so if you’re a 21 year old out on your own with a child you can I mean in15:07.700 –> 15:11.460Most cases it’s difficult to qualify for the earned income credit now15:11.460 –> 15:16.200There are some ways around that as a younger person, but over the age of 6515:16.200 –> 15:22.780I have not yet found a way to justify the fact that you are earning income reporting a child15:22.780 –> 15:25.660That’s under the age and you’re supporting that person15:26.080 –> 15:33.280They don’t allow us to claim that earned income credit. So that’s kind of important to know, especially if you’re a senior thinking15:33.280 –> 15:38.840Hey, I’ll get the the credit, you know that I can take this deduction and I’ll get that15:38.840 –> 15:41.500$4,000 earned income credit15:41.500 –> 15:43.980For that dependent you might not qualify15:43.980 –> 15:51.480So again making sure you understand how the tax law works is always the best way before you go and then you file something you’re thinking15:51.480 –> 15:54.420Oh, wow, I’ve got this. I got this covered and next thing you find out15:54.580 –> 16:01.980It’s not what you thought it was and now in some cases people have kind of counted their chickens before they hatch as my grandmother16:01.980 –> 16:03.060used to say and16:03.060 –> 16:05.180You know, they’ve already spent the money thinking16:05.180 –> 16:11.140Oh, we’re gonna get four or six or eight thousand dollars because we have children in the house and they don’t qualify for them16:11.140 –> 16:15.340So very important to make sure that you understand how the tax law is going to work16:15.340 –> 16:19.980So that way you can make sure you’re in the right position to do what you need to do16:20.500 –> 16:23.020So that was one of those questions where?16:23.020 –> 16:29.460This grandparent is over the age of 65 and wondered why they didn’t qualify and that is why right now16:29.460 –> 16:35.540Tax law doesn’t allow that. So if you are a senior and you’re raising your grandchildren16:35.540 –> 16:38.020Well first congratulations second16:38.020 –> 16:39.060That’s a difficult position16:39.060 –> 16:44.660But you’re not going to have a lot of tax help other than the regular child credit that you would qualify for16:45.620 –> 16:48.940Tax brackets kind of important to understand your tax bracket16:48.940 –> 16:54.300But when I say tax bracket, there is the actual tax bracket and there’s the marginal tax rate16:54.300 –> 17:00.820Marginals more the important number because you could be in the 32% tax bracket, but maybe only paying17:00.820 –> 17:04.86026% tax17:04.860 –> 17:08.980Because we don’t have we have a progressive tax code, right?17:08.980 –> 17:13.340So we go from 0 1 2 3 4 percent our percentages work their way up17:14.140 –> 17:17.580We start at basically once you get through the 0 we jump to 10%17:17.580 –> 17:21.700But again, I have people that pay maybe 6% or 4% tax17:21.700 –> 17:28.540Overall with all the the way it works. So the top tax bracket we have right now is 37%17:28.540 –> 17:34.740A single person would have to be making more than six hundred and nine thousand dollars to be paying it17:34.740 –> 17:39.400And here’s where the marriage penalty. I mean you guys have heard capital gains what I say about that one17:40.020 –> 17:45.420Thousand for an individual 250 for a married couple. Here you go again tax brackets17:45.420 –> 17:49.820six hundred and nine thousand for a single at the top bracket17:49.820 –> 17:52.540731 for a married couple17:52.540 –> 17:57.620The tax really gets hit right there. You start feeling it a little bit more17:57.620 –> 18:02.260it’s pretty even pretty much the up to 24 and then18:03.740 –> 18:11.18032 but after that you basically are start getting into a little bit the 35 basically but 37 definitely a marriage18:11.180 –> 18:18.700Penalty on those kind of situations no easy way around that. Sorry to say if you have two very successful individuals18:18.700 –> 18:21.980Marriage is not always the best thing in those18:21.980 –> 18:24.460conversations but18:24.460 –> 18:29.320But you can maximize some of your tax deductions by you know, making certain investments18:30.020 –> 18:35.120Deferring certain incomes that that’s the game we all want to play so that way we make sure we have enough18:35.120 –> 18:41.940When we get ready to retire. All right, so if you want to join the show you can six one five seven three seven nine nine18:41.940 –> 18:43.940eight six six one five18:43.940 –> 18:49.540seven three seven nine nine eight six, so I’m working on a case right now where a gentleman is18:49.540 –> 18:51.980his grandfather18:51.980 –> 18:59.740Passed away and his father so he now inherited the house that it was full of all kinds of things right all kinds of19:00.260 –> 19:01.940clothing19:01.940 –> 19:10.100Furniture and so he was detailed he went through and put everything listed it put the product and all the things19:10.100 –> 19:12.940but one of the things that they’ve come back and it added up to19:12.940 –> 19:16.060$84,000 that he gave to Goodwill and19:16.060 –> 19:21.860And the IRS has disallowed it right because they’re saying well you first you should have had appraisals19:21.860 –> 19:27.740You need to have the date that you received it the purchase price all this. Well, he didn’t purchase it19:27.740 –> 19:28.620He inherited it19:28.620 –> 19:33.340So at that point the value would have been what the value was at the time that he contributed19:33.340 –> 19:41.340Because that was pretty much the same value that we’re arguing because obviously he didn’t buy it from new and so there’s no loss19:41.340 –> 19:47.260It wasn’t a business asset. So it wasn’t listed on some sort of business tax return or anything19:47.260 –> 19:49.260It’s really just the matter that it was19:49.260 –> 19:53.660On there and since it was every little individual we’re talking19:54.180 –> 20:00.220Thousands of things he gave away loads and loads and he was very documented when he did it20:00.220 –> 20:04.260And so they’re basically saying well without an appraisal20:04.260 –> 20:10.100We can’t give you any of it and it you know, so we’re obviously there is ways around this and we’re still having20:10.100 –> 20:13.100very strong discussions, but20:13.100 –> 20:18.340we have to learn from what he did to make sure that if you have inherited and you’re20:19.220 –> 20:24.340Donating and you’re wanting to deduct those donations your best bet in doing that would be20:24.340 –> 20:28.180Actually having an appraisal or something come through it20:28.180 –> 20:33.900I know there’s a cost to that but when you consider tax bracket, you know20:33.900 –> 20:37.820If he’s even in the 10% tax bracket, he saved roughly20:37.820 –> 20:41.620$8,000 in taxes if he was able to itemize20:41.620 –> 20:45.940it would have been worth having this appraisal now in his20:46.980 –> 20:49.060Defense I wouldn’t have even known that myself20:49.060 –> 20:54.300I mean, I know when it’s a piece of art or it’s a car or something big sure20:54.300 –> 20:58.180We always get appraisals for those. I would have never thought about all the little20:58.180 –> 21:05.500pieces of furniture and clothing and all that that was in a house and a barn that would have needed to be21:05.500 –> 21:08.660appraised so21:08.660 –> 21:14.240Just putting that out there if you’re an individual that may be going through that right now and you’re thinking oh my gosh21:14.240 –> 21:16.780I you know, there’s just a ton of stuff here and21:16.780 –> 21:19.920Common-sense would be is hey, I’m gonna give it to good21:19.920 –> 21:23.380Well part you want to read, you know have someone actually repurpose it but to21:23.380 –> 21:26.420Why not deduct it from your taxes?21:26.420 –> 21:33.140And that’s why if you do it, there’s no reason you can’t the problem is you need to do it in a right way21:33.140 –> 21:36.680And you know what one person learns we pass to the other21:36.680 –> 21:41.960so the important part of that conversation really is if you’re in that kind of situation where you’ve got a21:42.060 –> 21:46.260Household of furniture and different things maybe you can call in an appraisal21:46.260 –> 21:50.460Praiser that will come in and you know, either document it for you21:50.460 –> 21:57.640Maybe even have like an auction versus doing the donations, but it’s more like a large garage sale kind of situation21:57.640 –> 22:00.420He wasn’t looking to have any money come back from it22:00.420 –> 22:05.800He really was just looking to repurpose it into a some place that could do something with it. So22:06.820 –> 22:12.460You know that that’s the the situation but just putting that out there that it’s a little bit unique22:12.460 –> 22:18.860Sometimes you don’t have and I want to also bring up that the IRS has pretty much come down and you know for all of22:18.860 –> 22:24.720You that have short-term rentals. Those are going to be switching to schedule C’s if you haven’t already done that22:24.720 –> 22:31.940It’s already been proven in court and everything else. The IRS is looking at all short-term rentals as schedule C’s22:31.940 –> 22:35.100We some of us have done them on schedule ease in all honesty22:35.660 –> 22:43.260Because people weren’t managing themselves. They were having managers and everything else being done, but they are moving those to a schedule C22:43.260 –> 22:45.380So again, if you’re in a short-term rental22:45.380 –> 22:48.260Those need to be moved to schedule C’s22:48.260 –> 22:52.060Which is a pro and con. I mean if you’re losing money on it22:52.060 –> 22:56.880It’s a good thing because theoretically you don’t have the same limitations as a schedule II does22:56.880 –> 23:02.540But if you’re making money on it, you will pay additional tax because you’ll pay self-employment tax23:02.540 –> 23:08.500If you’re not already maxed out on Social Security and Medicaid, well, you can’t max out on Medicare but Social Security, so23:08.500 –> 23:12.620It’s one of those conversations. You do need to have with your tax person and23:12.620 –> 23:19.000Make sure you’re moving in that right direction. That’s definitely something we’re seeing coming down through the audits23:19.000 –> 23:21.100where people23:21.100 –> 23:27.120Win or lose sometimes it’s actually a good audit because we actually were able to take losses that they weren’t able to but23:27.120 –> 23:29.500most cases that’s not the case so23:29.980 –> 23:36.980We’re gonna take our second break here in just a second. The phone lines are open six one five seven three seven nine nine eight six23:36.980 –> 23:40.940I’m sure many of you guys are out there right now. This is a sales tax-free weekend23:40.940 –> 23:43.300I would be out there if I wasn’t on the radio23:43.300 –> 23:44.460You need to you know23:44.460 –> 23:49.660Make sure you bulk up on all the things that you can qualify for and we’ll cover that and just come back23:49.660 –> 23:55.540I’ll go over what some of the things you can be buying making sure cuz here in Tennessee, that’s nine point two five to nine23:55.540 –> 23:57.500point seven five free23:57.500 –> 24:00.540Money, you know almost 10% That’s a pretty healthy24:00.540 –> 24:07.740Rebate let’s put it that way or deduction. So if we’re not paying sales tax, it’s a good time kids are getting ready to start school24:07.740 –> 24:14.700So we’re gonna come back the phone number here in the studio is six one five seven three seven nine nine eight six six one five24:14.700 –> 24:20.040Seven three seven nine nine eight six will be right back with the doctor Friday show24:20.040 –> 24:26.900With dr. Friday will return in a moment on super talk 997 WTM24:26.900 –> 24:30.980I’m gonna go ahead and get the phone call. I’m gonna go ahead and get the phone call24:30.980 –> 24:33.980I’m gonna go ahead and get the phone call. I’m gonna go ahead and get the phone call24:33.980 –> 24:38.980I’m gonna go ahead and get the phone call. I’m gonna go ahead and get the phone call. I’m gonna go ahead and get the phone call24:38.980 –> 24:41.980I’m gonna go ahead and get the phone call. I’m gonna go ahead and get the phone call. I’m gonna go ahead and get the phone call24:44.980 –> 24:46.980I’m gonna go ahead and get the phone call. I’m gonna go ahead and get the phone call. I’m gonna go ahead and get the phone call24:50.980 –> 24:52.980I’m gonna go ahead and get the phone call. I’m gonna go ahead and get the phone call25:06.980 –> 25:08.980I’m gonna go ahead and get the phone call. I’m gonna go ahead and get the phone call. I’m gonna go ahead and get the phone call25:08.980 –> 25:10.980I’m gonna go ahead and get the phone call. I’m gonna go ahead and get the phone call25:24.980 –> 25:26.980I’m gonna go ahead and get the phone call. I’m gonna go ahead and get the phone call. I’m gonna go ahead and get the phone call25:26.980 –> 25:28.980I’m gonna go ahead and get the phone call. I’m gonna go ahead and get the phone call25:42.980 –> 25:47.820and we can request — we have to go back in, amend the returns,25:47.820 –> 25:50.220making sure that we have a Schedule G, and then you have25:50.220 –> 25:54.300to attach a balance sheet to justify your net worth,25:54.300 –> 25:57.260and then they have to approve the refund and then you have25:57.260 –> 26:00.480to go through a refund process once those have been done.26:00.480 –> 26:04.340It’s not quite as simple as they like to make it sound26:04.340 –> 26:07.140when it was coming through, but it is working.26:07.140 –> 26:10.240And I will tell you, now bigger companies,26:10.240 –> 26:13.740obviously they were paying a lot more money.26:13.740 –> 26:16.140Many of them were reporting net worth26:16.140 –> 26:18.620and still paying more tax on Schedule G,26:18.620 –> 26:20.920so they are getting decent refunds.26:20.920 –> 26:25.500But most of my smaller companies, many of them,26:25.500 –> 26:28.100because they were Schedule Cs on their, you know,26:28.100 –> 26:29.460like a single member LLC,26:29.460 –> 26:31.860net worth wasn’t really being reported.26:31.860 –> 26:34.540Therefore, the Schedule G, and so when we reverse it,26:34.540 –> 26:38.340it’s not finding a huge refund, but they sent a letter out,26:38.340 –> 26:42.280Ron, to everyone, like you may be entitled to a refund,26:42.280 –> 26:44.920and you know, obviously not everyone’s going26:44.920 –> 26:47.840to get a refund, and not everyone actually has working26:47.840 –> 26:49.920balance sheets, so it’s requiring them26:49.920 –> 26:53.040to get some accounting work done to accomplish it.26:53.040 –> 26:56.800– Thank you so much.26:56.800 –> 26:58.480– No problem, that’s a great question.26:58.480 –> 27:00.320Thanks for calling, I appreciate you.27:00.320 –> 27:03.560And so yeah, I will just put out there27:03.560 –> 27:05.900for all business owners, Ron, being on there,27:05.900 –> 27:10.860but basically, if you haven’t, we only have27:10.860 –> 27:13.020to the end of the year to basically apply for this,27:13.020 –> 27:15.880so it can’t hurt to go in, amend,27:15.880 –> 27:18.480I have some that come back as zero,27:18.480 –> 27:21.260but you know, every dollar counts in this world,27:21.260 –> 27:23.360so it’s always a good thing to do it,27:23.360 –> 27:25.740and if you need help, our firm can help you27:25.740 –> 27:29.080get to that point and get that squared away.27:29.080 –> 27:32.560Okay, now, back to an exciting weekend for all of us,27:32.560 –> 27:36.540Friday, Saturday, Sunday, if I’m correct, yes,27:36.540 –> 27:41.420Friday, it basically started at 12.01 a.m. Friday,27:41.420 –> 27:44.780and it will end at midnight on Sunday.27:44.780 –> 27:46.700We have a tax-free weekend.27:46.700 –> 27:47.820Here’s what applies.27:47.820 –> 27:51.180General apparel for $100 or less per an item,27:51.180 –> 27:54.620so shirts, pants, socks, shoes, dresses, et cetera.27:54.620 –> 27:59.300Any piece of item that is more than $100 is not exempt.27:59.300 –> 28:00.860You will pay sales tax.28:00.860 –> 28:03.240Items sold together, such as shoes,28:03.240 –> 28:06.960you can’t say, well, each shoe is $50 or 75,28:06.960 –> 28:08.760so therefore, they’re under, it’s a pair.28:08.760 –> 28:10.400You can’t change that.28:10.400 –> 28:12.440You can’t split up anything.28:12.440 –> 28:15.960If it’s $100, it’s either 100 or it’s over 100.28:15.960 –> 28:19.480Same thing for items such as jewelry, handbags,28:19.480 –> 28:22.080sporting, and recreational equipment.28:22.080 –> 28:24.880They do not apply in this situation.28:24.880 –> 28:27.680This is basically true back-to-school.28:27.680 –> 28:30.980Things that you need, not to say that I’m sure new bats28:30.980 –> 28:32.940and some of that may come into play.28:32.940 –> 28:36.140Art supplies purchased for $100 or less per an item,28:36.140 –> 28:39.860such as binders, backpacks, crayons, pins,28:39.860 –> 28:43.100pencils, rulers, et cetera, et cetera, drawing pads,28:43.100 –> 28:45.260all of that is exempt,28:45.260 –> 28:48.820as long as each item is less than $100.28:48.820 –> 28:51.460School and art supplies individually priced28:51.460 –> 28:55.620at more than $100 per an item is not exempt.28:55.620 –> 28:59.140Items that are normally sold together cannot be split.28:59.140 –> 29:02.100Again, if you’re buying a package of something29:02.100 –> 29:04.080that is usually all sold together,29:04.080 –> 29:06.500but now it’s being, it cannot be split up.29:06.500 –> 29:10.540It has to be per an item that is packaged that way.29:10.540 –> 29:15.160Computers for personal use, $1,500 or less,29:15.160 –> 29:17.120qualify for no sales tax.29:17.120 –> 29:18.740Come on, that’s almost $15029:18.740 –> 29:20.040we would have paid in sales tax.29:20.040 –> 29:22.080That is where you need to be looking.29:22.080 –> 29:25.120Laptop computers, if priced at 15 or less,29:25.120 –> 29:29.420qualify as well as tablet computers.29:29.420 –> 29:30.260That’s wonderful.29:30.260 –> 29:32.460Storage, media fields, flash drives,29:32.460 –> 29:35.020compact disc do not qualify.29:35.020 –> 29:38.300Individual purchased software do not qualify.29:38.300 –> 29:42.700Printer supplies do not qualify.29:42.700 –> 29:45.140Does it say that you can actually, I’m not sure.29:45.140 –> 29:46.940I mean, it doesn’t say printers qualify.29:46.940 –> 29:49.420Household appliances do not qualify.29:49.420 –> 29:52.640It specifically says computer for personal use29:52.640 –> 29:56.380or laptop computers or tablets.29:56.380 –> 30:00.520So those are definitely things that would be,30:00.520 –> 30:03.860things you wouldn’t wanna look at.30:03.860 –> 30:05.020This is a perfect, come on,30:05.020 –> 30:09.420we live in one of the highest states for sales tax.30:09.420 –> 30:13.220So this is, I mean, if you’re spending $1,00030:13.220 –> 30:16.740in school clothes, you just saved $100, that simple.30:16.740 –> 30:20.780Some of the things that may not qualify, just be smart.30:20.780 –> 30:24.160I mean, jewelry, things that are accessories,30:24.160 –> 30:25.360you know, ski clothes.30:25.360 –> 30:26.920I don’t know, that’s what they have on this list.30:26.920 –> 30:27.760Not too sure.30:27.760 –> 30:29.880We don’t have a lot of skiing here in Tennessee.30:29.880 –> 30:33.440But obviously all the other things,30:33.440 –> 30:36.480even a wedding gown, if it’s $100 or less,30:36.480 –> 30:37.400that’s interesting.30:37.400 –> 30:40.040I would have thought that was not a school thing.30:40.040 –> 30:42.960But there’s a whole list if you have questions.30:42.960 –> 30:46.880Most of the places you shop are going to have it30:46.880 –> 30:48.880already marked and set up for you.30:48.880 –> 30:52.280So it’s not gonna be something you have to walk in with.30:52.280 –> 30:57.140But all the essentials, definitely a good time to go online.30:57.140 –> 30:59.840And there’s no reason you couldn’t go online30:59.840 –> 31:02.240and do your shopping as well as going out.31:02.240 –> 31:05.800I mean, again, if you have a bunch of office supplies31:05.800 –> 31:08.400that you wanna buy or school supplies,31:08.400 –> 31:11.540binders, pencils, pens, markers, crayons, whatever,31:11.540 –> 31:15.000just order them online and get them shipped.31:15.000 –> 31:17.720As long as you do it before tomorrow at midnight,31:17.720 –> 31:21.200you qualify for the sales tax-free weekend.31:21.200 –> 31:23.800And I would definitely put some serious thought31:23.800 –> 31:26.680into whatever it is that you basically are gonna want31:26.680 –> 31:29.000because that way then you don’t have to play31:29.000 –> 31:30.080too much with it.31:30.080 –> 31:33.840All right, let’s get John before the next break if we can.31:33.840 –> 31:35.560John from Cookville, that way he doesn’t have to wait31:35.560 –> 31:36.640through, hey John.31:36.640 –> 31:39.200– Hey, Dr. Friday, enjoy your show.31:39.200 –> 31:40.040Good job, girl.31:40.040 –> 31:41.720Thank you so much for your time.31:41.720 –> 31:42.680– Thanks for calling.31:42.680 –> 31:44.560What can I do for you?31:44.560 –> 31:47.000– Okay, got a friend of mine asked this question to me31:47.000 –> 31:47.960and I could not answer it.31:47.960 –> 31:49.960I’m in the insurance financial planning business31:49.960 –> 31:52.640and do some trust work and he asked this question.31:52.640 –> 31:55.120I thought, oh, that’s a good one.31:55.120 –> 31:57.240He is 64, he draws Social Security.31:57.240 –> 31:59.840Him and his wife earned about,31:59.840 –> 32:02.800I think he said he earned 94,000 himself last year,32:02.800 –> 32:04.200unusual year.32:04.200 –> 32:07.080His wife owns, earns about 40,000 with Social Security32:07.080 –> 32:08.640and so forth.32:08.640 –> 32:10.440So they went over the 100,000 mark.32:10.440 –> 32:14.160He started drawing Social Security and he’s not 65 yet.32:14.160 –> 32:16.760Does he have to, if he goes drawing Social Security,32:16.760 –> 32:19.360does he have to pay any of that Social Security back?32:19.360 –> 32:23.760– Yes, but it depends on how he earned the money.32:23.760 –> 32:28.720So you can’t earn more than like $20,00032:28.720 –> 32:30.960if you’re on what we call early Social Security,32:30.960 –> 32:34.920which he is until he hits his actual 66 and a half, 67,32:34.920 –> 32:37.120whatever his full retirement is.32:37.120 –> 32:41.200So, but what you were talking about doesn’t sound like he,32:41.200 –> 32:42.840he wasn’t working a job.32:42.840 –> 32:44.080He was drawing Social Security32:44.080 –> 32:46.360and maybe taking money from his retirement?32:46.360 –> 32:49.520– No, it was income money.32:49.520 –> 32:51.960– Oh, I mean, he did go out and work?32:51.960 –> 32:53.880– It was the 1099, yeah, the work he did,32:53.880 –> 32:55.680he gets the 1099 at the end of the year, yes.32:55.680 –> 32:59.200– So yeah, so if his profit on that 109932:59.200 –> 33:03.040is over the $20,000, he will have to pay back $133:03.040 –> 33:05.040for every $2 over that 20.33:05.040 –> 33:06.760And there’s, I don’t know the exact number.33:06.760 –> 33:09.080Let’s just call it 21,000 to be safe.33:09.080 –> 33:12.120So if he made $40,000,33:12.120 –> 33:15.600theoretically he’ll be paying back $1 of every $2 over.33:15.600 –> 33:18.480So he’ll be paying a big chunk of money back.33:18.480 –> 33:20.240– Okay.33:20.240 –> 33:23.560– That’s what I don’t like about early Social Security.33:23.560 –> 33:25.320– So they would stop his Social Security then, right?33:25.320 –> 33:26.720That’s what he’s worried about.33:26.720 –> 33:27.800– Pretty much they will.33:27.800 –> 33:30.440I mean, he’ll have to pay it back,33:30.440 –> 33:33.200which means they’re gonna keep his Social Security33:33.200 –> 33:34.080for the next year,33:34.080 –> 33:35.840’cause he’s gonna be paying back the year before33:35.840 –> 33:37.520where he took it.33:37.520 –> 33:41.000And so until he hits full retirement, it’s almost,33:41.000 –> 33:43.280I mean, if he’s gonna continue working anyways,33:43.280 –> 33:46.480I mean, this may have been unusual year, but you know.33:46.480 –> 33:49.440– It was, yeah, it was, yeah.33:49.440 –> 33:52.240Okay, very good, that answers my question.33:52.240 –> 33:54.960– Yeah, is him and his wife both worked the business33:54.960 –> 33:55.880or it was just him?33:55.880 –> 33:57.880Because obviously if they both worked,33:57.880 –> 34:00.760it would be 20 on each of them roughly.34:00.760 –> 34:03.400But yeah, I mean, if this was an unusual year,34:03.400 –> 34:07.440unfortunately, it’s always easy, you see it all the time.34:07.440 –> 34:09.400I’m sure John, same thing I do.34:09.400 –> 34:11.080One of those questions would have been a good one34:11.080 –> 34:14.040to ask his tax person while it was happening.34:14.040 –> 34:17.040So you could have either stopped the Social Security,34:17.040 –> 34:18.960just so you don’t have to pay it back.34:18.960 –> 34:22.640But that’s hindsight.34:22.640 –> 34:27.200And at this point, he’s gonna end up with a situation34:27.200 –> 34:29.560where he’s gonna possibly owe some decent money34:29.560 –> 34:31.360and they’ll either gonna take his Social Security34:31.360 –> 34:33.160every month as the payback,34:33.160 –> 34:36.360or I mean, they send you a bill basically.34:36.360 –> 34:37.600And so you’ll have to pay it back34:37.600 –> 34:39.760or pay it through your Social Security,34:39.760 –> 34:41.880depending on his situation.34:41.880 –> 34:43.800– Well, what he has his taxes done,34:43.800 –> 34:46.520if I think this is correct, through a tax person,34:46.520 –> 34:48.920it’s not a CPA and they say, “We’ll get back with you.”34:48.920 –> 34:51.040And it’s when he called me about two weeks ago34:51.040 –> 34:52.440and I said, “I’ve got to get back with him.”34:52.440 –> 34:54.040But it was about two weeks ago.34:54.040 –> 34:56.960And so, yeah, I don’t know if he’s a person that-34:56.960 –> 34:58.840– Hopefully his tax person got back with him34:58.840 –> 35:00.440and they made a plan to move forward35:00.440 –> 35:02.760because it’s nothing worse than getting that.35:02.760 –> 35:05.480I mean, again, he may have gotten lucky35:05.480 –> 35:06.840and just had a really good year35:06.840 –> 35:09.880and didn’t have any expectation of that happening, but-35:09.880 –> 35:11.560– I think that’s what happened, yeah.35:11.560 –> 35:13.240So does he need to call Social Security?35:13.240 –> 35:15.200You think you’d advise him to do that?35:15.200 –> 35:18.360– Well, I mean, if this was in 2024 that’s happened,35:18.360 –> 35:21.000or do you think it was a ’23 issue?35:21.000 –> 35:22.400– ’23.35:22.400 –> 35:24.160– ’23, well, then they’re gonna be notified35:24.160 –> 35:25.960’cause he’s filed his taxes.35:25.960 –> 35:29.640So he’s gonna be getting a love letter relatively soon.35:29.640 –> 35:31.040– Okay, and here’s some message then.35:31.040 –> 35:33.760He filed, he told me he filed a…35:33.760 –> 35:34.880He filed a…35:36.760 –> 35:40.440– Wait, call it, you defer your taxes, he filed extension.35:40.440 –> 35:42.920– Yeah, well, that means he hasn’t,35:42.920 –> 35:45.960I mean, he needs to go ahead and file his taxes,35:45.960 –> 35:48.000but his tax person also needs to help him35:48.000 –> 35:50.440try to figure out roughly what the bill can be.35:50.440 –> 35:54.240So he’s not gonna be given a huge surprise at that time.35:54.240 –> 35:55.080Right?35:55.080 –> 35:56.480I mean, I’m just saying he needs somebody35:56.480 –> 35:58.840that’s gonna prepare him for it35:58.840 –> 36:00.560because there’s nothing worse than getting a bill36:00.560 –> 36:03.320from the government for five, $10,000.36:03.320 –> 36:06.800I don’t, I mean, depending on his profit and what it is,36:06.800 –> 36:09.200but he has until October 15th to file,36:09.200 –> 36:12.320but I’m assuming he’s still drawing Social Security today.36:12.320 –> 36:15.200– Well, I would think he probably is.36:15.200 –> 36:16.360I don’t know, but I can ask him.36:16.360 –> 36:19.080– Yeah, I mean, and the question will be is36:19.080 –> 36:22.200if this year is going to be as good36:22.200 –> 36:25.400or even close to as good as it was, then he may,36:25.400 –> 36:27.440you know, I’m just saying he’s gonna end up36:27.440 –> 36:28.880eventually having to pay it back.36:28.880 –> 36:30.320So he needs to have a plan.36:30.320 –> 36:32.960I always think a plan is a good plan.36:32.960 –> 36:33.800– Yes, ma’am.36:33.800 –> 36:35.520– All right, well. – Hey, let’s show36:35.520 –> 36:36.320what’s up, dog.36:36.320 –> 36:39.920– Thanks, I appreciate the phone call, John.36:39.920 –> 36:41.240– Yes, ma’am, bye-bye.36:41.240 –> 36:42.080– Thanks, bye.36:42.080 –> 36:43.480All right, we’re gonna take our last break.36:43.480 –> 36:44.880If you wanna join the show, you can.36:44.880 –> 36:48.080615-737-9986.36:48.080 –> 36:51.320615-737-9986.36:51.320 –> 36:54.400We’ll be right back with the “Dr. Friday Show.”36:54.400 –> 36:56.600– Your money coach with “Dr. Friday”36:56.600 –> 37:01.600will return in a moment on Supertalk 99.7 WTM.37:01.720 –> 37:04.320(upbeat music)37:04.320 –> 37:08.760All righty, we are back live here on the radio37:08.760 –> 37:10.880and it looks like we’ve got a few phone callers,37:10.880 –> 37:12.400which I appreciate.37:12.400 –> 37:15.160Let’s hit John first for the early retirement,37:15.160 –> 37:16.000maybe my boy.37:16.000 –> 37:17.360What can I do for you, John?37:17.360 –> 37:19.560– Thanks for taking my call.37:19.560 –> 37:22.480I do have, to follow up a little bit on your last caller.37:22.480 –> 37:28.360I’m about to retire and I’m gonna have a little over 40 years37:28.360 –> 37:31.160but I’m not reached 62 yet.37:31.160 –> 37:35.640My thinking is, or what my question is,37:35.640 –> 37:39.400if I take early retirement at 62, is my,37:39.400 –> 37:41.760I mean, my social security at 62,37:41.760 –> 37:47.720is my retirement pension, does it count towards income?37:47.720 –> 37:49.000Am I?37:49.000 –> 37:49.840– No. – Or can I?37:49.840 –> 37:51.400– That’s what I was trying to make sure37:51.400 –> 37:52.500with that last caller.37:52.500 –> 37:54.340So it’s really truly earning.37:54.340 –> 37:58.720So 1099W2, that’s the ones that affect37:58.720 –> 38:00.520the payback of two to one.38:00.520 –> 38:02.720So you’ll be fine if you have a pension38:02.720 –> 38:05.280and your social security, they’re not gonna take any,38:05.280 –> 38:07.440I mean, there’s no penalty for that.38:07.440 –> 38:08.400– Great, great.38:08.400 –> 38:11.580Well, thank you so much for your information.38:11.580 –> 38:13.240I greatly appreciate it.38:13.240 –> 38:15.000– Thanks for the phone call, I appreciate you.38:15.000 –> 38:17.440All right, let’s hit Bobby in Fairview.38:17.440 –> 38:20.400Bobby in Fairview, what you got going for me, buddy?38:20.400 –> 38:24.720Oops, I’m a little faster than my radio guy here.38:24.720 –> 38:27.240Bobby in Fairview?38:28.200 –> 38:29.200Not too sure.38:29.200 –> 38:31.240Okay, I’m not too sure.38:31.240 –> 38:32.600Hold on, Bobby, don’t hang up.38:32.600 –> 38:34.360I’m not too sure what we’re, oh, there we go.38:34.360 –> 38:36.440Hey, Bobby, what’s happening?38:36.440 –> 38:37.520– All right, ma’am.38:37.520 –> 38:42.240My wife owned a wedding dress shop in Fairview38:42.240 –> 38:45.880and, or is in Dixon, but anyway,38:45.880 –> 38:48.840they closed up shop and tried to liquidate.38:48.840 –> 38:53.320We got stuck with about 50,000 roughly in inventory.38:53.320 –> 38:55.640I’m having trouble moving the inventory.38:55.640 –> 38:58.200I’m having trouble moving that inventory38:58.200 –> 39:03.000and just wonder if there’s like a good option39:03.000 –> 39:07.680to claim that on taxes since we can’t39:07.680 –> 39:10.120or haven’t been able to sell it to this point.39:10.120 –> 39:14.100– Right, so you’ll have to be a little bit more tenacious39:14.100 –> 39:18.720on that one because the 50,000 would be either your cost,39:18.720 –> 39:21.720which is what we consider 50,000 in inventory,39:21.720 –> 39:24.920but it may also be what the market price would have been.39:24.920 –> 39:26.840So you’re only going to be able,39:26.840 –> 39:30.240and then did they already deduct that from the business39:30.240 –> 39:33.320as a loss ’cause if they’ve closed the doors,39:33.320 –> 39:35.320they may have already just wrote it off39:35.320 –> 39:37.480and therefore there’s no value to it39:37.480 –> 39:39.720because the loss came through the business.39:39.720 –> 39:41.960Or if the business is still basically holding on39:41.960 –> 39:44.440trying to get rid of this last 50,000,39:44.440 –> 39:46.960then the best bet is donate the dresses,39:46.960 –> 39:49.560clean out the, I mean, obviously that’s a nice thing to say.39:49.560 –> 39:51.960I don’t know financially how that will work for us,39:51.960 –> 39:56.960but you could donate or give them and then that money,39:56.960 –> 39:59.200then the cost of whatever those dresses cost,39:59.200 –> 40:02.920you’d be able to deduct as a loss on the business.40:02.920 –> 40:07.920– Okay, yeah, I don’t think that she claimed it yet.40:07.920 –> 40:12.360– Right, she’s still trying to get a value out of them.40:12.360 –> 40:15.240– Right, it’s her cost, it’s not the retail price.40:15.240 –> 40:18.640– Okay, well, that’s a lot of money to take a loss on.40:18.640 –> 40:20.040I mean, in all honesty.40:20.040 –> 40:23.880Hopefully she can do something with them,40:23.880 –> 40:28.880but if she can’t, then obviously close final tax return,40:28.880 –> 40:33.840zero out inventory, donate to one of those places40:33.840 –> 40:37.280or whatever and see if that will at least give you some,40:37.280 –> 40:38.680it will give you some tax loss,40:38.680 –> 40:41.480which will give you some tax dollars back.40:41.480 –> 40:42.720– Okay.40:42.720 –> 40:44.720– Okay, cool. – All right, well, thank you.40:44.720 –> 40:46.360– Thanks, Bobby, thanks for holding.40:46.360 –> 40:48.880All right, let’s hit Randy real quick in Alexandra.40:48.880 –> 40:51.6001031 X transfer or exchange as I call it.40:51.600 –> 40:53.720Hey, Randy, what’s happening?40:53.720 –> 40:55.960– Hey, Dr. Friday, good to talk to you again.40:55.960 –> 40:59.240The question is, my wife and I,40:59.240 –> 41:04.240we have a little over a hundred acre piece of property41:04.240 –> 41:06.840in an area that’s not near our house41:06.840 –> 41:09.320and not necessarily wanting to sell it all,41:09.320 –> 41:12.120but maybe some of it and buy another piece of property41:12.120 –> 41:15.960closer to where we live and maybe in the area we wanna live,41:15.960 –> 41:18.760let me just say that, which is near where we live.41:18.760 –> 41:22.840And build maybe another house or something.41:22.840 –> 41:24.440How could I make that work?41:24.440 –> 41:28.680I mean, if I didn’t sell it all or do you have to sell it all41:28.680 –> 41:31.800can you just kind of go over how 1031 transfer works?41:31.800 –> 41:33.680– You got a couple of moving parts there, Randy.41:33.680 –> 41:36.600First thing is, yes, you can sell one acre41:36.600 –> 41:39.360to whatever number you want,41:39.360 –> 41:42.200probably depending on the capital gains,41:42.200 –> 41:44.000do we determine the 1031?41:44.000 –> 41:46.080I mean, obviously you paid so much for them,41:46.080 –> 41:48.320but let’s just assume that you’re gonna make a profit41:48.320 –> 41:50.600of 50 to a hundred grand,41:50.600 –> 41:53.760then a 1031 would be a good suggestion.41:53.760 –> 41:58.4401031 cannot be used to buy your primary home.41:58.440 –> 42:01.880So a 1031 would be dirt for dirt in this situation.42:01.880 –> 42:06.120So you can sell 20 acres, go buy a hundred acres, whatever,42:06.120 –> 42:08.000you don’t have to buy the same number,42:08.000 –> 42:11.400but the idea would be is to sell the acreage on the side42:11.400 –> 42:14.200that you may not want to be dealing with42:14.200 –> 42:17.760and then to invest onto the land on the side of town42:17.760 –> 42:20.240that you might actually be able to do what you wanna do,42:20.240 –> 42:22.520either that being farming or whatever.42:22.520 –> 42:25.920I mean, it’s dirt, doesn’t have to be doing anything.42:25.920 –> 42:28.080And then that would be the main thing.42:28.080 –> 42:30.040You cannot make your primary home though,42:30.040 –> 42:33.760for a minimum of two years, 1031 exchanges have to be,42:33.760 –> 42:35.600and then there’s some loops you have to jump through42:35.600 –> 42:38.120and eventually you’d actually have to pay the capital gain.42:38.120 –> 42:41.440So I guess my question would be on that one.42:41.440 –> 42:45.040Normally a primary home is five acres and a house.42:45.040 –> 42:48.640So if you’re getting a larger piece of land potentially,42:48.640 –> 42:52.280maybe that can be farmland or whatever,42:52.280 –> 42:55.200obviously 15 acres or more is always a good idea42:55.200 –> 42:58.080for the greenbelt, but that’s again,42:58.080 –> 43:00.080may or may not come into conversation,43:00.080 –> 43:01.960but I’m just saying for tax purposes.43:01.960 –> 43:05.760– Okay, so, but it does have to be acre for acre,43:05.760 –> 43:06.600is that correct?43:06.600 –> 43:07.480– No, it doesn’t.43:07.480 –> 43:10.240No, you can sell one acre and buy a hundred.43:10.240 –> 43:13.240No, does not have to be, it’s just basically dirt for dirt.43:14.520 –> 43:19.520– Okay, so, okay, so does that transfer43:19.520 –> 43:23.560as far as all of the, not transfer, but defer the taxes?43:23.560 –> 43:27.320– Yes, if you do a 1031, yes.43:27.320 –> 43:29.720But if you sell a piece of property for a hundred thousand,43:29.720 –> 43:31.720you have to go spend a hundred thousand.43:31.720 –> 43:34.000– Right, okay.43:34.000 –> 43:35.680– No matter what your profit was,43:35.680 –> 43:38.260for whatever it sells for, you have to spend.43:38.260 –> 43:42.200– On another piece of property, either large–43:42.200 –> 43:44.440– On another piece of property, yes.43:44.440 –> 43:45.920– And there’s a two year hold back43:45.920 –> 43:47.840on building a home on it, correct?43:47.840 –> 43:49.560– Primary home, yes.43:49.560 –> 43:51.520And then you still have to pay the capital gain.43:51.520 –> 43:53.840So I think we, if you have a tax,43:53.840 –> 43:55.080or we’d have to talk a little bit more43:55.080 –> 43:57.200about what’s the advantage or disadvantage,43:57.200 –> 43:59.840at least to the five acres there you’re gonna build the house43:59.840 –> 44:03.200compared to a 1031 on the other dirt, right?44:03.200 –> 44:04.920It’s not primary, it’s a dirt for dirt.44:04.920 –> 44:06.280So just saying.44:06.280 –> 44:09.240– Okay, okay, all right.44:09.240 –> 44:11.800Well, that gives me some information about.44:11.800 –> 44:13.520– Cool, great question.44:13.520 –> 44:15.160Thanks for calling.44:15.160 –> 44:17.840All right, guys, we’re winding down the show here.44:17.840 –> 44:19.520We’re getting down to the last couple of minutes.44:19.520 –> 44:21.760So let’s just go through all the important information,44:21.760 –> 44:24.600like how can you reach my office on Monday morning,44:24.600 –> 44:26.760if you’ve got a question or you weren’t able to get through44:26.760 –> 44:28.200or you’re out shopping and you’re like,44:28.200 –> 44:31.000“Oh, I wanted to go out, but I’m out shopping,” right?44:31.000 –> 44:36.000615-367-0819 is my phone number, 615-367-0819.44:40.680 –> 44:45.400You can also email friday@drfriday.com,44:45.400 –> 44:49.880friday@drfriday.com.44:49.880 –> 44:53.600You can also go onto the web, drfriday.com,44:53.600 –> 44:55.960and just check out who I am.44:55.960 –> 44:58.400You may not know, I am an enrolled agent44:58.400 –> 45:00.360licensed by the Internal Revenue Service,45:00.360 –> 45:03.120which means I do not work for the Internal Revenue Service.45:03.120 –> 45:05.840I am licensed by them to do representation,45:05.840 –> 45:08.520basically to help put a shield between you and the IRS45:08.520 –> 45:09.780so you have someone there45:09.780 –> 45:12.160that can actually kind of talk the same language,45:12.160 –> 45:15.180making sure that we can do our very best to represent you,45:15.180 –> 45:17.500making sure that things are going the way they should,45:17.500 –> 45:21.200and also to explain why the IRS is doing what they’ve done.45:21.200 –> 45:24.000‘Cause sometimes people are all like, “Why, why, why?”45:24.000 –> 45:25.960Sometimes it’s simple errors,45:25.960 –> 45:29.600and sometimes it’s because they’re interpreting something45:29.600 –> 45:31.400differently than the way you interpreted it,45:31.400 –> 45:33.880and maybe it’s even just a matter of getting them45:33.880 –> 45:35.280on the same page.45:35.280 –> 45:37.600Had some really unique situations45:37.600 –> 45:39.640where someone may have sold a house45:39.640 –> 45:42.240and they ended up reporting twice on their taxes,45:42.240 –> 45:45.020and therefore the IRS was trying to collect it twice,45:45.020 –> 45:47.280even though it was the same exact house.45:47.280 –> 45:49.080These kinds of things happen.45:49.080 –> 45:51.540The biggest thing is making sure you got the communication45:51.540 –> 45:54.840or you have someone there that’s going to help represent you.45:54.840 –> 45:57.340Had a situation yesterday where someone was telling me45:57.340 –> 46:01.920we couldn’t e-file 2021, but yet we can e-file 2021.46:01.920 –> 46:05.300So, you know, IRS is not always right,46:05.300 –> 46:07.560but it is important that they’re on the same page46:07.560 –> 46:09.800as where we are, because otherwise,46:09.800 –> 46:13.120you’re gonna be spending a lot of time going in circles,46:13.120 –> 46:16.600and sometimes it’s too late to make certain recommendations.46:16.600 –> 46:18.400Sometimes we have to do reconsiderations,46:18.400 –> 46:20.600hoping that we can get an audit reopened46:20.600 –> 46:22.800because something didn’t get done the first time.46:22.800 –> 46:24.920But there are ways of working with the IRS.46:24.920 –> 46:27.360It is their job to help make this work,46:27.360 –> 46:30.240not necessarily just be a collection firm.46:30.240 –> 46:32.640But again, if you wanna call us Monday morning,46:32.640 –> 46:37.640you can at 615-367-0819.46:37.640 –> 46:40.920Email is friday, just like the day of the week,46:40.920 –> 46:45.920at drfriday.com, friday@drfriday.com.46:45.920 –> 46:49.040You can check out the web, drfriday.com.46:49.040 –> 46:50.880And that way you make sure that you’ve got46:50.880 –> 46:53.520all the information you need to make sure you know46:53.520 –> 46:54.760what the next steps are,46:54.760 –> 46:57.040that you’re not just spinning your wheels trying,46:57.040 –> 46:58.360and hopefully those love letters46:58.360 –> 47:00.720aren’t accumulating in the drawer.47:00.720 –> 47:02.720As we always say, cop you later.

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Welcome to another episode of the Dr. Friday Radio Show! In this episode, Dr. Friday provides expert advice on navigating the complex tax landscape, discussing topics such as extensions, phantom income, and real estate tax implications. This episode is packed with valuable insights to help you manage your finances better.

Key Points Tax Extensions and Deadlines: + Discussion on the recent tax extension deadline of June 17. + Importance of filing extensions to avoid penalties. + Upcoming deadlines for individuals (October) and businesses (September). * Phantom Income: + Explanation and tax implications of phantom income. + Examples in Sub S corporations, 1065 partnerships, or LLCs. + Recent court cases and controversies around phantom income taxation. * Pass-Through Entities: + Understanding pass-through profits and their impact on individual taxes. + Differences between cash basis and accrual basis for tax purposes. * Uber and Lyft Drivers: + Tax tips for ride-sharing drivers. + Importance of accurately tracking mileage. + IRS audits and common pitfalls for drivers. * Real Estate and Capital Gains: + Tax implications of selling primary residences. + Exclusions available for married couples versus single individuals. + Special considerations for retired individuals and those on Social Security. * Quarterly Tax Estimates: + Importance of making quarterly estimated tax payments. + Penalties for underpayment and how to avoid them. + How to calculate quarterly payments to avoid surprises. * Inheritance and Taxes*: + Tax treatment of inherited properties and cash. + Step-up basis and its impact on capital gains. + When inherited money or property becomes taxable.

Transcript00:00 –> 00:02Hey, this is the Dr. Friday show.00:02 –> 00:07If you want to join the show, you can at 615-737-9986.00:07 –> 00:13615-737-9986.00:13 –> 00:15You’re going to want to open the phone lines.00:15 –> 00:18And we’re talking today about my favorite subject,00:18 –> 00:21which is obviously taxes and anything to do00:21 –> 00:23with basically money.00:23 –> 00:26There’s not been a lot of tax changes, as we know.00:26 –> 00:30Many of you were under extension until 6/1700:30 –> 00:31and that’s already passed.00:31 –> 00:34So hopefully you filed extensions.00:34 –> 00:36That way you’re good until October for individuals,00:36 –> 00:40September for businesses.00:40 –> 00:43And you’ll be able to then make sure everything is filed00:43 –> 00:45and done properly.00:45 –> 00:49I had an interesting question that came in the email bag.00:49 –> 00:50And I thought it was interesting00:50 –> 00:53’cause it was referred to as phantom income.00:55 –> 00:57There’s been some controversy a little bit00:57 –> 00:59on what is phantom income00:59 –> 01:03and should I have to pay taxes on phantom income?01:03 –> 01:06And for anyone that’s actually part of a sub S corporation01:06 –> 01:10or a 1065 partnership or LLC,01:10 –> 01:12you probably know we call it pass through,01:12 –> 01:16but it is income that you’re going to want to,01:16 –> 01:17you will pay tax on, right?01:17 –> 01:21So if a business you’ve invested in as a partner01:21 –> 01:24and you make money, but maybe they can’t distribute it.01:24 –> 01:27So let’s say you own 10% and they make a hundred thousand.01:27 –> 01:30So theoretically your K1 could come to you01:30 –> 01:32with a $10,000 profit,01:32 –> 01:35but maybe the money’s tied up in inventory or equipment.01:35 –> 01:37So it’s not actually tangible.01:37 –> 01:39Therefore no distribution can be done01:39 –> 01:42of that $10,000 of profit.01:42 –> 01:46And so you will pay tax on that $10,000,01:46 –> 01:50even though it’s not in your pocket.01:50 –> 01:52So that’s considered phantom income.01:52 –> 01:54And then it adds to your basis.01:54 –> 01:58And then later, if there’s a distribution,01:58 –> 02:00you may not have to pay tax on all of it02:00 –> 02:02because some of it may be distributed later02:02 –> 02:04from prior profits.02:04 –> 02:06But the question came down was,02:06 –> 02:10should I have to pay tax on phantom income?02:10 –> 02:11It’s not income.02:11 –> 02:14I do my taxes on the cash basis.02:14 –> 02:18Therefore, why am I paying tax on money I didn’t receive?02:18 –> 02:20And that is because the business that you invested in02:20 –> 02:22did make a profit.02:22 –> 02:25They did not make a profit that could be distributed,02:25 –> 02:27but it was a profit,02:27 –> 02:29even on the cash or and or accrual basis.02:29 –> 02:32And the business could be doing it on the accrual basis,02:32 –> 02:34even though you do your taxes on the cash basis.02:34 –> 02:38So there are some numbers or some court cases02:38 –> 02:39and things coming through.02:39 –> 02:43One individual is in a tax court situation02:43 –> 02:45where they are arguing the point02:45 –> 02:47and their numbers are much larger.02:47 –> 02:50It was like, I don’t know, $500,000 pass through.02:50 –> 02:52And they never received a dollar of it.02:52 –> 02:55Therefore, they’re saying they shouldn’t be held responsible02:55 –> 02:56for paying taxes on it.02:56 –> 02:59But it’s not a C corporation, right?02:59 –> 03:01We all know what the C corporation,03:01 –> 03:03the corporation pays taxes.03:03 –> 03:05And then when they distribute,03:05 –> 03:08the individuals pay taxes and it’s double tax,03:08 –> 03:11which is what we all try to avoid in life.03:11 –> 03:14And so the next thing you have is the individual03:14 –> 03:15that has passed through,03:15 –> 03:19which is a sub S corporation and or LLC or partnership,03:19 –> 03:21depending on it’s a hybrid.03:21 –> 03:23So it could be taxed in a couple of different directions,03:23 –> 03:26but all of them do a pass through of profits03:26 –> 03:30from said investment to the shareholders03:30 –> 03:33or members or partners.03:33 –> 03:37And so that is, and again, it does get added to basis.03:37 –> 03:40So later if the business sells and you’ve already paid tax03:40 –> 03:41on the money that’s in the basis,03:41 –> 03:44you will eventually get that money back.03:44 –> 03:49Or if you have big losses, then you pay tax03:49 –> 03:51so that added, so that will give you the ability.03:51 –> 03:55You can’t take a loss on a business, a partnership03:55 –> 03:59or any pass through that exceeds your original basis.03:59 –> 04:00So that is an important thing.04:00 –> 04:03So you don’t, and that’s something I have seen04:03 –> 04:05a lot of people do.04:05 –> 04:08And this really got changed probably back in 17, 18,04:08 –> 04:12when basis actually started being reported on the K ones04:12 –> 04:15so that people could see, hey, my basis is a negative04:15 –> 04:17and now I’ve got a loss.04:17 –> 04:20Now, unless you have a personal guarantee down04:20 –> 04:22on some of these, otherwise that loss is not yours.04:22 –> 04:25You didn’t physically lose that money.04:25 –> 04:28The company lost it and it’s passing through to you,04:28 –> 04:29but it is only a pass through.04:29 –> 04:34You cannot deduct that money off of your personal tax return04:34 –> 04:35unless you physically have a loss04:35 –> 04:38or you’re held liable for that loss04:38 –> 04:41if the company was to go under.04:41 –> 04:44And that’s a really big and important question04:44 –> 04:46because again, I have seen many people04:46 –> 04:49that have taken losses to offset gains.04:49 –> 04:52And then, obviously IRS comes back04:52 –> 04:54and they review these returns and they go,04:54 –> 04:56well, I’ve got a K one with a loss,04:56 –> 04:59but your basis was already negative before that.04:59 –> 05:01You cannot claim that loss.05:01 –> 05:03So if you’ve got questions, maybe you’re doing your taxes05:03 –> 05:07or you’re looking at, many of us are still on extension05:07 –> 05:11for 2023 or you’re working, it’s six months05:11 –> 05:15almost through 2024 and maybe you have had some sales05:15 –> 05:18of real estate, be that primary or rental,05:18 –> 05:20or you’ve invested into something05:20 –> 05:23that has actually now distributed income.05:23 –> 05:24If you’ve got questions, you can join the show05:24 –> 05:29at 615-737-9986, 615-737-9986, taking your calls,05:29 –> 05:36talking about what we have,05:36 –> 05:39as far as what may be affecting your taxes.05:39 –> 05:41I know I have a large number of people05:41 –> 05:46that have taken up Uber or Lyft doing side jobs that way,05:46 –> 05:50which are considered self-employment,05:50 –> 05:52which does mean that you have the ability05:52 –> 05:55to deduct some expenses against those jobs.05:55 –> 05:56Of course, for Uber and Lyft,05:56 –> 05:58the biggest thing is your miles.05:58 –> 06:02But keep in mind, there has been a number of audits done06:02 –> 06:04by the IRS on Uber drivers06:04 –> 06:07because people are overstating miles06:07 –> 06:09that they can’t justify.06:09 –> 06:11It doesn’t mean that they’re not right or wrong,06:11 –> 06:14but if you can’t justify the number on your tax return,06:14 –> 06:15I don’t suggest putting it down.06:15 –> 06:19So if you are using mileage or IQ,06:19 –> 06:22I mean, Uber and Lyft both present a number06:22 –> 06:24that they have paid by the miles that’s been tracked06:24 –> 06:26from their aspect of payment.06:26 –> 06:30But many times there is some return.06:30 –> 06:32Like for example, I flew in last week06:32 –> 06:36and I took an Uber from the airport down to Brentwood06:36 –> 06:41and that driver was going back up to the airport.06:41 –> 06:44He wasn’t picking up a load or an individual.06:44 –> 06:45Apparently there wasn’t something.06:45 –> 06:47So he said he was just gonna head back up to the airport.06:47 –> 06:49Now that would be business miles06:49 –> 06:53’cause he was returning back to pick up another driver.06:53 –> 06:54He wasn’t stopping, he wasn’t going by home,06:54 –> 06:57he wasn’t doing anything for personal reasons.06:57 –> 07:01And if some ride came available on his way07:01 –> 07:02between Brentwood and the airport,07:02 –> 07:05I’m sure he would have picked that person up.07:05 –> 07:07But that’s the kind of thing07:07 –> 07:10that would not have been most likely tracked by Uber07:10 –> 07:12because he was not on their clock.07:12 –> 07:17But if you drive from home to your first pickup is not,07:17 –> 07:21that is commuting, that’s to your first job.07:21 –> 07:22So wherever your first pickup is,07:22 –> 07:25is your actual start of your miles.07:25 –> 07:27And if you were to stop and do the grocery store07:27 –> 07:31or pick up a child from school or daycare or whatever,07:31 –> 07:35any of those miles commuted in there are not business miles.07:35 –> 07:37So again, having something like mileage IQ07:37 –> 07:39that shows every stop and every start07:39 –> 07:44and it has a log is a great idea for any of my drivers,07:44 –> 07:46even self-employed individuals.07:46 –> 07:48If you’re using miles,07:48 –> 07:50have a chart that shows where you stopped,07:50 –> 07:52where you started.07:52 –> 07:57I mean, and again, any individual that has a business07:57 –> 08:00and your business requires you to go to one location,08:00 –> 08:02home to that one location08:02 –> 08:06is never going to be business miles.08:06 –> 08:08For example, my office is in Brentwood.08:08 –> 08:09I live in Spring Hill.08:09 –> 08:11So when I drive from Spring Hill to Brentwood,08:11 –> 08:13I can’t deduct those miles08:13 –> 08:16even though I have a home office and a business office.08:16 –> 08:19I meet my clients at that office08:19 –> 08:21that I choose to have a home office.08:21 –> 08:23And so therefore my real office is in Brentwood.08:23 –> 08:27So my home to business is commuting.08:27 –> 08:28From that point on,08:28 –> 08:29if I were to go to lunch and meet a client,08:29 –> 08:31if I was to drive out to someone’s office,08:31 –> 08:33meet some other person,08:33 –> 08:37all of those would be legitimate miles for business.08:37 –> 08:40But make sure you are tracking that details.08:40 –> 08:43And it does add up every time you go to the bank,08:43 –> 08:44every time you have to go pick up supplies,08:44 –> 08:46office supplies, whatever.08:46 –> 08:47If you are a person that has to run08:47 –> 08:49and do those kinds of situations,08:49 –> 08:53then it’s important that you have that information08:53 –> 08:55at your fingertips and you know how many miles,08:55 –> 08:59’cause at 65 cents a mile, that is pretty darn sweet.08:59 –> 09:01Even for all of us that might drive vehicles09:01 –> 09:05that are not as auto-efficient as,09:05 –> 09:07or petro-efficient as others.09:07 –> 09:09So again, if you wanna join the show, you can.09:09 –> 09:14615-737-9986.09:19 –> 09:21Got another letter here in the email,09:21 –> 09:23and they’re just wanting to know09:23 –> 09:26if the deadlines for 2024 are any different09:26 –> 09:28than the deadlines for 2023.09:28 –> 09:31And I’m assuming they mean tax filing deadlines.09:31 –> 09:33It doesn’t look like it in 2024.09:33 –> 09:37It looks like April 15th will be tax day again in 2025,09:37 –> 09:41as far as I can tell.09:41 –> 09:46So we’ll be able to stick to all the basic normal deadlines.09:46 –> 09:50Also, make sure you guys are making your quarterly estimates.09:50 –> 09:53I have had a number of people that,09:53 –> 09:54for some reason, this is last year,09:54 –> 09:56it just seemed like they were making them09:56 –> 09:58and now they kind of stopped,09:58 –> 10:00maybe because income had changed, sources had changed.10:01 –> 10:04It’s important because the penalties you get10:04 –> 10:07for not paying, it used to, not so bad.10:07 –> 10:10Interest at the IRS used to be about 7%,10:10 –> 10:12which a lot of people were making that in investments.10:12 –> 10:15Now it’s almost 12% interest.10:15 –> 10:18Penalties, of course, start at 5% per a month,10:18 –> 10:22maximizing on most of them at 25%.10:22 –> 10:26And then they charge interest on penalties as well.10:26 –> 10:29So 12% interest is pretty high, guys.10:29 –> 10:31And then the penalties on top of it,10:31 –> 10:34I mean, easily you can have, you know,10:34 –> 10:38five, $6,000 be added to your bill before you even know it.10:38 –> 10:41So again, make sure if you’re making your quarterlies,10:41 –> 10:45all we have to do is pay 100% of the year before basically,10:45 –> 10:49or 110 to completely eliminate all penalties.10:49 –> 10:50And then if you still owe money,10:50 –> 10:53so if you owe 20,000 in 2023,10:53 –> 10:58and you pay in, you know, 23,000 or whatever for 2024,10:58 –> 10:59but yet you owed 40,10:59 –> 11:01there’s not gonna be a penalty for the difference11:01 –> 11:03as long as you pay that by the due date.11:03 –> 11:06But that’s the kind of thing you wanna do.11:06 –> 11:08And then if you overpay,11:08 –> 11:10well, then you can either get it back as a refund11:10 –> 11:12or roll the money over into the next year,11:12 –> 11:13which is what most of us do.11:13 –> 11:16So that way you can actually11:16 –> 11:18reduce your estimates for the next year, right?11:18 –> 11:20So if you overpay one year, just roll it to the next,11:20 –> 11:23and then you don’t have to pay, you know, as much out.11:23 –> 11:25IRS already has your money, which, you know,11:25 –> 11:26anytime you’re self-employed,11:26 –> 11:28I don’t care what anyone else thinks.11:28 –> 11:30I personally think there’s a partner in my business,11:30 –> 11:32and it is the Internal Revenue Service.11:32 –> 11:35They can be often very silent, which is why I like them,11:35 –> 11:38but otherwise they can be quite boisterous11:38 –> 11:39if you don’t treat them11:39 –> 11:42the way they feel the bylaws should say.11:42 –> 11:44So again, if you have questions, you can join the show,11:44 –> 11:49615-737-9986.11:49 –> 11:51I’m Dr. Friday, I’m an enrolled agent,11:51 –> 11:52licensed with the Internal Revenue Service11:52 –> 11:54to do taxes and representation.11:54 –> 11:56So if you’ve got text questions,11:56 –> 11:58or maybe you have something coming down the line11:58 –> 11:59that could affect your taxes,11:59 –> 12:01this is the show you wanna call in.12:01 –> 12:02We’re gonna take our first break.12:02 –> 12:05When we get back, we can get to some of your phone calls,12:05 –> 12:07or you can email friday@drfriday.com,12:07 –> 12:09and I’ll go through the email bag.12:09 –> 12:11We’ll be right back with the Dr. Friday Show.12:11 –> 12:17All righty, we are back here live in studio,12:17 –> 12:19and if you’ve got a question, again,12:19 –> 12:24the phone lines are open, 615-737-9986,12:24 –> 12:29615-737-9986.12:29 –> 12:31Did get a question through the email bag,12:31 –> 12:32and it was a great question.12:32 –> 12:35I’ve had a couple people this year, for some reason,12:35 –> 12:39unclaimed property that you can go online,12:39 –> 12:41you can see if maybe you had an old paycheck,12:41 –> 12:46or some stocks, or a person that they had a 401k12:46 –> 12:48that they forgot about.12:48 –> 12:50And so anyways, if you go in there,12:50 –> 12:51the state and the federal, I believe,12:51 –> 12:54both have places where you can look.12:54 –> 12:56And then you can get that money back.12:56 –> 12:58But the question she had asked, which was good,12:58 –> 13:02was is it taxable, or would it be taxable to her father?13:02 –> 13:07And in my experience, it really depends on what it is.13:07 –> 13:12For example, the gentleman that had a 401k that was lost,13:12 –> 13:14and then they put the money with the state,13:14 –> 13:20he did receive a 1099-R, showing it as fully taxable income.13:20 –> 13:22The person that we had, just recently,13:22 –> 13:25the gentleman had four or five stocks, little stocks.13:25 –> 13:27But when it came out, it was a couple hundred dollars,13:27 –> 13:31and they had sent him 1099-Bs, just like a regular stock.13:31 –> 13:33So, and they showed the sale price.13:33 –> 13:36And of course, we had no cost basis on any of these,13:36 –> 13:38because he didn’t remember buying them.13:38 –> 13:40He didn’t know if they may have been given to him,13:40 –> 13:41’cause he had worked for some of these companies,13:41 –> 13:44and they may have been just part of his job.13:44 –> 13:48And so he didn’t remember them, so we had a zero basis.13:48 –> 13:50So he had to pay tax on a couple hundred dollars13:50 –> 13:54worth of stock that probably, or may have actually13:54 –> 13:55been a loss, as far as we know.13:55 –> 14:00So those things kind of come out in how they come to you.14:00 –> 14:03But again, I’ve had people that had bank accounts,14:03 –> 14:07or banks that closed, and that became non-taxable income.14:07 –> 14:09So that was a good thing.14:09 –> 14:12All right, well, it looks like we have Mike14:12 –> 14:14on the line from Nashville.14:14 –> 14:16Let’s see if we can get Mike live here,14:16 –> 14:17and see if I can help him out.14:17 –> 14:19Hey, Mike, what’s happening?14:19 –> 14:24– Okay, I’ve got a question about paying taxes14:24 –> 14:26on a house that I sold.14:26 –> 14:27– Okay.14:27 –> 14:32– I’ve got, I’m also on social security.14:32 –> 14:36So I’m trying to figure out if the sale of this house,14:36 –> 14:40’cause I’ve lived in it, you know, for about 10 years.14:40 –> 14:42– Okay, so it’s your primary home, or was your primary home?14:42 –> 14:45– Yeah, it was my primary house.14:45 –> 14:48So I’ve sold it, and I’m wondering14:48 –> 14:50if I need to pay taxes on it,14:50 –> 14:52’cause it was less than 500,000.14:52 –> 14:53And I’m married.14:53 –> 14:55– Well, let me ask, are you married, Mike?14:55 –> 14:56– Yes.14:56 –> 14:58– Okay, and did both of you live in there14:58 –> 15:00at least the last two years?15:00 –> 15:02– Well, I did.15:02 –> 15:04I just got married about a year and a half ago.15:04 –> 15:05– Okay, so she’s already living there.15:05 –> 15:07– And now I’m living in her house,15:07 –> 15:10and I’ve sold my primary house.15:10 –> 15:14– All right, so theoretically, two out of five years,15:14 –> 15:16she had to have lived in there to qualify15:16 –> 15:18for the 100% of it.15:18 –> 15:20But I don’t know if we need all of that anyways.15:20 –> 15:21How much did you pay for the house15:21 –> 15:23back 10 years ago or whatever?15:23 –> 15:27– It’s about 125.15:27 –> 15:29– Okay, and what did you sell it for?15:29 –> 15:30– I sold it for 340.15:30 –> 15:34– Okay, so 255,7370.15:34 –> 15:36We wouldn’t even need her exclusion,15:36 –> 15:39because you would get a 250,000 plus your basis,15:39 –> 15:43which gives it 375, so there’s no tax on this house sale.15:43 –> 15:47Okay, the other question that’s combined with that is,15:47 –> 15:49I’m on Social Security.15:49 –> 15:52So, I know I had trouble when I got married,15:52 –> 15:55because they wanted to charge me extra,15:55 –> 15:58I think it was IRMAA or something.15:58 –> 16:00– It’s called IRMA, but yes,16:00 –> 16:02I know exactly what, for your Medicare side.16:02 –> 16:04– Okay, so the question I’ve got is,16:04 –> 16:05is that gonna count?16:05 –> 16:08Is the sale of that house gonna mean16:08 –> 16:11I’m gonna have to pay more on my Social Security16:11 –> 16:12in a couple of years? – It should not.16:12 –> 16:13– Or not?16:13 –> 16:14– It should not.16:14 –> 16:16It only affects when it affects your tax return,16:16 –> 16:21since this is gonna show up as a zero on your tax return,16:21 –> 16:22filing jointly or singly.16:22 –> 16:25I mean, theoretically, if all you have is Social Security16:25 –> 16:28in this home sale, there’d be no tax return required.16:28 –> 16:30In essence, I would suggest filing,16:30 –> 16:31because they don’t know it’s your primary,16:31 –> 16:33unless you tell them sometimes.16:33 –> 16:37But anyways, no, this should not affect your IRMA.16:37 –> 16:42Now, again, depending on your guys’ joint income,16:43 –> 16:46I wanna say IRMA is like 200,000 for married,16:46 –> 16:51100,000 for individuals, right around that dollar amount.16:51 –> 16:55So as long as you guys are under that, you’ll be fine.16:55 –> 16:55– Okay, so that’s fine. – And the house16:55 –> 16:56would not count towards– – So I really don’t need16:56 –> 17:00to send any quarterly payment in on taxes,17:00 –> 17:02’cause I won’t have any.17:02 –> 17:03– Exactly, exactly.17:03 –> 17:05The only thing is, being that you’re married,17:05 –> 17:09your Social Security could become taxable17:09 –> 17:11because of the joint income.17:11 –> 17:13So you might wanna consider that,17:13 –> 17:15but otherwise, you’re in good shape.17:15 –> 17:16– Okay, thank you.17:16 –> 17:17I heard you talking about that.17:17 –> 17:18I just wanted to clarify it,17:18 –> 17:21but before the end of the quarter here.17:21 –> 17:23– Exactly, smart man, just to make sure,17:23 –> 17:25’cause you don’t wanna then later come up and say,17:25 –> 17:28“Oh my gosh, I owe $10,000 or something,17:28 –> 17:29“and that wasn’t prepared.”17:29 –> 17:31– Right, okay, thank you very much.17:31 –> 17:32– No worries, mate.17:32 –> 17:33Thanks, Mike, I appreciate it.17:33 –> 17:35All right, that was a great question.17:35 –> 17:37And so if you do have questions like that,17:37 –> 17:42you can certainly join the show at 615-737-9986,17:42 –> 17:46615-737-9986.17:46 –> 17:50So there are some exceptions to the moving out17:50 –> 17:53two out of five year situation.17:53 –> 17:57Usually it only has to do with health or jobs,17:57 –> 17:58but sometimes you can, or divorce.17:58 –> 18:00I have had several divorces where people18:00 –> 18:03have purchased homes and not made it the full two years,18:03 –> 18:06but had to sell because of the divorce.18:06 –> 18:08And there are some exclusions in there18:08 –> 18:10that’ll give you a day-to-day calculation,18:10 –> 18:11and maybe not all of the 250,18:11 –> 18:15but depending on how close you are to the two year mark,18:15 –> 18:16they’ll give you a portion of that,18:16 –> 18:19which will help you not pay capital gains18:19 –> 18:20on a house like that.18:20 –> 18:23So anyway, so make sure you talk to a tax expert.18:23 –> 18:26If you do have extenuating circumstances,18:26 –> 18:27Mike won’t have to worry about it.18:27 –> 18:30But primary homes are great, I mean,18:30 –> 18:33as far as being able to do the two out of five year18:33 –> 18:35situation, but if you have,18:35 –> 18:37what one of the things Mike brought up,18:37 –> 18:40which is also something I think a lot of people forget,18:40 –> 18:41or don’t even know really exists18:41 –> 18:43until they end up having to pay on it,18:43 –> 18:47which is IRMA, which is, I don’t know,18:47 –> 18:49I probably can figure out, but what it stands for,18:49 –> 18:52but bottom line is they means test Medicare.18:52 –> 18:57So if you’re an individual that’s over 65 or 65 and older,18:57 –> 18:59then you are now on Medicare most likely.18:59 –> 19:02And so your income now is going to affect,19:02 –> 19:04you think, okay, well, Medicare is Medicare.19:04 –> 19:06That’s what I would have thought until later.19:06 –> 19:08And then I found out that Medicare isn’t Medicare,19:08 –> 19:11Medicare is tested based on how much money you make.19:11 –> 19:15So if you were to have a one-time situation,19:15 –> 19:17and I’ve heard different things,19:17 –> 19:19there’s supposedly a one-time exclusion,19:19 –> 19:22but I heard someone from the Medicare office19:22 –> 19:24physically say to one of my clients19:24 –> 19:27that it has to be a life-changing experience.19:27 –> 19:30For example, you now have retired,19:30 –> 19:32not just a one-time situation,19:32 –> 19:35but bottom line is if you make over $100,000,19:35 –> 19:40be it from a sale or your RMDs or anything you have,19:40 –> 19:42social security, 100% is added to that.19:42 –> 19:45All of that, if you make over 100,000,19:45 –> 19:46they’re gonna start charging you more19:46 –> 19:50than the standard tax or the standard Medicare fees.19:50 –> 19:53And it jumps up every 50,000 or so after that.19:53 –> 19:55And I believe there’s no marriage penalty,19:55 –> 19:56so I think it doubles.19:56 –> 19:59But it’s important to know if you’re making a decision19:59 –> 20:01to convert or to sell something,20:01 –> 20:03how is that going to affect your IRMA?20:03 –> 20:05Maybe a question you need to ask.20:05 –> 20:06Hey, Peggy in Watertown.20:06 –> 20:07Hey, Peg, what’s happening?20:07 –> 20:10– Hey, good afternoon.20:10 –> 20:15We have a farm and we are planning20:15 –> 20:19to sell 15 acres off of it.20:19 –> 20:23And we want to know what,20:23 –> 20:27are we gonna have to reinvest that money20:27 –> 20:32within a certain amount of time to avoid taxes or what?20:32 –> 20:36We are both retired on social security.20:36 –> 20:38– So is the farm your primary residence?20:38 –> 20:44I mean, usually they take five acres in the home,20:44 –> 20:45but how big is the farm?20:45 –> 20:51– Well, it’s 50 acres, but we’re selling 15 acres.20:51 –> 20:53– Right. – Not the house.20:53 –> 20:54– Right, you’re keeping the house.20:54 –> 20:56You’re just selling the dirt right now,20:56 –> 20:58it sounds like, just selling off 15 acres.20:58 –> 21:01So the tax law for this is,21:01 –> 21:03it’s not gonna fall under primary home21:03 –> 21:05because it’s not the five acres and the house.21:05 –> 21:08You’re just selling off a portion of the extenuating dirt21:08 –> 21:11that you have or farmland, whatever the proper term is.21:11 –> 21:13So you have two options.21:13 –> 21:17You can do a 1031 exchange21:17 –> 21:19in which you would take those monies,21:19 –> 21:21and I believe you have 90 days,21:21 –> 21:23and then a little bit more if you have the finance21:23 –> 21:25or whatever to buy like kind,21:25 –> 21:27which would be either any type of real estate.21:27 –> 21:30You could do commercial, rental, whatever,21:30 –> 21:34cannot buy a primary home, or you pay tax.21:34 –> 21:36So the question would be is,21:36 –> 21:39is a like kind even gonna be good for what you’re looking at21:39 –> 21:40because you’re retired?21:40 –> 21:42Are you looking to get into real estate21:42 –> 21:46as a secondary investment or is not really?21:46 –> 21:51– Well, we thought possibly a vacation home.21:51 –> 21:53– Okay. – In another state.21:53 –> 21:54Yeah. – Well, that would be great.21:54 –> 21:56As long as it’s a vacation rental,21:56 –> 21:59you can go spend a couple of weeks there or whatever.21:59 –> 22:01There’s different criteria. – Right.22:01 –> 22:03– You can do what you need, but that would be a viable,22:03 –> 22:06I just, a lot of times with people, as we all get older,22:06 –> 22:07sometimes we try to simplify life22:07 –> 22:09and getting rentals is not always,22:09 –> 22:12but an Airbnb version of that and a rental,22:12 –> 22:14a lot of those places handle everything for you anyways,22:14 –> 22:18but you would wanna look and have that kind of pre-setup22:18 –> 22:21so you know, ’cause what happens is it gives a 1031,22:21 –> 22:23so it just goes into escrow,22:23 –> 22:24and then you would close on the rental22:24 –> 22:27once you closed on the dirt or on the acreage sale.22:27 –> 22:30So that would be the easiest way to do that.22:30 –> 22:33So you kind of know what you wanna do with it before22:33 –> 22:35because it’s a very short windows, 90 days,22:35 –> 22:37it’s pretty short to give them the property22:37 –> 22:39that you’re wanting to close on.22:39 –> 22:41So it’d be good to have it in advance22:41 –> 22:44so you know what you wanna do, it’s less stressful.22:44 –> 22:45But yeah, you can do that22:45 –> 22:47and that way there would be no taxes.22:47 –> 22:51– So would we have to reinvest the whole amount22:51 –> 22:53that we make on that property?22:53 –> 22:56– So let’s say you sell it for 150,000, just as a number,22:56 –> 22:58let’s just say you sell it for 150,22:58 –> 23:00you have to go spend 150.23:00 –> 23:05– Okay, all right, well, thank you, that answers my question.23:05 –> 23:07– All right, thanks for the phone call, great phone call.23:07 –> 23:08Thanks Peggy.23:08 –> 23:09– Thank you.23:09 –> 23:10– All right, we’re gonna take a quick break here23:10 –> 23:13and when we get back, you can join us live here23:13 –> 23:17on the radio at 615-737-9986,23:17 –> 23:22615-737-9986, or you can email friday@drfriday.com.23:22 –> 23:26I realize it is a hot Saturday out there,23:26 –> 23:29so you may or may not be sitting and listening to the radio,23:29 –> 23:30maybe you’re driving or whatever,23:30 –> 23:35but if you wanna join the show again, 615-737-9986,23:35 –> 23:40and we’re gonna be right back with the Dr. Friday Show.23:40 –> 23:42– For existing essential and standard customers.23:42 –> 23:44(upbeat music)23:47 –> 23:53– All right, we are back here, live in Beacon,23:53 –> 23:55and if you wanna join the show you can,23:55 –> 23:56615-737-9986,24:04 –> 24:06live here in studio,24:06 –> 24:08and we are lucky enough to have Elizabeth on the line,24:08 –> 24:10so let’s get her on the phone.24:10 –> 24:13Hey Elizabeth, what’s happening?24:13 –> 24:17– Hello, I was needing to know if I have to pay taxes24:17 –> 24:21on an inherited house for my mother’s that I sold.24:21 –> 24:25– Well, when did you inherit it?24:25 –> 24:29– She passed away,24:29 –> 24:33no, she passed away November of the year before last,24:33 –> 24:36and it was sold this year.24:36 –> 24:38– All right, so here’s the answer to that,24:38 –> 24:42whatever the house was worth November of ’22,24:42 –> 24:46it sounded like, year before last, it may have been ’23,24:46 –> 24:49I don’t know, whatever, she passed away, Elizabeth.24:49 –> 24:52Whatever the house was worth is what your basis is.24:52 –> 24:55So if you sold it for more than it was worth24:55 –> 24:58back in November, then you would pay capital gains.24:58 –> 25:00If you sold it for less, then you would not.25:00 –> 25:02Does that help?25:02 –> 25:05– Okay, so it was valued at $500,00025:05 –> 25:08according to the real estate people.25:08 –> 25:11The month that she passed away,25:11 –> 25:13and it was sold for $462,000.25:13 –> 25:18So I guess the answer is no, it won’t have to be paid.25:18 –> 25:19– You got it.25:19 –> 25:23– Thank you so much, have a wonderful day.25:23 –> 25:25– You too, sweetheart.25:25 –> 25:26All right, and that’s a great question.25:26 –> 25:31Again, often have, I mean, when people pass away,25:31 –> 25:36it’s always great when you can inherit residents right now,25:36 –> 25:40or homes, or real estate, because of this step up in basis25:40 –> 25:43that we get to claim.25:43 –> 25:44It is on the table.25:44 –> 25:47I know Biden is trying to eliminate25:47 –> 25:52that particular inherited situation25:52 –> 25:55because of the fact that it is obviously25:55 –> 25:56costing the government a lot of money,25:56 –> 26:00because if mom and dad paid $10,000 50 years ago,26:00 –> 26:03and now we sell it, and we don’t have to pay any gains,26:03 –> 26:05and mom and dad would have had to,26:05 –> 26:07or they would have had at least a smaller exclusion,26:09 –> 26:10it changes the whole tax law.26:10 –> 26:12So the problem with that is,26:12 –> 26:15is none of us know what mom and dad pay for properties.26:15 –> 26:19Most people, you’re lucky if you can truly find26:19 –> 26:24the original documentation where it was purchased or owned,26:24 –> 26:30but if the case comes down where we have to find out26:30 –> 26:32what the original amount is,26:32 –> 26:34then that’s gonna be really hard for most of us.26:34 –> 26:35I’m gonna be honest.26:35 –> 26:37You’re gonna have a very difficult time26:37 –> 26:40trying to find out what the original purchase price,26:40 –> 26:43because in my family, at least many of them,26:43 –> 26:45was laying that they inherited,26:45 –> 26:48and then they built a home on it after or whatever.26:48 –> 26:50And so you’ve got generational situations,26:50 –> 26:52people that built their own homes,26:52 –> 26:55so there was no original dollar amount.26:55 –> 26:57So you could either go to property taxes,26:57 –> 27:00but we all know how those aren’t necessarily correct,27:00 –> 27:02because look at my own property tax.27:02 –> 27:04I mean, it’s not what I paid for the house.27:04 –> 27:07What the property tax says it’s valued at now.27:07 –> 27:09So where exactly do we go with that?27:09 –> 27:11So right now they basically still have,27:11 –> 27:13and I think they’ll continue at least27:13 –> 27:14with that step up in basis.27:14 –> 27:15All right, let’s see here.27:15 –> 27:18It looks like William was on first, so let’s hit William.27:18 –> 27:20Hey, William, what’s happening?27:20 –> 27:22– Thank you for taking my call.27:22 –> 27:24My question is this.27:24 –> 27:25We are retired.27:25 –> 27:27We’re in our late 70s.27:27 –> 27:28– Okay.27:28 –> 27:33– I don’t generate income from a W-2.27:33 –> 27:34– Right.27:34 –> 27:38– I have a corporation I’ve had for 30 years.27:38 –> 27:43We take dividends because of the tax advantage.27:43 –> 27:46However, my question is this.27:46 –> 27:51Could I take a fee, a directions fee or something,27:51 –> 27:54where I’m getting a 1099,27:54 –> 27:58and could I make a contribution to our IRAs?27:58 –> 28:02– It has to be earnings,28:02 –> 28:04but if you can certainly do something,28:04 –> 28:05if you’ve been in this company,28:05 –> 28:07I’m sure you could justify your time.28:07 –> 28:11In any earnings right now, age does not apply, so yes.28:11 –> 28:13And to answer your question, the basic answer is yes.28:13 –> 28:15If you have earnings,28:15 –> 28:19that earnings can then be converted into IRA or SEP28:19 –> 28:22or Roth IRA, whatever your,28:22 –> 28:23you know, I’m not a financial planner,28:23 –> 28:27but any of that basic situation.28:27 –> 28:30– Now, I take dividends, but that is tax-28:30 –> 28:32– But dividends is not earnings, as you know.28:32 –> 28:35That’s an investment.28:35 –> 28:39So it’d have to come through W-2 or 1099.28:39 –> 28:43– Okay, and I can go 75 max?28:43 –> 28:45– 75 max for each of you,28:45 –> 28:47and you can contribute for your wife.28:47 –> 28:50– All right. – I think you’re married.28:50 –> 28:52– We are, but we both own the company,28:52 –> 28:56so we both could take a directors fee or whatever, 1099.28:56 –> 28:57– Yep.28:57 –> 28:59And if it’s a 1099,28:59 –> 29:01you have to back out the social security29:01 –> 29:03that you’ll still end up paying on that,29:03 –> 29:06because as you know, it only washes earnings for earnings.29:06 –> 29:09So you might want to distribute eight grand to get to 7529:09 –> 29:10if you’re putting 75 in.29:10 –> 29:12– Oh, okay.29:12 –> 29:16Okay, take more than that to make the difference.29:16 –> 29:18– To offset the difference, yeah, exactly.29:18 –> 29:20– All right, thank you.29:20 –> 29:21– No problem, great phone call.29:21 –> 29:22Thanks, William.29:22 –> 29:24All right, let’s hit Jeff real quick.29:24 –> 29:27– Well, hello, Ms. Ardo. – Hey, Jeff.29:27 –> 29:28– Hello.29:30 –> 29:34I’ve been down under, but I didn’t pay taxes down there.29:34 –> 29:36Now, I have a couple of acres in Georgia29:36 –> 29:39that’s unimproved land.29:39 –> 29:42And I live with my father, take care of him,29:42 –> 29:44and rent my house out for $900 a month.29:44 –> 29:48But I live on a HUA disability check.29:48 –> 29:53Now, I will be the inheritor of his property when he’s gone.29:53 –> 29:58And the question is, if I sell the property in Georgia,29:58 –> 30:01and I spend that money on improvements or repairs30:01 –> 30:06to his property, do I still have to pay taxes on it?30:06 –> 30:10– Yep, yeah, they eliminated the reinvestment situation.30:10 –> 30:14So you would either have to have lived in the house,30:14 –> 30:15and I don’t know when this all happened,30:15 –> 30:17but if it’s still your primary,30:17 –> 30:20meaning you lived in it two out of the last five years,30:20 –> 30:22so you could have had it as a rental30:22 –> 30:23for the last two and a half years,30:23 –> 30:25and before that you lived in it,30:25 –> 30:28you would still qualify for the exclusion30:28 –> 30:30on the primary home.30:30 –> 30:34– Well, the property in Georgia is unimproved land.30:34 –> 30:36– Okay, but you said you have a home30:36 –> 30:37that you were gonna sell.30:37 –> 30:38No? – No, no.30:38 –> 30:40I wanna sell the unimproved land.30:40 –> 30:42I’m gonna continue to rent out my house.30:42 –> 30:46I live with my father now, and my house is next door to him.30:46 –> 30:47– Totally sorry.30:47 –> 30:50Okay, so the unimproved, yes, you would qualify for that,30:50 –> 30:52would be what’s called a 1031 exchange,30:52 –> 30:54if you wanna not pay.30:54 –> 30:57But again, you can’t sell that30:57 –> 31:00and make improvements on your home or your father’s home.31:00 –> 31:03– Well, the thing is, his house needs a roof,31:03 –> 31:06and the only way we can afford it is for me to sell that land.31:06 –> 31:08– So you’re gonna have to sell it, pay taxes,31:08 –> 31:09and then fix the roof.31:09 –> 31:11– Yeah, I don’t like that.31:11 –> 31:13I haven’t paid taxes since 2011.31:13 –> 31:15(both laughing)31:15 –> 31:17– I’m not saying it’s the best plan.31:17 –> 31:19I’m just telling you how it’s gonna shake down.31:19 –> 31:20Yeah, there’s no way of avoiding,31:20 –> 31:23hopefully, I mean, hopefully you’ll make a nice profit on it.31:23 –> 31:26Is it in your name, Jeff, just out of curiosity,31:26 –> 31:28jointly with you and your father, or how is it titled?31:28 –> 31:32– No, the property in Georgia is just in my name.31:32 –> 31:34– Okay, all right.31:34 –> 31:36But you’re on disability, correct?31:36 –> 31:37– Correct.31:37 –> 31:39– So you do have to be careful31:39 –> 31:40when you do something like that.31:40 –> 31:41If it’s a big enough sale,31:41 –> 31:44it could mess up your disability.31:44 –> 31:47– Okay, now here’s another question on the same property.31:47 –> 31:50It’s two acres, and there was an old,31:50 –> 31:51fallen apart house on it when I bought it.31:51 –> 31:54I bought it to put an RV on to live for a few months31:54 –> 31:56because I had no place to go.31:56 –> 31:58And what I paid for the property31:58 –> 32:01was 4,000 in cash plus a Harley Davidson.32:01 –> 32:04(all laughing)32:04 –> 32:07– Okay, did you have a basic value on that Harley?32:07 –> 32:09– I don’t.32:09 –> 32:15It was, at the time, it was a, what, six years old?32:15 –> 32:16– Mm-hmm.32:17 –> 32:21– A six year old Harvester that I bought new.32:21 –> 32:28– Well, I mean, obviously, I’m assuming that they said,32:28 –> 32:28“Okay, you know what?32:28 –> 32:30I’ll take the Harley and this,32:30 –> 32:31and it’s basically 10 grand,32:31 –> 32:32and I’m gonna count it as that.”32:32 –> 32:36I mean, there’s a value there somehow32:36 –> 32:39you’d have to come back into to deal with that.32:39 –> 32:40You know what I’m saying?32:40 –> 32:42– Well, the owner and I,32:42 –> 32:45the previous owner and I kinda sort of halfway agreed32:45 –> 32:49on the Harley for 4,000 and then the 4,000 in cash,32:49 –> 32:51so $8,000.32:51 –> 32:53– So you paid $8,000 roughly for the property,32:53 –> 32:55and what’s it worth today?32:55 –> 32:59– Well, I’m paying taxes on about 9,000.32:59 –> 33:00– Oh, okay.33:00 –> 33:03So theoretically, you’re looking at paying tax,33:03 –> 33:05which at your income would be zero33:05 –> 33:06for a profit of $1,000.33:06 –> 33:11You’re under $50,000,33:11 –> 33:14so capital gains has a zero capital gains rate33:14 –> 33:16’cause you’ve owned it for over a year,33:16 –> 33:19so you could sell it for 25,000 theoretically,33:19 –> 33:23depending on how much you get for disability and all that,33:23 –> 33:26but I’m just saying you’d be at zero tax.33:26 –> 33:27– I don’t get much in disability.33:27 –> 33:30I get like 1,300 and something a month.33:30 –> 33:32It’s impossible to live on it.33:32 –> 33:34And then 900 on the rental,33:34 –> 33:38so I’m making about 2,250 a month total.33:38 –> 33:39– Okay.33:39 –> 33:42So as long as your overall income is under 50,000,33:42 –> 33:45including whatever the capital gains would be on this,33:45 –> 33:48then you’d pay zero tax on that capital gains.33:48 –> 33:50– Oh, it would be way under that.33:50 –> 33:52– So it doesn’t sound like to me33:52 –> 33:54that it should be a problem for you.33:54 –> 33:55– Okay.33:55 –> 33:56I just wanted to check with you.33:56 –> 33:57I’ve never called you.33:57 –> 33:58I visited down under. – I appreciate it.33:58 –> 34:00– And you’re the only one from down under34:00 –> 34:01that I ever listened to.34:01 –> 34:04– Well, thank you so much for listening.34:04 –> 34:05I appreciate it.34:05 –> 34:06– Well, tell me one thing.34:06 –> 34:07Even while we’re still in there,34:07 –> 34:09where are you from down under?34:09 –> 34:12– Armadale, about 70 kilometers north of Sydney.34:13 –> 34:15– Okay, well, we pulled into,34:15 –> 34:18I just forgot.34:18 –> 34:20(laughing)34:20 –> 34:23Somewhere on the East Coast.34:23 –> 34:27We’ve just decided to have a session with me.34:27 –> 34:27– Gotcha.34:27 –> 34:30– It’s good to meet you, even if it is on the radio.34:30 –> 34:31– Thanks.34:31 –> 34:32Appreciate you, Jeff.34:32 –> 34:34All right, let’s see if we can get Elizabeth34:34 –> 34:36back in really quick before we hit the break.34:36 –> 34:39Hey, Elizabeth, what can I do for you?34:39 –> 34:40– Sorry to bother you again.34:40 –> 34:43I needed to ask, do you have to pay tax34:43 –> 34:48on inheritance from checking and savings account money?34:48 –> 34:50– No, the only thing that usually happens34:50 –> 34:53is any interest that’s been earned would be taxable,34:53 –> 34:55but the money that’s in the bank34:55 –> 34:57is already assumed to have been taxed.34:57 –> 35:00– Okay, and then one more question.35:00 –> 35:04Does the money have to be re-spent35:04 –> 35:06in a certain amount of time?35:06 –> 35:07– If you sell the acreage?35:07 –> 35:09– To pay taxes on it?35:09 –> 35:11– Are you talking about the land sale?35:11 –> 35:13– Yes.35:13 –> 35:14– Okay, yes.35:14 –> 35:17It’s called the 1031 exchange.35:17 –> 35:20So you have a limited window, about 90 days,35:20 –> 35:22to list the property that you want to exchange,35:22 –> 35:25the property that you sold for, to the new property.35:25 –> 35:28So there is a very small window that you have35:28 –> 35:30to actually find the property that you want to buy35:30 –> 35:33once you sell the property that you’re selling.35:33 –> 35:37– Okay, but since I don’t want to buy any property,35:37 –> 35:39what will I have to do?35:39 –> 35:40– Then you pay tax.35:40 –> 35:42I mean, whatever the difference between,35:42 –> 35:44we’d have to come up with the basis35:44 –> 35:47because you paid so much for the 50 acres and the home,35:47 –> 35:49and then whatever the difference is,35:49 –> 35:53you just pay either 15 or up to 23% tax.35:53 –> 35:55I don’t know your income bracket or anything about it,35:55 –> 35:57but if you need help, you can call me.35:57 –> 36:01– Even though that was inherited,36:01 –> 36:03I’d still have to pay the tax on it.36:03 –> 36:04– Oh, wait, wait, wait.36:04 –> 36:05Maybe I’m getting the subperson.36:05 –> 36:06You have an inherited,36:06 –> 36:09this is the home you inherited from your mother?36:09 –> 36:10– Correct.36:10 –> 36:12– I’m so sorry.36:12 –> 36:17So this one you said was like $462,000 was the value?36:17 –> 36:21– Right, but it was split between me and my sister,36:21 –> 36:24so I only got like 230.36:24 –> 36:26– Okay, but how much was it valued36:26 –> 36:29at the time that mom passed away?36:29 –> 36:30– 500,000.36:30 –> 36:32– Okay, so there’s nothing on that one.36:32 –> 36:33That’s all zero.36:33 –> 36:35You don’t have to do anything with that.36:35 –> 36:38– So even though I’m not, just put it in the bank,36:38 –> 36:39it won’t cost taxes or nothing?36:39 –> 36:40– That’s correct.36:40 –> 36:42The only thing you’ll, just go earn some interest.36:42 –> 36:44Yes, ma’am.36:44 –> 36:44– Thank you so much.36:44 –> 36:47I love listening to your show every week.36:47 –> 36:48– Thank you, I appreciate it.36:48 –> 36:50All right, we’re gonna take a quick break.36:50 –> 36:52When we get back, we’ll get to Jake36:52 –> 36:54and anyone else that wants to join the show36:54 –> 36:57at 615-737-9986.36:57 –> 36:59We’ll be right back.36:59 –> 37:02– Services, planning, business, and IRS negotiation.37:02 –> 37:04Visit drfriday.com.37:04 –> 37:07(upbeat music)37:07 –> 37:13– All righty, we are back here live in studio.37:13 –> 37:16We’ve got a few people waiting on the show.37:16 –> 37:18So we’re gonna wade right in with Jake37:18 –> 37:20that’s waited all the way through the break.37:20 –> 37:20So let’s do it.37:20 –> 37:23Jake, what can I do for you, sweetheart?37:23 –> 37:25– Yeah, thanks for taking my call.37:25 –> 37:28Hey, I was wondering if you have a home that you live in37:28 –> 37:33and you sell it for, say you sell it for 25037:33 –> 37:36and I’m on disability and my wife sells self-security.37:36 –> 37:40Will they allow you to keep that money you receive37:40 –> 37:41from the sale of that home?37:41 –> 37:45Or do they expect you not to have that much in the bank,37:45 –> 37:47you know, disability?37:47 –> 37:49– Right, well, I’m not gonna claim37:49 –> 37:50I’m an expert at disability,37:50 –> 37:53but for one, you paid something for the house.37:53 –> 37:56It was just 100,000 whatever.37:56 –> 37:58And I do know, so, you know,37:58 –> 38:00there’d be no capital gains.38:00 –> 38:03But the answer is, my understanding is38:03 –> 38:05it can only keep like $3,000.38:05 –> 38:08A person on disability can have like 300038:08 –> 38:10or something in the bank and that’s it.38:10 –> 38:14Now, since your wife is not on disability,38:14 –> 38:18I’m assuming there may be some way of doing this38:18 –> 38:20where, you know, the money’s, you know, for her.38:20 –> 38:22I mean, obviously she shouldn’t be penalized38:22 –> 38:24by what happens with the other.38:24 –> 38:27So I would definitely, before I decide to do that,38:27 –> 38:30I would definitely try to talk to someone.38:30 –> 38:31And I don’t have an individual myself,38:31 –> 38:33but someone that really knows about,38:33 –> 38:35’cause what I would hate to have38:35 –> 38:39was mess up your disability in getting that money, right?38:39 –> 38:41I mean, that’s what I was trying to say.38:41 –> 38:43Because if you sell something,38:43 –> 38:46and I’ve had people that have lost their disability38:46 –> 38:48because they’ve inherited money.38:48 –> 38:50So I’m gonna assume that that can mess you up,38:50 –> 38:53but it’s your own home that you’re selling.38:53 –> 38:55So I’m thinking that you might have some sort of38:55 –> 38:57a safety or exclusion, Jake,38:57 –> 38:59but I would definitely do a little research before I did it.38:59 –> 39:01I’m not helping.39:01 –> 39:02I can tell you it’s tax free,39:02 –> 39:04but that doesn’t help your answer.39:04 –> 39:07Sorry, I don’t know the exact answer on that one.39:07 –> 39:09– It’s sad to say when you’re down, they keep you down.39:09 –> 39:11I’ll put it that way.39:11 –> 39:12– No, I hear you, buddy.39:12 –> 39:14I know it doesn’t seem to be a win-win situation,39:14 –> 39:16but thank you.39:16 –> 39:17Good luck.39:17 –> 39:18– All right, thanks for your help, bye.39:18 –> 39:19– Thanks.39:19 –> 39:20All right, that’s it, Brian.39:20 –> 39:21He’s got a tax question.39:21 –> 39:23Hey, Brian, what’s happening?39:23 –> 39:26– Hey, Dr. Friday, thanks for taking my call.39:26 –> 39:27– Sure.39:28 –> 39:29– I had a question.39:29 –> 39:32So I’ve got a 401k, it’s a Roth 401k39:32 –> 39:35that I’ve been investing in for some time39:35 –> 39:39for a company that I’m currently leaving.39:39 –> 39:43The new company I’m going to has a 401k plan39:43 –> 39:46that I could roll it into, but they don’t match it.39:46 –> 39:50So I think I’ve decided to take those funds out,39:50 –> 39:52just take an early disbursement.39:52 –> 39:55And from what I’ve read,39:55 –> 40:00you have to pay, I think, 20% on what your earnings were,40:00 –> 40:02but not your contributions,40:02 –> 40:07and then a 10% penalty when I have to file taxes.40:07 –> 40:08Is that correct?40:08 –> 40:10– Right, well, depending,40:10 –> 40:12the 20% would depend on your tax bracket, right?40:12 –> 40:15But the 10% is the early withdrawal penalty,40:15 –> 40:17and then whatever your tax rate being,40:17 –> 40:20probably averaging 20 sounds about right,40:20 –> 40:24then you’ll pay on just the gains.40:24 –> 40:27The investment, you had already paid tax on when it went in,40:27 –> 40:29so you don’t have to pay tax on it coming out.40:29 –> 40:33– So they were saying that when they go40:33 –> 40:34to give me the disbursement,40:34 –> 40:36they will hold the taxes out.40:36 –> 40:38Does that sound right?40:38 –> 40:39– Yes, and that’s where the 20%,40:39 –> 40:41because I think there’s like a mandate40:41 –> 40:43on the federal tax law that tells them40:43 –> 40:44they have to withhold 20%,40:44 –> 40:48and then, you know, and as long as your tax bracket fits that40:48 –> 40:49then we’re fine with that.40:49 –> 40:51If you need a little bit more though,40:51 –> 40:53because if they’re taking 20 plus 10,40:53 –> 40:56that would be 30%, which would be fine,40:56 –> 40:58but a lot of times they’ll only take 20,40:58 –> 41:01which would mean 10% penalty plus 10 for federal,41:01 –> 41:03and that might be a little shy41:03 –> 41:06if your income bracket is over $50,000.41:06 –> 41:09– So I would just need to basically,41:09 –> 41:14once they take the 20% out, keep 10% back out of whatever.41:14 –> 41:15– That’s a smart man.41:15 –> 41:16Yep, that’s what I like.41:16 –> 41:18Yes, good plan.41:18 –> 41:19– And then I’ll just,41:19 –> 41:22and then we’ll pay our other taxes as normal.41:22 –> 41:23– Yep.41:23 –> 41:25Perfect.41:25 –> 41:27– All right, perfect.41:27 –> 41:28Thank you so much for your help.41:28 –> 41:29– No problem, thanks.41:29 –> 41:31All right, well, I’ll try Valerie.41:31 –> 41:33Hopefully we can make it, if she can talk fast.41:33 –> 41:34Hey, Val.41:34 –> 41:36– Hi, hi, Dr. Friday.41:36 –> 41:39Thank you for taking my call.41:39 –> 41:42I wanted to ask basically if I have to pay taxes41:42 –> 41:45on an inherited amount of money from my mom41:45 –> 41:47with the cell phone house.41:47 –> 41:50So basically I was her power of attorney,41:50 –> 41:53the month long process eventually led to the house sale.41:53 –> 41:54The house was sold.41:54 –> 41:57And then unfortunately, a few days later,41:57 –> 42:02my mom passed away and the,42:02 –> 42:05basically Medicaid has already cleared everything42:05 –> 42:07with nothing needed to be paid to them.42:07 –> 42:10With some of that money from her house sale,42:10 –> 42:13her remaining debts were paid with her,42:13 –> 42:16like even after her passing, her remaining debts were paid.42:16 –> 42:20And so that leaves X amount of dollars with the proceeds.42:20 –> 42:22And I didn’t know if taxes needed to be paid.42:22 –> 42:23– So Val, yours is a little different42:23 –> 42:26because the house sold prior to your mom’s passing.42:26 –> 42:30So this would actually be on her personal tax return.42:30 –> 42:33So she would fall under that personal exclusion.42:33 –> 42:35Let’s just say mom brought the house for a hundred42:35 –> 42:37and it sold for 200.42:37 –> 42:40She would be zero tax to mom,42:40 –> 42:41whatever’s left in the bank,42:41 –> 42:42’cause that’s what you’re inheriting42:42 –> 42:44is the money in the bank theoretically.42:44 –> 42:49And so the tax burden is on mom’s personal tax return,42:49 –> 42:51not on the estate.42:51 –> 42:55As long as whatever mom paid for the house42:55 –> 42:58plus 250,000 added on top of whatever she paid,42:58 –> 43:00as long as the house sold for less than that,43:00 –> 43:02there’s no tax to mom,43:02 –> 43:05therefore no tax to the estate.43:05 –> 43:06Does that make sense?43:06 –> 43:06– Okay.43:06 –> 43:07– Okay.43:07 –> 43:08– I believe so.43:08 –> 43:09– Yeah, so if you need more help,43:09 –> 43:11you can always call me Monday or whatever,43:11 –> 43:13and we can talk, I know it’s on the radio is a little hard.43:13 –> 43:16But just the biggest thing is you just need43:16 –> 43:19to get the number, find out how much mom paid for the house.43:19 –> 43:20And then we can work from there.43:20 –> 43:22You know how much it’s sold for,43:22 –> 43:25but that would have to fall on her personal tax return.43:25 –> 43:27And then the fact that you paid everything off or whatever43:27 –> 43:31would be outside of the tax law.43:31 –> 43:33So that would be your big thing.43:33 –> 43:37– Okay, I really appreciate that.43:37 –> 43:39And yeah, definitely might call you more in depth43:39 –> 43:40to talk about it, but I thank you so much.43:40 –> 43:42And I believe that makes sense though.43:42 –> 43:43So I really appreciate it.43:43 –> 43:44– Thank you.43:44 –> 43:45All right.43:45 –> 43:48And unfortunately we’re gonna be taking a quick,43:48 –> 43:50the show quits in about a minute and a half.43:50 –> 43:53So I can’t get to Joe, but Joe, if you want,43:53 –> 43:58you can call either my office on Monday at 615-367-0819.43:58 –> 44:04Again, 615-367-0819.44:04 –> 44:09Or you can email me your question at friday@drfriday.com.44:09 –> 44:12Again, friday@drfriday.com.44:12 –> 44:14But if you have tax problems,44:14 –> 44:17maybe you’re dealing with love letters coming in the mail,44:17 –> 44:19not sure exactly how to move forward,44:19 –> 44:21what you’re gonna need to do,44:21 –> 44:23then you can give our office a call.44:23 –> 44:24We’re an, I’m an enrolled agent,44:24 –> 44:26licensed by the Internal Revenue Service,44:26 –> 44:29been doing this for about 25 plus years.44:29 –> 44:33So if you need help figuring out what’s the best plan,44:33 –> 44:35just calling one of those companies you hear,44:35 –> 44:37I know on the radio,44:37 –> 44:38but you need to be able to do a face-to-face.44:38 –> 44:39You need to know who’s helping you44:39 –> 44:42and you need to understand what your choices are.44:42 –> 44:43Don’t just pick up the phone.44:43 –> 44:44And then the first thing they always tell you,44:44 –> 44:47I think it’s amazing is, oh, sure, we can help you.44:47 –> 44:49You need to pay a set dollar amount.44:49 –> 44:50And it’s often based on how much money44:50 –> 44:53you owe the IRS at the time.44:53 –> 44:55Sometimes you don’t even owe that money to the IRS.44:55 –> 44:58So you need to make sure you’re dealing with someone44:58 –> 44:59that’s gonna help you get through this.44:59 –> 45:01And if you need help with that, again,45:01 –> 45:06you can call our office on Monday morning at 615-367-0819.45:06 –> 45:11615-367-0819.45:11 –> 45:14You can also check us out on the web at drfriday.com.45:14 –> 45:18That’s D-R-F-R-I-D-A-Y.com.45:18 –> 45:22Or you can email friday@drfriday.com.45:22 –> 45:23As an enrolled agent,45:23 –> 45:26we are licensed by the Internal Revenue Service45:26 –> 45:28to do taxes and representation.45:28 –> 45:29That is all we do.45:29 –> 45:33We do tax preparation and we do representation.45:33 –> 45:34Well, I shouldn’t say that.45:34 –> 45:35We also do bookkeeping.45:35 –> 45:37My brother handles that part of the business.45:37 –> 45:40But if you need help and you’re a small business owner45:40 –> 45:41and you’re trying to get into,45:41 –> 45:43we’re certified QuickBooks advisors.45:43 –> 45:46So we can help you also get your QuickBooks going.45:46 –> 45:48And then you have the good information to give to me45:48 –> 45:49to do your taxes.45:49 –> 45:51See how it works.45:51 –> 45:53But if you do need help dealing with the love letters45:53 –> 45:57or payroll issues, or just getting your taxes in line45:57 –> 45:59and just making sure you’re on track,45:59 –> 46:04you can call my office 615-367-081946:04 –> 46:09or Friday@drfriday.com.46:09 –> 46:11Totally hope you’re enjoying this Saturday.46:11 –> 46:14and as we say in Australia, cop you later.46:14 –> 46:16(upbeat music)

View Details

In this episode of the Dr. Friday Radio Show, Dr. Friday discusses various tax-related topics, including franchise excise requirements, inheritance tax, and the American Family and Work Act of 2024. Dr. Friday also provides advice on starting a business and maintaining proper documentation for tax purposes.

Topics covered:

• Franchise excise requirements and potential refunds for Tennessee businesses
• Business ownership information (BOI) filing deadlines and penalties
• Inheritance tax and step-up in basis for inherited property
• American Family and Work Act of 2024 and potential changes to the child tax credit
• Sales tax exemptions for farmers selling their own products at markets
• Tips for starting a business and maintaining proper financial records
• Importance of documenting expenses for tax purposes and audit-proofing
• Dr. Friday’s credentials as an enrolled agent and her ability to represent clients before the IRS

Notice: Please note that due to some technical difficulties during the recording, the audio quality may be slightly compromised towards the end of the episode. We apologize for any inconvenience this may cause.

Transcript:

00:00 –> 00:06No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your00:06 –> 00:07financial woes.00:07 –> 00:09She’s the how-to girl.00:09 –> 00:10It’s the Dr. Friday Show.00:10 –> 00:18If you have a question for Dr. Friday, call her now, 737-WWTN.00:18 –> 00:19That’s 737-9986.00:19 –> 00:26So here’s your host, financial counselor and tax consultant, Dr. Friday.00:26 –> 00:34G’day, I’m Dr. Friday and doctor is in the house.00:34 –> 00:39So if you’re thinking about working on taxes or you happen to be a small business owner,00:39 –> 00:42not necessarily small, but franchise excise requirements.00:42 –> 00:47Now, these are not going to be individuals that only pay the $100.00:47 –> 00:51There’s no refund for them, but there was a change in the tax law that basically said00:51 –> 00:57you can’t be taxing both schedule G and F and they were taking basically the highest00:57 –> 00:59of the two.00:59 –> 01:05Now they’re only allowed to request what is your schedule F, which is your debt ratio01:05 –> 01:09or your income that you have.01:09 –> 01:14So the only way to adjust this is first you have to go on to TINTAP.01:14 –> 01:19I mean, every day we’re getting two or three people sending us a letter that the Tennessee01:19 –> 01:21department of labor sent out.01:21 –> 01:26The letter basically says you could be entitled to a refund.01:26 –> 01:33But that’s such a lean, you know, I mean, I’m just being honest, a large number of clients,01:33 –> 01:38even my big clients, many of them aren’t going to be in much of a refund so far.01:38 –> 01:43I think we’ve seen like a $600 refund, which I’m not saying isn’t a purpose to do it.01:43 –> 01:48Of course, go ahead and do the refund, but it just keep in mind that you have to file01:48 –> 01:50to get the refund.01:50 –> 01:54You have to first go in and file an amended return.01:54 –> 01:58Then you can either attach a balance sheet or you have to give them a report of debt01:58 –> 02:01if your refund is over $200.02:01 –> 02:07So you’re theoretically going to go through an audit with the state, which again, isn’t02:07 –> 02:08the end of the world.02:08 –> 02:11It’s just one of those situations where you’re like, well, do I want to have to go through02:11 –> 02:14an audit to get my own money back?02:14 –> 02:20So, you know, just be in mind that this isn’t something that’s going to happen fast.02:20 –> 02:25Again, first thing you need to do is if you are a franchise excise filer and you don’t02:25 –> 02:33just pay the $100, then you need to go and see about amending the last four years, 2021,02:33 –> 02:3622, and 23.02:36 –> 02:42And they say specifically on the year of 23, you have to file it the old way and then go02:42 –> 02:44back and amend it.02:44 –> 02:49They don’t want you correcting it yourself, in essence.02:49 –> 02:54I don’t really understand that particular one because to me, if the law says you can02:54 –> 02:59only do my net worth and that’s all I’m going to have to be taxed on, then why am I getting02:59 –> 03:04you how much I have in inventory, what my asset value is, how much I paid in rent?03:04 –> 03:09That doesn’t seem like that is going to be a perfect situation.03:09 –> 03:13It basically eliminates the property measure for the franchise tax calculation starting03:13 –> 03:16as of January 1st, 2024.03:16 –> 03:18So there’s some things you need to know.03:18 –> 03:22One, you only have until November to make these corrections.03:22 –> 03:28The tax period in 2023, tax period ending on or before December 31st, 2023, must complete03:28 –> 03:34both the schedule F and the schedule G as you have done always in the past.03:34 –> 03:36You cannot, and then go back.03:36 –> 03:41And then based on that alternative basis, you can amend the taxes and then go back and03:41 –> 03:42correct it.03:42 –> 03:44But again, why are they doing that?03:44 –> 03:48Well, the only reason I can come up with is they want to be able to audit that information.03:48 –> 03:52If they can’t see what’s on the schedule G in the first place and you’re only turning03:52 –> 03:56in your net worth or the schedule F information, they don’t know.03:56 –> 03:59And then they don’t want, they want to have to review you, right?03:59 –> 04:03Because if you turn that in and then there’s no schedule G, then they theoretically could04:03 –> 04:04come back and audit.04:04 –> 04:10So you want to make sure that this is covering January 1st, covering the period ending or04:10 –> 04:14on or after March 31st, 2020.04:14 –> 04:16We encourage the records and the consultant taxes.04:16 –> 04:19You should consult a tax expert.04:19 –> 04:20You can go into appeals.04:20 –> 04:25You do actually have to sign off that you will not sue the state, Tennessee Department04:25 –> 04:32of Revenue or thereof if they don’t, by getting your refund back.04:32 –> 04:35So again, I have a feeling there is some sort of action out there.04:35 –> 04:37We’re not really being told.04:37 –> 04:39They’re trying to make sure it goes away.04:39 –> 04:42The standard claim for refunds will not work.04:42 –> 04:44You have to go all through this process, right?04:44 –> 04:52You have to put on the amended return specific verbiage, you know, appeal schedule G. And04:52 –> 04:57then you have to go under the schedule G refund and it will pull up after you’ve amended,04:57 –> 05:02it will pull up whichever ones of the years that you might have qualified for any refunds.05:02 –> 05:05Then you can go through the refund process.05:05 –> 05:06It isn’t going to be fast.05:06 –> 05:10It’s going to probably be a little bit painful.05:10 –> 05:16But it is November 30th, 2024 is the last day they will accept any of this.05:16 –> 05:24So you actually have, you know, ranges anywhere between obviously $0 up to or more than $10,00005:24 –> 05:26people are getting that according to the state.05:26 –> 05:31But again, if you have that kind of situation and you’re going to be getting anything more05:31 –> 05:36than a couple hundred dollars, you will have to provide additional documentation.05:36 –> 05:40Basically they’re wanting you a balance sheet, which will prove your net worth.05:40 –> 05:46Many small businesses don’t always have balance sheets and sole proprietor or single member05:46 –> 05:49LLCs also don’t report it.05:49 –> 05:56If you do a corporation, 1120, 1120S, a 1065, most of those returns, you’re going to have05:56 –> 05:58a balance sheet already on it.05:58 –> 06:00So it gives them that information.06:00 –> 06:04But if you don’t, then you’re going to end up having to produce one of those forms to06:04 –> 06:05make sure you have it.06:05 –> 06:11If you’re not too sure how to do this, I will say 10TAP does have a live demo right there06:11 –> 06:12on the website.06:12 –> 06:16So if you want to know more before you decide to open that up, or if it’s even worth it.06:16 –> 06:20I mean, we’ve went through and amended a ton of our clients.06:20 –> 06:25And like I said, we’re not seeing very much in refunds in all honesty for a large number06:25 –> 06:30of those clients because they took whichever was hired net worth or your schedule G, your06:30 –> 06:31property.06:31 –> 06:36And in many of these cases, it’s most likely the net worth was already higher anyway.06:36 –> 06:42So it didn’t really change the taxes, but those letters that you’re getting, and I know,06:42 –> 06:45like I said, guys, we are trying to get one almost every single day.06:45 –> 06:49Someone’s taking a picture or emailing it or calling us about it.06:49 –> 06:53It says that Tennessee Department of Revenue is, you could qualify.06:53 –> 06:55And that’s the key words there.06:55 –> 06:59You could qualify for a refund.06:59 –> 07:02You know, I’m just, you know, not as many people I think are going to qualify for this07:02 –> 07:05refund as you think.07:05 –> 07:08So just not saying you shouldn’t do it.07:08 –> 07:13It is a bit of time consumption, but there’s no reason you can’t do the corrections and07:13 –> 07:14get it done.07:14 –> 07:15Just be prepared.07:15 –> 07:20They’re going to come back and most likely ask you for a balance sheet or whatever.07:20 –> 07:23And then again, do not file the regular refund status.07:23 –> 07:29You have to go under the one that specifically says refunds for schedule G once you have07:29 –> 07:34already amended those returns, if you’re doing it on TINTAP at least.07:34 –> 07:38So hopefully that gives you guys, if you’ve got any questions, sorry, I just want to get07:38 –> 07:39that.07:39 –> 07:44I’ve had a ton of questions and I really wanted to at least do a basic overview on that because07:44 –> 07:48it’s again, everyone thinks that there’s money out there for their business or for themselves.07:48 –> 07:52And it’s not going to be as simple as a PPP money or something.07:52 –> 07:53All right.07:53 –> 08:03The phone number here in the studio, 615-737-9986.08:03 –> 08:06The other one that we’re working very hard on, and we have to have everything done by08:06 –> 08:13January of 2024 of course, is the business ownership information, the BOI.08:13 –> 08:15Again, you can do that.08:15 –> 08:20And if you have started a new business, be that a sole proprietorship, I’m sorry, anything08:20 –> 08:28that’s listed as a LLC, a partnership, a corporation, if you’ve started it now, you’ve only got like08:28 –> 08:3060 days to file the BOI.08:30 –> 08:36If you had filed, if you’ve been in business forever, like my company, 25 plus years, then08:36 –> 08:40we have until January 2024 to do it.08:40 –> 08:45If we don’t meet these deadlines, that particular one specifically says in the PAMP that they08:45 –> 08:50sent out a $500 penalty per a day.08:50 –> 08:51That’s right.08:51 –> 08:52500 a day.08:52 –> 08:56Now this other franchise, if you don’t want to amend, you don’t want to do anything, there’s08:56 –> 08:58no penalty not to do it.08:58 –> 08:59Really no penalty to do it.08:59 –> 09:02Worst they’re going to tell you is no, you don’t qualify.09:02 –> 09:05But on the BOI, it is a penalty and it’s very important.09:05 –> 09:12If you run any type of entity via business, any kind of entity, and now there are a few09:12 –> 09:19exclusions, insurance companies, CPA firms, some of those, they say they’re excluded.09:19 –> 09:24I think it has to do with our licensing, but any way you look at it, it’s better to be09:24 –> 09:25safe than sorry.09:25 –> 09:29You do have to have driver’s license and this is being put out.09:29 –> 09:33The BOI is not requested by the Internal Revenue Service, just to let you know.09:33 –> 09:35They already have most of this information.09:35 –> 09:38It’s being put out by the foreign banking.09:38 –> 09:43And I believe it’s a way of trying to figure out how many people own or operate businesses09:43 –> 09:50here in the United States that maybe don’t have a necessary green card or whatever, the09:50 –> 09:58proper IDs, because you can’t do the BOI unless you have a passport or a driver’s license09:58 –> 10:00or something to do that.10:00 –> 10:05So they’re probably trying to figure out something along the four, outside my pay grade guys,10:05 –> 10:06but that’s my guess.10:06 –> 10:10And the most important part again of that conversation, if you run a business or you10:10 –> 10:15work for a business and you’re the accountant, I mean, I know some of you guys, or you work10:15 –> 10:19in that division, you might want to make sure it’s not based on just little companies or10:19 –> 10:20big companies.10:20 –> 10:26I mean, as far as I know, all companies have to file this information.10:26 –> 10:32Now I’m sure if it’s over the 10 million, you fit into the large, there may be a different10:32 –> 10:38situation you have to comply with, but again, it’s still a compliant situation that you10:38 –> 10:39have.10:39 –> 10:42Of course, if you’re on the stock market, those companies have already done this because10:42 –> 10:45they have to have that before they can get registered to go public.10:45 –> 10:46So a little different.10:46 –> 10:48These are for basically private health.10:48 –> 10:53So again, if you have a question or you want to join the show, maybe there’s something10:53 –> 11:03you have that you want to say, 615-737-9986, 615-737-9986.11:03 –> 11:08Also I think I said January of 24 guys, I meant January of 2025.11:08 –> 11:09I am so sorry.11:09 –> 11:10I got the wrong year.11:10 –> 11:13I’m working on 23 taxes and I got the wrong year.11:13 –> 11:19So business ownership information has to be filed by January of 2025.11:19 –> 11:22Sorry about that error guys.11:22 –> 11:27If you want to have questions or you have something you want to share, 615-737-9986,11:27 –> 11:35615-737-9986, taking your calls, talking about all good things.11:35 –> 11:40Other than that, when there’s not a whole bunch, I will say in the tax year of 2024,11:40 –> 11:45the year we’re in right now, assuming nothing changes in tax law, which we have no guarantee11:45 –> 11:46one way or the other.11:46 –> 11:54As of today, if you go and buy a piece of equipment, you’re going to qualify for 60%11:54 –> 12:00of the value for first year section 179 bonus depreciation, whatever.12:00 –> 12:05You want to be able to know this because so many people, last year we were hoping the12:05 –> 12:07hundred would go through, but it was only 80, right?12:07 –> 12:08We got 80%.12:08 –> 12:09It wasn’t too bad.12:09 –> 12:11Now we’re going to be down to 60.12:11 –> 12:15I think it loses the incentive for a lot of business owners to go buy bigger pieces of12:15 –> 12:20equipment because a lot of times they use those savings to help pay off or pay down12:20 –> 12:21that equipment.12:21 –> 12:25But if you’re a person that likes to go and buy equipment and you buy a new car every12:25 –> 12:31year or every few years, you’re not going to get that instant gratification that you’re12:31 –> 12:32used to.12:32 –> 12:33So you may need to rethink.12:33 –> 12:38I mean, I have some clients that every two or three years they go buy a new truck.12:38 –> 12:42They usually turn in the old truck, which means we have to recapture the depreciation12:42 –> 12:46on the old truck for whatever value they got on it.12:46 –> 12:50And then they put the new one on and it, at least if you’re doing the a hundred percent,12:50 –> 12:53you usually end up spending more than what you’re having to recapture.12:53 –> 12:55Therefore, at least we’re not paying taxes.12:55 –> 12:59You know, you’re not have a lot of huge tax savings, but you’re not paying taxes.12:59 –> 13:02That changes when we have the other side of it.13:02 –> 13:03But you know what?13:03 –> 13:04I’m going to take a quick break.13:04 –> 13:06When I get back, we’ll get more into this.13:06 –> 13:10Uh, phone number here, 615-737-9986.13:10 –> 13:11We’ll be right back.13:11 –> 13:19We are back here live in studio.13:19 –> 13:21Again, you can join the show.13:21 –> 13:29615-737-9986, 615-737-9986.13:29 –> 13:30Talking about taxes.13:30 –> 13:32So my favorite subjects in life.13:32 –> 13:38And I realized, guys, it’s the holiday weekend and you’re not likely to be basically sitting13:38 –> 13:42around probably looking, especially if you’re enjoying it, maybe you’re having a barbecue13:42 –> 13:43or something.13:43 –> 13:44It’s Saturday.13:44 –> 13:47Most people do that on Sunday for Memorial Day, but who knows, you know, you got to live13:47 –> 13:48on the wild side.13:48 –> 13:53That being said, um, if you are listening, we’re, I’ll talk a little bit more about the13:53 –> 13:56American family and work act of 2024.13:56 –> 14:00This is going to be something that has not yet been approved.14:00 –> 14:01It’s trying to be approved.14:01 –> 14:05It’s working its way through the Senate and everything, but in it, um, some of you would14:05 –> 14:09be happy to know that they’re trying to change the child tax credit.14:09 –> 14:16If many of you guys remember back in 2021, 2020 and 2021, we had $3,600 for child tax14:16 –> 14:17credit.14:17 –> 14:19A portion was only refundable.14:19 –> 14:20It’s now right.14:20 –> 14:23The second is back down to 2000, which is what it was prior to that.14:23 –> 14:27They’re trying to get it back up to the 36 per child.14:27 –> 14:31Um, so that will be interesting to see if it passes.14:31 –> 14:35There are a couple of other things, but that’s probably one of the most notable in this particular,14:35 –> 14:39um, bill that is sitting out there to see if it’s actually going to work.14:39 –> 14:45I got an, um, an email here just now with someone that is actually inheriting, um, some14:45 –> 14:50property and they also are selling their primary home.14:50 –> 14:54Not that that makes big, big difference, but the beautiful thing about this will be kind14:54 –> 14:55of like a good news moment.14:55 –> 15:00So you have a situation where you’ve sold your primary home.15:00 –> 15:04And again, I don’t know this person, but I’m assuming let’s just make the assumption you15:04 –> 15:06are married based on the email.15:06 –> 15:09So you have $500,000 exclusion.15:09 –> 15:13You do not have to go buy another house to get that exclusion.15:13 –> 15:15You don’t have to reinvest nothing.15:15 –> 15:19You just basically whatever you paid for plus 500,000, you can sell that house for and pay15:19 –> 15:21zero tax.15:21 –> 15:25Same kind of situation with the inheritance where there’s what we call a step up in15:25 –> 15:26basis.15:26 –> 15:31So it depending on when you inherited the basis happened at the time of inheritance,15:31 –> 15:33you then turn around and sell it.15:33 –> 15:37Your basis is going to be higher than it would have been for the person you inherited from.15:37 –> 15:40So you know, just making sure you have that situation.15:40 –> 15:45Hey, it looks like Joe might be on the same kind of situation I was just talking about.15:45 –> 15:48Hey Joe, what’s happening?15:48 –> 15:54We lose him.15:54 –> 15:55We lost him.15:55 –> 15:56Okay.15:56 –> 16:04So if you, again, so if you inherit property in most cases, the inherited property is one16:04 –> 16:10where you obviously whatever the date of that person passing away, it’s very important to16:10 –> 16:18get at least comps if not an appraisal, depending on how much this property is worth.16:18 –> 16:21I mean, you’ve got a couple of million dollars, even a million dollars worth of inherited16:21 –> 16:22property.16:22 –> 16:26So I would definitely suggest breaking the bank and going and paying less than a thousand16:26 –> 16:29dollars probably to get a good appraisal.16:29 –> 16:35That way then you have the value for everyone, whoever’s involved in the sale of that land.16:35 –> 16:40And also what people don’t always, there’s a step up, there’s the next step and the step16:40 –> 16:46up from there on, because you want to make sure you have that basis to keep going.16:46 –> 16:49So again, if you’re selling your primary home, that’s one thing.16:49 –> 16:54And then if you inherit, you have the other side of that to go with it.16:54 –> 16:57If Joe’s on the line, guys, you can just connect it for me.16:57 –> 16:59Hey Joe, what’s happening?16:59 –> 17:01Yeah, lost you there.17:01 –> 17:03I know a little typo on our side.17:03 –> 17:04I can hear you though.17:04 –> 17:05Thanks for calling back.17:05 –> 17:06Yeah.17:07 –> 17:13If you buy a house for a 99,000 years ago, and then you turn around and you sell it right17:13 –> 17:23now for two 50 and you are a disability, will you be able to keep that money?17:23 –> 17:24That’s a great question.17:24 –> 17:28And unfortunately I, my understanding is this.17:28 –> 17:30No.17:30 –> 17:31I don’t mean that.17:31 –> 17:36My understanding is it could go, they could take that money and apply it against your17:36 –> 17:37future medical.17:37 –> 17:38I don’t know.17:38 –> 17:41They have a five year look back and you’re only allowed to have like 3000 in the bank17:41 –> 17:44is my understanding of people.17:44 –> 17:51So if you go and put 250,000 in the bank, now you’ve got more money than what, you know,17:51 –> 17:55they would want you to live off that and then go back onto disability, which is very hard17:55 –> 17:56to do.17:56 –> 17:57Right.17:57 –> 18:05Now what about if you’re just on, you’re just on social security because you’re 65.18:05 –> 18:06Right.18:06 –> 18:07That’s different.18:07 –> 18:09If you’re on social security, it doesn’t make a difference if it’s a social security, the18:09 –> 18:14only thing you would have that could kick in a, well, this is your primary home.18:14 –> 18:17So no, there’d be nothing that that would be perfect.18:17 –> 18:22You would not have any penalty for having, would you have to pay taxes on it?18:22 –> 18:26If you decided to just go rent a house, you want to just keep the money.18:26 –> 18:27That’s a great question.18:27 –> 18:32And no, Joe, I mean, under your scenario, you paid 98, you sell it for two 50, you have18:32 –> 18:35a $250,000 exclusion.18:35 –> 18:40So you would have plenty of wiggle room to not have to pay any tax as long as you lived18:40 –> 18:42in that house two out of the last five years.18:42 –> 18:43Yeah.18:43 –> 18:46So you don’t, wouldn’t have to go buy another house.18:46 –> 18:47No sir.18:47 –> 18:48Okay.18:48 –> 18:50Well, I appreciate your help on that.18:50 –> 18:51No problem.18:51 –> 18:54I thank you for listening and calling today.18:54 –> 18:55Well, enjoy your show.18:55 –> 18:58You do a really nice job on the show.18:58 –> 19:00You really appreciate it.19:00 –> 19:02All right.19:02 –> 19:03Thank you for calling.19:03 –> 19:04All right.19:04 –> 19:05I’m going to try to get this on the show.19:05 –> 19:06You can 615-737-9986, 615-737-9986.19:06 –> 19:07And I want to appreciate Joe for calling.19:07 –> 19:18One of the reasons is because so many people still call.19:18 –> 19:23And at one point back in the day, guys, there was the situation where if you sold a home,19:23 –> 19:29you had two years to reinvest it in another home and you didn’t have to pay tax.19:29 –> 19:32That is not on the table any longer and hasn’t been for quite a while.19:32 –> 19:37And nowadays they just give you this exclusion and you can do whatever you want.19:37 –> 19:39You can pay, you can go buy another house.19:39 –> 19:41You don’t have to buy another house.19:41 –> 19:47The money is yours free with this step up that they provide or this basis addition they19:47 –> 19:48give you.19:48 –> 19:54So the exclusion for single person, 250, married couple, 500.19:54 –> 19:57Both people do have to have lived in the house two out of five years.19:57 –> 20:01And if you’ve actually excluded a house in the last two out of the five years, there20:01 –> 20:04are some other additional questions that do come in play.20:04 –> 20:09And I also want to say, sometimes people don’t realize this, but theoretically, if you don’t20:09 –> 20:12live in the house two out of five years, but let’s say you got divorced.20:12 –> 20:19So you were forced to have to sell the house due to that circumstance or for other major20:19 –> 20:20reasons.20:20 –> 20:22There is some additional exclusions available out there.20:22 –> 20:29A lot of times people don’t seem to know what that is, but it is something out there.20:29 –> 20:33So if you have a situation like that, make sure you talk to a tax person.20:33 –> 20:38You don’t want to be paying capital gains tax or at least less if that’s a possibility.20:38 –> 20:41I’m not too sure how to say the person’s name.20:41 –> 20:42Is it Pius?20:42 –> 20:43We’ll see.20:43 –> 20:44All right.20:44 –> 20:50We got, I think it’s Pius in Hendersonville.20:50 –> 20:51You want to have him join?20:51 –> 20:52Thanks.20:52 –> 20:54Am I saying that first name right?20:54 –> 20:55– Yes, Pius.20:55 –> 20:56– Pius.20:56 –> 20:57Okay.20:57 –> 20:58Hey, what can I do for you?20:58 –> 20:59– Yes.20:59 –> 21:00We had the home for the past 11 years or 12 years.21:00 –> 21:01We moved from there about a year ago.21:01 –> 21:02We bought another house.21:02 –> 21:03It hasn’t sold, but it’s about to get sold.21:03 –> 21:04So are we still qualified for the 250 I mentioned?21:04 –> 21:05– Yes, you would.21:05 –> 21:06– We lived in it for 12 years.21:06 –> 21:07– Because you lived in it two out of the last five years, because you said you moved out21:07 –> 21:08a year ago.21:08 –> 21:09So you would be fine.21:09 –> 21:10The last time you moved out, you were in the house for two years.21:10 –> 21:11– Yes.21:11 –> 21:12– So you’re still qualified.21:12 –> 21:13– Yes.21:13 –> 21:14– Okay.21:14 –> 21:15– So you’re still qualified.21:15 –> 21:16– Yes.21:16 –> 21:17– Okay.21:17 –> 21:18– So you’re still qualified.21:18 –> 21:19– Yes.21:19 –> 21:20– Okay.21:23 –> 21:28– So you said you moved out a year ago, so you would be fine.21:28 –> 21:31The old home, I’m assuming, is the one that sold, correct?21:31 –> 21:33Not the new house that you just moved in?21:33 –> 21:35– No, the old home.21:35 –> 21:36– Okay.21:36 –> 21:37Yes, you would qualify for that.21:37 –> 21:43So whatever you paid, plus either 250 if you’re single or 500,000 if you’re married, that’s21:43 –> 21:44where the exclusion.21:44 –> 21:48So if you paid 200 and you’re married, you could sell for 700,000 or less and you pay21:48 –> 21:50zero tax.21:50 –> 21:53– Wonderful.21:53 –> 21:54Great question.21:54 –> 21:55Thank you, sir.21:55 –> 21:56– All right, bye-bye.21:57 –> 22:00Let’s hit Randy really quick.22:00 –> 22:02Randy and Franklin, hey, bud, what’s happening?22:02 –> 22:04– Hello, Dr. Freda, how are you doing?22:04 –> 22:05– I am doing awesome.22:05 –> 22:06– Good.22:06 –> 22:07– What can I do for you?22:07 –> 22:15– I am, just a quick question about my wife and her brother, they’ve inherited their mother’s22:15 –> 22:16house.22:16 –> 22:17– Okay.22:17 –> 22:22– It’s gonna be about a year now that they’re finally getting around to settling everything.22:22 –> 22:27But one sibling wants to buy the other sibling out.22:27 –> 22:31Is there a tax consequence on that because one’s not getting the step up for the real22:31 –> 22:32estate or how does that work?22:32 –> 22:35– No, they’re still getting the step up.22:35 –> 22:39So when mom passed away, assuming that they didn’t own the house prior to mom passing22:39 –> 22:42away, but they inherited it, so they would get it.22:42 –> 22:44And then let’s just say the house is worth 200,000.22:44 –> 22:49If the other sibling is wanting to give one 100,000 or whatever, they agree, it doesn’t22:49 –> 22:54have to be the same, but let’s just, for the assumption here, 100,000, that money would22:54 –> 22:57be tax free to that person that received it.22:57 –> 23:01And the new basis for the other partner would be 200,000.23:01 –> 23:02– Got it, got it.23:02 –> 23:03So as long as at the time that-23:03 –> 23:04– Does it make sense?23:04 –> 23:05– Yeah, it makes sense.23:05 –> 23:10As long as at the time they inherited it, it’s still a half, then it washes.23:10 –> 23:12– Exactly, yes.23:12 –> 23:16So they’re just giving their share for the value of whatever the existing, and I’ve had23:16 –> 23:20some where they’ve done it for less because of a lot of repairs, and maybe it doesn’t23:20 –> 23:21actually appraise.23:21 –> 23:24And there’s all kinds of different moving parts to that.23:24 –> 23:29But as long as they don’t sell it for more than the 50% that they think it’s worth more23:29 –> 23:32and the person’s willing to buy them out, then there’s no taxes you have to worry about.23:32 –> 23:35– Outstanding, thank you.23:35 –> 23:36– No worries, thank you.23:36 –> 23:39All right, guys, we’re gonna take another quick break here.23:39 –> 23:40This is the Dr. Friday Show.23:40 –> 23:51You can join the show at 615-737-9986, 615-737-9986.23:51 –> 23:54When we get back, we’ll get some more of your phone calls and emails.23:54 –> 24:01You can also call the studio, 615-737-9986, or email friday@drfriday.com.24:01 –> 24:04We’ll be right back with the Dr. Friday Show.24:04 –> 24:06All righty, we are back.24:06 –> 24:16We are live in studio on this absolutely beautiful Saturday.24:16 –> 24:20So I’m glad that everyone’s still out here listening because the sun is shining where24:20 –> 24:21I am at.24:21 –> 24:32Let me tell you, again, 615-737-9986, excuse me, 615-737-9986 is the number here in studio.24:32 –> 24:37And we’re taking phone calls, talking about taxes, talking about different situations.24:37 –> 24:45I had someone that contacted me just recently about they are doing their own bees and honey,24:45 –> 24:48and they’re taking them to the market.24:48 –> 24:52They wanted to know if they had to charge sales tax on the honey that they sell.24:52 –> 24:54And the answer is no.24:54 –> 24:59If you make the product here, so for example, if you grow corn and you go down to a farmer’s24:59 –> 25:04market and you sell the corn, there is no sales tax in the state of Tennessee on that25:04 –> 25:07product because you actually grew it and sold it.25:07 –> 25:12And that’s just one of those little loopholes in the tax system.25:12 –> 25:16So if you have, you want to go and you want to start some little, you know, farmer’s market25:16 –> 25:22or do something like that, then the answer is you just need to, you know, just pack it25:22 –> 25:23up and go down there.25:23 –> 25:24Like I told them, see what happens.25:24 –> 25:28If you want to be able to make something like that and do it.25:28 –> 25:29I think it’s awesome.25:29 –> 25:33We’ve been looking at honeybees ourselves because I think bees, especially if you live25:33 –> 25:39out and you know, you want to actually do grow corn or tomatoes or anything, they usually25:39 –> 25:43have to be pollinated and that requires somebody to do it.25:43 –> 25:47I actually did one year pollinate myself, my tomato plants, and that was a lot more25:47 –> 25:49than it needed to be.25:49 –> 25:54I think bees would do the job so much easier than me tickling every little vine.25:54 –> 25:59So if you’re a person that enjoys that kind of thing, it’s not a worries, but if you want25:59 –> 26:03to join the show talking about taxes or, you know, building businesses, if you’ve got a26:03 –> 26:08new business and you’re trying to figure out what type of entity should even be an entity,26:08 –> 26:14you know, so often I find that people jump right into starting LLC, starting corporations,26:14 –> 26:17but they really haven’t even started the business yet.26:17 –> 26:18I’m not an attorney.26:18 –> 26:20Let’s clarify that right now.26:20 –> 26:24I am not an attorney, but from the tech standpoint, once you’ve started something like that, you26:24 –> 26:27know, you’re basically saying this is a business.26:27 –> 26:29Hello, I’m doing a business.26:29 –> 26:33And if that’s the case, there’s going to be business licenses potentially, or, you know,26:33 –> 26:38even if it’s only 22 or $44, you’re going to have the F and E minimum, a hundred dollars26:38 –> 26:41annual for, for an LLC.26:41 –> 26:46The annual amount is $300 to the secretary of state, $20 if it’s a corporation, money26:46 –> 26:50is going out the door, but yet you haven’t really started the business.26:50 –> 26:55So my personal opinion is before you really get too far into it, let’s make sure you have26:55 –> 26:57a viable business.26:57 –> 27:01Let’s make sure you have a business in which you can do so, you know, start a business27:01 –> 27:03and also good practice.27:03 –> 27:07If you’re going to, if you’re going into business and I will say, I have had clients stumble27:07 –> 27:11into business, meaning they never intended to be in business, but the next thing they27:11 –> 27:15knew they were in business, they did one little thing here, did something else next thing,27:15 –> 27:16you know, they’re doing it.27:16 –> 27:21But if you’re planning your business, then start the simplest thing, start out with a27:21 –> 27:26bank account, even if it’s just a separate bank account in your name, something that27:26 –> 27:32you can then track all income out, all income, all expenses out, sorry, all income in all27:32 –> 27:33expenses out.27:33 –> 27:39Um, and, and you will then have at least the idea of a balance sheet and financial statement,27:39 –> 27:41which would then help you when you’re doing your taxes.27:41 –> 27:44Also let you know if you’re making money or not.27:44 –> 27:48I, I’ve, you know, I’ve been doing this for a number of years, 25 plus years.27:48 –> 27:53And one thing we see a lot of is sometimes people don’t realize how much money they make.27:53 –> 27:58Uh, every tax season, I guarantee every single tax season, I have number of people that will27:58 –> 28:03come in every time and say, I, um, I couldn’t have made that kind of money.28:03 –> 28:04Where is it?28:04 –> 28:05What’d you spend?28:05 –> 28:08You know, where, what, as if the money just disappeared all on its own.28:08 –> 28:11Then you go back through and you show them where the money went.28:11 –> 28:16Oh, you did this, you did that, or you purchased this, or you’ve got more inventory, whatever28:16 –> 28:17it might be.28:17 –> 28:19The dollar amount is still there.28:19 –> 28:21It didn’t disappear.28:21 –> 28:26But if you need to be able to do that, if you have the ability to do now, QuickBooks28:26 –> 28:31is a decent software, but wave is a good, cheap, inexpensive way to start.28:31 –> 28:35Um, you may eventually want to move into QuickBooks depending again on the type of business.28:35 –> 28:38I mean, even Excel is a good place to start.28:38 –> 28:44You don’t have to be, um, an accountant to do the basics on a brand new startup business.28:44 –> 28:48You really just want somebody that’s going to take the time to actually track the expenses.28:48 –> 28:49Right?28:49 –> 28:53So the important, I mean, you want to make yourself as audit proof as possible.28:53 –> 28:56And to do that is really starting out the way you want to continue.28:56 –> 29:00You don’t want to be the guy that used his own personal checking account.29:00 –> 29:04And then, you know, you get so big and you’re like, Oh, I don’t really know where my expenses29:04 –> 29:08because everything going, all the petro going through that bank is basically personal because29:08 –> 29:09we have nothing to go.29:09 –> 29:14All of the, um, meals or entertainment and stuff like that is all there because of the29:14 –> 29:15same reason.29:15 –> 29:20Um, you know, you have the same situation where you have that going on.29:20 –> 29:24And so you have to be able to figure out what you want to do and how you’re going to do29:24 –> 29:27it.29:27 –> 29:31And so if you have a separate bank account that you can do it in, then it’d be a good29:31 –> 29:37idea to be able to track and then you can say, Oh wait, these meals had to do with business.29:37 –> 29:41These meals had to do with petro, um, or for, for miles.29:41 –> 29:43And I use this cause it’s a lawn service.29:43 –> 29:50Maybe I use this for just tracking my diesel or whatever else that was happening over there.29:50 –> 29:54Um, so you have, you know, the tracking is so important.29:54 –> 29:58If you really want to be audit proof guys, you have to have the documentation.29:58 –> 30:00Now in QuickBooks and stuff, it is nice.30:00 –> 30:05You’re able to scan the receipts, put them in behind the checks or the invoices, those30:05 –> 30:06kind of things.30:06 –> 30:11So you’re able to actually track all of those different expenses, not just, um, you know,30:11 –> 30:15just cause people will say, well, I have it on my credit card or I use my debit card.30:15 –> 30:17So here’s the information that’s not going to work.30:17 –> 30:21In many cases, the IRS has no idea if you went to office Depot, unless you have the30:21 –> 30:26receipt, they don’t know if you went and brought school supplies, personal supplies or business30:26 –> 30:27supplies.30:27 –> 30:31If you’re a contractor and you went to Home Depot, same thing, how do they know you didn’t30:31 –> 30:35just fix up your own house or your kid’s house instead of fixing, um, you know, somebody30:35 –> 30:37else’s for paid work.30:37 –> 30:43Very important to have the additional documentation and then anytime possible, obviously on the30:43 –> 30:48receipt itself, or if you’re like a Home Depot, there’s the pro service and stuff, putting30:48 –> 30:52the PO, putting the name of each property that you’re working on.30:52 –> 30:57So that way you can go back, run a report for this one client and be able to do something30:57 –> 31:02on that as far as being able to track the expense.31:02 –> 31:05So how much did I spend on this house?31:05 –> 31:09I had the same problem again on rentals, rentals.31:09 –> 31:10I get it.31:10 –> 31:11I have rentals.31:11 –> 31:15You guys all know that I love my rentals, but to track each rental separately is the31:15 –> 31:16key.31:16 –> 31:19If you’re going to do, especially if it’s a short term, in my opinion, cause there’s31:19 –> 31:24a lot more expenses than longterm, but if you’re going to pay a utility bill, if you’re31:24 –> 31:28going to run the Walmart, you’re going to get a hire someone to fix something, then31:28 –> 31:33you want to be able to make sure that you have the documentation.31:33 –> 31:37If you go to Home Depot and you say, well, I did this on my Sulphur Springs road, or31:37 –> 31:41I did this for this, you had better have more detail.31:41 –> 31:45For one, if you’re buying it here in Sulphur Springs and Knoxville, then you might be wondering31:45 –> 31:46why you drove all the way up.31:46 –> 31:50It’s not, you couldn’t, but it’s, I mean, it’s just that you want to document it because31:50 –> 31:55if you don’t document it, the IRS comes back and they question you and you don’t have any31:55 –> 31:56notes on there.31:56 –> 32:00It’s going to be very hard for you to justify these expenses.32:00 –> 32:01That’s all I’m saying.32:01 –> 32:05Your job is to make sure every time you write off something on your tax return to be able32:05 –> 32:09to say, Hey, was it a true actual expense?32:09 –> 32:11Was it necessary for my business?32:11 –> 32:17Not just because I want to, but the word necessary is actually in the tax law.32:17 –> 32:20Is it necessary to run my business?32:20 –> 32:25And that’s where it gets a little gray when people say, well, I need to drive a G wagon32:25 –> 32:27or something like that.32:27 –> 32:33And you know, your business doesn’t necessarily require you to drive that kind of vehicle.32:33 –> 32:37There is tax courts that has been taken to tax courts cases.32:37 –> 32:42And most of the ones I’ve ever seen win under those circumstances for having the nicer higher32:42 –> 32:49end are people mostly in finance or real estate where they’re dealing and having to meet or32:49 –> 32:51even have people in their car.32:51 –> 32:54And they’re, you know, people are worth millions.32:54 –> 32:57And then they, they have these kinds of vehicles because they want to be able to show that32:57 –> 32:59they’re so good at what they do.32:59 –> 33:00It represents them.33:00 –> 33:04It’s like in the day when Rolex, apparently that’s no longer the top watch, but people33:04 –> 33:08used to wear the Rolex same way to show that they had wealth and therefore you should invest33:08 –> 33:10with me because I am so good.33:10 –> 33:12I can afford a Rolex.33:12 –> 33:23So if you want to join the show, you can 615-737-9986, 615-737-9986.33:23 –> 33:25Taking your calls, talking about taxes.33:25 –> 33:29Maybe you’ve got a situation, like I said, where you starting a new business, what you33:29 –> 33:32should and shouldn’t do.33:32 –> 33:36Keep in mind next year, the 1099K is going to also, which is what we’ve all been a little33:36 –> 33:37feared at one point.33:37 –> 33:41It said 600, then it went all the way up to 12,000.33:41 –> 33:43It is $5,000.33:43 –> 33:52So 200 transactions, $500,000 or $5,000, 200 transactions, whichever is closest to you.33:52 –> 33:57Have a little eBay business of, if you’re selling something, it could be antiques.33:57 –> 33:59It could be anything like that.33:59 –> 34:05Any of those situations, you’re going to want to be able to backtrack.34:05 –> 34:19We’re going to make a little change there, guys.34:19 –> 34:22I’m so sorry, but we are good to go.34:22 –> 34:27Let’s see some weather or something in the way, but we will work around that to make34:27 –> 34:29sure it’s working good for us.34:29 –> 34:40Again, you can join the show, 615-737-9986, taking your calls, talking about my favorite34:40 –> 34:51subject, which of course is taxes, tax issues, taxes.34:51 –> 34:56We’re going to keep things moving.34:56 –> 35:01If you’ve got questions or you need to help, you can.35:01 –> 35:07Otherwise, we’re going to keep you posted.35:07 –> 35:09Where we’re at and what we have to do.35:09 –> 35:16Let’s see, I think I’m hearing myself talk, so I’m just going to do that.35:16 –> 35:17615-737-9986.35:17 –> 35:18All right.35:18 –> 35:19We covered today.35:19 –> 35:26We talked about the franchise excise, again, getting a lot of letters.35:26 –> 35:30You can go to 10TAP live demo if you are a person that works in the same industry, but35:30 –> 35:31keeping taxes.35:31 –> 35:34I need to make a call for you.35:34 –> 35:39I’m going to walk you through.35:39 –> 35:41There you go.35:41 –> 35:47Anyways, if you have questions or you need to do something, just let me know, 615.35:47 –> 35:51At this point, actually, let’s just go through talking a little bit more about what we have35:51 –> 35:52as options coming up.35:52 –> 35:55You do have deadlines coming up.35:55 –> 36:00You have September 15th, obviously, for corporations or businesses.36:00 –> 36:04You also have October 15th for individuals.36:04 –> 36:06That’s when our extensions exile.36:06 –> 36:07And also June 17th.36:07 –> 36:14Remember, June 17th for anyone that was in the different counties, which are Robertson,36:14 –> 36:19Wheatley, Cheatham, Gibson, Stewart, Davidson, Dixon, Montgomery, and Sumpner.36:19 –> 36:22All of you guys had extensions until June 17th.36:22 –> 36:28So if you happen to forget to file an extension or you didn’t pay your bill yet because of36:28 –> 36:33having all the storms and all that, they’re giving you until that date to do what you36:33 –> 36:34need to do.36:34 –> 36:42So, again, that was Robertson, Wheatley, Cheatham, Gibson, Stewart, Davidson, Dixon, and Montgomery,36:42 –> 36:43and Sumpner.36:43 –> 36:49So, again, those are the ones that you have working on getting those extensions so that36:49 –> 36:51way you don’t file late.36:51 –> 36:55And if you haven’t filed — if you’ve already done your taxes and you live in those counties36:55 –> 36:58and you haven’t quite paid it all off, now would be the time to try to come up with that36:58 –> 37:03money so that you could actually do what you need to do because then you won’t have the37:03 –> 37:04penalties.37:04 –> 37:05And penalties are bad.37:05 –> 37:09I mean, I can’t tell you how many times — I mean, obviously, we’ve been at this for a37:09 –> 37:16while and every time someone will send something, you know, it’s $1,000, it’s $2,000, it’s $5,000,37:16 –> 37:18it’s $11,000, and they don’t always know why.37:18 –> 37:23I mean, they paid their taxes, but then they didn’t make proper estimates, filed late,37:23 –> 37:26they — failure to file at all.37:26 –> 37:28Just the penalties can keep adding up.37:28 –> 37:33So it’s very important that you try your best to obviously meet those criteria so you don’t37:33 –> 37:35get hit with those penalties.37:35 –> 37:39Things will happen, and, you know, there are some ways of getting some of it waived.37:39 –> 37:43There’s no guarantee unless you’ve never, ever had a case with the IRS because then37:43 –> 37:47you always get that first or only time, get out of jail card free, as I call it, but basically37:47 –> 37:50an abatement to your penalties.37:50 –> 37:54But, you know, you just have to make sure you have what you need to have.37:54 –> 38:01So moving to the fact that I’m an enrolled agent licensed by the Internal Revenue Service38:01 –> 38:03to do taxes and representation.38:03 –> 38:08Sorry, someone just emailed and I’m trying to multitask here.38:08 –> 38:12So they asked who or what my credentials were, and my credentials are I’m an enrolled agent.38:12 –> 38:17An enrolled agent is the only, the highest you can get from the Internal Revenue Service38:17 –> 38:19as a tax professional.38:19 –> 38:21We do taxes and representation.38:21 –> 38:23That’s all I do.38:23 –> 38:27And I can help you do deals with the IRS.38:27 –> 38:31They do have the smart choice that you can actually use.38:31 –> 38:36But keep in mind that a lot of the deals we make with the IRS, I mean, if you have money38:36 –> 38:41in your house, this is something, again, we take a lot of phone calls on, but if you have38:41 –> 38:49money in your house, equity, you have money, you know, in a 401k, in a savings account,38:49 –> 38:54because a lot of times people will call and say, well, I can’t afford to pay the IRS.38:54 –> 38:58And then of course, you know, you go through, well, I don’t want to have to, now the IRS38:58 –> 39:01cannot make you sell your house.39:01 –> 39:05They can’t force you unless they can prove that it’s fraudulent or whatever.39:05 –> 39:08They can’t take the money out of your IRA.39:08 –> 39:11They can take it from your paycheck.39:11 –> 39:15If you have more than one property, which is often something, you know, if you have39:15 –> 39:21a rental or just land or something else, then they can take it from that.39:21 –> 39:27But they cannot take it right out of, I mean, they can’t just seize your house, seize your39:27 –> 39:28properties.39:28 –> 39:32The only reason that would happen is if they can prove fraud or, you know, basically you39:32 –> 39:34broke the law.39:34 –> 39:37At that point, sure, they can do like any other person.39:37 –> 39:40They took Al Capone down for tax evasion.39:40 –> 39:45So, you know, there are ways of them using that for good, I guess you would say.39:45 –> 39:51But if that is the case in yours, the biggest things you have to understand is that it isn’t39:51 –> 39:56always, I mean, I took a call on last Thursday and, you know, the gentleman was great and39:56 –> 40:04he had been audited and the IRS had adjusted due to the audit because something that a40:04 –> 40:11lot of times people forget is that you cannot deduct expenses on a hobby, right?40:11 –> 40:17So if you’re a real estate agent and you work a full-time job somewhere else and you didn’t40:17 –> 40:24make any sales in the last year, two years, three years or very minimal of sales, and40:24 –> 40:30you’re still deducting all of your expenses or you’re a person that goes out and does40:30 –> 40:36some sort of consulting and you have a full-time job, anytime you have first a full-time job,40:36 –> 40:42I find it normally with investment real estate or real estate brokers or agents where if40:42 –> 40:48they went to work somewhere else and they still have those licenses, then you are most40:48 –> 40:52likely going to be labeled a hobby, especially if you’ve already had two or three years of40:52 –> 40:53loss.40:53 –> 40:55You’re not going to be referred to as a hobby.40:55 –> 41:00The only way around that not being a hobby is plain and simple, documenting the fact41:00 –> 41:06that you’re making the attempt to actually do real estate.41:06 –> 41:12You’ve taken people on showings, you’ve had, you know, interest in different properties,41:12 –> 41:15they just fell through, you know, why isn’t there a sale?41:15 –> 41:19You know, and in the case of the gentleman I called, unfortunately, he really was only41:19 –> 41:24doing real estate for either himself or family or friends, and then the loss got deducted41:24 –> 41:28because you can’t claim that as a loss if that’s all you’re doing.41:28 –> 41:34But if you are truly just not able to sell real estate, basically, you know, the market41:34 –> 41:38isn’t your type of market, whatever, and you’re making the attempt, you’re still keeping your41:38 –> 41:42CE credits, you’re doing everything you’re supposed to do, and it’s not happening, well,41:42 –> 41:50you can’t prove to the IRS that you are making the attempt to be able to sell, you know,41:50 –> 41:54to sell real estate, you just haven’t been able to get it to that point.41:54 –> 42:00But you don’t want to leave it up to them to make the determination that there is or42:00 –> 42:07is not an ability to be a hobby or not, because they would make every business almost a hobby,42:07 –> 42:16especially anybody that is working a full-time job and then doing said other business, because42:16 –> 42:23that’s obviously where it becomes a problem, is that they don’t have the ability to make42:23 –> 42:24that work for you.42:24 –> 42:31So if you have a question on that or maybe have some situation where you are in the midst42:31 –> 42:36of your own audit or review or anything like that, then you can call us as an EI can represent42:36 –> 42:41you in front of the IRS, which is really just, you know, it’s like anything else.42:41 –> 42:42Would you want a mechanic?42:42 –> 42:43Would you want somebody?42:43 –> 42:48Yeah, you want somebody that actually understands the language and the terms and what the IRS42:48 –> 42:49is saying to you.42:49 –> 42:52It’s not that you can’t do it, but this is a prime example the gentleman that called42:52 –> 43:00is, had he possibly had a representation and not talked directly to the IRS, it may have43:00 –> 43:02been that the exclusion could have been continued.43:02 –> 43:03It may not have been.43:03 –> 43:08You don’t know the guy or his situation or any of that, but you do know that the situation43:08 –> 43:13is going to be one of those where if you represent yourself, you’re most likely, I mean, the43:13 –> 43:18IRS trains agents how to get around those questions, to make you feel like you’re your43:18 –> 43:20friend, that they’re only doing their job.43:20 –> 43:26And again, they are only doing their job and their job is to collect money for the IRS,43:26 –> 43:31which means to audit you and make it sure that you don’t have any other situation where43:31 –> 43:35you’re going to be able to pay less to the IRS.43:35 –> 43:41I mean, I’ve had several audits that came out as no change or less than $50 one way43:41 –> 43:42or the other.43:42 –> 43:43But it doesn’t always happen.43:43 –> 43:48Most of the time you hear about the guy that ended up with, I mean, one I know of, he ended43:48 –> 43:50up owing like $300,000.43:50 –> 43:52So it can be any direction.43:52 –> 43:54So just be careful if you’re representing yourself.43:54 –> 43:59All right, guys, we’re going to wind down this road, this show down the road.43:59 –> 44:02Oh, goodness, my tongue is so not working today.44:02 –> 44:04We’re going to wrap up the show.44:04 –> 44:07If you want to, you can call our office at 615-367-0819.44:07 –> 44:17Again, we’re closed on Monday, but Tuesday, 615-367-0819.44:17 –> 44:23You can also email Friday@DRFriday.com.44:23 –> 44:26That’s Friday@DRFriday.com.44:26 –> 44:30Or if you have a question and you don’t want to email, you can go right to the website,44:30 –> 44:32which is DRFriday.com.44:32 –> 44:34Any direction you want to do on that one.44:34 –> 44:39So that way you make sure you have everything you need on being able to handle.44:39 –> 44:43If you’ve got love letters and you have an answer to them, you need help with back taxes,44:43 –> 44:46you need the ability to get the IRS back on track.44:46 –> 44:48Because that’s what we’re good at.44:48 –> 44:52We’re helping people get their business back on track so they can get back to living life44:52 –> 44:54and enjoying the things they want to be able to do.44:54 –> 45:01Again, 615-367-0819 is the direct number to our office.45:01 –> 45:08615-367-0819 or email Friday@DRFriday.com.45:08 –> 45:10Also check us on the web, DRFriday.com.45:10 –> 45:12Talk to you later.

View Details

In this episode of the Dr. Friday Show from May 11, 2024, Dr. Friday covers a range of tax-related topics, including updates on tax laws, advice for handling tax issues, and answers to listener questions. She provides insights and guidance to help navigate the complex world of taxes.

Topics covered:

• Tennessee franchise and excise tax refunds for filings after March 31st, 2020
• Handling amended tax returns and dealing with IRS delays
• Gift tax exemptions for 2024
• 1099-K threshold changes for 2024
• Depreciation rules for vehicle purchases in 2023 and 2024
• Tax implications of selling a primary residence
• Handling taxes for a deceased relative as an executor
• Importance of estate planning and power of attorney
• Communicating with the IRS and setting up payment plans for tax debt

Transcript:

00:00 –> 00:06No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your00:06 –> 00:07financial woes.00:07 –> 00:09She’s the how-to girl.00:09 –> 00:10It’s the Dr. Friday Show.00:10 –> 00:19If you have a question for Dr. Friday, call her now, 737-WWTN.00:19 –> 00:23That’s 737-9986.00:23 –> 00:29So here’s your host, financial counselor and tax consultant, Dr. Friday.00:29 –> 00:30All right, good day.00:30 –> 00:31I’m Dr. Friday.00:31 –> 00:37This is the Dr. Friday Show, and we are today going to be talking more about state tax.00:37 –> 00:43I know a number of you have received the letters from the Tennessee Department of Revenue talking00:43 –> 00:49about refunds, a portion of your franchise and excise tax that could be being refunded,00:49 –> 00:53anything that was filed after March 31st, 2020.00:53 –> 00:58You do have to file for your credit or refund claim, must be filed between May 15th and00:58 –> 01:01November 30th, 2024.01:01 –> 01:06This is an alternative minimum tax measure that minimizes the franchise tax using only01:06 –> 01:12a portion of net worth taxes ending in or on before January 1st, 2024.01:12 –> 01:18The bill was authorized refunds for franchise tax paid using an AMT or an alternative minimum01:18 –> 01:23property calculation reduced by the amount of tax that would have otherwise be owed under01:23 –> 01:27the proportional net worth calculation.01:27 –> 01:32Bottom line, plain language, they’ve changed the way we’re calculating the franchise excise01:32 –> 01:33tax.01:33 –> 01:39So, this is really the guys that are paying $100, self-employed, single members in many01:39 –> 01:45cases, not to say it wouldn’t apply, but most of those cases, you’re not paying all those01:45 –> 01:46taxes.01:46 –> 01:52This would definitely apply to larger companies where you were paying a portion of your net01:52 –> 01:57worth on the books, and now they’re changing the way it was calculated, claiming it was01:57 –> 02:02not constitutional, and so they’re able to go back three years, basically, and make this.02:02 –> 02:08So, you have available refunds for the tax filings on or after January 1st, 2021, for02:08 –> 02:13the tax period on or after March 30th, 2020.02:13 –> 02:17Claims must be made on the forms that the tax commissioner will prescribe solely for02:17 –> 02:18the purpose of refunds.02:18 –> 02:22So, it’s not going to be something that you can easily just go out and say, “Hey, I amended02:22 –> 02:23the return.”02:23 –> 02:25No, they’re going to have refund forms.02:25 –> 02:31There is going to be some publications for the refunds, and then claiming waivers.02:31 –> 02:36Businesses claiming a refund must waive any claim or right to sue, alleged in the state02:36 –> 02:37of Tennessee.02:37 –> 02:42The franchise commission is unconstitutional and fail by … There are several cases out02:42 –> 02:43there, just to let you know.02:43 –> 02:47So, many people have jumped on saying they’re going to sue because it wasn’t unconstitutional.02:47 –> 02:54Actually, that’s how it got brought up, because the courts were getting some really good CPA02:54 –> 02:57firms, and their clients took it on.02:57 –> 03:00And of course, then attorneys jumped in to represent.03:00 –> 03:04But this is a opportunity, a small window.03:04 –> 03:12So, if you do pay franchise and excise, I suggest going back to your accountant, your03:12 –> 03:13enrolled agent, your CPA.03:13 –> 03:16If you do it yourself, you’re going to wait.03:16 –> 03:20Now, again, they haven’t yet really opened up some of the forms.03:20 –> 03:25We haven’t received all of the exact steps that we’re going to use to do these refunds.03:25 –> 03:31We will be going back and auditing or reviewing many of our places.03:31 –> 03:35But if you are one of those individuals, and you want to make sure, because if you’re a03:35 –> 03:38smaller one, we may not think about all the little ones.03:38 –> 03:43So again, just if you pay franchise and excise, my suggestion is review it.03:43 –> 03:44See if it even applies to you.03:44 –> 03:45Did it even have an effect on you?03:45 –> 03:50If you had losses, because during these years, many of these people had losses, doesn’t mean03:50 –> 03:54your net worth wasn’t calculated and that there wasn’t tax due, but these would have03:54 –> 03:59been possibly smaller or lower years, or even NOLs that rolled forward, which may have eliminated03:59 –> 04:00or reduced some of these.04:00 –> 04:06So it just comes down to what’s going to apply in your individual situation.04:06 –> 04:08But that is the big topic for today.04:08 –> 04:12So if you’ve got questions, maybe not concerning F and E tax, because that really does only04:12 –> 04:18apply to my self-employed individuals or people that run their own businesses, but you have04:18 –> 04:20other types of getting your refunds.04:20 –> 04:25Again, I have a number of people that say they haven’t received their refunds yet.04:25 –> 04:32We’ve also had a, I guess it was a newsletter sent out by the Internal Revenue Service.04:32 –> 04:38It came back telling us that on some cases, they’re matching, again, matching social security04:38 –> 04:44names, address, I mean, names and social security numbers to tax returns filed.04:44 –> 04:49They are also matching children to those to make sure someone else hasn’t already claimed.04:49 –> 04:54So if any of those reasons are on your thing, and also employers or information, I had one04:54 –> 04:57that came in just yesterday.04:57 –> 05:00And sometimes these matches don’t happen in the same year.05:00 –> 05:05Sometimes it is what holds up, but sometimes it’s also like I had one where they had done05:05 –> 05:10a lot of cryptocurrency, but it wasn’t like they were hiding it.05:10 –> 05:15They did it through multiple wallets, but it wasn’t reported on the tax return.05:15 –> 05:18We prepared it, but we didn’t have that information.05:18 –> 05:22So when we got the love letter from the IRS showing that there had been some Robin Hood05:22 –> 05:25in crypto, we were able to amend and correct.05:25 –> 05:30Of course, the IRS says, “Hey, we’re predicting you might owe this much more in taxes.”05:30 –> 05:35In this case, it will not be that much because he actually didn’t make any money on his currency05:35 –> 05:36exchange.05:36 –> 05:41But that being said, you will get those love letters sometimes, and they could be after05:41 –> 05:42a year or so.05:42 –> 05:49And then once that happens, it’s difficult because when you file an amended tax return,05:49 –> 05:53then you could take, according to the IRS, 120 days for them to process.05:53 –> 05:58We have had some that’s over 365 days and still processing.05:58 –> 06:04Make sure if you have that situation, first thing, confirm either on irs.gov or take the06:04 –> 06:11bite and call the IRS and find out for sure that they have a copy of the amended return.06:11 –> 06:16Also ask when they received it, because if it’s been more than 120 days, you might want06:16 –> 06:21to ask them what’s the delay because honestly, I’ve had them where they basically told us06:21 –> 06:22they’ve received them.06:22 –> 06:25We have proof that they had them in the system and then they fall out.06:25 –> 06:29And we never get any information on why they rejected the amended tax return.06:29 –> 06:33Had one again this last week where we’ve been dealing with it for two years.06:33 –> 06:39She called the IRS and she says, they told me that the date, the date was not correct06:39 –> 06:42and didn’t make any sense to us since we had the current date.06:42 –> 06:46It was an amended return at the time that the amended return was prepared.06:46 –> 06:51But the person, the revenue, the person that answered the phone, the IRS agent called and06:51 –> 06:53they basically said, well, they can’t see it.06:53 –> 06:58All it has was a note saying something about dates, but she couldn’t tell us what date,06:58 –> 07:02if it was a date that they received it or a date that was on the return or signature07:02 –> 07:03date.07:03 –> 07:04There’s a lot of dates people.07:04 –> 07:10So again, not always very helpful when it comes to that time of understanding what the07:10 –> 07:11IRS is wanting.07:11 –> 07:15So then we usually go back to the drawing board and we resubmit.07:15 –> 07:17We make sure all the dates are correct.07:17 –> 07:22We make sure the information is as straightforward as we can provide it with the documentation07:22 –> 07:23behind it.07:23 –> 07:28And then we resubmit it because you might wait and then keep in mind, you only have07:28 –> 07:33really three years if you’re expecting a refund to get that information straight.07:33 –> 07:37If you can prove that the IRS has delayed it, well, then you do have some wiggle room07:37 –> 07:41on that, but it still doesn’t change the fact that you want to make sure that everything07:41 –> 07:43is to the best of your ability, correct?07:43 –> 07:45And then follow up on it.07:45 –> 07:50Even if you get a voucher back from the mail service that says that they’ve received it07:50 –> 07:55and at this time or whatever, it doesn’t, again, there’s no guarantee that they’ve put07:55 –> 07:56it in their system.07:56 –> 08:00So you have to be the aggressor on those amended returns.08:00 –> 08:05As far as I’m concerned, we actually can now e-file many of the amended returns.08:05 –> 08:10In the case of this last one, though, we had a situation where we could not get this go08:10 –> 08:15through and we keep trying and they keep saying the original return was never accepted, but08:15 –> 08:17we know it was because they got the refund.08:17 –> 08:22So again, not always going to make a lot of sense, but you must stick with it if you’re08:22 –> 08:26going to try to deal with the IRS on your own, because it’s not something that’s going08:26 –> 08:30to be for the faint of heart or the ones that want to just walk away.08:30 –> 08:35I mean, I’ve had cases that’s taken us two and three years, not like we’re doing something08:35 –> 08:41every day, but we’re continuously following up and finally, finally getting that resolution08:41 –> 08:43to the problem.08:43 –> 08:47And then one case, it actually came right back around, like another office picked up08:47 –> 08:50the same information and then they opened the entire thing again.08:50 –> 08:55The good news is if you’ve ever worked with the Tennessee, especially the Nashville tax08:55 –> 08:59advocate office, I will tell you that they’re the best.08:59 –> 09:06The advocates, they advocate for us, but they are a great way of getting information because09:06 –> 09:09when you get someone from the IRS, they half the time won’t tell you what you want to know09:09 –> 09:15or they don’t have the authority or anything else where the tax advocate office does have09:15 –> 09:16all of that.09:16 –> 09:20So even though sometimes they, I mean, they’re only, so they take a little while to get it,09:20 –> 09:26but the resolution, every time I’ve actually managed to get it set up, has followed suit09:26 –> 09:31so that they’re able to, even if it’s not the resolution I want, resolution is done09:31 –> 09:33because we understand what the situation is.09:33 –> 09:34All right.09:34 –> 09:43So if you want to join the show, 615-737-9986, 615-737-9986.09:43 –> 09:48We’re going to take your calls talking about taxes, tax changes, anything that you might09:48 –> 09:49have.09:49 –> 09:52If you haven’t filed taxes for a number of years as an enrolled agent, that’s something09:52 –> 09:54we deal with all the time.09:54 –> 09:59We have constantly people that haven’t filed for 5, 10, 15, even 20 years.09:59 –> 10:03And in some cases we, yes, we have to go back all the way to that 20 years because certain10:03 –> 10:07things haven’t happened and time clocks haven’t started where we might want to make sure that10:07 –> 10:13happens, especially on tax years where they’ve had large sales or 1099s or there’s been assessments10:13 –> 10:14by the IRS, right?10:14 –> 10:18Because if the IRS filed the tax return for you, I am sure it’s the best that they could10:18 –> 10:23do, but they will claim that you’re single, you’re zero and you have no deductions.10:23 –> 10:27And if you’re a self-employed individual, that’s never going to be good.10:27 –> 10:30And especially if you’re a father with three or four children and they’re not allowing10:30 –> 10:33you to claim that because of the way they filed your tax returns.10:33 –> 10:36Again, not going to be, but there are ways of fixing that.10:36 –> 10:42Once you get that fixed, then you may be able to go into the offer and compromise situation.10:42 –> 10:47And on that note, we also want to cover that offer and compromises.10:47 –> 10:49So there’s, you guys hear a lot of stuff on the radio.10:49 –> 10:51Heck, you’re hearing me right now.10:51 –> 10:56But one of the things you want to be careful with is the people that you call and they10:56 –> 11:01are dealing with the IRS, they’re negotiators, just like myself.11:01 –> 11:04But the difference between me and them is one, you’re going to meet with me, two, we’re11:04 –> 11:08going to put together an actual resolution and we’re not going to tell you, Hey, you11:08 –> 11:13need to pay me this much money upfront before I even know if I have a case, if I can even11:13 –> 11:14fix what you have going on.11:14 –> 11:19If I can make the deal, why are you paying me six grand because you owe 40 grand or 5011:19 –> 11:20grand.11:20 –> 11:23And they see, Oh, well, if we can save them 10%, they’re going to be happy.11:23 –> 11:24No, I don’t.11:24 –> 11:28I mean, that’s, we want to be happy with what we can actually get the best of why pay that11:28 –> 11:31much money to an individual if nothing’s getting done.11:31 –> 11:34And that’s the problem we have with many of these organizations.11:34 –> 11:37So you need to make sure if you have a tax resolution issue and you want to be dealing11:37 –> 11:42with someone you can actually meet, talk to, and make sure the paperwork is being filed11:42 –> 11:46and actually have that conversation, not only moving backwards before it, I had one that11:46 –> 11:51just came back and apparently somehow 2021 did not show up in the IRS website.11:51 –> 11:56They kicked it out because you have to stay current for five years after you’ve made a11:56 –> 11:57deal with the IRS.11:57 –> 11:59And we’re like, almost at that five year mark.11:59 –> 12:02And now they’re saying, no, 2021, we’re going to back it out.12:02 –> 12:05So we’re going back and we had proof that had been filed or we had made the attempt.12:05 –> 12:08There was a situation, but we were able to deal with it.12:08 –> 12:12And that’s what we stay on top of too, because it’s not just now, but it’s also the history12:12 –> 12:14and moving forward.12:14 –> 12:15We have to keep all of that going.12:15 –> 12:16All right.12:16 –> 12:22So if you want to join the show, you can 615-737-9986, 615-737-9986.12:22 –> 12:27We’re going to take our first break.12:27 –> 12:33When we get back, we’ll get to some of your emails or phone calls 615-367-0819.12:33 –> 12:34We’ll be right back.12:34 –> 12:40All righty.12:40 –> 12:42We are back here live in studio.12:42 –> 12:53And again, if you want to join the show, 615-737-9986, 615-737-9986.12:53 –> 12:58I know many of you guys are possibly still working because we have till June 17th to12:58 –> 13:04file many of the tax returns that fall into Robertson, Weekly, Cheatham, Gibson, Stewart,13:04 –> 13:08Davidson, Dixon, Montgomery, Rutherford.13:08 –> 13:12And so if you’re under that extension, then you’ll have that.13:12 –> 13:18And then I’m waiting to see if anything’s going to change for even though Murray County13:18 –> 13:19got hit hard.13:19 –> 13:23I don’t know if it’s going to have any effect on last year if you were under extension or13:23 –> 13:24not.13:24 –> 13:27But right now they are not under the prior extension.13:27 –> 13:30There’ll probably be something possibly later for this year.13:30 –> 13:35But that being said, what you want to make sure is that you are filing your taxes.13:35 –> 13:38Make sure you’ve done the best of your ability and then get them done.13:38 –> 13:45If you’ve started a business, you do want to make sure that you are filing also the13:45 –> 13:52obligated member situation where small businesses are required to not just small, all LLCs and13:52 –> 13:56corporations must now report that to the foreign banking.13:56 –> 14:00There’s an additional step that you have to do when you’re registering for a new company.14:00 –> 14:02Most of them only have like 60 days.14:02 –> 14:09So if you’ve started an LLC in 2024 and if you started in April, then you have till May,14:09 –> 14:12June, basically the end of June or whatever date you had.14:12 –> 14:17If you started before April or March, March and April, you’re probably safe.14:17 –> 14:20January and February, if you’ve opened one at that point, you’re probably late.14:20 –> 14:25They say the penalty can be up to $500 a day for not complying.14:25 –> 14:26It’s a pretty serious penalty.14:26 –> 14:31We don’t see, I mean, we see a lot of penalties, but we don’t often see that kind of crazy14:31 –> 14:32penalty.14:32 –> 14:37So if you’ve got questions or you need help filing this, let us know what we can do as14:37 –> 14:43far as your obligation and what you might need.14:43 –> 14:47But if you have started a new LLC in 2024, you are going to want to get on top of it.14:47 –> 14:55If you’ve had an LLC prior to that, then you’re good until January of 2025.14:55 –> 15:00You have the rest of this year to get all of your LLCs, sub-S corporations, corporations15:00 –> 15:01registered.15:01 –> 15:03I believe it’s a one-time deal.15:03 –> 15:07I don’t believe it’s something we have to do unless you’ve changed members or updated15:07 –> 15:09your shareholders.15:09 –> 15:15But it is one of those situations where we’re going to be following, you know, what’s going15:15 –> 15:18to be required by, you know, changing.15:18 –> 15:21Again, this has to do with foreign banking.15:21 –> 15:26So we, you know, it’s a little different than what we all usually deal with because normally15:26 –> 15:29we don’t have anything to deal with this.15:29 –> 15:34And I think it’s a way, honestly, I think it’s basically a way for them to make sure15:34 –> 15:39that all members, all shareholders are operating in the United States because if they’re earning15:39 –> 15:43money in the United States, then most of the time they aren’t filing probably properly15:43 –> 15:48the 1040s because there is non-resident 1040s.15:48 –> 15:53So you just want to make sure you have that, you know, that information in there and make15:53 –> 15:57sure your entity is straight because the penalty can be pretty tight again.15:57 –> 15:59So if you’re not sure.15:59 –> 16:04Also obviously we’re going to have anyone that was under the extension for up until16:04 –> 16:05June 17th.16:05 –> 16:13Keep in mind, June 17th is also the second estimated payment is due on that time.16:13 –> 16:14So we have that situation.16:14 –> 16:18So if you hear my puppy dog, sorry about that.16:18 –> 16:23But you all be making your first and second if you fell under that situation.16:23 –> 16:26So you will be again making your first and second.16:26 –> 16:31If you did not make your estimated payments, you’re going to be making those on that time.16:31 –> 16:34That also applies for 940 ones on individuals with payroll.16:34 –> 16:40But most of us, most my clients of course continue to make their payments on time.16:40 –> 16:44But just making sure if you had made it and maybe you were a little late for some reason,16:44 –> 16:50you would have a reason to have the penalty waived if you were in those counties.16:50 –> 16:54Again, just really just making sure that we’re staying on top of it and following through16:54 –> 16:59with what we need to talk about on any kind of new tax laws.16:59 –> 17:01We really don’t have a whole bunch we’re going to be talking about.17:01 –> 17:09Had someone asked what 2024 new tax we are waiting still to be quite honest.17:09 –> 17:11Depreciation bonus depreciation.17:11 –> 17:16A lot of that at this moment is still kind of being held up.17:16 –> 17:22We’re waiting to see if they were going to actually pass that law and get it back to17:22 –> 17:24100% bonus depreciation.17:24 –> 17:29At this moment, it’s not really they have come out with the numbers for 2024 as far17:29 –> 17:34as the standard deductions and why we need to know that is because when we get ready17:34 –> 17:38to work out our numbers for if you want to do a Roth conversion or you’re going to be17:38 –> 17:44paying tax on a higher entity of some sort, maybe you have a capital gains that you sell17:44 –> 17:45something.17:45 –> 17:52So in 2024, they have a single individual individuals to 14 six add another seven.17:52 –> 17:59It’s about 750 above head of household and standard will be 21 nine about $1100 up from17:59 –> 18:06there so and you will double so you know be 29 to I guess it would be for married couples.18:06 –> 18:13So that will be another good thing that we’re working on Washington during this time.18:13 –> 18:17Obviously everyone’s trying to work on who’s going to be elected.18:17 –> 18:21So I don’t feel they’re actually pushing too hard on what they need to be doing as far18:21 –> 18:24as passing the new tax laws that we need to have.18:24 –> 18:30But at the moment, we’re moving forward with what we do know and it’s easier to have that18:30 –> 18:31conversation.18:31 –> 18:38Also, I’ve had quite a number of people come in the office talking about gifting, gifting18:38 –> 18:46money to helping kids to do some changes on the gifting if there’s going to be so again,18:46 –> 18:48it’s $17,000 for individuals.18:48 –> 18:54So if you have a child and you want to gift them $17,000, you can do that without a gift18:54 –> 18:55tax return.18:55 –> 19:00If you’re married, both of you can gift that child 17 each.19:00 –> 19:05And then that way you’ll be able to maybe you’re helping put a down payment pay off19:05 –> 19:06student loans.19:06 –> 19:12Sometimes all of that is going to work on what’s best 1099 case.19:12 –> 19:13Great question.19:13 –> 19:181099 case, not a lot changed from 2023 going into 2024.19:18 –> 19:24So either 20,000 or more than 200 transactions, that’s going to be the 1099 k.19:24 –> 19:33At this point, there is a conversation again, there they were initially looking at announcing19:33 –> 19:36the delay of the $600 threshold in 23.19:36 –> 19:38And they are previously still remaining.19:38 –> 19:47So 2024, they’re saying $5,000, you could be getting a 1099 k $5,000 or 200 transactions19:47 –> 19:48is on the table.19:48 –> 19:51But again, that’s been kicked already two years down the line.19:51 –> 19:54So we will see what they do.19:54 –> 19:59In 2024, they’ll may I’m hoping there’ll be a lot more information.19:59 –> 20:03Clean vehicle credits, not a lot of vehicles out there for us to be able to claim that.20:03 –> 20:09But if you happen to get one that falls within that availability, you do have to, you know,20:09 –> 20:16have the certificate has the car tag numbers on it, the identification number for the car20:16 –> 20:21and what type of vehicle it’s going to be earned income credit, no change to 2024.20:21 –> 20:27At this moment, they are basically the same as always after the act in 2021.20:27 –> 20:32Basically they have to be over the age of 25 under the age of 65 to get earned income20:32 –> 20:33credit.20:33 –> 20:39So if you’re dealing with that, you can also get some of that on the situation where you20:39 –> 20:41have.20:41 –> 20:44So I have had seniors that are raising their grandchildren, and they’re always asking why20:44 –> 20:47don’t I get it because they have changed the rules.20:47 –> 20:50So over 25 under 65.20:50 –> 20:56So if you are a grandparent and you might qualify, but you will not be able to get the20:56 –> 21:00earned income tax credits under that situation.21:00 –> 21:09The child credit six to 18 expired has expired 2023 initial amount is now $2,000.21:09 –> 21:13You know, you have to do the situation.21:13 –> 21:18If you overpay on a student loan, can someone receive a refund back to them?21:18 –> 21:21Not if, if there’s still a balance, they’re going to offset.21:21 –> 21:23That’s a question that came in.21:23 –> 21:28And the answer to that is if you’ve overpaid on your student loans, they’re not looking21:28 –> 21:31on, they’re just going to apply it to the principal.21:31 –> 21:33They’re not going to give you a refund.21:33 –> 21:38At least none of the companies I know if you’re actually making a bigger payment, you’re just21:38 –> 21:42paying down more of the principal, unless of course you’ve paid off the student loan.21:42 –> 21:47And then at that point they would refund any amount due, but most likely you’re just making21:47 –> 21:50an extra payment, kind of like a mortgage where a lot of us will send in a couple hundred21:50 –> 21:53dollars or a thousand dollars or whatever more.21:53 –> 21:58And that way we pay down the house faster because that portion will go to principal21:58 –> 22:02only, which is actually a good idea considering student loan interest, depending on who you’re22:02 –> 22:07with might be a good idea to just keep making an overpayment because then eventually you’ll22:07 –> 22:10be out of that debt.22:10 –> 22:14And with so many extensions out there and stuff nowadays, it just is one of those crazy22:14 –> 22:18questions that I have a niece that I think still making student loans.22:18 –> 22:22And I get it, you can run them out for 30 years.22:22 –> 22:26I’ve had people come in and they just basically, I mean, they went to college, they worked22:26 –> 22:31their whole career continually making on and off payments when they were required.22:31 –> 22:36And now they’re into getting close to retirement and they still have balanced due.22:36 –> 22:41It just doesn’t, I mean, some of these, I guess some of these loan companies, it seems22:41 –> 22:47like they would make the payments for based on 10,000 or 10 years or something like that.22:47 –> 22:50And I think they do, but I think what happens is there’s hardships.22:50 –> 22:54And so you’re able to make a smaller payment, which barely covers the interest, a lot like22:54 –> 22:58the IRS, but the IRS really only has 10 years to collect.22:58 –> 23:00These guys can go on for 30 years.23:00 –> 23:05I have a person 30 years, they’ll pay in a student loan interest, student loans.23:05 –> 23:11And I’m not too sure, I’m assuming at some point it’s not going to be collectible, but23:11 –> 23:15I could be wrong because I don’t think it’s with the federal reserve.23:15 –> 23:17I think it’s with a private lender of some sort.23:17 –> 23:22So it would be interesting to find out what happens with student loans in the big picture.23:22 –> 23:24It just seems to me it should be over a period of time.23:24 –> 23:28If you graduate, you have five years or 10 years to pay back those loans.23:28 –> 23:32Otherwise, you know, they turn, they need to be rolled into something.23:32 –> 23:37I don’t know, a payment plan that actually eventually zeros out because it just makes23:37 –> 23:39no sense for 20 years to be paying on something.23:39 –> 23:45And still in some cases, she only owed like 15, but because of all the delays and the23:45 –> 23:48interest rates and everything, she still owes like eight.23:48 –> 23:53So in 30 years, she’s paid like 8,000 of the principal back, but yet she’s paid a ton more.23:53 –> 23:56So it doesn’t, I’m not going to say I’m an expert on that one.23:56 –> 23:59But anyways, off of that subject, we’re going to get ready to take our second break.23:59 –> 24:05If you want to join the show, you can 615-737-9986.24:05 –> 24:09615-737-9986.24:09 –> 24:15We’ll be right back with the Dr. Friday show.24:15 –> 24:24Alrighty, we are back here live in studio.24:24 –> 24:28One of the things we also want to talk about, because I know a lot of people sit down and24:28 –> 24:32say, Hey, I’m going to go buy something at the end of the year so I can reduce my taxes24:32 –> 24:38for, you know, if I go buy a $70,000, $3,500 Ram, because I need a new truck.24:38 –> 24:41I do construction is a hundred percent used for business.24:41 –> 24:44And you could use a hundred percent in that year.24:44 –> 24:50Keep in mind, 2023, we only received 80% in 2024.24:50 –> 24:55Right now, if the law stays as it is, we’re going to get 60%.24:55 –> 24:59The rest of it will be depreciated over a number of years, depending on what it is,24:59 –> 25:06but they were trying to push that to, or expand it out to 2025.25:06 –> 25:08It did not yet happen.25:08 –> 25:13There is a bill out there that they’re working on the tax relief for American families and25:13 –> 25:16work deck of 2024.25:16 –> 25:17It has not passed yet.25:17 –> 25:23We are hoping a lot of delays in our in fact, a number of extensions that happened because25:23 –> 25:24of it as well.25:24 –> 25:27So we’ll get more onto that one and see what we have.25:27 –> 25:28All right.25:28 –> 25:29Let’s see if we can get Alan on the show.25:29 –> 25:30Hey Alan.25:30 –> 25:31How are you doing?25:31 –> 25:32Thanks for taking my call.25:32 –> 25:33Sure.25:33 –> 25:34Thanks for calling.25:34 –> 25:35What can I do for you?25:35 –> 25:36Yeah.25:36 –> 25:45Well, I was wondering if you have a home and you listed for say $250,000 and you sell it25:45 –> 25:51and you only owe $50,000 on it, you pay that off and then you find another home for say,25:51 –> 25:57let’s say a hundred thousand and you buy that to live in and you have a hundred thousand25:57 –> 26:00that’s left over and you put it in the savings.26:00 –> 26:03Will you have to pay taxes on that?26:03 –> 26:04So let me, yeah.26:04 –> 26:09So just back up home that you list, is that your primary or have you lived in it two out26:09 –> 26:12of the last five years in this example?26:12 –> 26:14The one that was selling, yes.26:14 –> 26:15Okay.26:15 –> 26:21So the good news is if you sell the house for 250,000, you’re not going to pay any tax26:21 –> 26:24and you do not have to go buy another house.26:24 –> 26:25You don’t have to do anything.26:25 –> 26:28I’m assuming you paid something for the house originally.26:28 –> 26:30Let’s just say it was 50,000 originally.26:30 –> 26:36I think you probably paid more, but if you paid 50, then you get an exclusion of 25026:36 –> 26:40for a single person, 500,000 for a married couple.26:40 –> 26:44So you don’t have to do any, you could take that money, put it in your pocket, go get26:44 –> 26:48a second mortgage, do whatever you want on a new property, but you don’t have to pay26:48 –> 26:55any tax if you sell it for 250 as a single person or less, you’re basically all, whatever26:55 –> 26:57profit is going to be in your pocket.26:57 –> 26:58Yeah.26:58 –> 27:03So it says me and my wife, we sell our house for 250.27:03 –> 27:04Yep.27:04 –> 27:08Pay off the mortgage that say owed 50 on it.27:08 –> 27:09Right.27:09 –> 27:10And then you don’t have to do anything else.27:10 –> 27:15You can go, you don’t have to buy that other house to save taxes is all I’m saying.27:15 –> 27:17You can go pay another house.27:17 –> 27:20Yeah, well you, you’re exactly right, Alan.27:20 –> 27:25You wouldn’t need a house, but I’m just saying, so basically once you sell the house for 250,27:25 –> 27:27you don’t owe any taxes.27:27 –> 27:31So what you decide to do with that money, put it all in the bank, go buy another house,27:31 –> 27:33rent for some time.27:33 –> 27:34That’s all up to you.27:34 –> 27:35Zero tax will be due.27:35 –> 27:36Okay.27:36 –> 27:37I appreciate you.27:37 –> 27:43You don’t have to send a file or an end to the IRS saying that there will be at the end27:43 –> 27:44of the year.27:44 –> 27:45But make sure that you sell the house.27:45 –> 27:48There will be something you’ll put on your personal tax return.27:48 –> 27:52Just showing what you’re, what you sold it for and what you paid for it.27:52 –> 27:56If you’re a social security, you don’t do taxes anymore.27:56 –> 28:02You wouldn’t have to make sure that when you do the closing, that the closing agents know28:02 –> 28:03that it’s your primary home.28:03 –> 28:05Most likely you won’t have to do anything.28:05 –> 28:08Oh, I appreciate all your help.28:08 –> 28:09No problem.28:09 –> 28:10Thanks Alan.28:10 –> 28:11I appreciate your call.28:11 –> 28:12Thank you very much.28:12 –> 28:13Bye.28:14 –> 28:15Let’s go ahead and go to Tori in Nashville.28:15 –> 28:16Yes.28:16 –> 28:17A few people listening.28:17 –> 28:18Hey Tori.28:18 –> 28:19Hello there.28:19 –> 28:26I hardly know enough to even ask this question because I am 60 years old and I’ve never done28:26 –> 28:30my taxes, my own taxes in my whole life.28:30 –> 28:37And I am the executor of my aunt’s will and she died last year.28:37 –> 28:38Everything was fine.28:38 –> 28:41She always had somebody at a company do her taxes.28:41 –> 28:46So I just sent them all the information off to them, had them keep doing it.28:46 –> 28:51And so the lady told me not only did she have to do state this time, but she also had to28:51 –> 28:53do federal.28:53 –> 28:55I’m not sure why I didn’t ask.28:55 –> 28:57I should have asked, but I didn’t.28:57 –> 29:00And now- Where was your aunt from?29:00 –> 29:04She is in Alabama or was in Alabama.29:04 –> 29:07And I’m in Tennessee.29:07 –> 29:11And so she told me, you know, she, she sent me the copies of stuff.29:11 –> 29:17She’s only getting like $60 back, but it’s been like three months and I still haven’t29:17 –> 29:18gotten it.29:18 –> 29:22And now I can’t get in touch with the person who did her taxes.29:22 –> 29:29So is there a way to trace your return?29:29 –> 29:30Well two things.29:30 –> 29:34So when you, when she filed the final return for the aunt, I mean there would have been29:34 –> 29:37a federal, always a federal and a state.29:37 –> 29:41I mean, unless the aunt didn’t require filing at all and then she wouldn’t have had a tax29:41 –> 29:44person in the first place.29:44 –> 29:47So there should have- I don’t think she did.29:47 –> 29:52She was 89 and had worked for the state.29:52 –> 29:53I don’t think she- Yeah.29:53 –> 29:54I don’t think she owed taxes.29:54 –> 29:55I’ll give you that.29:55 –> 30:00Alabama’s pretty good for seniors, but there would have been a state tax.30:00 –> 30:03Maybe what she meant is that there was some money due.30:03 –> 30:06Because normally again- That’s what I’m all for.30:06 –> 30:11So that being said, you have a copy of the returns first, right?30:11 –> 30:12I do.30:12 –> 30:13Okay.30:13 –> 30:17And you said there was a small refund coming back from the fed or the state?30:17 –> 30:18Yes.30:18 –> 30:19From the fed.30:19 –> 30:20I’ve already gotten the state.30:20 –> 30:21Okay.30:21 –> 30:27So on the federal, there should have been a form called a 1031, which would have said,30:27 –> 30:29or 1301 I think it is.30:29 –> 30:33Anyways, it says that who’s going to take the money, because obviously your aunt is30:33 –> 30:34deceased.30:34 –> 30:38So the money either goes into an estate or to you that you then will take responsibility30:38 –> 30:41for proper distribution, whatever.30:41 –> 30:47So that being on the tax return, I would make sure that’s included just to make sure, because30:47 –> 30:50otherwise the IRS is going to send you a sweet little love letter coming back saying you30:50 –> 30:53didn’t include it.30:53 –> 30:58And then assuming that that was properly included, then you should be able to go onto the irs.gov30:58 –> 31:01and see the status of the refund.31:01 –> 31:02Okay.31:02 –> 31:05What kind of information do you have to put in to get?31:05 –> 31:10You would just have to have the aunt’s name, social security number and the amount, date31:10 –> 31:13of birth and the amount that she was getting back.31:13 –> 31:14Okay.31:14 –> 31:15I can do that.31:15 –> 31:16Yeah.31:16 –> 31:17I can do that.31:17 –> 31:22I had to pay, I think she paid $150 to have it done to get $60 back.31:22 –> 31:24Yeah, I know.31:24 –> 31:28That’s the sad, but that was probably one of the few years I will say, you know, of31:28 –> 31:33course, your aunt or whatever always did them anyways, but that was the final year.31:33 –> 31:37So that would definitely, assuming that was the last year she was alive, then that needs31:37 –> 31:40to be done just to make sure everything’s closed out from the IRS side.31:40 –> 31:42So it’s a smart move on your side.31:42 –> 31:43Okay.31:43 –> 31:45Well, thank you very much.31:45 –> 31:46No problem.31:46 –> 31:47Thanks for the phone call.31:47 –> 31:48I appreciate it.31:48 –> 31:49Okay.31:49 –> 31:50All right.31:50 –> 31:51Bye-bye.31:51 –> 31:52Bye.31:52 –> 31:53All right.31:53 –> 31:54Those are great questions.31:54 –> 31:57And it’s always hard to, you know, I think it’s funny because a lot of times when someone31:57 –> 32:01passes away, they always tell you, okay, you’re going to be the executor or you’re going to32:01 –> 32:04handle this, or hopefully they tell you in advance.32:04 –> 32:08So you’re at least prepared when someone reads off and says, oh, you’re the person that’s32:08 –> 32:10going to be handling it.32:10 –> 32:14But there’s an assumption that we all know how to handle those.32:14 –> 32:18And thank goodness, I guess, for the internet in many cases, because many people probably32:18 –> 32:22do a lot of Googling and figure out what their responsibility is.32:22 –> 32:27But what the last caller did was right, was the nice thing is she did follow, either she32:27 –> 32:30found out or she knew to file those as final.32:30 –> 32:34Because one of the things we have to do is make sure that the IRS is in good standing.32:34 –> 32:40Not to say if the person that’s deceased has no income or no real assets and they owe the32:40 –> 32:45IRS, well then obviously you don’t care about that because you can’t pay somebody.32:45 –> 32:48You don’t have to pay off the IRS on behalf of that person.32:48 –> 32:52That same thing goes with credit cards and certain things that are non-secured.32:52 –> 32:55So you wouldn’t have to go after those certain debts.32:55 –> 33:00So you want to always make sure if it goes through probate, obviously, then it opens33:00 –> 33:03up, it has to be printed in the newspaper.33:03 –> 33:08And then they’re going to run that information and make sure that you’re in compliance.33:08 –> 33:14And if anyone that wants to, which is why, I mean, theoretically, even trusts are probated,33:14 –> 33:16but it’s a poor overwhelm.33:16 –> 33:21It really just basically says everything that’s been in the trust is going to be handled through33:21 –> 33:25the trust and the poor overwhelm catches anything that isn’t there.33:25 –> 33:32So you have that documentation, but it does give a little less, the assets aren’t listed33:32 –> 33:33like with a will.33:33 –> 33:40So again, big fan of trust because I guess partly is I’m a bit of a control freak.33:40 –> 33:46So even if I’m not here, I would like to believe that what my wishes were if I was here are33:46 –> 33:47going to be carried out.33:47 –> 33:49I don’t always feel with a will that happens.33:49 –> 33:55Now I’m not an attorney, so don’t call me for legal advice.33:55 –> 33:57That would be someone like Russ Cook or Jack McCann.33:57 –> 34:00They’re great attorneys and what we work with all the time.34:00 –> 34:03And they would be able to help you with setting up and handling all that.34:03 –> 34:07We handle the tax side of all those types of entities, but not the legal side.34:07 –> 34:13But again, making sure, especially if you have multiple families, I’ve sat in many meetings34:13 –> 34:19where his family, her family, our family, and making sure that all of those assets are34:19 –> 34:24going the direction you want, even if you’re not the last person alive, even though you’re34:24 –> 34:29leaving your spouse or your significant other in control, you want to make sure that your34:29 –> 34:32wishes are there and covered.34:32 –> 34:39And also a power of attorney for medical as well as financial, because if there’s no one34:39 –> 34:43that has access to your bank, how are you going to continue to pay your mortgage or34:43 –> 34:49bills that have to be paid while you’re either incapacitated or God forbid dead.34:49 –> 34:53So you just want to make sure that all of those are checked off so you can just chill,34:53 –> 34:54enjoy life.34:54 –> 34:56And if something happens, it happens.34:56 –> 34:57Right.34:57 –> 34:58All right.34:58 –> 35:00So we’re getting ready to wind down to the last section of the show.35:00 –> 35:03So if you’ve been holding your breath, you’re like, Oh, I’ve got a question.35:03 –> 35:05I don’t know if you know what, there are no dumb questions.35:05 –> 35:10They’re really odds, because if you ask me anything about a car, I would probably sound35:10 –> 35:13really, really silly because I only know to put Petro in it.35:13 –> 35:18And you know, in my DEF, that’s like the only things I have to worry about.35:18 –> 35:19Everything else is handled by my mechanic.35:19 –> 35:22Well, let’s think about that when it comes to taxes.35:22 –> 35:23This is the one subject.35:23 –> 35:26So if you’ve got questions, you’re not too sure what you want to do.35:26 –> 35:27615-737-9986.35:27 –> 35:36You guys can’t see us, but my engineer is hilarious.35:36 –> 35:41615-737-9986 is the number here in the studio.35:41 –> 35:43We’re going to take again, a quick break.35:43 –> 35:47I am an enrolled agent licensed by the Internal Revenue Service.35:47 –> 35:51Do you do taxes and representation, which basically means guys, that’s all I do is taxes35:51 –> 35:56or represent individuals in front of the IRS, which means I do not work for the IRS.35:56 –> 36:01I work for you and help represent you so that you have someone that understands the tax36:01 –> 36:06law so you don’t get caught into saying something or doing something that maybe you didn’t intentionally36:06 –> 36:07do.36:07 –> 36:10So again, 615-737-9986.36:10 –> 36:14We’ll be right back with the Dr. Friday Show.36:14 –> 36:17All righty.36:17 –> 36:20We are back here live in studio.36:20 –> 36:22This is the Dr. Friday Show.36:22 –> 36:26Again, I’m an enrolled agent licensed by the Internal Revenue Service.36:26 –> 36:28I do taxes and representation.36:28 –> 36:32I understand I’m going to probably get embarrassed here in a second.36:32 –> 36:34Let’s bring Tim on the line.36:34 –> 36:35Dr. Friday.36:35 –> 36:38That’s my boy.36:38 –> 36:42I know that accent anyway.36:42 –> 36:47I just want to tell your audience that this lady is incredible.36:47 –> 36:49I mean, she really, really is.36:49 –> 36:54I knew nothing about a state and all of that kind of stuff.36:54 –> 36:56My parents went down at the same time.36:56 –> 37:02She helped me from day one about everything.37:02 –> 37:07I kind of semi-cheated on her and I had to admit it.37:07 –> 37:13The lady who called in just recently about her aunt’s estate was very similar to my question37:13 –> 37:16with my mother’s estate.37:16 –> 37:22I went to see Dr. Friday this week, y’all, and I’m telling you, I left there so relieved37:22 –> 37:25and so thankful to have her.37:25 –> 37:31Don’t waste your time with these law firms that say, “Oh, they can get your taxes down.”37:31 –> 37:33Don’t even waste your time.37:33 –> 37:34Just forget it.37:34 –> 37:40You need to call my buddy, my buddy, Dr. Friday and let her handle it for you.37:40 –> 37:41She is the man.37:41 –> 37:42All right.37:42 –> 37:43Thank you, Tim.37:43 –> 37:44I love you.37:44 –> 37:45Thank you.37:45 –> 37:46All right.37:46 –> 37:47Talk to you later, buddy.37:47 –> 37:48Bye.37:48 –> 37:49Okay.37:49 –> 37:52As you guys always know, I’m so good with those kind of things, but I do.37:52 –> 37:57I mean, there’s no better compliment than a client willing to get on a public radio37:57 –> 37:58and say, “You’re awesome.”37:58 –> 38:01I mean, how often does that happen in life?38:01 –> 38:02So, thank you, Tim.38:02 –> 38:03Appreciate it.38:03 –> 38:06But, you know, I mean, a lot of times it is confusing.38:06 –> 38:07Taxes are confusing.38:07 –> 38:09A lot of things in life are confusing.38:09 –> 38:14One of the few things I’m really good at is trying to simplify taxes, trying to make it38:14 –> 38:17where at least we have steps, how are we going to resolve it.38:17 –> 38:20And it’s, you know, again, it’s not fast.38:20 –> 38:21It’s frustrating.38:21 –> 38:29I had a couple come in and they were getting ready to leave town and they had another person38:29 –> 38:34handling a tax situation, but they’re still getting the love letters that say, “Intend38:34 –> 38:40to levy, intend to seize,” you know, and there’s nothing more frustrating than that happening.38:40 –> 38:45And then they turn around and, you know, and the person not really communicating as well38:45 –> 38:50as they would like, which Tim left out of his conversation that we had.38:50 –> 38:55I was so busy in taxes, I wasn’t communicating as fast as I should have with him is one of38:55 –> 38:58the reasons he claims he cheated on me, but he didn’t.38:58 –> 39:02But that being said, communication is important, especially when you’re getting these love39:02 –> 39:03letters.39:03 –> 39:07And so they hired us to just to make sure, you know, that nothing happens.39:07 –> 39:09And so we went to the tax advocate office and they’re great.39:09 –> 39:15Again, they got back with me, I think within 48 hours of me sending this kind of express,39:15 –> 39:20“Oh my gosh, we need help,” kind of thing, a 911 to them and they responded very quickly39:20 –> 39:22and were able to get a hold.39:22 –> 39:26They did see, but they’re trying to figure out where they stand on this situation.39:26 –> 39:29My point being is that, you know, I do my best.39:29 –> 39:32I really do try to make sure I treat people the way you guys all treat me.39:32 –> 39:36I mean, treat people the way you want to be treated is always the best thing.39:36 –> 39:40And after 28 years of doing this, I’ve been blessed with awesome clients.39:40 –> 39:45So that being said, if you need help, if you need someone that’s going to, you know, if39:45 –> 39:47nothing else, explain, let’s see what we have.39:47 –> 39:54If you have tax debt, you have an audit going on, most audits, many of the audits are paper39:54 –> 39:55audits.39:55 –> 39:59And then, you know, that you’re moving forward and you’re like, “Okay, what do I need to39:59 –> 40:00do?”40:00 –> 40:04Because sometimes people get so locked into the past, “Oh my gosh, they want 40,000, they40:04 –> 40:10want 60,000, they want 150,000,” whatever the number is, it’s a number at this point.40:10 –> 40:14And you know, even though it’s all penalties and interest and all this other, but every40:14 –> 40:18year you’re adding to it because you’re so worried about throwing money towards the past40:18 –> 40:23that you’re not concentrating on stopping the bleeding, which means moving forward first,40:23 –> 40:24right?40:24 –> 40:25We got to look forward.40:25 –> 40:26The past isn’t going to change.40:26 –> 40:31So what do we need to do to get you making sure enough money’s coming out that you’re40:31 –> 40:35making all the proper quarterlies and you’re meeting the requirements that you need to40:35 –> 40:39be doing and then dealing with the past?40:39 –> 40:42Because if you’re trying to make a deal or a payment plan or anything else, you have40:42 –> 40:45to show you’re making proper estimates.40:45 –> 40:49And one thing you want to do is if you have to overpay the future to make sure you have40:49 –> 40:54enough, and then whatever’s overpaid, they’re going to keep anyways.40:54 –> 40:57So you know, if you have that and they see that, “Hey, you know what?40:57 –> 40:58They got 20/20 for it.40:58 –> 41:01We don’t have to add it to a payment plan.41:01 –> 41:02We’re out of that.”41:02 –> 41:08And then 20/25, they see the consistency because so often, statistically, people set up and41:08 –> 41:11defunct payment plans more times than you like.41:11 –> 41:16It’s probably like 62% or something of people that set up a payment plan will defunct over41:16 –> 41:19the lifetime of that plan, which is 72 months.41:19 –> 41:21And that’s often because life happens.41:21 –> 41:25So if you’re able to keep current, the past is only going to…41:25 –> 41:29I mean, no matter what, you have 10 years of collections, 10 years of pain, usually41:29 –> 41:3472 months of pain, and that’s either going to go away or it’s not.41:34 –> 41:37It’s going to fall off or it’s going to get paid.41:37 –> 41:39That’s just the facts of the matter.41:39 –> 41:40Sure.41:40 –> 41:44There may be some way of making a deal, dealing and dealing with situations on it.41:44 –> 41:47But really when you’re dealing with the IRS, there are rules.41:47 –> 41:48There is a path.41:48 –> 41:50There is a stepping.41:50 –> 41:53It’s not something that you have to worry about.41:53 –> 41:58I mean, there really is a straight answer, but part of it comes to is also what you’re41:58 –> 41:59doing with your money, right?41:59 –> 42:05Because if you have money that you’re putting in 401k, but yet you owe the IRS, does that42:05 –> 42:06really make sense?42:06 –> 42:10I guarantee you, talks to any good financial planner, they will say, stop paying the 401k42:10 –> 42:17and start paying the IRS because the IRS then could say, your savings are ours because you42:17 –> 42:20didn’t pay us, but you put money into a retirement plan.42:20 –> 42:24Well, the company’s matching 6% or 3%.42:24 –> 42:25Doesn’t make a difference.42:25 –> 42:30People, the government needs to get paid off because they’re the world’s worst loan offices.42:30 –> 42:33Second part you want to do is make sure that if you’re making monthly payments on other42:33 –> 42:35things that you have those in control.42:35 –> 42:42I mean, if you, if you’re driving a $1,500 a month car and yet you have no reason to,42:42 –> 42:48and I say reason, because there are certain industries that they might allow you to do42:48 –> 42:49that.42:49 –> 42:53If you’re selling million plus homes, it may be better that you’re driving a nice car,42:53 –> 42:55but also on the other hand, be good if you’re paying your taxes, if you’re selling those42:55 –> 42:57kinds of homes.42:57 –> 43:00So you need to have that conversation and then, you know, write it off.43:00 –> 43:05But if you having that car, but you don’t really have the means to pay for that car43:05 –> 43:11because you’re using IRS money to make the payment, then the IRS could actually say,43:11 –> 43:15you know what, we’re willing to make a deal with you, but you need to get a car that’s43:15 –> 43:17worth less than, you know, this dollar amount.43:17 –> 43:19You need to have these situations.43:19 –> 43:21They can’t make you sell your home.43:21 –> 43:28And if you only have one car, they can’t make you sell that car, but they do have limitations43:28 –> 43:34on what they consider normal car expense, auto expense, and I don’t know, it’s like43:34 –> 43:36450 for a car payment.43:36 –> 43:43It’s, you know, for a single person, it’s like $1,700 for, you know, rents, utilities,43:43 –> 43:44et cetera.43:44 –> 43:49So if you’re outside of those numbers, outside of that criteria, they can give you, I mean,43:49 –> 43:54you can do a partial payment plan and see if you can refinance or do something.43:54 –> 44:00If you own any other cars, if you have more than one car, unless you’re married and, you44:00 –> 44:03know, each person’s allowed one car.44:03 –> 44:07If you have children under the age of 17 and the cars are in your name, theoretically,44:07 –> 44:09they will consider them your cars.44:09 –> 44:12So you, I mean, those cars are second and third.44:12 –> 44:18If you’ve got two or three kids, those cars are yours and therefore those cars are actually,44:18 –> 44:21could be sold based on the IRS.44:21 –> 44:22So there’s ways around some of this.44:22 –> 44:24I’m not trying to freak people out.44:24 –> 44:27I’m just saying that there are ways around it.44:27 –> 44:31Having your name on your child’s bank account, which may I point out is a silly thing that44:31 –> 44:36the IRS says, because you can’t open a bank account for a minor child unless an adult44:36 –> 44:37is on it.44:37 –> 44:43But if you do have IRS issues, I have personally had a case where they took all the money from44:43 –> 44:49the bank accounts, including the children’s, because his name was on all of them.44:49 –> 44:53We were able to get the kids money back, but of course that took 90 days.44:53 –> 44:57But you know, again, all of those things come into play.44:57 –> 45:01Making sure you understand how it works for you is really, you know, then you can figure45:01 –> 45:04out how do we make this the best plan for you?45:04 –> 45:05That’s what our job is.45:05 –> 45:07That’s what we work together to do.45:07 –> 45:11So if you want to set up an appointment to talk either about your tax issues or getting45:11 –> 45:18a payment plan of some sort, 615-367-0819.45:18 –> 45:21That is my direct number.45:21 –> 45:25615-367-0819.45:25 –> 45:28You can also check us out on the web, drfriday.com.45:28 –> 45:34Been doing this for 28 years now in the Nashville, Brentwood is where we’re at, Brentwood area.45:34 –> 45:39But if you, you know, if you have a question and you don’t really want to call or you just45:39 –> 45:43want to email, you can Friday at drfriday.com.45:43 –> 45:45Friday at drfriday.com.45:45 –> 45:52Again, I am a licensed enrolled agent licensed by the internal revenue service, which means45:52 –> 45:54I’ve taken all the tests to be licensed by them.45:54 –> 45:56I do not work for them.45:56 –> 45:59I need to make sure that’s clear because so often people will say, well, you’ve worked45:59 –> 46:00for the IRS.46:00 –> 46:02No, never have worked for the IRS.46:02 –> 46:04I have talked to a lot of people that work for the IRS.46:04 –> 46:06I have never done that.46:06 –> 46:09So as an enrolled agent, that’s what I do, guys.46:09 –> 46:11I do taxes and representation.46:11 –> 46:16So if you need help, you need clarification, you need a path, then you need to call our46:16 –> 46:17office 615-367-0819.46:17 –> 46:18615-367-0819.46:18 –> 46:32Also email Friday, that’s my first name, Friday at drfriday.com.46:32 –> 46:36Friday at drfriday.com, or just check us out on the web, drfriday.com.46:36 –> 46:39Again, drfriday.com.

View Details

In this episode of the Dr. Friday Show, tax expert Dr. Friday takes on a variety of questions from callers seeking advice on tax issues, inheritance, and financial matters. Dr. Friday provides insights and guidance to help listeners navigate the complex world of taxes and finance.

Topics covered:

• Changes in Tennessee tax laws for small businesses and franchise excise tax
• Handling inheritance of bonds and the process of cashing them out
• Reporting class action settlement money received by a deceased individual
• Lending money to a friend for home improvements and potential gift tax implications
• Filing requirements and penalties for late payment of taxes
• Setting up payment plans with the IRS and the importance of compliance
• Dealing with IRS audits and the need for professional representation

Transcript:

00:00 –> 00:06No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your00:06 –> 00:07financial woes.00:07 –> 00:09She’s the how-to girl.00:09 –> 00:10It’s the Dr. Friday Show.00:10 –> 00:19If you have a question for Dr. Friday, call her now, 737-WWTN.00:19 –> 00:23That’s 737-9986.00:23 –> 00:26So here’s your host, financial counselor and tax consultant, Dr. Friday.00:26 –> 00:33Good day, I’m Dr. Friday and the doctor is in the house.00:33 –> 00:37It’s a nice rainy Saturday, I guess.00:37 –> 00:41Not really raining here in Spring Hill, but it’s supposed to.00:41 –> 00:44And if you want to join the show, if you’ve got tax questions or maybe you’re working00:44 –> 00:51on 2024 questions, or maybe you’re even thinking, do I need to amend my franchise excise because00:51 –> 00:53I was an early filer?00:53 –> 00:59The phone number here in the studio is 615-737-9986.00:59 –> 01:05615-737-9986 is the number in the studio.01:05 –> 01:10And I will say many of us filed extensions for many of our businesses and franchise excise01:10 –> 01:15if they had something to do with depreciation, because we did know that something was coming01:15 –> 01:16down the line.01:16 –> 01:20But in some cases, you don’t always know, and some clients just like to get it paid01:20 –> 01:21and done with.01:21 –> 01:27But you might be an individual that needs to reevaluate, especially if you have assets01:27 –> 01:32and the state of Tennessee was not complying with bonus depreciation.01:32 –> 01:33We always had separate situations.01:33 –> 01:39So I know for a fact I have one or two that we will have to go back and amend those returns01:39 –> 01:43so that they can get some of their refunds back because they’ve actually physically overpaid01:43 –> 01:49due to the fact that the tax law did go in effect after the tax season had already begun.01:49 –> 01:54So again, if you are an individual that has a small business and maybe you have assets01:54 –> 01:58or different things like that, there are many things that may have changed.01:58 –> 02:03But one of the main ones is that Tennessee is now following the federal law for bonus02:03 –> 02:04depreciation.02:04 –> 02:08So that can lead to an important situation on that.02:08 –> 02:09All right.02:09 –> 02:12So Kevin here in Nashville, let’s go ahead and get him on the line.02:12 –> 02:14Hey, Kev, what can I do for you?02:14 –> 02:16Hi, thanks, Friday.02:16 –> 02:20A question about taxes in general.02:20 –> 02:27I’m considering getting my CFP and I’m wondering, are there any courses or certifications you02:27 –> 02:31would recommend for someone who would want to broaden his client base?02:31 –> 02:37So I could give maybe not like some like just general tax advice.02:37 –> 02:38Right.02:38 –> 02:41So CFP is a certified financial planner.02:41 –> 02:45I mean, you do financial planning on the one side, but obviously you need to know taxes02:45 –> 02:47to do good financial planning.02:47 –> 02:48Right.02:48 –> 02:49Yeah.02:49 –> 02:54So, yeah, I mean, there are a couple good programs, National Association of Enrolled02:54 –> 02:55Agents.02:55 –> 02:59You don’t have to be an enrolled agent to take many of their courses.02:59 –> 03:04That’s actually back in the day how I became an enrolled agent was I heard there was such03:04 –> 03:09a organization hadn’t known anything about enrolled agents in the day.03:09 –> 03:12But yeah, that would be an organization.03:12 –> 03:14There’s also the Tennessee Association of Enrolled Agents.03:14 –> 03:20I know we have a seminar coming up next month where you can take, you know, get CE credits,03:20 –> 03:25find out more about current tax laws and also get to know some of the enrolled agents or03:25 –> 03:31tax people, because at least in my practice, I’ve been at almost 28 years, but I work with03:31 –> 03:36a lot of financial planners because, you know, there’s always those moving parts of AMT tax03:36 –> 03:37and different things.03:37 –> 03:41But I think it’s great that you do learn a little bit more because I’ve met some financial03:41 –> 03:45planners, to be quite honest with you, that just rely a lot on software.03:45 –> 03:48They’re not actually knowing a lot of that information.03:48 –> 03:51So I think it’s a great idea, Kevin.03:51 –> 03:52Hopefully that information will help.03:52 –> 03:54And if you have any questions, you always call my office.03:54 –> 03:55Okay.03:55 –> 03:59So National Association, start with the National Association of Enrolled Agents.03:59 –> 04:00Right.04:00 –> 04:04NAEA.org, I think is the website.04:04 –> 04:05Okay.04:05 –> 04:08Just a quick question.04:08 –> 04:12Would you recommend like actually working for the IRS?04:12 –> 04:13Or is that too?04:13 –> 04:18I mean, yeah, I mean, personally, obviously I’m on the other side, right?04:18 –> 04:23So I represent taxpayers against the IRS.04:23 –> 04:27But I mean, some of my many of my friends, mostly, you know, obviously auditors that04:27 –> 04:31have either worked and there’s some enrolled agents that were at one point revenue officers04:31 –> 04:34or agents in their history.04:34 –> 04:35I don’t know.04:35 –> 04:39I mean, it does help, obviously, if you get if you actually work on the audit side, you04:39 –> 04:44would truly understand a lot of the tax laws, at least what’s currently on the books.04:44 –> 04:49But I personally, I’ve never worked for the IRS and always like to be on this side of04:49 –> 04:50the table.04:50 –> 04:51Okay, perfect.04:51 –> 04:54All right, Friday, thank you so much for your for your advice.04:54 –> 04:55No problem.04:55 –> 04:56Thank you.04:56 –> 04:57All right.04:57 –> 05:07If you have any questions, you can certainly go to W, you can call the studio 615-737-9986,05:07 –> 05:15615-737-9986, taking your calls so we can actually see what you want.05:15 –> 05:18Or we can help you out with some of your tax questions.05:18 –> 05:20It was actually a good question.05:20 –> 05:24You know, so often we don’t get to hear about some of those.05:24 –> 05:31So I think anytime you want to I mean, I have I have clients that actually will take seminars05:31 –> 05:35on taxes every year because their taxes are somewhat complicated.05:35 –> 05:40And they like to understand what the current tax law like I was talking when I opened up05:40 –> 05:41the show.05:41 –> 05:45We have had tax law changes in the state of Tennessee.05:45 –> 05:50One was the carryover credits where they’re now, you know, any credit that was earned05:50 –> 05:56after on or after December 31st, 2028 is going to be automatically applied.05:56 –> 05:57That wasn’t always the case.05:57 –> 05:58We had to make sure we applied it.05:58 –> 06:03So it makes it easier because sometimes people forgot they had a credit and then it was rolling06:03 –> 06:06forward and then they would pay taxes.06:06 –> 06:11The other big one that’s going to affect many of my clients, of course, is the the assets,06:11 –> 06:12right?06:12 –> 06:17The bonus depreciation, because you had you didn’t have a bonus depreciation here in in06:17 –> 06:20Tennessee franchise excise.06:20 –> 06:23So it will be nice to have some additional.06:23 –> 06:28And it’s also easier when you’re doing your federal return and your state return.06:28 –> 06:35It’s much simpler to follow the same process than it is to have to have two separate processes,06:35 –> 06:36one for federal and one for state.06:36 –> 06:41So those are definitely one of those.06:41 –> 06:44And that went into effect in 2023.06:44 –> 06:49So again, if you filed your taxes and you did your normal and it was before the change,06:49 –> 06:53then it would be important to go back and make the changes on the state side.06:53 –> 06:58And then for you, larger employers that might actually have family leave or medical leave,06:58 –> 07:02they’re moving some of the federal credits also to the state.07:02 –> 07:08Again, most of you hopefully have a enrolled agent or CPA that’s handling your taxes and07:08 –> 07:11they should be on top of all of those changes.07:11 –> 07:15But if you did file early again, I really want you to make sure that you make those07:15 –> 07:16changes so you have it.07:16 –> 07:18Let’s hit Deb real quick.07:18 –> 07:20Hey, Deb and Smyrna, what can I do for you?07:20 –> 07:23>> Hi, thanks for taking my call.07:23 –> 07:39I’m completing a final 1041 and the estate name received a 1099R and box one was checked07:39 –> 07:42and box seven distribution code was T.07:42 –> 07:43>> Okay.07:43 –> 07:49I believe this was a, was this a Roth?07:49 –> 07:50>> Yes.07:50 –> 07:51>> Okay.07:51 –> 07:54So, I mean, was there anything in box two?07:54 –> 07:55>> No.07:55 –> 07:56>> Okay.07:56 –> 07:59So, theoretically, there’s nothing to report.07:59 –> 08:05I usually do under other income, I usually make a memo of the 1099R with the federal08:05 –> 08:12ID number and then obviously under the taxable amount, I put zero because it is a Roth distribution,08:12 –> 08:16therefore no taxes, but I do usually list it in there so that way if there’s something08:16 –> 08:21that comes back later, you know that you actually did receive it and you did report it, just08:21 –> 08:26that there is nothing to report theoretically as far as taxable income on the 1041.08:26 –> 08:27>> Okay.08:27 –> 08:37The other question was the estate did receive interest income, you know, it’s like 130 bucks.08:37 –> 08:42Would that carry that number down on the form anywhere?08:42 –> 08:43>> Right.08:43 –> 08:45That would actually go under interest and dividends.08:45 –> 08:50I mean, there’s a schedule there that you would carry over.08:50 –> 08:54Depending on the trust, you may have a 100 or a $300 exclusion.08:54 –> 09:03If it’s a 300, I mean, if it’s a regular, the seat, traditional trust, I should know09:03 –> 09:06the proper term and it’s just left my brain.09:06 –> 09:17>> Would it be the qualified dividends allocable to the estate and I put it there which is09:17 –> 09:18in box.09:18 –> 09:21Well, it’s not really a box.09:21 –> 09:22It’s just a line.09:22 –> 09:24Is that where I would put it?09:24 –> 09:25>> Right.09:25 –> 09:26Yes.09:26 –> 09:30You will carry it down from there and then obviously if you’ve got qualified dividends09:30 –> 09:36and interest, there should be a place where you see bank interest or interest.09:36 –> 09:39There should be one line on that and then that would carry down.09:39 –> 09:41Again, you said $137.09:41 –> 09:47Theoretically, again, not knowing the type of trust, but you do get an exclusion that09:47 –> 09:49should be down there right before the taxable amount.09:49 –> 09:55I don’t know, say 100 or 300 or 600 and whatever the exclusion is, you can back out and then09:55 –> 09:59you only pay tax on the remaining $37.09:59 –> 10:02Worst scenario, maybe zero depending on the type of trust.10:02 –> 10:03>> Okay.10:03 –> 10:08And since I have to mail this in, would it hurt to send a copy of that 1099 all?10:08 –> 10:12>> No, you don’t need to send a copy of that with the report, no.10:12 –> 10:13>> Okay.10:13 –> 10:14All right.10:14 –> 10:15Well, that takes care of my issue.10:15 –> 10:16Thank you so much.10:16 –> 10:17>> Thanks.10:17 –> 10:18All right.10:18 –> 10:19Thanks.10:19 –> 10:23And yeah, again, for anyone that’s wondering what she’s completing, a 1041 is for a trust10:23 –> 10:25or an estate.10:25 –> 10:29And she said it was her final, so she was closing out on an estate situation.10:29 –> 10:34So again, making sure that you get, and you do want to make sure you file a final one,10:34 –> 10:39even if there is no income to report, because you want to close that federal ID number.10:39 –> 10:41Very important to do.10:41 –> 10:42That way you don’t keep getting love letters.10:42 –> 10:47The IRS knows the estate is closed and you’re able to move forward in your life and not10:47 –> 10:49have to worry about all of that.10:49 –> 10:51And that’s pretty straightforward to do.10:51 –> 10:53So good job in handling that.10:53 –> 11:05If you want to join the show, you can at 615-737-9986.11:05 –> 11:10You can also email Friday@drfriday.com if you’re not a person that likes to make those11:10 –> 11:15phone calls, because we all know that, let’s be honest, it’s not always easy to make phone11:15 –> 11:16calls.11:16 –> 11:22Hopefully that you have filed your taxes, but keep in mind that Robertson Weekly, Cheatham,11:22 –> 11:29Gibson, Stewart, Davidson, Dixon, Montgomery, and Sumpner are on extension automatically11:29 –> 11:31until June 17th.11:31 –> 11:36So if you forgot to make an extension, or maybe you didn’t pay your bill yet, because11:36 –> 11:42you usually would pay the bill on April 15th and you have this automatic extension, you11:42 –> 11:46need to make sure you hit that deadline or make sure you have the preparation done before11:46 –> 11:49then because otherwise, you know, the penalty happens.11:49 –> 11:51And we’re going to take a quick break here.11:51 –> 11:53When we get back, we’re going to hit the phone lines.11:53 –> 11:58Also, we’re going to talk a little bit about, even though you get this automatic extension,11:58 –> 12:02that you could be getting penalties by not paying it on time.12:02 –> 12:05But let’s go ahead and take a quick break so we can hit the phone lines.12:05 –> 12:08When we get back, you are listening to the Dr. Friday Show.12:08 –> 12:13I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.12:13 –> 12:17We’re going to take this break and we’ll be right back with the Dr. Friday Show.12:17 –> 12:26All righty, we are back here live in studio.12:26 –> 12:32And if you want to join the show, you can at 615-737-9986.12:32 –> 12:36615-737-9986.12:36 –> 12:38And let’s go right to the phone lines.12:38 –> 12:40We’ve got Ken in Eagleville.12:40 –> 12:43Hey, Ken, what can I do to help?12:43 –> 12:48We’ve got what started off as a simple handling of a survivorship and it’s turning into a12:48 –> 12:49nightmare for us.12:49 –> 12:52It may be simple for you, Dexys, and I need your help.12:52 –> 12:55A series of events.12:55 –> 13:00My wife’s brother died in February of ’23.13:00 –> 13:07We filed his taxes for ’22, like we should, and also filed more or less a closed account.13:07 –> 13:09His whole estate was payment on debt.13:09 –> 13:11All accounts was payment on debt.13:11 –> 13:13So there’s no will.13:13 –> 13:17Everything was transferred over to the DOD.13:17 –> 13:24But what is happening now is a month ago, we get this check for $13,000 of my dollars13:24 –> 13:31that after things closed out and the check, he was in a class action suit situation.13:31 –> 13:38And yeah, and he, of course, his check was made out to him or my wife, his or, not his13:38 –> 13:39or.13:39 –> 13:40And so he’s dead.13:40 –> 13:42So she cashed it.13:42 –> 13:49Now do we claim that $13,000 on ours as income or can it go back as part of the estate?13:49 –> 13:54Well it sounds like there really wasn’t much of an inherited state because it was all POD.13:54 –> 13:59So in essence, it’s POD to her, the class action.13:59 –> 14:03She will be the one that’s going to pay the taxes on it.14:03 –> 14:09So then we have to, well, being as only 13-3, that’s below my estate and below the minimum14:09 –> 14:10for filing.14:10 –> 14:12So do we even file?14:12 –> 14:19Well if your income is below all of that, then the answer is no, you won’t have any14:19 –> 14:21taxes due on the 13-3.14:21 –> 14:25But I don’t know if you have other income other than social security.14:25 –> 14:26I’m guessing.14:26 –> 14:28I have no idea, interest, dividends or anything.14:28 –> 14:30That’s my question.14:30 –> 14:31We definitely have to file.14:31 –> 14:36But the point is his estate, the 13-3- But this didn’t come to his estate.14:36 –> 14:37This came to your wife.14:37 –> 14:39The estate was already POD.14:39 –> 14:41So the estate doesn’t exist in essence.14:41 –> 14:46And if you ran it through a 1041, you’ll pay a higher tax than you would on your own personal14:46 –> 14:50tax because it starts at 24% on an estate tax.14:50 –> 14:53So it’s not likely.14:53 –> 14:56And the fact was it was paid basically to your wife.14:56 –> 15:01Now did she have to distribute that money to somebody else after she received it?15:01 –> 15:04Yes, her brother.15:04 –> 15:05Well her brother passed away.15:05 –> 15:06So there was another brother?15:06 –> 15:07No, no, no.15:07 –> 15:08This is the second brother, a living brother.15:08 –> 15:09Okay, a living brother.15:09 –> 15:10Okay, got you.15:10 –> 15:18So I mean, in theory, what she’s going to need to do since it had her name and the deceased15:18 –> 15:21brother’s name on the check, correct?15:21 –> 15:22Yes.15:22 –> 15:23Okay.15:23 –> 15:28So she’s going to have to, before she does any distribution, she needs to calculate her15:28 –> 15:29taxes.15:29 –> 15:34So that would be money that would be held until you can calculate how much your guys’15:34 –> 15:39joint tax on that, and then she would split whatever his share of that after taxes.15:39 –> 15:44There’s no way of transferring that over to him as additional tax that I know of.15:44 –> 15:50To summarize then, we claim it as income to us, and then we’ll make the distribution later.15:50 –> 15:54But right now, we claim it on our taxes with our regular income.15:54 –> 15:55That is 100% correct, yes.15:55 –> 15:56It’s not treated as inheritance.15:56 –> 15:57No, it’s not treated as inheritance.15:57 –> 15:58Okay.15:58 –> 15:59I really enjoy your show.15:59 –> 16:00Been listening for years.16:00 –> 16:03It was the first time I called.16:03 –> 16:04Thank you very much.16:04 –> 16:05Well, thanks, Ken.16:05 –> 16:06I appreciate it very much.16:06 –> 16:07All right.16:07 –> 16:08Let’s hit Mike in Nashville.16:08 –> 16:09Hey, Mike, what’s happening?16:09 –> 16:10Hey, hello.16:10 –> 16:11Just got a couple of quick questions.16:11 –> 16:12I’ll try to be brief.16:12 –> 16:13Sure.16:13 –> 16:21One is about an insurance settlement that a friend of mine received, about $20,000,16:21 –> 16:26and I should say he was going to receive it, and they said, “Well, who’s your contractor?16:26 –> 16:27I’m a sole proprietor.”16:27 –> 16:31I said, “Well, just go ahead and make it out to me,” naively, of course.16:31 –> 16:34So the check came to me from the insurance company.16:34 –> 16:36I since forgot about it.16:36 –> 16:37It’s already been two years.16:37 –> 16:41What is my recourse here?16:41 –> 16:43So you received the insurance check.16:43 –> 16:44Are you his contractor?16:44 –> 16:48Did you do work for him?16:48 –> 16:49Technically not yet.16:49 –> 16:51He’s kind of like held off, so no.16:51 –> 16:52I didn’t do anything.16:52 –> 16:54I just basically passed the money on to him.16:54 –> 16:56So I was just going to be a…16:56 –> 16:57I got you.16:57 –> 17:00So you received it and gave the money to him.17:00 –> 17:03So theoretically, you needed to…17:03 –> 17:09Your recourse would be to have transferred the 1099, because in essence, you refunded17:09 –> 17:13him the money you received from the insurance company.17:13 –> 17:15That’s correct.17:15 –> 17:19And since it didn’t come directly from the insurance company, which would have considered17:19 –> 17:26a settlement to offset maybe roof damage or something else, you can do it as other income,17:26 –> 17:32a 1099 miss, because he didn’t work for you, there was no earnings, but you would do it17:32 –> 17:34as other and then you need to transfer it back.17:34 –> 17:39It really becomes his issue since it really looks like from the business standpoint, it17:39 –> 17:41was a refund because services were never rendered.17:41 –> 17:42Right.17:42 –> 17:46And I guess the bottom line here is I’d forgotten about it.17:46 –> 17:47It didn’t even…17:47 –> 17:50Because I file a loan form every year because I’ve got rental property.17:50 –> 17:52And so I didn’t even report it.17:52 –> 17:56Now I’ve received insurance proceeds before and that’s my next question.17:56 –> 18:00Well, really, it’s not the next question, but it related to this property.18:00 –> 18:05So I had two capital gains on two sell properties back in 2022.18:05 –> 18:08I filed an extension.18:08 –> 18:09I owed money, of course.18:09 –> 18:14I waited, gosh, way too long, incurred interest and penalties probably in the tune of 15 to18:14 –> 18:1520,000.18:15 –> 18:16Now, here’s where I’m going with this.18:16 –> 18:21I paid the actual amount of the capital gain, which was like in the nineties.18:21 –> 18:27And I paid that because I kind of heard through maybe something, it could be misinformation18:27 –> 18:31that well, during COVID, they’re going to waive a lot of interest and penalties.18:31 –> 18:38I have since not received any notice since the very first notice a year and a half ago,18:38 –> 18:39two years ago.18:39 –> 18:45Well, 2022 did not fall into that waiver, just to let you know.18:45 –> 18:49There was stuff in 2020 where the government was closed because of COVID.18:49 –> 18:54And therefore there was waivers out there because people couldn’t get communication.18:54 –> 18:59And even in early 2021, we had a few, but mostly it was the year of 2020.18:59 –> 19:06So I will say if you were to sign on to id.me with the IRS, you will probably see that their19:06 –> 19:10collections and their interest in stuff is still accumulating.19:10 –> 19:15Right now, if you’ve been a good little taxpayer, Mike, for the last few years, and you haven’t19:15 –> 19:21had any kind of waivers or penalties assessed, and you’ve asked for forgiveness, my suggestion19:21 –> 19:27would be is to call the IRS and say, Hey, you know, they can see the penalties, right?19:27 –> 19:33I mean, they can see them right in their computer and ask them if you can have first time forgiveness.19:33 –> 19:34They know what that is.19:34 –> 19:35Yeah.19:35 –> 19:36And let me just say this real quick.19:36 –> 19:37I think I was advised by an attorney.19:37 –> 19:38I went and got an attorney.19:38 –> 19:45He claimed he could do all these creative things to maybe settle with the IRS since19:45 –> 19:47I’ve incurred all these interest and penalties.19:47 –> 19:51And again, I owed somewhere in the 90s or close to a hundred on the two cells of the19:51 –> 19:52property.19:52 –> 19:55But the point is, he said, don’t call the IRS.19:55 –> 19:59Well, again, I called him and the guy, he said, is this your first time?19:59 –> 20:02And I said, well, yeah, but there was an incident six years ago or something.20:02 –> 20:04And so he recorded something.20:04 –> 20:06But anyway, I haven’t gotten any more notices.20:06 –> 20:08It’s been almost two years.20:08 –> 20:11It is possible that you actually got the waiver.20:11 –> 20:17So I won’t tell you that the balance is zero, Mike, only because interest is never waived20:17 –> 20:19and you only paid the original amount.20:19 –> 20:24But it would be a lot less, right, because the penalties are what hurts the most.20:24 –> 20:29So again, I mean, personally, if you’ve got an attorney representing you, then obviously20:29 –> 20:34make let him I’m never would supersede your power of attorney.20:34 –> 20:36But at this point, he could be delaying it.20:36 –> 20:42And that doesn’t help you any because there is no magic way to make interest disappear.20:42 –> 20:46So if you already got the waiver, you’ve done his job and there’s not going to be a lot20:46 –> 20:51of other magic because you probably have assets enough to pay the bill that’s left.20:51 –> 20:55You know, I’m guessing.20:55 –> 20:58I went away from him almost a year ago already.20:58 –> 21:03And I said, because I paid him like all this money, he charged me five hundred refunded.21:03 –> 21:04And I said, let me just handle it.21:04 –> 21:06I don’t want to pay ten thousand dollars.21:06 –> 21:12And so I went on to pay the capital gain itself, but not the penalties.21:12 –> 21:17I would I would do a follow up just to make sure that something like little festering21:17 –> 21:22and interest charging on interest, you know, which they can do or even penalty for not21:22 –> 21:23paying the interest.21:23 –> 21:24And you’ve already gotten the waiver.21:24 –> 21:28So, I mean, we’re probably talking, you know, a thousand bucks or something, not like what21:28 –> 21:29you had before.21:29 –> 21:33But you don’t want to leave it out there just because the IRS hasn’t notified you.21:33 –> 21:34OK, yes.21:34 –> 21:35So don’t you’ve done the hard.21:35 –> 21:36You’ve made it go away.21:36 –> 21:37OK, yeah.21:37 –> 21:43So but but but go ahead and volunteer and get in touch with them.21:43 –> 21:49And you say exactly exactly because, you know, it’s probably a few dollars and you’d rather21:49 –> 21:53not keep it growing just because they haven’t sent you a love letter.21:53 –> 21:55OK, OK, OK, that’s good.21:55 –> 21:56OK.21:56 –> 21:57All right, buddy.21:57 –> 21:58Thanks for the phone call.21:58 –> 21:59Appreciate it.21:59 –> 22:00Thank you.22:00 –> 22:01Bye.22:01 –> 22:02All right.22:02 –> 22:03So we’re going to go to Dan and Brentwood.22:03 –> 22:04Hey, Dan, what can I do for you, sweetheart?22:04 –> 22:05Hi, Dr. Friday.22:05 –> 22:06Thanks for taking the call.22:06 –> 22:07Appreciate it.22:07 –> 22:08Good.22:09 –> 22:15A bit of the unique question, hopefully of use to somebody besides myself.22:15 –> 22:17And it has to do with lending friends money.22:17 –> 22:18Have a friend.22:18 –> 22:19OK, needs windows to her condo.22:19 –> 22:20They’re going to cost $15,000.22:20 –> 22:27The state has a program, a grant program that will give her back $10,000 of that.22:27 –> 22:31So she meets certain criteria, which are OK.22:31 –> 22:39Now, if I lend her the $15,000 with the contingency of getting the $10,000 grant money back upon22:39 –> 22:48delivery of that and let the remaining $5,000 be a gift, what documentation do I need for22:48 –> 22:49that for the IRS?22:49 –> 22:53And what IRS landlines might there be on that?22:53 –> 22:58You’re not really playing with anything from the IRS, in all honesty, because you can gift22:58 –> 23:02her $17,000 without any paper trail.23:02 –> 23:05So then you’re doing that, right?23:05 –> 23:06So you’re giving her 15.23:06 –> 23:09So from the IRS standpoint, there’s nothing there.23:09 –> 23:13You would have to pay tax before you gift versus the other way.23:13 –> 23:18And since basically you’re looking at 5,000 as a gift and potentially in the perfect world,23:18 –> 23:21you get the $10,000 back.23:21 –> 23:22No guarantees in life.23:22 –> 23:23So I’m saying that.23:23 –> 23:28But it’s all it’s a wash anyways, assuming that there’s no problem with the grants.23:28 –> 23:30And I mean, and I’m assuming the state has no issues long.23:30 –> 23:34She got windows and the windows apply, then life is good, right?23:34 –> 23:35She got her new windows.23:35 –> 23:39You got the you know, she got him for five grand additional versus the other and you’re23:39 –> 23:42a good friend that’s basically helping her out.23:42 –> 23:45So there would be no tax consequence in this scenario.23:45 –> 23:46Great.23:46 –> 23:49I just wanted to make sure there weren’t any landmines.23:49 –> 23:50Thank you.23:50 –> 23:51Yep.23:51 –> 23:52No, you did.23:52 –> 23:53Awesome.23:53 –> 23:54All right, buddy.23:54 –> 23:55Appreciate that phone call.23:55 –> 23:56Thank you.23:57 –> 23:58And if you’re watching this, you can join the show.23:58 –> 23:59We have some cool questions.23:59 –> 24:01I’m liking this today.24:01 –> 24:02615-737-9986.24:03 –> 24:12We’re going to be right back with the Dr. Friday show.24:12 –> 24:22All right, we are back here live in studio and we have Josh and Dixon that’s been holding24:22 –> 24:23through the break.24:23 –> 24:27So why don’t we have Josh join us on the show?24:27 –> 24:29Hey, Josh, what can I do for you?24:29 –> 24:30Hi, Dr. Friday.24:30 –> 24:31Great show.24:31 –> 24:41I just wanted to know if you can patch some bonds that were inherited from a relative,24:41 –> 24:48my aunt, without being the executor, was never an executor on her estate.24:48 –> 24:50All right.24:50 –> 24:54So are the bonds in your aunt’s name?24:54 –> 24:55She purchased them.24:55 –> 24:59They have her name on them and I have the paperwork.24:59 –> 25:00Okay.25:00 –> 25:03That was given to me by my father.25:03 –> 25:05He passed away.25:05 –> 25:13When he passed away back in 22, my mom inherited all that.25:13 –> 25:15Yeah, I guess she inherited by default.25:15 –> 25:17Whatever was his.25:17 –> 25:19Her name’s not on the bond list.25:19 –> 25:26I’m mentioned, my brother’s mentioned, and three cousins, two cousins and my dad are25:26 –> 25:27mentioned.25:27 –> 25:28So my dad’s dead.25:28 –> 25:32It’s just me and my brother and two cousins are mentioned on the paper of inheritors and25:32 –> 25:35the percentages, everything’s all printed on there.25:35 –> 25:41Well, I’m going to tell you, bonds can be, I would actually probably go to someone like25:41 –> 25:42my Hank Parrott.25:42 –> 25:43He does all my financial stuff.25:43 –> 25:49I know he deals with bonds because I do know I have purchased bonds for nieces and nephews.25:49 –> 25:53And I know that if something happens to one, there is a list that goes down, but a lot25:53 –> 26:00of times they want the bonds changed or have a true direct descendant situation.26:00 –> 26:01It’s not as simple as taking it.26:01 –> 26:06And nowadays you have to send the bonds in to cash them in, most of them.26:06 –> 26:09So you probably want to call the bond company.26:09 –> 26:10Maybe that’s also a second base.26:10 –> 26:11I did.26:11 –> 26:12Okay.26:12 –> 26:13So I’m going to go to the last one.26:13 –> 26:14They said, are you the executor?26:14 –> 26:15I said, no, there is no exec.26:15 –> 26:16There was never an executor for her estate.26:16 –> 26:17So, yeah, so basically she said, well, you have to, what do you call that?26:17 –> 26:18Probate it?26:18 –> 26:19Not nominate, but yeah, you have to, somebody has to become executor first.26:19 –> 26:20Right.26:20 –> 26:21And then that person.26:21 –> 26:22So they basically make the estate have to go through probate to actually get the bond26:22 –> 26:23in.26:23 –> 26:24So that’s the first step.26:24 –> 26:25And then the second step is to actually get the bond in.26:25 –> 26:26And then the third step is to actually get the bond out of the estate.26:26 –> 26:27And then the fourth step is to actually get the bond out of the estate.26:27 –> 26:28And then the fifth step is to actually get the bond out of the estate.26:28 –> 26:52And then the last step is to actually get the bond out of the estate.26:52 –> 27:18And then the last step is to actually get the bond out of the estate.27:18 –> 27:45And then the last step is to actually get the bond out of the estate.27:45 –> 28:13And then the last step is to actually get the bond out of the estate.28:13 –> 28:20and 15 it’s got to be split four ways, five ways, five ways. Okay so yeah I’m28:20 –> 28:24assuming then you probably need to open up probate or at least open up where28:24 –> 28:28someone could be so that way they have the authority to talk to banks and28:28 –> 28:33to get these all cashed and then that person would also be responsible for28:33 –> 28:39distribution of all the funds that you know would be required. So you guys would28:39 –> 28:44be so you know yeah. And like a newspaper or has to be an ad or something for so28:44 –> 28:51long? I mean normally if you open up probate the courts actually do require28:51 –> 28:55that it’s distributed make sure there’s no collections or any outstanding debts.28:55 –> 29:01Yeah who does that? The executor? The courts usually yeah the executor but29:01 –> 29:04normally it’s done through the courts at least here that’s pretty straightforward29:04 –> 29:08where you basically just run I mean they tell you right where to run the ad in29:08 –> 29:13the state of Tennessee so it’s a pretty easy thing to do. How much is it about to29:13 –> 29:18become exec to get a paperwork to become the executor and file all that? Is it a big amount of money?29:18 –> 29:23I don’t know I mean I would think you know again you’re on a different state so my29:23 –> 29:28suggestion would be is to see if you can find an attorney or someone in that29:28 –> 29:32state just to get those answers done. Yeah because he’s dragging his feet he29:32 –> 29:37doesn’t need the money but I do and I’m like well I could just do it myself. If I could do a29:37 –> 29:43remotely would be great and then when I get that percentage I have to do I have29:43 –> 29:49to pay a tax in Tennessee on that or just to the state of? Yeah you’d only be29:49 –> 29:53the state that it’s inherited as well as the feds. We don’t have an income tax29:53 –> 30:00here. Okay. I wouldn’t have to pay so I wouldn’t have to pay that state. You30:00 –> 30:03would have to pay in the state most states require if the money is earned in30:03 –> 30:07that state or the person deceased died in that state that that taxes would30:07 –> 30:11still be due in that state in most cases. Again I don’t know what states we’re30:11 –> 30:15talking about so but I’ll take a unfortunately on the show but that’s a30:15 –> 30:18great question if you need some more help I have no problem my office a call30:18 –> 30:23we’ll see if we can help out okay. Yeah I’ll do it thank you ma’am I appreciate30:23 –> 30:27it. Uh-huh all right if you have a question you can join the show at30:27 –> 30:39615-737-9986 615-737-9986 taking your calls talking about taxes sorry that30:39 –> 30:43last one got a little bit into the legal things and I don’t I want to make sure30:43 –> 30:48you understand I am NOT an attorney so I don’t know what what different states or30:48 –> 30:52even what state of Tennessee really requires with the exception of helping30:52 –> 30:56some clients with the states but you my personal opinion would be go to an30:56 –> 30:59attorney because they’re the ones that would know how to handle all of that30:59 –> 31:05without question. But again if you are a small business owner and you have31:05 –> 31:11franchise excise in the state of Tennessee you may want to review your31:11 –> 31:172023 return only because if you had assets that you did bonus depreciation31:17 –> 31:21on the federal side you may not have gotten it on the state side as well as31:21 –> 31:26if you have other there was some other changes also we all know about the31:26 –> 31:30business license or many of us do but if you filed your business license and31:30 –> 31:35didn’t you know made less than $100,000 and you paid something other than the31:35 –> 31:40$22 that are usually due or whatever again you want to make sure that you31:40 –> 31:46have that correct and you don’t overpay taxes and you know and again even for a31:46 –> 31:51little bit larger companies that do the paid family leave and medical leave31:51 –> 31:57there has been some changes on the franchise excise side of our business31:57 –> 32:01so all those you just want to make sure you have those going so that you have32:01 –> 32:05the ability to make sure your your base and your property and many of these32:05 –> 32:13things moved to 2023 some move backwards there is some changes that’s also coming32:13 –> 32:20in at 2024 so you know good time to make sure you’re reviewing and handling all32:20 –> 32:25of the new state changes no one wants to pay a dollar more than you have to32:25 –> 32:29obviously again we also have the extension for individuals that live in32:29 –> 32:35Robertson weekly Cheatham Gibson Stewart Davidson Dixon Montgomery and Sumpner32:35 –> 32:40that had the extension so if you lived in those areas you did have an extension32:40 –> 32:45you have until June 17th what I did want to bring up I had a gentleman that had32:45 –> 32:50as a tax person tell him he only had to you’d have to worry about it till June32:50 –> 32:5617th because he had the extension but keep in mind that doesn’t stop making32:56 –> 33:01proper quarterly your quarterlys are due on June 17th again it extends but if you33:01 –> 33:06didn’t pay in 2023 all of your properly quarters in this case the gentleman had33:06 –> 33:12had one time distribution and he owed taxes and so if you didn’t make the33:12 –> 33:16quarterlys properly the the penalties and interest will still happen it would33:16 –> 33:21have happened on April and now it will happen in June but if your idea is that33:21 –> 33:26you don’t have to pay any penalties or interest until you know June 17th but in33:26 –> 33:31theory you may have owed penalties and interest anyways because of the way you33:31 –> 33:35may have managed thinking that well I only have to pay at the end of year once33:35 –> 33:39the tax law basically says you have to make four equal payments based on the33:39 –> 33:46year before if the year before you owe $10,000 and this year you owe $20,000 you33:46 –> 33:49did not make the four quarterly estimates now some people say well it’s33:49 –> 33:53a one-time I sold a house I made some capital gains but then the law says 9033:53 –> 33:58days after you’ve made the earnings you need to make an estimated payment now if33:58 –> 34:03the 90 days happen to fall on April 15th and that’s great but that’s not likely34:03 –> 34:08since 90 days would have been into the new tax year so in most cases people you34:08 –> 34:14should have already made most of your payments so delaying it till June 17th34:14 –> 34:18could be costing you penalties and interest that’s what I’m trying to say34:18 –> 34:22penalties and interest could be coming at you if you haven’t paid in you’re34:22 –> 34:27thinking oh I can wait till June 17th some people can because they didn’t you34:27 –> 34:31know they owed $500 or they made all the proper quarterlies or they made a hundred34:31 –> 34:35and ten percent of the year before so they are not in jeopardy but many times34:35 –> 34:39the people that are avoiding had a big distribution of some sort and then that34:39 –> 34:44turns into a situation where you’re really just dragging your feet thinking34:44 –> 34:48you shouldn’t have to pay it there’s a lot of ads they say oh I think you know34:48 –> 34:53I can make ten cents on the dollar I can negotiate for you keep in mind that isn’t34:53 –> 34:58for individuals that actually have the money sitting in the bank to pay the IRS34:58 –> 35:02just because you have it and they’re thinking well I can make a deal does35:02 –> 35:05that make sense doesn’t really make sense does it because you have the money35:05 –> 35:08all right we’re gonna take our last break here so if you want to join the35:08 –> 35:16show now would probably be the time to think about doing it 6 1 5 7 3 7 9 9 8 635:16 –> 35:19again for some of you never heard me before I am dr. Friday and enrolled35:19 –> 35:25agents with the Internal Revenue Service I do representation and taxes been doing35:25 –> 35:31it for 28 years and going strong and if you have questions or if you need help35:31 –> 35:35with dealing with IRS or the love letters I’m the person you need to call35:35 –> 35:41and you can contact my office on Monday but today if you’ve got questions or35:41 –> 35:44you’ve got love letters or something coming up and you need help dealing with35:44 –> 35:51it then this is the number you want to call right now 6 1 5 7 3 7 9 9 8 6 and35:51 –> 35:54I’ll see if I can help you on the radio if not we can always set up an35:54 –> 35:59appointment at the office to do more private or simple meetings for you all35:59 –> 36:01right we’re gonna take a quick break when we get back we’ll take your calls36:01 –> 36:076 1 5 7 3 7 9 9 8 636:07 –> 36:15all right we are back here live in studio the last part of the show so if36:15 –> 36:19you’ve got a question now would probably be the time to call otherwise you can36:19 –> 36:24always catch us at the weekdays at our office but if you need something 6 1 536:24 –> 36:357 3 7 9 9 8 6 6 1 5 7 3 7 9 9 8 6 here in the studio and again we are working36:35 –> 36:43on completing our 2023 taxes so if you have not completed your 2023s and you36:43 –> 36:47need help you can always go this call at the office otherwise make sure that you36:47 –> 36:52get them filed I know we have extensions but again extensions don’t always extend36:52 –> 36:57the money and therefore the money is what really matters we don’t want to pay36:57 –> 37:02a dollar more to Uncle Sam than we have to and so in doing that we want to make37:02 –> 37:07sure that we have everything in the right place and if you have I mean this37:07 –> 37:13year I had a really unusual one where she came in just on Friday and again she37:13 –> 37:19had cashed out a long-term care policy never received anything and then they37:19 –> 37:23send a letter basically saying just you know the other day that oh wait we37:23 –> 37:28forgot we should have sent this to you and it was you know an additional tax of37:28 –> 37:33you know several thousand dollars and so she just received that and we’re you37:33 –> 37:37know obviously amended and paid the taxes but things happen that way and37:37 –> 37:42sometimes out of our control other times we know of things that happen but37:42 –> 37:47sometimes we forget during the year so I would always say if you have any37:47 –> 37:55opportunity to make sure that you have the ability to double check and make37:55 –> 38:00sure everything you know that happened in that year maybe even keep a cheat38:00 –> 38:03sheet you know something that says hey I sold something I purchased I changed38:03 –> 38:09jobs that is always a big one for us when people change jobs they forget to38:09 –> 38:16to what’s the easiest way you know they basically forget that they had the job I38:16 –> 38:19know it doesn’t seem but you know you’re so busy and you’re not sure and so when38:19 –> 38:24it comes down to it you forget and then you’re like oh wait that’s right I did38:24 –> 38:28work here and now Uncle Sam is saying something different than what the other38:28 –> 38:32you know what your taxes say and then they’ve changed your taxes and either38:32 –> 38:36you don’t get the refund that you think you should have had or worse you owe38:36 –> 38:42more money and that is a very scary situation when you know when you think38:42 –> 38:45you’re having a refund and then Uncle Sam sends you a love letter saying no no38:45 –> 38:49no we you owe us money and then you’re sitting there going why and so that’s38:49 –> 38:53and and they’re not very good at explaining those letters in all honesty38:53 –> 38:58we get them all the time and you know for multiple years or multiple38:58 –> 39:02situations and one of the biggest things you find out it’s basically just says39:02 –> 39:06we’ve changed your return and many times people don’t even understand why that is39:06 –> 39:09what’s happening where is it at and then you know you’re sitting there going oh39:09 –> 39:14wow now I owe them and I don’t understand or or they’ve taken more than39:14 –> 39:20half of your refund and it normally will say in in fairness it will normally say39:20 –> 39:24that they have applied it to another open year but many of my clients when39:24 –> 39:28that happens they come in and they’re like well I didn’t know I owed any money39:28 –> 39:32for that year so you know again one of those situations where you’re like oh39:32 –> 39:38wow I’m a I’m a little surprised but you know take it from there and see what you39:38 –> 39:45have that’s really all I can say on that situation and it’s make sure that if you39:45 –> 39:49have a payment plan that needs to be done have a question here they haven’t39:49 –> 39:57filed prior years but they are obviously trying to get current and so doing so39:57 –> 40:04they basically said hey I haven’t filed any taxes but I owe them for 2023 so can40:04 –> 40:09I just set up a payment plan well here’s the problem Uncle Sam is going to turn40:09 –> 40:14around and say you’re not in compliance if you’re not in compliance you’re not40:14 –> 40:19going to be able to set up a payment plan so even though you have done40:19 –> 40:22something on this one and you’re like okay well that’s great I can make it40:22 –> 40:28yeah if you haven’t if you haven’t you need to go back and you need file at40:28 –> 40:32least six years of taxes you need to be in compliance and if they have assessed40:32 –> 40:35you in any of those other years had a client we just found out that had been40:35 –> 40:41audited but he never knew of any audits in 2015 well you know normally we40:41 –> 40:46wouldn’t have to do 2015 but 2015 is an open audit so it means we need to go40:46 –> 40:52back in and deal with that one since it’s also a fairly large tax balance do40:52 –> 40:57and then you can set up all of this into some form of a payment plan we cannot do40:57 –> 41:02that if it’s not going to be in the same scenario so you know if you’re trying to41:02 –> 41:06do it you can set up payment plans online really easily to be quite honest41:06 –> 41:11with you but if you’re not in compliance they’re not going to set it up so that41:11 –> 41:15is an important situation you want to make sure that you’re in compliance that41:15 –> 41:19and if you can’t we can help you get all your tax documents we can help you put41:19 –> 41:24that together and get that all squared away but you know if you don’t if you41:24 –> 41:27don’t have all of your taxes filed the government’s sitting there going well41:27 –> 41:32wow I don’t know if that’s gonna really work for us right I mean that’s they’re41:32 –> 41:37thinking well if it’s not if we’re not in compliance and you want to pay for41:37 –> 41:41one year but how do we know you don’t owe for all of these years how do we41:41 –> 41:45know you don’t have a situation where you actually owe for multiple years and41:45 –> 41:51you’re just trying to pay for the one year you know that’s a problem so you41:51 –> 41:54just need to make sure that whatever you do that you have the situation and41:54 –> 41:59you’re able to file those different years and make it work if you can’t then41:59 –> 42:04you know it’s going to be interesting to see how it comes out but most cases the42:04 –> 42:07IRS is not going to set up that payment plan and so you’re going to end up with42:07 –> 42:12more love letters saying intent to levy and site to seize them to do something42:12 –> 42:17because they’re like you’re not following the rules rules are not always42:17 –> 42:20black and white but they are often black and white so we want to make sure that42:20 –> 42:23you actually have everything you know so if you’ve got questions let’s say you42:23 –> 42:27have love letters coming in maybe you’re in a payment plan but you know that42:27 –> 42:31you’ll be paying for the next 10 years and you’re not sure if you know maybe42:31 –> 42:35jobs have changed situations have changed and if that’s the case then42:35 –> 42:41guess what you may be able to alter that payment plan if it’s causing financial42:41 –> 42:47situations if it’s hurting you if the financial hardship is as part of it then42:47 –> 42:50they may say yep that’s a good idea let’s see if we can work on that and see42:50 –> 42:56if we can help make that happen then you know we can also help you achieve what42:56 –> 43:00you want to achieve on that if you need something else as far as being able to43:00 –> 43:05just deal with maybe get get a little breathing because the IRS is been you43:05 –> 43:10know hounding you there are ways of helping to negotiate to slow down you43:10 –> 43:15know I know sometimes representation does get a bad rap because sometimes it43:15 –> 43:18doesn’t seem like it’s something that really is that difficult that’s why I43:18 –> 43:22like to tell people you know you can go and do this yourself you can make this43:22 –> 43:28you know one time penalty go away you may not be able to do multiple years or43:28 –> 43:32you may not be able to deal with other issues but you know there is this on the43:32 –> 43:36table let the people go ahead and do that based on charging them a thousand43:36 –> 43:40or fifteen hundred dollars because well let’s be honest you have to spend an43:40 –> 43:43hour or two on the phone which obviously is going to have to be paid by someone43:43 –> 43:48so the best thing to do is to be able to turn around make sure you have it set up43:48 –> 43:52the right way and then you can deal with it but you know just because there’s a43:52 –> 43:57fear dealing with the IRS does not mean you should not be you know dealing with43:57 –> 44:01them I know sometimes people and if I’m representing you I don’t want you44:01 –> 44:05calling the IRS because I don’t want you changing what I’m telling them and you’re44:05 –> 44:10telling them sometimes that can confuse the revenue but if no one’s talking to44:10 –> 44:13them if you don’t have representation or you feel your representation is just44:13 –> 44:17not doing anything then we need to make sure that you’re in the right place and44:17 –> 44:22you’re going to be able to do what you need to do and you’re you’re moving44:22 –> 44:27forward to be able to get yourself out of the situation you’re in today it’s44:27 –> 44:32hard it doesn’t seem fair sometimes and I know I’ve had more than one person in44:32 –> 44:36this many years of doing it there they’re always angry because you know I44:36 –> 44:41paid my house off but the IRS wants to take it from me now well I mean again44:41 –> 44:48keep in mind if you have no debt on your house and you owe the IRS their thought44:48 –> 44:52is you used our money to pay your house off you could have been paying us but44:52 –> 44:57you decided to make mortgage payments doesn’t seem like a far reach so you’re44:57 –> 45:01not going to get the deal you think you’re entitled to because all you have45:01 –> 45:05is your house now that being said there are caveats to any of those situations45:05 –> 45:09it could be that that’s the only asset you have and you’re close to retirement45:09 –> 45:13maybe you would be able to use that argument that the money in the house is45:13 –> 45:17a retirement therefore you can’t afford to pay there are different arguments but45:17 –> 45:21you really need to understand how it works and what you’re going to do all45:21 –> 45:25right so we’re winding down the show here we go if you need to call us on45:25 –> 45:31Monday morning you’re going to call six one five three six seven zero eight one45:31 –> 45:38nine six one five three six seven zero eight one nine you can also email Friday45:38 –> 45:45at dr Friday comm check us out on the web dr Friday comm all of those are45:45 –> 45:51available so if you need to have someone take a second look get a perspective on45:51 –> 45:57how or what you have going on maybe you’re just at that precipice that’s45:57 –> 46:00going to be okay I either have to go over this edge or I’m going to make a46:00 –> 46:05deal or make it work you might need some help doing that and that’s what I can do46:05 –> 46:10I can help you make a deal with the IRS if the deal can be made I’m not one of46:10 –> 46:14those companies just gonna say oh yeah we can do anything not always can deals46:14 –> 46:19be made just keep that in mind again phone number six one five three six46:19 –> 46:28seven zero eight one nine email Friday at dr Friday comm and the website is dr46:28 –> 46:32Friday comm I hope that you guys are enjoying this Saturday spending some46:32 –> 46:38time outside enjoying the fresh air and as we always say in Australia cop you46:38 –> 46:40later

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In this episode of the Dr. Friday Radio Show, tax expert Dr. Friday discusses various tax-related topics, including extensions for certain counties affected by severe weather, setting up payment plans with the IRS, and handling tax situations involving inherited properties, capital gains, and more.

Topics covered:

• Extension until June 17, 2024, for individuals and businesses in certain Tennessee counties affected by severe weather
• Importance of filing extensions and being in compliance with the IRS
• Setting up realistic payment plans with the IRS and understanding their collection process
• Tax implications of inheriting a rental property and receiving rental income
• Reporting and splitting a charged-off commercial loan with an ex-spouse
• Earned Income Tax Credit for retirees with low income
• Deducting margin interest expense on Schedule A when itemizing deductions
• Capital gains tax on the sale of a primary residence and a rental property

Transcript00:00 –> 00:06No, no, no, she’s not a medical doctor, but she can sure cure your taxproblems or your00:06 –> 00:07financial woes.00:07 –> 00:10She’s the how-to girl.00:10 –> 00:11It’s the Dr. Friday Show.00:11 –> 00:19If you have a question for Dr. Friday, call her now, 737-WWTN.00:19 –> 00:20That’s 737-9986.00:20 –> 00:27So here’s your host, financial counselor and tax consultant, Dr. Friday.00:27 –> 00:34G’day, I’m Dr. Friday and the doctor is in the house.00:34 –> 00:36We are here live in studio.00:36 –> 00:40So if you’ve got a question, this will be the time to talk and we’ve got somegood news00:40 –> 00:45for some of those procrastinators out there and even some of my clientsbecause some people00:45 –> 00:51never got the memo that if you lived in certain counties, and really the onesthat it’s closest00:51 –> 00:59to us is Davidson, Robertson, and Sumner, but there are eight counties due tosevere00:59 –> 01:03thunderstorms and actually I think it was tornado warnings.01:03 –> 01:10The FEMA or the IRS ruled as severe thunder and so now they had until June17th.01:10 –> 01:16So even if you filed your taxes and you weren’t able to pay them or maybe youweren’t able01:16 –> 01:22to make your first estimate because you had to pay your taxes or even yourfourth quarter01:22 –> 01:26estimate on time, it could have been because of financial reasons.01:26 –> 01:31If you had a partnership or corporation that was due on March 15th and youweren’t able01:31 –> 01:39to file it or regular corporations or fiduciary ones that were due April 15thor even individuals.01:39 –> 01:45Also the non-profit, the tax exempt ones that are due May 15th, all of thoseestimates,01:45 –> 01:50all of those are extended until June 17th.01:50 –> 01:57So that gives you at least people that live in Robertson Weekly, Cheatham,Gibson, Stewart,01:57 –> 02:01Davidson, Dixon, Montgomery, and Sumner.02:01 –> 02:06Those are the counties that have an extension that we’ll have till that time.02:06 –> 02:10So it gives you a little, I mean, again, if you had a tough time and youweren’t able02:10 –> 02:13to make it, that will be the direction you want to go.02:13 –> 02:15All right, we’ve got Michael on the line.02:15 –> 02:17Hey Michael, what can I do for you, love?02:17 –> 02:20Hey, how are you today?02:20 –> 02:21I am doing awesome.02:21 –> 02:22Yourself?02:22 –> 02:23Not too bad.02:23 –> 02:24Just getting off of work, headed toward the house.02:24 –> 02:25Going to do a little grilling.02:25 –> 02:29Ah, sounds like a good day.02:29 –> 02:30What can I do for you?02:30 –> 02:38Hey, my wife and myself both, we have money taken out of our paychecks, ourbi-weekly,02:38 –> 02:45and it’s given, you know, taken out for taxes because we owe about $3,000roughly every02:45 –> 02:46year.02:46 –> 02:47Okay.02:47 –> 02:55So, would it be beneficial to us to not take that money out and invest itbecause it’s02:55 –> 03:01the same benefit or just keep doing what we’re doing and invest differentmoney?03:01 –> 03:07Well yeah, because the biggest problem, and I get it, right now interest ratesare really03:07 –> 03:12pretty good, but there is a penalty for not paying in enough taxes every year.03:12 –> 03:18So what you pay in penalty, would it be what you grew the money to be, wouldbe the question,03:18 –> 03:19right?03:19 –> 03:24And even if you just put it in a savings so you couldn’t take the risk oflosing, but03:24 –> 03:27at least that it would grow its 5% or something like that.03:27 –> 03:28But the penalty is six.03:28 –> 03:32The bottom line is you’re going to lose whatever you make anyways because thepenalty is going03:32 –> 03:38to be higher unless you can make seven or 8%, then the question may change atthe moment.03:38 –> 03:44So my suggestion would be paying enough so you don’t have to worry about, ifit’s $50003:44 –> 03:46or less, there’s no penalty.03:46 –> 03:49So you know, that number is fine.03:49 –> 03:54And then yes, I mean, if investing, you know, putting into a 401k or investingit outside03:54 –> 04:00of your business investments to give yourself a better leverage later in life,that’s obviously04:00 –> 04:02a smart thing to do, in my opinion.04:02 –> 04:07Well, I appreciate the answer because my train of thought was similar to that,but I was04:07 –> 04:12scared that if I went to like my financial advisor and said, Hey, I’ve gotthis extra04:12 –> 04:19$500 a month that I’m putting in in taxes, would it be beneficial for you toinvest it04:19 –> 04:20for me?04:20 –> 04:25Because I’m pretty sure he’s going to say yes, no matter if he’s right orwrong in the04:25 –> 04:26situation.04:26 –> 04:31So I would honestly hope that your investor guy would say, no, I don’t want totake the04:31 –> 04:32risk of investing it.04:32 –> 04:36That would be the answer because the last thing we want, I mean, again, ifit’s a sure04:36 –> 04:39thing, at least the principle doesn’t change.04:39 –> 04:41At least then we know you’ve always gotten the three grand.04:41 –> 04:44You don’t have to worry about maybe the penalties or whatever.04:44 –> 04:48But you know, if you put it into the stock market, it may be the worst time ofthe year04:48 –> 04:52to take it out when you actually have to pay Uncle Sam, you know?04:52 –> 04:56And then not only do you not have the full 3000 you put in, but you could beupside down04:56 –> 05:00and having to pull the money from other investments that cover it because oftiming.05:00 –> 05:06So yeah, I would hope that your investment advisor would give the same advice,Michael.05:06 –> 05:08But one never knows with those kinds of situations.05:08 –> 05:12So yeah, I think it’s always safe because the last loan officer you want inthe world,05:12 –> 05:14as far as I’m concerned, is the Internal Revenue Service.05:14 –> 05:15Okay.05:15 –> 05:17Well, hey, that answers my question.05:17 –> 05:18I appreciate your time.05:18 –> 05:20Y’all have a great weekend.05:20 –> 05:21You too.05:21 –> 05:22Enjoy the grilling.05:22 –> 05:23All right.05:23 –> 05:24We’re going to hit James in Lebanon.05:24 –> 05:25James, what can I do for you, sweetie?05:25 –> 05:26Yes, Dr. Friday, thank you for taking my call.05:26 –> 05:27I appreciate it.05:27 –> 05:28I listen to your show quite often.05:28 –> 05:29You’re always very resourceful and helpful.05:29 –> 05:40I have an LLC with my brother, and we’re fixing to sell the land in that LLC.05:40 –> 05:47And I was wanting to know if I could take my half of the proceeds and do a1031 exchange05:47 –> 05:51without him participating in his part in it.05:51 –> 05:52I know there is a way.05:52 –> 05:59I’m not an attorney usually, or at least my friend who does it for me is anattorney,05:59 –> 06:00and he’s a specialist in 1031s.06:00 –> 06:04I know I have sent him individuals that have been in partnerships.06:04 –> 06:08I’m not too sure if it has to be taken out of the name of the partnership foryou to06:08 –> 06:12do that before the time of closing so that you’re an individual, he’s anindividual,06:12 –> 06:14and then you guys can do your own thing.06:14 –> 06:19At this point, it probably, or the LLC, I should say, but it’s basically apartnership.06:19 –> 06:23It really wouldn’t change anything for tax purposes for him or for you, but itwould06:23 –> 06:25give you the authority to do.06:25 –> 06:30Because for some reason, I’m thinking we have to take it out of the name ofthe LLC to do06:30 –> 06:35so you can then have full control of your 50% or whatever percent you own, andthen06:35 –> 06:40he will treat it as capital gains, pay his taxes, and do what he wants withhis.06:40 –> 06:42But yes, there is a way around it.06:42 –> 06:43Okay.06:43 –> 06:45So I just need to check with an attorney.06:45 –> 06:46Is that what you’re saying then?06:46 –> 06:47Correct.06:47 –> 06:52If you need someone, just either text my number or call me Monday and I cangive you one that06:52 –> 06:53I use.06:53 –> 06:54It’s here local.06:54 –> 06:55Thank you.06:56 –> 06:57I appreciate it.06:57 –> 06:58You have a good day.06:58 –> 06:59You too.06:59 –> 07:00Thanks.07:00 –> 07:01All right.07:01 –> 07:04If you want to join the show, you can at 615-737-9986.07:04 –> 07:11615-737-9986 is the number here in studio.07:11 –> 07:17I got a text actually while I was talking to Michael and this person wanted meto reiterate07:17 –> 07:24what the deadlines for individuals and businesses that are in the eightcounties, which were07:24 –> 07:33Robertson, Wheatley, Cheatham, Gibson, Stewart, Davidson, Dixon, Montgomery,and Sumpna.07:33 –> 07:39Those are the counties that have an extension on not only fourth quarter 2023,first quarter07:39 –> 07:452024 for individuals filing your actual tax returns.07:45 –> 07:48Some of you may have already filed extensions, which already gave you some ofthat, but if07:48 –> 07:56you didn’t make a payment, it also extends the payment date until June 17th,2024.07:56 –> 07:57So that is the dates.07:57 –> 08:01And if you’ve got more questions, you can give us a holler.08:01 –> 08:07You can deal with that however you need to do with anyone who needed anadditional tiling08:07 –> 08:13extension beyond June 17th for the 2023 needs to request that electronicallyby April 15th.08:13 –> 08:19So this means that you have to, the extensions were not extended for thedeadline.08:19 –> 08:25According to this, the IRS urges anyone that needs additional filing beyond 17to file08:25 –> 08:28their federal extension by April 15th.08:28 –> 08:33Otherwise you have to file your taxes by June 17th.08:33 –> 08:35There’s no extension at that point.08:35 –> 08:41You have to file the taxes by June 17th or you’ve missed your extensionwindow.08:41 –> 08:46That’s why, you know, people, I mean, I’ve been doing, this was our 28th taxseason.08:46 –> 08:50And the one thing I sometimes I have people it’s like, well, did you alreadyfile an extension08:50 –> 08:51on me?08:51 –> 08:57I have become a bit over, over cautious on that, I guess, because thepenalties are so08:57 –> 09:00high and things happen in life that we don’t always expect.09:00 –> 09:03Sometimes you always, you know, have people I’ve always filed by April.09:03 –> 09:05You don’t need to ever file an extension on me.09:05 –> 09:08But then what if something happened to me is always my fear.09:08 –> 09:13What if I’m not able this year, I did have a situation where I had, I was outplaying09:13 –> 09:21and I burned my hand and, you know, just you know, making sure that you hadthe situation,09:21 –> 09:24you know, where I was, you know, out of the office for almost a week.09:24 –> 09:28And that put me behind for the entire rest of the tax season.09:28 –> 09:32So it was just something I didn’t have to worry about.09:32 –> 09:33Yes.09:33 –> 09:37But, you know, but again, you never know, right.09:37 –> 09:40And as a tax professional or any professional, if you’re helping clients, youwant to always09:40 –> 09:45make sure your client is best protected as you have the ability to do.09:45 –> 09:49But I will tell anyone, if you, you know, even if you’ve got a good tax personlike09:49 –> 09:53myself or whatever, you want to make sure that there is an extension filed.09:53 –> 09:58So you should always follow up with your tax person to make sure thathappened.09:58 –> 10:03But in the situation with some of these people and I guess I should havepushed this a little10:03 –> 10:07earlier because some people may have delayed certain situations.10:07 –> 10:13But I do want to make sure because I have a number of people thatprocrastinate, but10:13 –> 10:19maybe this year instead of waiting until October and paying the penalties andeverything, maybe10:19 –> 10:23in your situation this year, you could do something until June and get itfiled and10:23 –> 10:26not have to worry about penalties.10:26 –> 10:27That would be a blessing.10:27 –> 10:29Now, again, this is only for those counties.10:29 –> 10:34So if you’re in Williamson County or if you’re in Murray County, those aren’tgoing to help10:34 –> 10:36you at all in those situations.10:36 –> 10:41You are late if you have not filed and it’s time to move forward on thatsituation.10:41 –> 10:45But meanwhile, if you’ve got a question and you want to join the show, we’llbe taking10:45 –> 10:47a quick break here.10:47 –> 10:49After the break, we’ll get to more of your questions.10:49 –> 10:54Maybe you’ve got a situation where you are, the biggest questions usually Iget is if10:54 –> 10:59you’re selling your home or if you inherit something.10:59 –> 11:03A lot of times people get very confused on how all of that works.11:03 –> 11:09So again, very important to understand that if you need to know thatinformation before11:09 –> 11:10things are sold.11:10 –> 11:14I had a situation this last year where they were under the impression thatanything they11:14 –> 11:16inherited was tax free.11:16 –> 11:18Everything was tax free.11:18 –> 11:20And that’s just not always the case.11:20 –> 11:21There’s interest, there’s dividends.11:21 –> 11:27And in the case of the one I’m thinking of or the one I’m talking about, theyinherited11:27 –> 11:31a rental in which they received rental income every month from.11:31 –> 11:36Rental income is not tax free if you inherit it as an ongoing payment.11:36 –> 11:42Common sense in my world sometimes feels like that should be understood, butit isn’t always11:42 –> 11:43understood.11:43 –> 11:46I mean, it’d be like me trying to figure out what’s under the hood of my carto be quite11:46 –> 11:47honest.11:47 –> 11:50So if you’ve got questions, there’s really no silly or stupid questions.11:50 –> 11:54It really is just a matter of all of us understanding what we should or shouldnot have to worry11:54 –> 11:55about.11:55 –> 12:01So again, we’re going to take a quick break, but you can join us 615-737-9986.12:01 –> 12:02615-737-9986.12:02 –> 12:12When we get back, we’re going to take your phone calls or you can also emailfriday@drfriday.com.12:12 –> 12:14Sometimes people don’t want to come on the radio.12:14 –> 12:15I really do understand.12:15 –> 12:17It’s not a natural thing to just pick up the phone.12:17 –> 12:21Some people are great at it, but it’s not natural for many of us to just pickup the12:21 –> 12:23phone and talk to someone on the radio.12:23 –> 12:27But if you want to email me a question, you can friday@drfriday.com.12:27 –> 12:28We’re going to take our first break.12:28 –> 12:31We’ll be right back with the Dr. Friday show.12:31 –> 12:37All right, we’re back here live in studio.12:37 –> 12:54And if you want to join the show, you can at 615-737-9986.12:54 –> 12:59For any of you that have not heard this show before, I am Dr. Friday, anenrolled agent12:59 –> 13:03licensed by the Internal Revenue Service to do taxes and representation.13:03 –> 13:04That’s what we do year around.13:04 –> 13:09So, you know, when the love letter does come in June or July, we’re actuallyopen on like13:09 –> 13:15some different tax offices because we do this year round, but also we helpthose individuals13:15 –> 13:22that are behind on taxes that don’t know how they’re going to pay the taxes.13:22 –> 13:26Maybe you have a unique situation where, you know, you, you’ve divorced, whichI’m not13:26 –> 13:30going to say is very unique because a large number is one of the reasonspeople get behind13:30 –> 13:33on taxes is because of situations like that.13:33 –> 13:37So if you need help doing that, we’ve been, like I said, we just celebrate our28th year.13:37 –> 13:43We’ve been dealing a lot with these issues for years and we’ve always, alwayslearning13:43 –> 13:48and finding new ways to be able to do what we need to do.13:48 –> 13:50And of course I enjoy this part of the business.13:50 –> 13:56So if you’ve got a situation where you have either, you can’t pay the IRS, butthey’re13:56 –> 14:01sending you the love letters, there’s liens, levies, seizures coming down theline, or14:01 –> 14:04you know, you, you know, something’s going to be coming down.14:04 –> 14:09You need to understand why you hear on the news a lot of times, Oh, thisperson settled14:09 –> 14:12their taxes for 10 cents on the dollar and we’ve done it.14:12 –> 14:17You know, it’s not that it doesn’t happen, but those same individuals are nothomeowners,14:17 –> 14:19don’t have 401ks.14:19 –> 14:21Those same individuals don’t have access to anything.14:21 –> 14:23They’re living paycheck to paycheck.14:23 –> 14:28And yes, then you can actually make a pretty good deal with the IRS, assumingthat your14:28 –> 14:33paycheck to paycheck is within what the IRS would consider a livable wage, notmaking14:33 –> 14:39a decent, I had a gentleman pretty much doing it, but he was making $85,000 ayear and you14:39 –> 14:43know, his lifestyle, because the IRS can tell you what your lifestyle is.14:43 –> 14:48They, you may be out there paying $3,500 a month in rent, but they’re notgoing to allow14:48 –> 14:51that if you’re going to make a deal with the IRS.14:51 –> 14:52That’s excessive.14:52 –> 14:53That’s what they say.14:53 –> 14:56Not to say it is, but that’s what, you know, you need to know the game.14:56 –> 15:00You need to know the rules so you understand how this is going to work and howyou can15:00 –> 15:01get settlement.15:01 –> 15:05And if I, if, if I haven’t said it in the past, definitely need to say, ifthis is something15:05 –> 15:11that you have an issue with the IRS, make sure you deal with that before, ifyou can,15:11 –> 15:18before you get married or before you entwine your life with the significantother, because15:18 –> 15:23even though that person is not going to be responsible for paying your taxes,the IRS15:23 –> 15:26can’t say, Hey, you’re living in the same house now you’re fully responsible.15:26 –> 15:32No, but what they can say is if both of you work and the limit to how muchmoney can be15:32 –> 15:39earned and they will add that individual’s income to yours to settle thesituation.15:39 –> 15:43So maybe you’re the one that’s always paid the rent and utilities and theother one has15:43 –> 15:46had the money to do other things.15:46 –> 15:48Those other things could be considered excessive.15:48 –> 15:52They can’t take the money from your person, but they can add it in.15:52 –> 15:57So it looks like you have a lot more disposable income than you might if youwere single and15:57 –> 16:00not having someone else help support you.16:00 –> 16:05So it is very important to, again, understand before you make these decisionssometimes16:05 –> 16:06and I get it.16:06 –> 16:08Um, actually I can’t say I do.16:08 –> 16:12I can’t imagine marrying someone and then finding out after you get marriedthat this16:12 –> 16:17person owed the IRS or has huge credit card debts or huge debts somehow.16:17 –> 16:20Because I mean, I’ve had him walk in my office for years.16:20 –> 16:24So I mean it does happen every single day, but I don’t understand how youhaven’t had16:24 –> 16:28the conversation at least before you’re actually going to get married.16:28 –> 16:30So I’m learning curve on my side.16:30 –> 16:42Apparently that being said, if you want to join the show, you can615-737-9986, 615-737-9986.16:42 –> 16:45Taking your calls, talking about my favorite subject.16:45 –> 16:49And I realized guys, this is the first weekend after the end of tax season.16:49 –> 16:55And I am going to say I have not turned on my computers until this show.16:55 –> 16:59Um, well I work Thursday and Friday, but on the weekend up until now,obviously every16:59 –> 17:03weekend, every day, you know, we’re, we’re working here this first week andour computers17:03 –> 17:06were not on until I got ready to do my radio show.17:06 –> 17:08That was fairly nice to be quite honest.17:08 –> 17:14Um, it was a long tax season, but if you have questions, maybe you did fileand now you’re,17:14 –> 17:16you’re going to have to set up a payment plan.17:16 –> 17:21Um, and you’re not too sure how, and Oh, if you’re going to call the IRS andset up a17:21 –> 17:27payment plan, do not set up a payment plan that you can’t afford to pay.17:27 –> 17:32I mean this last week, two different people came in, the IRS called them,right?17:32 –> 17:34Which is very scary.17:34 –> 17:37Um, and if you don’t do something, we’re going to go against your job.17:37 –> 17:40We’re going to, you know, we’re going to put a lien against your house, whichI understand17:40 –> 17:43no one wants a lien against their house, but think about it.17:43 –> 17:46What can the IRS do besides put a lien?17:46 –> 17:50It’s not like they can take your house, you know, they can’t touch yourincome.17:50 –> 17:55And in this other situation, the person was self employed, so there reallywasn’t an employer17:55 –> 17:57they could easily go back to.17:57 –> 18:02Now, again, not to, to not say the IRS has the ability for self employedpeople.18:02 –> 18:07If you have the same vendors that you go to all the time, they can obtain thatvendor18:07 –> 18:13list based on 10 99s issued and they can go to those vendors and say, send usa hundred18:13 –> 18:16percent of what you owe this person because they’re avoiding taxes.18:16 –> 18:20And yes, those kinds of things can happen, but you can have a lot of stepsbefore that18:20 –> 18:27usually happens, but don’t because then the IRS, when we go and try to set upan actual18:27 –> 18:33payment plan that needs to be established, you’ve now got inside your recordsthat you18:33 –> 18:37set up a payment plan that you didn’t live up to, which makes it harder.18:37 –> 18:42The next time we try to negotiate an actual payment plan because you know, youagreed18:42 –> 18:47to something because you were scad because the revenue officer wasintimidating.18:47 –> 18:49You know, you, you, you have rights.18:49 –> 18:52Um, and those rights are important.18:52 –> 18:55So you want to make sure that if you’re following through, you’ve gotten alove letter or maybe18:55 –> 18:59they’ve sent something to your employer and you’re like, Oh my God, I’ve justgot to,18:59 –> 19:00I got to get something down.19:00 –> 19:05You know, make sure you, you understand what you’re agreeing to make sure youcan do it.19:05 –> 19:10Um, you know, I’m not going to say it’s going to be easy because the IRS isnot going to19:10 –> 19:12take an account, your credit card bill.19:12 –> 19:14That’s your problem, not theirs.19:14 –> 19:15They’re not going to take an account.19:15 –> 19:20You know, you, you’re going out for Starbucks or eating out or any of thosekinds of things.19:20 –> 19:23It’s going to be more, you know, what is the essential and they’re going toask you how19:23 –> 19:25much do you pay in your mortgage or rent?19:25 –> 19:27How much your utilities, what’s your health insurance?19:27 –> 19:30Do you have any medical bills that you have to pay?19:30 –> 19:32Anything that’s court ordered, et cetera, et cetera.19:32 –> 19:37They’re going to get down to the basics, but you know, other than theessentials, sometimes,19:37 –> 19:41you know, it’s hard to live without doing certain things and they’re not goingto give19:41 –> 19:43you much breathing room on that.19:43 –> 19:46So if you’re at that situation, you really do need to give our office a calland let19:46 –> 19:49us help you set up a payment plan that is reasonable.19:49 –> 19:55Again, not everybody’s going to see the same number because I have had overthe years,19:55 –> 19:59I’ve had people that have, you know, kids in private school and I know I’vesaid this19:59 –> 20:03many, many times, but the fact is private school is, is a luxury.20:03 –> 20:06The IRS does not see that as an essential.20:06 –> 20:11Um, you know, if you have three cars and all of them have car payments or ifthey don’t,20:11 –> 20:14you, you’ve got two of them paid off and you got one car payment.20:14 –> 20:18They may look at the other two as cars that they don’t, um, that, that youcould afford20:18 –> 20:20to sell to pay them.20:20 –> 20:27So, um, you know, if you own extra real estate, um, if you’re looking to, youknow, to make20:27 –> 20:32a settlement or if they feel that the payment you’re making is not highenough, they can20:32 –> 20:36request for you to sell your rental or investment real estate.20:36 –> 20:37It’s not your primary home.20:37 –> 20:41The only thing we have safe is our primary homes.20:41 –> 20:44Only car we have is one primary car for each adult.20:44 –> 20:47So you and your wife can each have a primary car.20:47 –> 20:52Um, if you have children, um, in some cases I have had one revenue officerthat did not20:52 –> 20:53consider that essential.20:53 –> 21:00Um, but you know, there are ways of, of, of at least bringing that back to thetable.21:00 –> 21:05Um, but, but you, you have to look at life through what is essential and whatis a luxury21:05 –> 21:09and those numbers again, aren’t always going to be the same because somepeople consider21:09 –> 21:13different things, but it’s important to not make a deal with the IRS that youcan’t follow21:13 –> 21:17through with because the next time they may not accept the next deal and theydo have21:17 –> 21:19the right to say no.21:19 –> 21:21Everyone always acts like it was, it’s an automatic.21:21 –> 21:28Yes, there are certain ones that are automatic, but also if you break up andyou know, don’t21:28 –> 21:32follow through enough times, they can just say, we’re not going to set upanother payment21:32 –> 21:33plan.21:33 –> 21:36We’re just not updating the money and you don’t want to be the person that’sat the21:36 –> 21:40other end of that phone call because most people don’t have access to themoney.21:40 –> 21:46They’re going to get much more aggressive and they’re, you know, you want tokeep that21:46 –> 21:49communication going in the right direction.21:49 –> 21:50That’s all.21:50 –> 21:54I mean, you want to make sure you understand what the IRS is giving you as anoption and21:54 –> 21:56how that’s going to work best for you.21:56 –> 21:57All right.21:57 –> 22:01So we’re going to gear up for a second, um, um, break here in a second.22:01 –> 22:05And if you want to join the show and I get it, it’s gorgeous outside.22:05 –> 22:08It’s a day that I would be outside right now or we’ll be going back outsidebefore you22:08 –> 22:09know it.22:09 –> 22:14Um, the number here is six one, uh, six one five seven three seven nine nineeight six22:14 –> 22:20six one five seven three seven nine nine eight six is the number here instudio.22:20 –> 22:25If you want to join the show and you can also email Friday at dr Friday.comagain, Friday22:25 –> 22:32at dr Friday.com is the number that you can email that you can send to.22:32 –> 22:36And as an enrolled agent, um, we are a shield between you and the IRS, right?22:36 –> 22:39Is what we do as representation.22:39 –> 22:47The tax law says that you’re entitled to representation and that we can helpbe that go between, between22:47 –> 22:49the IRS and you.22:49 –> 22:52Because again, they’re not, I know a lot of people will disagree with this.22:52 –> 22:57The people I know and that I work with at the IRS, not there to intimidate,they’re22:57 –> 22:59there to do collections.22:59 –> 23:03I mean, that’s the, the most aggressive ones are the collection side.23:03 –> 23:04Their job is to collect.23:04 –> 23:06They’re not there to do resolution.23:06 –> 23:08They’re not there to, to make life easy.23:08 –> 23:10They’re there to collect money.23:10 –> 23:14And that’s the ones that most of us deal with on a day to day basis.23:14 –> 23:18I will say there’s a division of the IRS that many of you guys don’t do muchwith.23:18 –> 23:21And of course that is the tax advocate office.23:21 –> 23:27I am an advocate for the tax advocate office because they have helped in thelast number23:27 –> 23:34of years to resolve probably 20 cases, um, you know, with their assistance indoing things.23:34 –> 23:39So, um, it’s just important to be able to give credit where credit is due.23:39 –> 23:41There is a division that is there to help with resolution.23:41 –> 23:46Um, all right, so we’re going to actually take the break and then we’ll comeback to23:46 –> 23:47David.23:47 –> 23:48It’ll be easier that way.23:48 –> 23:51I’ve got plenty of time to talk to him cause we’re right on top of the clockhere.23:51 –> 24:00If anyone else would like to join the show, 615-737-9986, 615-737-9986.24:00 –> 24:03We’re going to be taking a quick break and we get back, we’ll go to David andanyone24:03 –> 24:05else that comes on the lines.24:05 –> 24:10We’ll be right back with the Dr. Friday show.24:10 –> 24:15Alrighty.24:15 –> 24:21We are back live in studio and this is the Dr. Friday show and why don’t wehit right24:21 –> 24:26to the phones with David and we can see if I can help him with his question.24:26 –> 24:28Hey David, what can I do for you?24:28 –> 24:29Yeah.24:29 –> 24:30Hi, Dr. Friday.24:30 –> 24:39I went ahead and did my taxes through a, um, a user software and I was goingthrough it24:39 –> 24:43and doing it and I thought I was doing such a good job, but when I puteverything together24:43 –> 24:51and got excited and sent it off, I’d forgotten about my wife’s social securityand we had24:51 –> 24:53a 1099 on that.24:53 –> 24:55So I tried to do an extension.24:55 –> 25:01There’s naturally a, I waited till the last minute, but they rejected myextension.25:01 –> 25:06So at this point I know I’m probably going to end up owing a little bit ofmoney as opposed25:06 –> 25:12to getting money back, but that’s what was originally on the original one thatI sent25:12 –> 25:13in.25:13 –> 25:16So now where am I at and what do I need to do?25:16 –> 25:19You have two options to be quite honest with you.25:19 –> 25:25One is I would, I would go back into the software, find out how much money youowe and then just25:25 –> 25:32send a, you can go to irs.gov, click on pay, then do it as a balance due tothe tax year.25:32 –> 25:34So the money is in there, right?25:34 –> 25:39Cause I think what’s going to happen is IRS is going to do a match.25:39 –> 25:44They do it for all of us, you know, see if all your forms match up and they’regoing25:44 –> 25:47to discover that you understated income.25:47 –> 25:50But if the money’s sitting there, then the penalty is minimal, right?25:50 –> 25:52Because you’ve already accounted for it.25:52 –> 25:55And when you get that letter, it’s going to say, Oh, we’re going to changeyour taxes25:55 –> 25:58and this is how much money you owe.25:58 –> 26:04Or you can do an amended tax return, a 1040 X and add it in and then send themoney in.26:04 –> 26:06That’s your two, two options.26:06 –> 26:10I mean, either way, the most important part of that whole conversation isgetting the26:10 –> 26:11money paid in.26:11 –> 26:15The 1040 X is probably the most efficient because that way you’re tellingthem, cause26:15 –> 26:19it could take them a year to figure out maybe, you know, what’s going on.26:19 –> 26:25But other than that, that would be my way of going.26:25 –> 26:26Is David still there?26:26 –> 26:27I’m still here.26:27 –> 26:28Can you hear me?26:28 –> 26:29Okay.26:29 –> 26:30Sorry.26:30 –> 26:31I couldn’t hear you.26:31 –> 26:34What was, so what, that would be the direction I would go.26:34 –> 26:35No problem.26:35 –> 26:36I was just saying, thanks.26:36 –> 26:40I appreciate all that you do.26:40 –> 26:41No problem.26:41 –> 26:42Thanks for calling.26:42 –> 26:43I appreciate that.26:43 –> 26:44All right.26:44 –> 26:45Let’s hit Jason.26:45 –> 26:46Hey, Jace, what’s happening?26:46 –> 26:47How are you doing today?26:47 –> 26:48Thank you for taking the call.26:48 –> 26:50I am doing awesome.26:50 –> 26:51Thanks for calling.26:51 –> 26:52Okay.26:52 –> 26:57So what I have is about, I gotta be, I don’t even know the exact date.26:57 –> 27:05It’s been, it’s been about 14 years where I lost a business and a commercialloan.27:05 –> 27:09Since then got divorced all of a sudden.27:09 –> 27:15And I didn’t find out about it until in 2022 that in 2021 they charged it offon me after27:15 –> 27:20it had to have been a good nine, 10 years.27:20 –> 27:21They sent a letter.27:21 –> 27:23I finally got it from the IRS.27:23 –> 27:30I’d never got the letter from the bank when they did the 1099 saying that Iowed X amount27:30 –> 27:31of dollars.27:31 –> 27:36My ex-wife got the same letter for the same amount.27:36 –> 27:38So they basically tried to charge both of us.27:38 –> 27:40How do I get it split in half?27:40 –> 27:47Because I tried, the IRS told me I had to get another 1099 issued for justhalf of it.27:47 –> 27:49And it’s been an act of God.27:49 –> 27:50It’s not going to happen.27:50 –> 27:53That’s not going to happen because they’re considering it a joint situation.27:53 –> 27:59What you’re both going to do in essence is, or one of you basically, butanyways, whoever’s27:59 –> 28:06doing your taxes, whatever, I would actually issue the ex-wife a 1099 for hershare.28:06 –> 28:11And then she’s going to, I mean, or write it off and put in the memo probablythat,28:11 –> 28:12no, forget the 1099.28:12 –> 28:19I just put in the memo that this is a 50/50 and then you would report 50% ofit and expense28:19 –> 28:22the other 50% to your ex-wife.28:22 –> 28:27She’s going to be picking that same dollar amount up on her return, the 50%and she’ll28:27 –> 28:30be expensing the other 50% under your social security.28:30 –> 28:34So basically on both returns, what you would have is the other person’s socialsecurity28:34 –> 28:36with the other 50%.28:36 –> 28:42So when the IRS looks at both returns, they would see 100% reported.28:42 –> 28:44And it would start with the full number.28:44 –> 28:47She got one also, a letter.28:47 –> 28:48Right.28:48 –> 28:49A hundred percent.28:49 –> 28:50Both of you got a hundred percent.28:50 –> 28:53So you need to correct the tax return that that happened.28:53 –> 28:54Yeah.28:54 –> 28:56She doesn’t make the money I do.28:56 –> 28:57I make six figures.28:57 –> 28:58She’s much less.28:58 –> 29:02So they were able to get what they basically said she couldn’t afford it.29:02 –> 29:05And the IRS said that she didn’t have to pay it.29:05 –> 29:06Okay.29:06 –> 29:07Well, then she made an offer in compromise.29:07 –> 29:12So all you’re going to do is correct yours and write off the other to hersocial security29:12 –> 29:15number, which is the other half.29:15 –> 29:19And then you’re going to pay tax on the 50% that is truly yours, but you haveto start29:19 –> 29:20out with a hundred percent.29:20 –> 29:21I’m willing to pay half.29:21 –> 29:24I just didn’t think I should pay whole.29:24 –> 29:25All right.29:25 –> 29:26Well, let me let me clarify.29:26 –> 29:29This isn’t what the I mean, you need to first report.29:29 –> 29:33You need to file a tax return with your share on it.29:33 –> 29:34Right.29:34 –> 29:38Because it sounds like the IRS has already assessed you and they’ve assessedyou for29:38 –> 29:39a hundred percent.29:39 –> 29:42OK, let me I’m just saying.29:42 –> 29:47So you need to go back and actually amend the tax return to show that dollaramount29:47 –> 29:52and to show how much you actually owe, because otherwise she got a waiver andyou’re going29:52 –> 29:56to be responsible for 100 percent, because if she got a waiver and is duringthe time29:56 –> 29:59that you’re married, you’re not going to qualify for an offer in compromise.29:59 –> 30:04And of course, she doesn’t care, but she she got a waiver for all hundredpercent because30:04 –> 30:05that’s what happened.30:05 –> 30:07So you got left holding the whole bag.30:07 –> 30:12So you need to amend the tax return to show what you were truly responsiblefor, not the30:12 –> 30:1450, not the 100 percent.30:14 –> 30:17Otherwise they’re going to come after you for all 100 percent.30:17 –> 30:18There’s no way around it.30:18 –> 30:19That’s easy enough.30:19 –> 30:22I will get that taken care of here in the next couple of days.30:22 –> 30:23Thank you.30:23 –> 30:24Cool.30:24 –> 30:25Thanks, buddy.30:25 –> 30:26All right.30:26 –> 30:27Appreciate it.30:27 –> 30:28Yeah, sure.30:28 –> 30:29Bill in Nashville.30:29 –> 30:30What’s it, Bill?30:30 –> 30:31In Nashville?30:31 –> 30:32Yes, ma’am.30:32 –> 30:33Bill, what’s happening, bud?30:33 –> 30:41Well, I had some trust shares that were granted to me by my insurance companyin the year30:41 –> 30:472000, and I decided to sell those shares this year.30:47 –> 30:55The value of the shares when I first received them was fourteen dollars andtwenty five cents.30:55 –> 31:03I sold them at well, the profit from it, my gross from it was eighty twohundred and five31:03 –> 31:07dollars when I sold them this year.31:07 –> 31:10So my question to you is.31:10 –> 31:17I don’t really have any expenses to take off of that, that eighty two hundredand five31:17 –> 31:22dollars unless I can take the value of the shares when I receive them.31:22 –> 31:28Did you actually buy them or were they given to you?31:28 –> 31:29It was I said it was granted.31:29 –> 31:31They gave them to me.31:31 –> 31:32Granted.31:32 –> 31:33OK, that’s what I thought you said.31:33 –> 31:35I just want to make sure I was hearing you correctly.31:35 –> 31:36So that is not a deduction.31:36 –> 31:40So the eighty two oh five that you received is long term capital gains.31:40 –> 31:42All of it.31:42 –> 31:43OK.31:43 –> 31:50And then that what’s the percentage rate on that?31:50 –> 31:54Depending on your income bracket, if if you’re single and make less than fiftythousand,31:54 –> 31:55it’s zero.31:55 –> 32:00If you’re single and you make one hundred grand, then it’s 15 percent.32:00 –> 32:01Well that fits me.32:01 –> 32:03I’m I’m certainly make less than fifty thousand.32:03 –> 32:07I’ve been retired for about twenty five years.32:07 –> 32:08Well, there you go.32:08 –> 32:09See, so that’s good news.32:09 –> 32:11So it really has zero effect on you.32:11 –> 32:12Just have to report it.32:12 –> 32:14But it won’t it won’t affect your taxes.32:14 –> 32:17OK, I’m certainly glad to know that.32:17 –> 32:21And I appreciate you giving me the advice.32:21 –> 32:22No problem.32:22 –> 32:23Thank you for calling.32:23 –> 32:24Yes, ma’am.32:24 –> 32:25Bye bye.32:25 –> 32:26Have a good day.32:26 –> 32:27Bye bye.32:27 –> 32:28All right.32:28 –> 32:29Jim in Nashville.32:30 –> 32:31Hey, Jim, what’s up?32:31 –> 32:32Not much.32:32 –> 32:33How are you doing?32:33 –> 32:34I am doing great.32:34 –> 32:35Good, good, good.32:35 –> 32:41Earned income credit on somebody who is retired but did earn some money.32:41 –> 32:46Is there an earned income credit for a single person?32:46 –> 32:47There is.32:47 –> 32:51And I believe it’s less than twelve or fourteen thousand earned.32:51 –> 32:55You have twelve that we make less than twelve to fourteen thousand.32:55 –> 32:59There is a small earned income credit for individuals without children.32:59 –> 33:01Will they figure it and send that?33:01 –> 33:04Or is that something that you have?33:04 –> 33:06Yes, you would have to file a tax return.33:06 –> 33:10I mean, even though you may not be required, you’d have to file the tax returnto obtain33:10 –> 33:11the credit.33:11 –> 33:13I filed it.33:13 –> 33:18I was just wondering if if I didn’t put it on there, will they come back andtell me33:18 –> 33:21that I earned additional?33:21 –> 33:23I would like to say the answer is yes.33:23 –> 33:27I have seen it done, but I don’t know if you filed it.33:27 –> 33:31It would have kicked in most likely on most tax softwares.33:31 –> 33:35Is this person, did you say this is an older individual or a child?33:35 –> 33:37No older or neither older.33:37 –> 33:41OK, yeah, should they should have qualified?33:41 –> 33:44Are they on Social Security?33:44 –> 33:46The person’s on Social Security.33:46 –> 33:50OK, and they and they are in my.33:50 –> 33:54And I did not put the ERTC on it.33:54 –> 33:56Yes, I think they will.33:56 –> 33:58I mean, honestly, I think they will.33:58 –> 34:02But it may take six months for you to get the change of your income letter.34:02 –> 34:04But don’t spend it.34:04 –> 34:05They should send it.34:05 –> 34:06Yes.34:06 –> 34:07They don’t spend it yet.34:07 –> 34:08Yeah, well, yeah.34:08 –> 34:09Good idea.34:09 –> 34:10Don’t spend it until you get it.34:10 –> 34:11It’s a good motto to have.34:11 –> 34:12Thank you.34:12 –> 34:13No worries.34:13 –> 34:14Thanks, Jim.34:14 –> 34:15I appreciate it.34:15 –> 34:16All right.34:16 –> 34:17Let’s hit George before the next break.34:17 –> 34:18That way he doesn’t have to wait through it.34:18 –> 34:19Hey, Georgie.34:19 –> 34:20Hi, Dr. Friday.34:20 –> 34:21How are you?34:21 –> 34:22I am doing very well.34:22 –> 34:23What can I do for you?34:23 –> 34:36I had filed my taxes with TurboTax and I forgot to put in my investmentinterest expense,34:36 –> 34:43which I assumed was I have a margin account and I have like over $20,000 ofmargin interest34:43 –> 34:44that I paid.34:44 –> 34:49I forgot to put that in my in the tax return that I filed.34:49 –> 34:55Is that not a legitimate expense for investment?34:55 –> 34:56You say margin?34:56 –> 34:59Yes, there is a place for margin interest to come off.34:59 –> 35:06It is on the Schedule A. So it isn’t going to necessarily come off of thedirect 104035:06 –> 35:08unless you itemize.35:08 –> 35:13So it’s not going to be a part of just a straight 1040.35:13 –> 35:15OK.35:15 –> 35:20Is it not an investment interest?35:20 –> 35:21Isn’t that not an expense?35:21 –> 35:24On the Schedule A, it is an expense.35:24 –> 35:29But it’s not on Schedule B or D. It falls on the Schedule A.35:29 –> 35:30OK.35:30 –> 35:33So you have to itemize.35:33 –> 35:37And you may, I mean, if you get $20,000 and you’re single, you would beitemizing without35:37 –> 35:41your property tax, sales tax and other things that might have helped kick youover.35:41 –> 35:42Right.35:42 –> 35:43I am itemizing those.35:43 –> 35:46But I’m married, filing jointly.35:46 –> 35:50But another question popped up.35:50 –> 35:51I guess there’s a limit.35:51 –> 35:52I’m over 65.35:52 –> 35:53And I guess there is not.35:53 –> 36:00Is there a limit on your income that you receive so that you’d be able to takethat deduction?36:00 –> 36:01That’s a good point.36:01 –> 36:07This is when I like to say I cheat because our system, there could be alimited income,36:07 –> 36:09a loss that you can take, an expense.36:09 –> 36:13You may roll over, but there may be a limit on how much you can take based onyour income.36:13 –> 36:17Honestly, I don’t, I like to say I have a ton of people.36:17 –> 36:19I don’t have a lot of people that have margin interest.36:19 –> 36:24So it’s not something I put in on a daily basis, like capital gains andinterest income36:24 –> 36:26and you know, George.36:26 –> 36:29But if you want, you can certainly give me a call on Monday and we can pull itup and36:29 –> 36:33confirm that just because you don’t want to amend a tax return that’s notgoing to get36:33 –> 36:38you more money back, which would be what you’d have to do to correct it.36:38 –> 36:46If I put that, if I file a terrible tax and if I put that amount in there andaccess my36:46 –> 36:521040, do I have to file a 1040X to amend it?36:52 –> 36:53Yes, 100%.36:53 –> 36:54Yes, yes.36:54 –> 36:55You would have to file a 1040X.36:55 –> 36:56Okay.36:56 –> 36:57And that’s the way to amend it.36:57 –> 36:58Okay.36:58 –> 36:59That’s the way.36:59 –> 37:00Yeah.37:00 –> 37:01Okay.37:01 –> 37:02Thanks, George.37:02 –> 37:03Okay.37:03 –> 37:04Thank you so much.37:04 –> 37:05Bye-bye.37:05 –> 37:06All right.37:06 –> 37:07We’re going to take our last break here and we come back.37:07 –> 37:08You can make more of your phone calls at 615-737-9986.37:08 –> 37:09615-737-9986.37:09 –> 37:10We’ll be right back with the Dr. Friday Show.37:10 –> 37:11All righty.37:11 –> 37:12We are back here live in studio and we’re at the last bit of the show.37:12 –> 37:13I do want to go back to George’s question because I wanted to double check.37:13 –> 37:14So sometimes on the radio, it’s a little quick response I have to do.37:14 –> 37:15So I was right.37:15 –> 37:16You itemize it, but the question is, how do you get the most out of your taxreturn?37:16 –> 37:17And I’m going to give you a little bit of a hint.37:17 –> 37:18I’m going to give you a hint.37:22 –> 37:38I’m going to give you a hint.37:38 –> 38:02I’m going to give you a hint.38:02 –> 38:28I’m going to give you a hint.38:28 –> 38:57I’m going to give you a hint.38:57 –> 38:58I’m going to give you a hint.40:21 –> 40:22>> Yes, ma’am, there was.40:22 –> 40:23>> Okay.40:23 –> 40:30So, you know, you’re going to want to go back through and put all of thattogether.40:30 –> 40:36So, yes, the original 75, but maybe you put another 75, especially on therental side,40:36 –> 40:39because, I mean, obviously I maintain rentals, and we don’t put a time, butyou want to keep40:39 –> 40:41it at least at a certain thing.40:41 –> 40:45So you may have had to redo the kitchen or you may have had to do the floorsor put a40:45 –> 40:46new AC unit in it.40:46 –> 40:47>> Exactly, yes.40:47 –> 40:50>> So you want to keep those values, and some of them you would have possiblybeen depreciating40:50 –> 40:54or taking off on the rental side, but not on the primary side.40:54 –> 40:57So you’ve got to crunch all the numbers and then come back at it.40:57 –> 41:02But I would say, based on this conversation, because even if we just tooksimple math and41:02 –> 41:09said, all right, $75,000 plus 250, and I’m sure you’ve done this math, I’mjust cheating41:09 –> 41:15here, but it’s 325, you sold it for 510, so you’ve got capital gains, nomatter if it41:15 –> 41:22was in all your primary or not, you have roughly 185,000 that will fall intotheoretically41:22 –> 41:23a capital gain situation.41:23 –> 41:24>> Yes, ma’am.41:24 –> 41:27>> I mean, depending on how much you put into it.41:27 –> 41:28>> Yes, ma’am.41:28 –> 41:36Now, regarding the income, if I’m correct, is there a minimum income that anindividual41:36 –> 41:42can make, a single can make, that qualifies them as 0% that they need to pay?41:42 –> 41:45Is it under 42,000, under 50,000?41:45 –> 41:47>> Yeah, it’s under 50,000.41:47 –> 41:48Under 50,000.41:48 –> 41:51>> Is that the income for 2024?41:51 –> 41:54>> I mean, I’m going to play it safe.41:54 –> 41:59It’s basically going to be closer to about 57,000, but we kind of use the evennumbers41:59 –> 42:01in my world, so 50, 100.42:01 –> 42:05But yes, and you can get the crunch.42:05 –> 42:09I mean, I can give you the exact number, but on Monday or whatever, if youneed to make42:09 –> 42:10sure you’re working towards that.42:10 –> 42:14But don’t forget, you are, I mean, again, if you depreciate and if you didn’t,theoretically42:14 –> 42:20you have recapture of that depreciation, and you’ve got 20, you may havealmost depreciated,42:20 –> 42:23because back in those days it was, what, 27?42:23 –> 42:24You may be on top of it.42:24 –> 42:25>> 27 and a half.42:25 –> 42:29>> Close to, yeah, you’re close to almost being fully depreciated on thatproperty,42:29 –> 42:30possibly.42:30 –> 42:31>> I am.42:31 –> 42:32I was, yes, ma’am.42:32 –> 42:33That’s exactly correct.42:33 –> 42:34>> Yeah.42:34 –> 42:38So, I mean, the good news is you may not have recapture because it’s so old.42:38 –> 42:40>> Mm-hmm, mm-hmm, yeah.42:40 –> 42:45>> So, you might want to, if you have a tax person, Doug, if not, give us aholler.42:45 –> 42:48We can do some crunching once you get all your numbers down.42:48 –> 42:53And just so you make sure that you’ve, obviously, the biggest concern is setaside enough money42:53 –> 42:55so you can pay Uncle Sam.42:55 –> 43:00You have 90 days from the time of sale to theoretically make an estimate ifyou owe43:00 –> 43:01taxes.43:01 –> 43:05>> Yeah, but that tax is not due until 2025.43:05 –> 43:06Is that not correct?43:06 –> 43:09Because it goes on next year’s taxes when it comes due?43:09 –> 43:10>> No.43:10 –> 43:11>> Okay.43:11 –> 43:16>> Well, the tax law says you have to pay 110% of the year before or you haveto make43:16 –> 43:18estimates within 90 days.43:18 –> 43:19>> Within 90 days.43:19 –> 43:20Okay.43:20 –> 43:24>> So, whatever you owed in 2023, yeah, or have it, yes.43:24 –> 43:25So, you have a little window.43:25 –> 43:26>> All right.43:26 –> 43:27I sure appreciate all your help, Dr. Friday.43:27 –> 43:28Thank you so much.43:28 –> 43:32>> No problem, buddy.43:32 –> 43:33Good luck.43:33 –> 43:34>> All righty.43:34 –> 43:37So, we’re winding down the show here.43:37 –> 43:39Hopefully, you guys are enjoying this Saturday.43:39 –> 43:40Seriously, it’s a beautiful day outside.43:40 –> 43:44I hope you guys don’t have to spend the whole day talking about taxes, eventhough I do43:44 –> 43:49appreciate you guys joining me on this Saturday, considering it’s not taxseason.43:49 –> 43:51But for many of us, we’re always preparing, just like Doug.43:51 –> 43:54He’s got a situation already starting for 2024.43:54 –> 43:59And it’s great that he’s working the numbers now, not waiting for later,because, you know,43:59 –> 44:04the longer you think about it, then, you know, he’s got time to recreate andfigure out what44:04 –> 44:06he did and didn’t do on his property.44:06 –> 44:11So, if you need help with taxes or you need consulting on how to, you know,crunch the44:11 –> 44:16numbers or even just figure out what your liability is, because it’s a —there’s always44:16 –> 44:19moving parts, just like on a home, primary home sale.44:19 –> 44:21And Doug’s situation is a little bit different.44:21 –> 44:26Most of us have one home, one residence, and then we can just take and add orsubtract44:26 –> 44:28to that situation.44:28 –> 44:34But in his case, because part of it was profitable or investment real estateand the other half44:34 –> 44:37was primary, he has a split situation to deal with.44:37 –> 44:43If you have questions, you can email Friday@DRFriday.com.44:43 –> 44:49I do want to reiterate again about the June 17th for the eight counties ofRobertson,44:49 –> 44:54Weakley, Cheatham, Gibson, Stewart, Davidson, Dixon, Montgomery, and Sumpna.44:54 –> 45:02Those individuals are at an extension automatically until June 17th for thetax year of 2023,45:02 –> 45:07which also means that you don’t have to worry about if you missed the fourthquarter or45:07 –> 45:09if you missed the first quarter.45:09 –> 45:11Maybe you can make it all up on the June 17th.45:11 –> 45:18Now, again, don’t make the fourth quarter 2023 on your June 17th first quarterestimate.45:18 –> 45:21You got to keep your quarters separate or they’ll put it on the wrong year.45:21 –> 45:33Or if you need help, just call the office 615-367-0819.45:33 –> 45:37You can also check us out on the web at DRFriday.com.45:37 –> 45:45Again, DRFriday.com is the website or email Friday@DRFriday.com.45:45 –> 45:49We are obviously going to be in the office on Monday, so you can just leave amessage45:49 –> 45:52and we’ll get back with you as soon as we can.45:52 –> 45:57Also, if you haven’t filed taxes, we can complete your 2023, set up anappointment,45:57 –> 46:00get you all squared away so that way we can move forward.46:00 –> 46:06Because keep in mind, you cannot do anything as far as making a deal, making apayment plan,46:06 –> 46:08anything unless you’re in compliance.46:08 –> 46:12So just because you filed 2023 but you haven’t filed those prior years,46:12 –> 46:16you’re going to find out that you don’t have the ability to make a paymentplan46:16 –> 46:21because the IRS has to show that you are in compliance before we can make thepayment plan.46:21 –> 46:24So it’s important to get all that back work done first and then moving forward46:24 –> 46:26on how to make the resolution.46:26 –> 46:30More important to pay forward and not to concentrate so much on the past.46:30 –> 46:32Often people are so worried.46:32 –> 46:35All right, we’re going to be taking a quick break and we will be seeing younext Saturday.46:35 –> 46:38As we say in Australia, “Cop ya later!”46:38 –> 46:41Dr. Friday, Tax and financial firm, Inc.46:41 –> 46:44Have you received love letters from the Internal Revenue Service?46:44 –> 46:46I’m Dr. Friday, an enrolled agent.

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In this one-minute moment, Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, reminds listeners that Tax Day 2023 has arrived. She emphasizes the importance of making final contributions to IRAs and HSAs for the 2023 tax year, as well as submitting estimated payments for 2024 and any remaining balance for 2023 taxes. Dr. Friday warns that failing to make these payments on time may result in penalties. She also invites listeners to tune in to her live call-in show every Saturday afternoon from 2 to 3pm on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

That’s right. We survived guys. We made it. 2023 taxes have been put to bed or an extension has been filed. So again, if you have any money in the savings account and you think you owe money to the IRS, now would be the day. Today. You need to make your IRA contribution if you haven’t done it for the year of 2023. HSA, if you have a health savings account, you can make that final payment today. Estimated payments for 2024 are due today. Your payment for 2023 final payment is due today. Make it or don’t complain when penalties hit.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3pm right here on 99.7 WTN.

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As the tax deadline approaches, Dr. Friday urges listeners who haven’t filed their taxes to submit Form 4868 and pay their estimated tax liability to avoid penalties. By filing an extension, taxpayers gain until October to complete the necessary paperwork. Additionally, Dr. Friday reminds listeners to review and adjust their W-4 forms, especially if they have children turning 18 or are going through a divorce, to ensure accurate withholding throughout the year.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

It’s Friday. It’s almost tax day, guys. You only have till Monday. It’s going to be a very long and busy weekend. If you haven’t filed your taxes yet, I suggest filing a 4868, paying whatever you think you’re gonna owe, file the extension. I know I keep pushing it, but it saves you a lot of money. Then you have until October to file the paperwork. Not pay it, but file it. Also, you need to make sure that if you haven’t done it yet, you’ve taken a look at your W-4. Maybe you need to make an adjustment. It’s time to do that. If you have children turning 18 this year, or you have divorce in the highlight, you need to make adjustments to your W-4 form.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3pm right here on 99.7 WTN.

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Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, warns that selling personal items at a gain can trigger a 1099-K from the IRS. To properly report these sales, taxpayers must use either Form 8949 or Schedule D. The challenge lies in providing proof of the original cost of the item sold, as the IRS requires this information during audits. Without a receipt or other evidence of the purchase price, the cost basis will be considered zero, potentially leading to a higher tax liability on the sale.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

The IRS says selling personal items at a gain can cause a 1099-K for personal items sold. There is a form, actually two forms. You can form an 8949 for sale and other disposition of capital assets, or the Schedule D when selling those. The hard part of all this is if you’re selling personal items, you need to be saving the receipt of the original cost. If you don’t have it, you don’t have a deduction. If you can’t prove how much money you paid for something that you’re selling 10, 15 years later, the cost factor is zero unless you can prove otherwise. That’s what the IRS is saying when they review audits.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3pm right here on 99.7 WTN.

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In this episode of The Dr. Friday Show, Dr. Friday, discusses various tax-related topics and answers questions from callers. She provides insights on the new Tennessee franchise tax bill, medical deductions, self-employment taxes, and dealing with the IRS.

Topics covered:

• Tennessee Senate Bill 2103 and its impact on franchise excise tax
• Maximizing medical deductions and the 7.5% AGI threshold
• Adjusting W-4 forms to avoid owing taxes
• Quarterly estimated taxes for self-employed individuals
• Amending tax returns to include Social Security income
• Inheriting property and the stepped-up basis
• Filing as head of household with a dependent ex-spouse
• Communicating with the IRS and resolving tax issues

Transcript00:00 –> 00:06No, no, no, she’s not a medical doctor, but she can sure cure your taxproblems or your00:06 –> 00:07financial woes.00:07 –> 00:09She’s the how-to girl.00:09 –> 00:10It’s the Dr. Friday Show.00:10 –> 00:19If you have a question for Dr. Friday, call her now, 737-WWTN.00:19 –> 00:23That’s 737-9986.00:23 –> 00:27So here’s your host, financial counselor and tax consultant, Dr. Friday.00:27 –> 00:33All right, I’m Dr. Friday, and I’m here live in studio.00:33 –> 00:37You probably hear my dogs in the background having a little chit-chat of theneighborhood,00:37 –> 00:43but we are going to talk a little bit first about the new bill that thegovernor has put00:43 –> 00:49out there concerning the franchise tax board and the refunds that the businessoperating00:49 –> 00:51in Tennessee could be heading towards.00:51 –> 00:53This has not yet been signed.00:53 –> 00:56So this is a bill that he has put.00:56 –> 01:02It’s the Senate Bill 2103, which will change how we complete the franchiseexcise tax and01:02 –> 01:07not having the property tax calculation in there, which is pretty big.01:07 –> 01:13I mean, they’re saying that’s going to reduce revenue for the state of over$400 million01:13 –> 01:16beginning the year that this goes into play.01:16 –> 01:21So it will be an interesting — this only applies to businesses that filefranchise01:21 –> 01:23and excise tax.01:23 –> 01:30So it’ll be interesting to see if this actually passes, and we’ll stay on topof it to see01:30 –> 01:33if there’s any changes.01:33 –> 01:38Nothing I read in here does it say that it’s going to go backwards.01:38 –> 01:45So it looks like to me it’s really going to go into effect for 2024, not in2023.01:45 –> 01:53All right, let’s see if we can go to the — oh, the phone lines here in thestudio are 615-737-9988.01:53 –> 02:01And it looks like we’ve already got Jay on the line, which is awesome.02:01 –> 02:03Hey, Jay, what’s happening?02:03 –> 02:04>> Hi, good afternoon.02:04 –> 02:09Thank you so much for taking my call.02:09 –> 02:17My wife had a lot of health issues last year, and so like $217,000 in medicalexpenses.02:17 –> 02:25And so anyway, we have a high deductible health plan, $10,000, and we’re onthe hook for that.02:25 –> 02:32Anyway, so obviously we exceeded that, and so we’re having to pay all that.02:32 –> 02:36So one of my questions — I have about three questions.02:36 –> 02:42One of my questions was, can we write off the full $10,000, or we had to workout payment02:42 –> 02:48plans with some of the doctors or the hospitals and so forth?02:48 –> 02:51We’re making payments of several hundred dollars a month.02:51 –> 02:52So what can I write off?02:52 –> 02:57>> You will write off — you’ll only write off what you physically have paid.02:57 –> 03:00So it may take you a couple years to pay off the $10,000.03:00 –> 03:04I mean, unfortunately, this, you know, it’s always our worst nightmare, in allhonesty.03:04 –> 03:07But hopefully she’s doing well.03:07 –> 03:10But in answer to your question, there’s going to be two sides.03:10 –> 03:16One, you will be able to put that on the Schedule A under medical, whateveryou’ve paid.03:16 –> 03:21But also, we lose the first 7.5 of our adjusted gross income.03:21 –> 03:26So you know, depending on how much money you make, and if you have mortgageinterest, property03:26 –> 03:31taxes, sales tax, charitable contributions, will you exceed — are you guysunder or over03:31 –> 03:32the age of 65?03:32 –> 03:36>> I’m 66, and she’s 63.03:36 –> 03:37>> Okay.03:37 –> 03:43So you’re going to have a total of — in the ballpark of like $29,000 is yourstandard03:43 –> 03:44deduction.03:44 –> 03:45>> Okay.03:45 –> 03:50And so this — so that’ll be the standard, okay.03:50 –> 03:51All right.03:51 –> 03:52>> Yeah.03:52 –> 03:53>> All right.03:53 –> 03:54So all right.03:54 –> 03:55That answers that question.03:55 –> 04:00Now, I have been — I’ve done ministry work for several years.04:00 –> 04:06I’ve been with other congregations where I was issued a 1099.04:06 –> 04:14I started with a new congregation in February of ’23, where they issued me aW-2 instead04:14 –> 04:17of a 1099, but they didn’t withhold anything.04:17 –> 04:20So what — you know, how do I move forward with that?04:20 –> 04:26I don’t — you know, I’ve never — I’ve always had a 1099 so I could write offoffice expenses04:26 –> 04:27and so forth.04:27 –> 04:28So —04:28 –> 04:29>> Right.04:29 –> 04:32So they gave you a W-2 with just box one completed?04:32 –> 04:34Like a statutory employee?04:34 –> 04:37>> I’d have to look at it.04:37 –> 04:38>> Yeah.04:38 –> 04:40>> They — let me see what boxes.04:40 –> 04:41>> Sure.04:41 –> 04:42>> It’ll take me a second.04:42 –> 04:43I’ve got to lay it out here.04:43 –> 04:44>> That’s all right.04:44 –> 04:49Because I’m assuming that if you have — if it’s just box one, you canactually choose04:49 –> 04:54in your software to roll that to a Schedule C, which will then be — you’ll beable to04:54 –> 04:55write off your expenses.04:55 –> 05:00Because what they’re basically saying is that you’re a statutory employee,which means we05:00 –> 05:01didn’t withhold Social Security.05:01 –> 05:02We didn’t withhold Medicare.05:02 –> 05:08We didn’t do anything besides pay this person theoretically like asubcontractor.05:08 –> 05:09>> Okay.05:09 –> 05:14So what I’ve got on box one is 21 — or the dollar amount.05:14 –> 05:15>> Uh-huh.05:15 –> 05:17>> And note box two, zero.05:17 –> 05:21Box three, the Social Security wages and Medicare wages.05:21 –> 05:22>> Oh.05:22 –> 05:23All right.05:23 –> 05:28So did they actually — so box three and five have numbers and so do box two,one, two,05:28 –> 05:31three, four, three, four, five, six, whatever.05:31 –> 05:32All of them have numbers?05:32 –> 05:33>> The only — okay.05:33 –> 05:34Box one —05:34 –> 05:35>> Yes.05:35 –> 05:36>> — has a dollar amount in it.05:36 –> 05:37Box two is zero.05:37 –> 05:38>> Okay.05:38 –> 05:39>> Box three has the same dollar amount in it.05:39 –> 05:40>> Right.05:40 –> 05:41>> And box five has the same, but four and — four — okay.05:41 –> 05:42One — or two is zero.05:42 –> 05:43>> Okay.05:43 –> 05:44>> Four is zero.05:44 –> 05:45Five has six and so forth.05:45 –> 05:46All the rest of them —05:46 –> 05:56>> So they did not withhold any Social Security and they did not pay yourMedicare?05:56 –> 05:58>> They didn’t pay any —05:58 –> 06:00>> They did not — they put zeros on all those.06:00 –> 06:04So then if your tax software — or if you’re doing your own taxes, you shouldbe able to06:04 –> 06:09roll that over to a Schedule C and treat it as — I mean, at this point, I’mnot too sure06:09 –> 06:14why they didn’t just do it as a 1099, but that’s not us to question.06:14 –> 06:19So you’re going to go ahead and write off the expenses because they truly aretreating06:19 –> 06:20you as a subcontractor.06:20 –> 06:23They did not pay your — pay you like an employee.06:23 –> 06:24>> Okay.06:24 –> 06:25So the —06:25 –> 06:26>> Does that make sense?06:26 –> 06:27>> I’ve got —06:27 –> 06:29>> So you’re just going to roll that over and then it should bounce on.06:29 –> 06:35So it’s not going to show up on line one of your W — of your 1040 or lineseven, wherever06:35 –> 06:40the W-2, it’s going to show as subcontract or 1099 self-employment.06:40 –> 06:41>> Okay.06:41 –> 06:48And then the third thing is I was 66 and a half in October, so I starteddrawing Social06:48 –> 06:49Security.06:49 –> 06:56And so any — anything — any help there or whatever?06:56 –> 06:57>> No.06:57 –> 07:01I mean, as long as you — I mean, as long as you drew it on your fullretirement age,07:01 –> 07:03whatever that might be, then there’s no penalty.07:03 –> 07:06They may tax you, but there’s no penalty for doing it.07:06 –> 07:09If you drew it early, then you have to be careful with how much you’ve earnedor they’ll07:09 –> 07:12make you pay $1 for every $2 over.07:12 –> 07:13>> Okay.07:13 –> 07:17So Social Security is still taxable, but I was —07:17 –> 07:18>> Yes.07:18 –> 07:22>> — 66 and a half in October, so that was my full retirement age.07:22 –> 07:23>> Yeah.07:23 –> 07:26>> So it’s taxable, but they can’t take back any of your other earnings.07:26 –> 07:27>> Okay.07:27 –> 07:28Okay.07:28 –> 07:29>> Okay?07:29 –> 07:31>> Well, I appreciate you.07:31 –> 07:32>> No problem, sir.07:32 –> 07:33>> Thank you for —07:33 –> 07:35>> Hopefully that helps and hope your wife feels better, okay?07:35 –> 07:37>> Oh, she’s doing much better.07:37 –> 07:38Thank you so much.07:38 –> 07:39>> Wonderful.07:39 –> 07:40All right.07:40 –> 07:41Thanks.07:41 –> 07:42All right.07:42 –> 07:43Let’s take Kevin, I guess.07:43 –> 07:44Kevin in Nashville.07:44 –> 07:45Hey, Kev.07:45 –> 07:46>> Hi.07:46 –> 07:47How are you, Freddie?07:47 –> 07:48>> I’m doing well.07:48 –> 07:49How about yourself?07:49 –> 07:50>> Not bad.07:50 –> 07:51Thanks.07:51 –> 07:52>> Okay.07:52 –> 07:53So a question about my 1099.07:53 –> 07:56It looks like the B section.07:56 –> 08:01It says that there are short-term transactions and long-term transactionswhich are not reported08:01 –> 08:04to the IRS and those which are.08:04 –> 08:08I’m assuming that even those which are not reported to the IRS, that thoseamounts need08:08 –> 08:10to be reported on my 1040?08:10 –> 08:12>> Right.08:12 –> 08:15Under Schedule D, you’re going to show them.08:15 –> 08:18If you use the ATT&CK software, it will say reported or not reported, andyou’ll just08:18 –> 08:20check the proper box.08:20 –> 08:23But, yes, they still need to be reported.08:23 –> 08:29The difference is your basis isn’t reported, which is more concerning becauseif they received08:29 –> 08:33how much it was without basis, if you don’t report it, they’re going to makean assessment08:33 –> 08:35that none of it had a basis.08:35 –> 08:39So you want to report it just like your 1099 or the Schedule B has.08:39 –> 08:40>> Okay.08:40 –> 08:41Perfect.08:41 –> 08:42That was all I wanted to know.08:42 –> 08:43Thanks so much for your time.08:43 –> 08:44>> No problem.08:44 –> 08:45Thanks.08:45 –> 08:46All right.08:46 –> 08:47Let’s see DJ in Nashville while we’re on the roll here.08:47 –> 08:48Hey, DJ.08:48 –> 08:49>> Hey there, Dr. Freddie.08:49 –> 08:53Thanks for taking the call, and thanks for the help you give everybody hereevery week.08:53 –> 08:54>> Sure.08:54 –> 08:55>> Great.08:55 –> 08:56Here’s the question.08:56 –> 09:00My brother passed away last year, and I inherited his IRA.09:00 –> 09:08As per instructions, I put those funds into a “inherited IRA” account.09:08 –> 09:12And the instructions also said that RMDs must start by 12/31 of the year afterdeath.09:12 –> 09:14Like I say, he passed away last year.09:14 –> 09:18However, all well and good, and I understand the 10-year rule and that wholebit.09:18 –> 09:22However, I noticed a note that was kind of buried in there, and it says, “Ifthe original09:22 –> 09:27account holder did not take an RMD in the year of death, an RMD must be takenfrom the09:27 –> 09:32account by 12/31 of the year the original account holder died.”09:32 –> 09:35I didn’t do that because I didn’t know about it.09:35 –> 09:36>> You shouldn’t have.09:36 –> 09:39Normally, you would not be the responsible person for that.09:39 –> 09:44Normally, the custodial person, let’s just say it was JP Morgan, whoever, itdoesn’t09:44 –> 09:45make a difference.09:45 –> 09:49Whoever they are, before they distributed the money to you, they should have,and you09:49 –> 09:53may have to ask, but they should have done that distribution.09:53 –> 09:59That is their job to make sure that the RMD was pulled in the name of thedeceased.09:59 –> 10:03So that way, when you filed his final tax returns, or whoever handled it,would have10:03 –> 10:09filed that as part of his income or to the estate if the money may have beenpulled and10:09 –> 10:14put into the estate and theoretically distributed to you, but it would havebeen taxed in 2023.10:14 –> 10:17Instead of 2024 to you.10:17 –> 10:20Either way, you might want to backtrack just to me.10:20 –> 10:24Were you also the executor or were you just the beneficiary of this particularaccount?10:24 –> 10:25>> Both.10:25 –> 10:30I am the executor of his will and the beneficiary of that particular account,among others.10:30 –> 10:31>> Okay.10:31 –> 10:36So I would probably just for the fiduciary side of things, go back to whoeverhad that10:36 –> 10:38money.10:38 –> 10:44Ask them first if there had been a distribution done prior to themdistributing the funds10:44 –> 10:46to you as POD.10:46 –> 10:48And then I’m assuming it was to you.10:48 –> 10:54And then if there wasn’t, then we need to go back and at least they can’t goback and10:54 –> 10:58do the distribution, but your estate can go back and make a correction andpick that money10:58 –> 11:02up because theoretically it would have been taxed to the estate, which mayhave been a11:02 –> 11:09roundabout way directly to you, DJ, depending on if there’s a federal ID and atrue estate11:09 –> 11:14opened or a trust that had been opened or if everything was just POD to you.11:14 –> 11:21So not sure the whole situation, but you might want to review to make surebecause bottom11:21 –> 11:26line is someone may not pay tax in 2023, a money that should have been taxed.11:26 –> 11:31>> Well, and that is certainly the case because I could see how much was inthe account prior11:31 –> 11:35to its distribution to me and subsequent to its distribution to me, and thatamount didn’t11:35 –> 11:36change.11:36 –> 11:42They did not do a distribution to my brother prior to or after.11:42 –> 11:47So I’m just wondering what kind of trouble I’m in and how do I get around thisbecause11:47 –> 11:52I wasn’t informed of this particular rule at the time.11:52 –> 11:53>> Right.11:53 –> 11:59Well, I don’t think, I mean, I’ll be honest, the IRS has been pretty good inmy experience11:59 –> 12:01with these particular situations.12:01 –> 12:06It’s better to be the person to go back and tell them, in my opinion, than itis for them12:06 –> 12:10to possibly find out three years from now and then penalties, interest andeverything12:10 –> 12:11else, right?12:11 –> 12:13Here you have honest mistake.12:13 –> 12:19Hey, as soon as I found out, went back, corrected, amended my return, addedthe RMD, here it12:19 –> 12:20is.12:20 –> 12:27Because in theory, you need to take that distribution as well because it’sright now growing tax-free12:27 –> 12:29in that account.12:29 –> 12:32And as you know, RMDs had to come out.12:32 –> 12:33So we need to- >> Yeah, understood.12:33 –> 12:36I just thought I didn’t have to do that until 12/31/2024.12:36 –> 12:41>> Nope, you’re gonna do a double dip this year and then file them both intothis year12:41 –> 12:45because you don’t wanna go back and then you’re gonna explain that the firstdistribution12:45 –> 12:51was the error that the, however you wanna put it, my opinion, that the priorcustodial12:51 –> 12:52did not live up to.12:52 –> 12:54>> Well, the prior custodian was the federal government.12:54 –> 12:56He worked for the Department of the Interior.12:56 –> 12:57>> There you go.12:57 –> 12:59That explains it all to me, DJ.12:59 –> 13:07I mean, it’s really just making it right so that way they can’t say that youdidn’t live13:07 –> 13:10up to what you found out at the time you found it out.13:10 –> 13:11That’s really what it comes down to.13:11 –> 13:15>> Let’s hope the IRS is as honorable as you seem to think they are.13:15 –> 13:20>> Well, 28 years, you get good and bad, but I think under this, we have had,this happens13:20 –> 13:23more time than I like to tell you, DJ.13:23 –> 13:28Because just like you said, it is not blatantly out there as everyone knowsnow, “Well, I’ve13:28 –> 13:30got 10 years to do this,” or “I’ve got these numbers.”13:30 –> 13:32No one pushes that.13:32 –> 13:36And I do blame the custodian, the people that are managing the funds, becausethey should13:36 –> 13:38know that before it gets distributed.13:38 –> 13:39>> Right.13:39 –> 13:40Thanks for the help.13:40 –> 13:42>> But, you know, no problem, DJ.13:42 –> 13:43Thanks.13:43 –> 13:44All right, we’re gonna take our first break.13:44 –> 13:50When we get back, we’ll get more of the phone calls, 615-737-9986.13:50 –> 13:52We’ll be right back with The Dr. Friday Show.13:52 –> 13:59[Music]13:59 –> 14:04>> All righty, we are back here live in studio.14:04 –> 14:07And we are here to take your calls if you’ve got questions.14:07 –> 14:11615-737-9986.14:11 –> 14:15615-737-9986.14:15 –> 14:20As we all know, it’s April 6th, so it is time for everyone, if you have notcompleted your14:20 –> 14:25taxes and you’re probably gonna be working the next few, oh, we got almost aweek, almost14:25 –> 14:2710 days to get these done.14:27 –> 14:31But if you aren’t sure you’re gonna get there, you’re not too sure if you’llbe able to get14:31 –> 14:35it finished, then my suggestion is definitely file that extension.14:35 –> 14:41It is so important to have an extension filed so that you can then make surethat if you’re14:41 –> 14:45running late, you’re not hit with failure to file on-time penalties.14:45 –> 14:48So again, if you’re not sure if you’re gonna get them done, then make sure youfile that14:48 –> 14:50extension.14:50 –> 14:53Sometimes life gets in the way and we don’t always know what’s gonna followwith that.14:53 –> 14:57So just making sure we have what we need and when we need it.14:57 –> 15:01And so make sure you don’t forget things on your taxes.15:01 –> 15:05Unlike when we were talking to DJ, which was not something that was forgotten,but many15:05 –> 15:09times I’ll have people that will come in and they’ll say, “Oh, I just gotanother schedule15:09 –> 15:13B. Is that going to be something I need to deal with?15:13 –> 15:16Or I forgot a W-2.”15:16 –> 15:17Or whatever.15:17 –> 15:19Just go through your information.15:19 –> 15:20Make sure.15:20 –> 15:25I mean, you can always fix if you forgot something, but it’s kind of nice notto have to worry15:25 –> 15:30about going backwards if you can actually get things fixed the way you needthem to15:30 –> 15:31be fixed.15:31 –> 15:34So again, just making sure you have everything the way you need it.15:34 –> 15:38So that way, when you hit the send button to the best of your ability, youhave managed15:38 –> 15:41to take care of what you need to take care of.15:41 –> 15:46And if you’ve got questions, you can join the show at 615-737-9986.15:46 –> 15:57I will say that we also have run into many emails this last week about medicaldeductions.15:57 –> 16:01And again, keep in mind that depending on if you’re single, married, over theage of16:01 –> 16:0565, under the age of 65, what your standard deduction is.16:05 –> 16:09You have to be able to exceed that.16:09 –> 16:15And plus, whatever that is, you also have to take whatever your taxable incomeis and16:15 –> 16:18remove the first 7.5% of it.16:18 –> 16:24So if you have $10,000 of income, you get the first 7.5% of that that you’regoing to16:24 –> 16:25deduct off.16:25 –> 16:30And then everything above that will become part of your itemizing.16:30 –> 16:32They don’t add everything.16:32 –> 16:37So it’s very difficult to maximize medical deductions.16:37 –> 16:43So if you’re working with that concept, you need to make sure, A, that you’remaking sure16:43 –> 16:47you’re tracking everything, all of your trips back and forth to the pharmacistor to the16:47 –> 16:52doctors or to the chiropractor or whatever, because you do get medical miles.16:52 –> 16:58That is not as high as individual working miles, but still you get that alongwith obviously16:58 –> 17:03all of your out-of-pocket costs to see if you can actually do that, see if youcan actually17:03 –> 17:04itemize.17:04 –> 17:07And if you can, then you can maximize that deduction.17:07 –> 17:13Other than that, you want to make sure that in that same scenario, there usedto be people17:13 –> 17:17were tracking all of their sales tax paid, but since the standard deductionwent up,17:17 –> 17:22I have fewer and fewer people that do that because the SALT tax, no matterwhat, I had17:22 –> 17:28a gentleman that came in last week and he had more than $40,000 in propertytaxes on17:28 –> 17:31all these different properties that he owns.17:31 –> 17:35They’re investment properties, but as we all know, we can deduct property tax.17:35 –> 17:42Well, the problem is you can only deduct in property tax, sales tax, $10,000.17:42 –> 17:43That’s the most.17:43 –> 17:46And if it’s married, filing separately, it’s $5,000 each.17:46 –> 17:51But if it’s married or single, it’s $10,000.17:51 –> 17:56So if you have $40,000 in property tax thinking you’re going to be able toitemize, it’s not17:56 –> 17:57going to happen.17:57 –> 18:02He had no mortgages, so he didn’t have very much in charitable contributionsor medical.18:02 –> 18:07So even though he had all of that money that he was paying in property taxes,that wasn’t18:07 –> 18:11going to work as far as the concept of itemizing.18:11 –> 18:15So you do want to make sure that if that’s your situation that you’refollowing through18:15 –> 18:21with that, because sometimes it sounds like a great idea until somebody has totell you18:21 –> 18:23it didn’t happen.18:23 –> 18:28Also I don’t know about anyone else, but this year seems to be a year wherepeople are having18:28 –> 18:30to pay more money.18:30 –> 18:34Many times it’s money that people are not expecting to have to pay.18:34 –> 18:42So if you’ve prepared your tax return and that tax return is, I don’t know,let’s just18:42 –> 18:48say you owe $2,000 and you normally don’t, or maybe something happened.18:48 –> 18:52Because sometimes people change jobs in the middle of the year, sometimesmultiple times,18:52 –> 18:54and that usually does mess it up.18:54 –> 18:59But in some of these cases, just the fact of the new tax code going intoeffect, whatever18:59 –> 19:02it is, it affected the payroll systems.19:02 –> 19:06And so people are getting less coming out of their paychecks and no one looksat their19:06 –> 19:09pay stubs any longer, it seems like.19:09 –> 19:12So when you’re doing your payroll and you’re not seeing, “Oh, well, I got alittle bit19:12 –> 19:13more money.19:13 –> 19:16So maybe you thought you got a raise, so you’re going to get more money.”19:16 –> 19:21Anyways, that money is now, you’re short, right?19:21 –> 19:24So you need to think about your W-4 form.19:24 –> 19:30I don’t care if you are truly single with three kids, or if you’re marriedwith four19:30 –> 19:34kids or one kid, or you don’t have any children.19:34 –> 19:37If you owe money, you need to make an adjustment.19:37 –> 19:42It can be simply leave it at whatever it is, and you know you owe $2,000 andyou’ve got19:42 –> 19:4410 paychecks left.19:44 –> 19:49Take $200 of paycheck, go to line four in the W-4 where it says additionalwithholding.19:49 –> 19:50Only put a number in there.19:50 –> 19:52Do not put zeros everywhere else.19:52 –> 19:57Do not complete anything other than the top where it says married, single,head of house19:57 –> 19:58or whatever.19:58 –> 20:04And then you’ve got the lower part where it says, like I say, line four,additional withholdings.20:04 –> 20:08Sometimes I think by putting zeros on some of the lines in there, it actuallymakes you20:08 –> 20:12exempt and therefore it’s not withholding the normal tax code.20:12 –> 20:19So if you owe money this year, I would definitely say consider looking at yourW-4 form so that20:19 –> 20:24you can actually make sure that you had enough money filed to take out.20:24 –> 20:29No one likes to owe taxes, especially if you’re working on a regular paycheckand you’re like,20:29 –> 20:31“Okay, this is my usual situation.20:31 –> 20:34Why am I now having to deal with this?”20:34 –> 20:35Don’t really know the answer guys.20:35 –> 20:39All I can tell you how to fix the problem.20:39 –> 20:44And I will say also many people made a lot more money in interest this year.20:44 –> 20:48You put the money in the bank, you made more money and no taxes came out ofthat.20:48 –> 20:52So sometimes you owe a little bit more because of the growth of your money.20:52 –> 20:56So again, just making sure that you’re tracking all the right information.20:56 –> 21:01And if you are making extra money outside, be that through social security,because many21:01 –> 21:06people do not have any withholdings come out of their social security, be itbeing from21:06 –> 21:11stocks, dividends, interest, any of those, and taxes are not coming out.21:11 –> 21:14Prepare yourself before you come to the tax person.21:14 –> 21:17And then we have to turn around and say, “Oh, you know what?21:17 –> 21:19You do owe a few dollars.”21:19 –> 21:21And then you’re like, “Why?”21:21 –> 21:22Because this.21:22 –> 21:27So just prepare so you know what you have going and you’re able to make sureyou have21:27 –> 21:32all of the right information that you need to run that the way you need to.21:32 –> 21:38So just making sure that you don’t run into the situation where if you owemoney and you’re21:38 –> 21:42not too sure what you need to do, there is ways of compensating.21:42 –> 21:47So it’s a lot easier to pay it over a number of paychecks than it is at theend of the21:47 –> 21:48year.21:48 –> 21:51And there is often penalties that can be a part of that as well.21:51 –> 21:55So you don’t want to get hit with some of those penalties if you can stop thatfrom21:55 –> 21:56happening.21:56 –> 22:01And that leads me to self-employed individuals that decide they do not want topay quarterly.22:01 –> 22:04Hey, it’s a choice, not really.22:04 –> 22:06The IRS basically says it’s a mandate.22:06 –> 22:10You owe four equal payments based on the prior year.22:10 –> 22:15And if you don’t file that, we are going to have a situation where you’regoing to pay22:15 –> 22:17penalties.22:17 –> 22:18Okay.22:18 –> 22:21Now some people will say, I’d rather pay the penalties and pay all my money atthe end22:21 –> 22:22of the year.22:22 –> 22:23That is fine.22:23 –> 22:26That is your prerogative, maybe I should say.22:26 –> 22:31But if you are a self-employed person and every year you’re not able to payyour taxes,22:31 –> 22:36now you’re getting yourself upside down and creating a whole differentsituation and that22:36 –> 22:38becomes a problem.22:38 –> 22:39All right.22:39 –> 22:40Let’s really quick.22:40 –> 22:43We’re going to get Lisa and then maybe we can get the other one after thebreak.22:43 –> 22:44Hey, Lisa.22:44 –> 22:45Hey, Dr. Friday.22:45 –> 22:47I’ve got a question.22:47 –> 22:53My husband passed away in February of this year.22:53 –> 22:57We always filed married, filing jointly.22:57 –> 23:01And I’m still preparing for the 2023 filing.23:01 –> 23:04I’m hoping to get it done this week.23:04 –> 23:12Do I need to do anything differently because he passed away in February ofthis year or23:12 –> 23:13last year?23:13 –> 23:14Sorry.23:14 –> 23:15Yeah.23:15 –> 23:16Sorry for your loss.23:16 –> 23:17But the answer, the good news is no.23:17 –> 23:20The only thing you might need to fill out is a 1310.23:20 –> 23:24If there’s a refund, there’s going to be an additional form you need tocomplete that23:24 –> 23:29just says as the spouse, I’m collecting all the refunds so that they knowwho’s to get23:29 –> 23:31the, if there’s a refund.23:31 –> 23:35If there’s no refund and you’re making a payment, then there’s absolutelynothing.23:35 –> 23:41And in 2024, you’re going to file married as well because you were married inthe year23:41 –> 23:42he passed away.23:42 –> 23:46So the big change won’t be until 2025 for you.23:46 –> 23:47Okay.23:47 –> 23:50Cause I was thinking I’d have to do head of household next year.23:50 –> 23:53Now, do you have a child or someone at home?23:53 –> 23:57Yeah, I have two children at home.23:57 –> 23:58So you will.23:58 –> 24:02I mean, there’s a, there is a, for someone like yourself, there’s also thewidow one,24:02 –> 24:07which if there’s children at home, you can claim widow for two years afterit’s pretty24:07 –> 24:09much the same as head of household.24:09 –> 24:12But two years after the death of the, of the other parents.24:12 –> 24:16So yes, you’ll be good for another few years and then you can go ahead ofhousehold.24:16 –> 24:20That will be determined whichever way, but 2024 will still be married.24:20 –> 24:21Okay.24:21 –> 24:22Good deal.24:22 –> 24:23All right.24:24 –> 24:25Well, thank you so much.24:25 –> 24:26No problem.24:26 –> 24:27Thanks, Lisa.24:27 –> 24:28All right.24:28 –> 24:29We’re going to go ahead and get Angela in Nashville.24:29 –> 24:30This is the Dr. Friday show.24:30 –> 24:31We’ll be right back.24:31 –> 24:32Alrighty.24:32 –> 24:42We are back here live in studio and let’s head right over to Angela inNashville so24:42 –> 24:44we can find out if we can help her.24:44 –> 24:45Hey, Angela.24:45 –> 24:46Hi, Dr. Friday.24:46 –> 24:49Thank you for taking my call.24:49 –> 24:55So I already submitted my taxes, but the thought occurred to me that Iactually drew social24:55 –> 24:59security for the first time starting last year.24:59 –> 25:01So I didn’t submit that.25:01 –> 25:06So I imagine I have to make a full out magendum.25:06 –> 25:07Yes.25:07 –> 25:08An amended return.25:08 –> 25:09Actually, it’s a 1040 X.25:09 –> 25:14You’re going to need to potentially, at least you’re going to want to check.25:14 –> 25:19Uncle Sam will be more than enough to theoretically, Uncle Sam will probablysend you back a change25:19 –> 25:23letter saying you had not reported all of your income and they will estimate.25:23 –> 25:27But if you owe money, it’s better to know that in advance.25:27 –> 25:32If they have a refund, they may just change and take part of your refund, notknowing25:32 –> 25:33your situation.25:33 –> 25:38But yes, I would say, did you do them yourself, Angela, or did you go tosomebody?25:38 –> 25:39I did.25:39 –> 25:43I went to a preparer and I figured I would have to admit it.25:43 –> 25:44I just wanted to submit it.25:44 –> 25:46I didn’t want to wait for the last minute.25:46 –> 25:47I think that’s the smart.25:47 –> 25:48I was going to say, yeah.25:48 –> 25:49Yes, ma’am.25:49 –> 25:50Go ahead.25:50 –> 25:52I just wanted to know.25:52 –> 26:00Do you know I didn’t receive anything from the government with regard to theSocial Security?26:00 –> 26:02That does happen from time to time.26:02 –> 26:08You should have received a tri-fold paper that would have a red center on it.26:08 –> 26:11If you didn’t, you can call them and they will, I think they will mail you.26:11 –> 26:15They will not fax you because I think we’ve tried that a few times or email,but they26:15 –> 26:17will mail you a duplicate form.26:17 –> 26:22So you might want to call that and get that in hand before you make sure thatwhenever26:22 –> 26:26you started receiving it, that it will have the detail, how much you receivedand anything26:26 –> 26:27else that might be pertinent.26:27 –> 26:28Okay.26:28 –> 26:31Well, already last question.26:31 –> 26:38So like with your company and how you want to tell them what you want towithhold, for26:38 –> 26:43example, you’re married with children and you want to withhold, you know,maybe four26:43 –> 26:45or five.26:45 –> 26:48How do you do that with the Social Security?26:48 –> 26:49You know what the form that is?26:49 –> 26:50Social Security, you don’t.26:50 –> 26:52The Social Security is a little different.26:52 –> 26:55They’re going to take a percentage.26:55 –> 26:58So you’re going to need to know what tax bracket you’re in.26:58 –> 27:03So when, so whoever you go into just might want to ask them, you know, what’smy, not27:03 –> 27:08your actual tax bracket, but ask her or him what your effective tax bracket,it’s usually27:08 –> 27:09much lower.27:09 –> 27:14You may be in the 22% tax bracket, but maybe only pay 14% average tax.27:14 –> 27:16Ask them what your effective tax rate is.27:16 –> 27:20And that way you can use that when you’re talking to Social Security.27:20 –> 27:23Thank you so much for your help and your answers.27:23 –> 27:24Have a good day.27:24 –> 27:25No problem.27:25 –> 27:26You too.27:26 –> 27:27Thank you, sweetheart.27:27 –> 27:28All right.27:28 –> 27:31So yeah, sounds like Angela, that I can’t tell you how many times we have onethat came27:31 –> 27:36in the other day and we don’t know what we did not report because thegovernment’s really27:36 –> 27:40good about saying, hey, we’ve held back or we’re changing your tax return.27:40 –> 27:45But sometimes some of the letters will say we did it because of this, this orthis reason27:45 –> 27:48and not knowing which one of those things apply.27:48 –> 27:51I much prefer the letters where the IRS says we’ve changed it.27:51 –> 27:54And here’s the reason that this is what’s not matching up.27:54 –> 27:57And many times it’s really not changed.27:57 –> 28:00It’s going to affect you in some ways, even though the love letter says, oh,we’re going28:00 –> 28:02to charge you $5,000.28:02 –> 28:07It’s because they didn’t have the basis in some cases on the stock sales.28:07 –> 28:12So as once we get that filed and submitted and accepted, then that usually cantake care28:12 –> 28:13of itself.28:13 –> 28:15But you don’t know until you’re dealing with the situation.28:15 –> 28:20And right now it’s still difficult to be dealing with IRS situations.28:20 –> 28:26I will say that the tax advocate office does an excellent job here inNashville, Tennessee,28:26 –> 28:31even though some of the revenue officers that you try to deal with here in thestate, it28:31 –> 28:35can be difficult to get them on the phone and to follow up with situations.28:35 –> 28:40And part of it is obviously middle tax season when we try to do that andeveryone’s really28:40 –> 28:41busy.28:41 –> 28:43So be patient with that.28:43 –> 28:48But if you do have a major or you have something where you have the intent tolevy letters28:48 –> 28:53and they’re coming out and getting much more aggressive, then you definitelywant to go28:53 –> 29:01in and just either do a 911 to the tax advocate office or make an appointmentto the IRS office29:01 –> 29:06so they are open again so that you can actually try to get some sort ofresolution or maybe29:06 –> 29:10even it’s just getting a payment plan set up, getting something done where youcan make29:10 –> 29:15a monthly payment and that way they’re no longer sending you nasty grams whenit comes29:15 –> 29:16to that kind of thing.29:16 –> 29:18Because no one likes love letters.29:18 –> 29:22Love letters can just be a bit overwhelming, especially nowadays where theysend one to29:22 –> 29:26you, one to your spouse, and then one for every year.29:26 –> 29:30And if you’ve got four or five years, you can end up with 10 love letters inone day.29:30 –> 29:33And that’s a bit stressful for some of my clients.29:33 –> 29:37So very important to make sure that you’re tracking.29:37 –> 29:41But do not just take all of those love letters and throw them in a drawerbecause that is29:41 –> 29:47going to pretty much eventually lead to the IRS coming and taking actionagainst your29:47 –> 29:50payroll or going into your bank account.29:50 –> 29:55I had this time of year, of course, I get to fortunate enough to see many,many of my29:55 –> 29:59clients and some of them still, “Oh, I don’t want to give the IRS my bankaccount.”29:59 –> 30:05But working with the IRS now for 20 plus years, one thing I will tell you isif you have your30:05 –> 30:10social security number tied to a bank account, the IRS knows about that bankaccount.30:10 –> 30:11Doesn’t mean they’re going to do anything.30:11 –> 30:13It doesn’t mean they’re going to take anything.30:13 –> 30:18But if you are in trouble with the IRS, you’re ignoring them or not makingplans or doing30:18 –> 30:22things, they can come right in and do what they need to do.30:22 –> 30:26Sometimes it’s, I swear, it’s just to get your attention so that you’ll startdoing30:26 –> 30:27what needs to be done.30:27 –> 30:32But that being said, there’s nothing worse than thinking that you have rentmoney in30:32 –> 30:35the bank and then you find out that that money is gone.30:35 –> 30:39And I will say we’ve had only a handful of cases this has ever happened.30:39 –> 30:44But if your name, if you have the IRS issues and you have bank accounts withyour children,30:44 –> 30:49because children can’t open up their own bank account without an adult, theycan also take30:49 –> 30:52that money because the bank account is tied to the adult.30:52 –> 30:58So be very careful if you have IRS issues, you may want to make sure that themoney that30:58 –> 31:03the children have are not in your name, if that’s at all possible.31:03 –> 31:05All right, let’s hit Bill in Nashville real quick.31:05 –> 31:07Hey Bill, what’s happening?31:07 –> 31:17Well, on my wife’s dad last year, was, am I eligible for a step up in basis onthe real31:17 –> 31:19estate?31:19 –> 31:23So was it held jointly, Bill, when you guys purchased it?31:23 –> 31:25No.31:25 –> 31:27Was it in your wife’s name alone?31:27 –> 31:28Yes.31:28 –> 31:30Oh, okay.31:30 –> 31:33So then the answer is if it was in your wife’s name alone, yes.31:33 –> 31:37When you inherited that property, you get a step up in basis.31:37 –> 31:43Now, should I have had an appraisal done right off or can I still have thatdone?31:43 –> 31:45Or how does that work?31:45 –> 31:52So my personal opinion is to get an appraisal or to get an appraiser to do aopinion, I31:52 –> 31:53think is what they call it.31:53 –> 32:00But you need something that somebody can say within 60 days of the passing ofyour wife,32:00 –> 32:05that this was the value of this property based on said comps.32:05 –> 32:08Just like if you were going to buy real estate anywhere else.32:08 –> 32:11That way, is this a primary home, Bill?32:11 –> 32:12Yes.32:12 –> 32:13Okay.32:13 –> 32:15So then you’re probably going to continue to live in it.32:15 –> 32:18So that may be, you know, yeah.32:18 –> 32:22So a number of years from now, if you decide you want to sell, you’re going toneed to32:22 –> 32:26have that appraisal to be able to use for your justification.32:26 –> 32:29Because obviously the only information we would have prior to that would havebeen the32:29 –> 32:33value that she had paid for the house originally.32:33 –> 32:38So you need that appraisal to be put into your documents to create your newstep up32:38 –> 32:39in basis.32:39 –> 32:40Okay.32:40 –> 32:41Well, I didn’t do that.32:41 –> 32:48Is it possible to get someone to look back and do that now?32:48 –> 32:50Absolutely, yes.32:50 –> 32:53You might want to find maybe if you know a real estate person or whatever, youjust need32:53 –> 32:57to find a real estate person that will then give you an appraiser.32:57 –> 33:01They can go back based on comps at the time of her passing.33:01 –> 33:02It’s been done many times.33:02 –> 33:03Okay.33:03 –> 33:04Thank you.33:04 –> 33:06No problem, sir.33:06 –> 33:07Thanks for the phone call.33:07 –> 33:08Sorry for your loss.33:08 –> 33:09Thanks.33:09 –> 33:10Appreciate it.33:10 –> 33:11Yeah.33:11 –> 33:12All right.33:12 –> 33:15So we are getting close to our last break here.33:15 –> 33:21If you want to join the show, you can at 615-737-9986.33:21 –> 33:27615-737-9986 is the number here in the studio.33:27 –> 33:31Taking your call, talking about things that we need to make sure we do so thatwe keep33:31 –> 33:32Uncle Sam off our back.33:32 –> 33:33Right.33:33 –> 33:38Or if Uncle Sam is already on your back and you’re like, okay, I need to getout from33:38 –> 33:39under this.33:39 –> 33:44Maybe your time has come where you’re just like, I need to make arrangements.33:44 –> 33:46I need to do an offer and compromise.33:46 –> 33:47I need to do a fresh start.33:47 –> 33:48I need a payment plan.33:48 –> 33:52I don’t know because each person is different and we need to figure out what’sgoing to33:52 –> 33:53work best for you.33:53 –> 33:59But whatever those things are, you need to make sure that you are not justignoring them33:59 –> 34:04because sooner or later when you really want to go either sell your realestate because34:04 –> 34:05now they’ve put a lien against it.34:05 –> 34:07So when you sell, guess what?34:07 –> 34:09They’re going to take their share.34:09 –> 34:11They’re going to make it their asset.34:11 –> 34:15And then that way when you sell, they’re going to try to do what they needdone or they’re34:15 –> 34:18going to turn around and they’re going to say, Hey, uh, that piece of realestate that34:18 –> 34:22you have over here, it’s not your primary home and you owe us.34:22 –> 34:24So we’re going to force you to sell.34:24 –> 34:30And yes, if it’s not your primary home, the IRS can mandate selling thatproperty.34:30 –> 34:34If you have not made arrangements to do something else, it’s that simple.34:34 –> 34:39You either, you either make arrangements and in some cases that arrangementmay be that34:39 –> 34:44you have to sell or take a mortgage against an existing property that you haveto make34:44 –> 34:45it work for you.34:45 –> 34:48Um, all right, let’s hit Ron before the break.34:48 –> 34:49That way it isn’t the way through the break.34:49 –> 34:50Hey Ron.34:50 –> 34:51Hello.34:51 –> 34:52How are you today?34:52 –> 34:53I am good.34:53 –> 34:54Good.34:54 –> 34:55Excellent.34:55 –> 34:58I got a quick question for you about standard deduction.34:58 –> 34:59I’m done.34:59 –> 35:00I’ve done it myself.35:00 –> 35:01A 1040 SR.35:01 –> 35:12And I checked one box in that section and I’ve got to the latter stages ofthe, uh,35:12 –> 35:15of the tax return and it asked how many boxes are checked.35:15 –> 35:21Well, I’ve also filed a check the box single in the filing status.35:21 –> 35:27So is that one check box and standard deduction or is that two counting thefiling status?35:27 –> 35:28One.35:28 –> 35:29Okay.35:29 –> 35:30Just one.35:30 –> 35:31Okay.35:31 –> 35:32Yeah.35:32 –> 35:33And I got one other question.35:33 –> 35:34Quick question.35:34 –> 35:43I’ve got my ex wife lives in my home with me and she, uh, she makes about12,000 a year.35:43 –> 35:44So you get that.35:44 –> 35:49I guess I’m certainly have to file her taxes at that rate.35:49 –> 35:54Plus, uh, she’s on social security and Medicare.35:54 –> 35:57So last, uh, go ahead.35:57 –> 35:58Go ahead.36:00 –> 36:06So last year what I had done was, um, I filed her under a head of household.36:06 –> 36:09I mean, I filed myself under head of household.36:09 –> 36:16She had filed last year and I did get a letter that somebody else had filedfor her that36:16 –> 36:18would then herself.36:18 –> 36:23And she realized that she probably didn’t have to do that and didn’t file thisyear.36:23 –> 36:26So can I file her as a head of household this year?36:26 –> 36:27Yeah, directly.36:27 –> 36:28You’re legally divorced.36:28 –> 36:34So she is a dependent of yours if she’s making $12,000.36:34 –> 36:39Or is she making 12,000 plus social security and Medicare or the 12,000 is hersocial security36:39 –> 36:40and Medicare.36:40 –> 36:41That’s it.36:42 –> 36:44Just, just social security and Medicare.36:44 –> 36:45Nothing else.36:45 –> 36:46Correct.36:47 –> 36:48Okay.36:48 –> 36:49Then yes, she can be a dependent.36:49 –> 36:50They don’t consider that earnings.36:50 –> 36:53So, you know, and you’re probably providing her room board.36:53 –> 36:58I mean, I’m just saying supporting a large part of her lifestyle since there’snot much36:58 –> 37:00income there.37:00 –> 37:04So you can be head of household.37:04 –> 37:09And if I file head of household on her, would she have a chance of losing herMedicare or37:09 –> 37:14Medicaid because she’s filing as a dependent under me or I’m filing her as adependent37:14 –> 37:15under me?37:15 –> 37:16Is there a chance that she would lose her Medicaid?37:16 –> 37:17How old is she?37:17 –> 37:18She’s 72.37:18 –> 37:22Oh no, no, that would have no effect.37:22 –> 37:28It was only if she was on disability or something that that would come intoplay.37:28 –> 37:31Well that makes quite a difference in my refund.37:31 –> 37:37I would imagine it would, but then again, you have a second individual thatyou’re supporting.37:37 –> 37:39The biggest thing is you probably just want to do a support test.37:39 –> 37:44I’m pretty sure you, you know, making sure you’re supporting her more than50%.37:44 –> 37:49But you know, when you consider all the overhead and what she has, I would saythat that’s37:49 –> 37:51probably not hard to do Ron.37:51 –> 37:52Okay.37:52 –> 37:57So what would I do with the letter they sent me about her filing last year?37:57 –> 38:00And then nothing, I mean, I’m assuming when you filed last year, you took heroff and38:00 –> 38:02you filed single this year.38:02 –> 38:03She hasn’t filed.38:03 –> 38:05So you shouldn’t have a problem.38:05 –> 38:06Very good.38:06 –> 38:07Thank you so much for your help today.38:07 –> 38:08I appreciate it.38:08 –> 38:09Thanks Ron.38:09 –> 38:10No problem.38:10 –> 38:11Thanks.38:11 –> 38:12All right.38:12 –> 38:13We’re going to take our last break for the day.38:13 –> 38:15You can reach us here in studio at least for a few more minutes.38:15 –> 38:16615-737-9986.38:16 –> 38:22We’ll be right back with the Dr. Friday show.38:22 –> 38:23All right.38:23 –> 38:31We are back here live in studio for the last part of the show.38:31 –> 38:38You can reach us for a few minutes at 615-737-9986.38:38 –> 38:42615-737-9986.38:42 –> 38:45Taking your calls here in studio.38:45 –> 38:50So if you want to make sure you’ve got everything going the way you need to goagain, just like38:50 –> 38:54you hear callers, make sure you’re thinking about what the situation is, whatyou have38:54 –> 38:55going on.38:55 –> 39:00And then that way we can make sure that we are spot on when it comes to doingwhat we39:00 –> 39:03need to do on our taxes.39:03 –> 39:07Nothing really be afraid of, just making sure that we get them done right sothat we don’t39:07 –> 39:10have to worry about all the other situations that go with it.39:10 –> 39:11Right.39:11 –> 39:15If you do need help, I know our phone lines have went crazy at this time.39:15 –> 39:21We aren’t able to take on any new clients directly, but we can get youextensions filed39:21 –> 39:28and then we can go ahead and do what we need to do when it comes to gettingyou in after39:28 –> 39:32tax season and getting you squared away and making sure we’ve done everythingwe need39:32 –> 39:33to do to get you set up.39:33 –> 39:39If we can help you with any kind of issues you may have with the IRS and youknow, just39:39 –> 39:40get you back.39:40 –> 39:42So you have what you need done and where you’re going for it.39:42 –> 39:46So again, if you need help with that or if you’ve got a question, you can joinus here.39:46 –> 39:49We’ve got about, I don’t know, six, seven minutes left.39:49 –> 39:50615-737-9986.39:51 –> 40:02Taking our call, dealing with any kind of issues you might have with taxes andmaking40:02 –> 40:06sure that at least you’re going the right direction so you can make sure youhave what40:06 –> 40:09you need, when you need it and how you need it.40:09 –> 40:13So we can make sure, you know, I mean, last thing anyone wants is getting alove letter.40:13 –> 40:14It’s that simple.40:14 –> 40:18When you get those letters in the mail, you’re sitting there going, Oh mygosh, what am I40:18 –> 40:19going to do?40:19 –> 40:20How am I going to take care of this?40:20 –> 40:21Are they going to take my house?40:21 –> 40:23Are they going to take something from me?40:23 –> 40:25And you don’t know the answer.40:25 –> 40:30And it’s not, I mean, to think that the IRS cannot take your house or to thinkthat the40:30 –> 40:36IRS cannot get into your bank account or to take your paycheck is a bit sillybecause40:36 –> 40:37of course they can’t.40:37 –> 40:41I mean, if you have ignored them, if you have not given them the information,if they’ve40:41 –> 40:47been trying to track you down and all you’ve done is move and relocate, thenwe’re good.40:47 –> 40:49We’re time to go do what we need to do and move forward.40:49 –> 40:55But if you have been communicating, if you have been doing what you can, maybeyou haven’t40:55 –> 41:00been able to keep a good payment plan because maybe you’ve lost the job orsomeone in the,41:00 –> 41:04something’s happened within the family and you’re able to do what you needdone, then41:04 –> 41:07you’re going to have to make do with what you can do.41:07 –> 41:12But communication is the secret to making sure you have what you need.41:12 –> 41:17You need to keep that communication open so that you can make sure that you’reable to41:17 –> 41:22achieve what you need to achieve and not have the IRS stepping back on you andsaying, oh41:22 –> 41:23my gosh, they’re going to do this.41:23 –> 41:29And there’s nothing worse than your employer finding out that you have IRSissues by them41:29 –> 41:34sending notices to them saying that they want you to levy their checks, right?41:34 –> 41:38They want to take and take your paycheck from you in some fashion.41:38 –> 41:43So if you’re having those kinds of issues, you need to have thatcommunication.41:43 –> 41:47And again, I know I’ve people that keep logs that have said, I’ve tried tocall the IRS41:47 –> 41:48at this time.41:48 –> 41:49This is the number I call.41:49 –> 41:53They tried to call here and every time I’ve been on hold for two hours, I wason the,41:53 –> 41:56I got, I got someone and then they hung up on me.41:56 –> 42:01So I understand the frustration, but the fact is you still have to make thatresolution.42:01 –> 42:04You still have to communicate with them and you still have to get that.42:04 –> 42:06So if you need help with doing that, that’s what we do.42:06 –> 42:09We deal with the IRS all the time.42:09 –> 42:13And I know that not everybody is going to have a perfect situation.42:13 –> 42:18And sometimes people don’t think they can afford to pay the IRS, but the waythe IRS42:18 –> 42:22calculates debt, it’s not the same way as you might sit there and say, well, Idon’t42:22 –> 42:24have any extra money by the end of the month.42:24 –> 42:29But theoretically the IRS is saying, Hey, you know, you have your child inprivate school.42:29 –> 42:34You have three cars and there’s only one of you and you have two car payments.42:34 –> 42:38These are things that they consider excessive and therefore they may give youtime to resolve42:38 –> 42:39it.42:39 –> 42:43But if they can’t, then they’re going to say, you need to sell one of thosecars, right?42:43 –> 42:46That you need to consider taking your kids.42:46 –> 42:51And yes, I was sitting in a meeting about four or five years ago with arevenue officer42:51 –> 42:55and her resolution was going to submit to her, her employer that they neededto take42:55 –> 42:59their children out of private school.42:59 –> 43:04The advantage we had was the school was because of the child being on thespectrum and we43:04 –> 43:10had to have doctors and all kinds of different things showing that theschooling was essential.43:10 –> 43:14Therefore we got it removed, but you know, not every time is that going to bethe situation.43:14 –> 43:21So really understanding how the tax law works, what you can do to protectyourself and your,43:21 –> 43:25your assets and what you need to be doing so that the government doesn’t kindof just43:25 –> 43:29take the bull by the horn and say, here, this is what we’re going to do.43:29 –> 43:32First and foremost is filing your taxes.43:32 –> 43:35And right now we’re in the midst of filing 2023 tax returns.43:35 –> 43:39So either complete your tax return or file an extension.43:39 –> 43:43So that way you’ve got enough time to resolve it within the tax code, whichmeans until43:43 –> 43:49October, if you have a proper extension done, that does not extend the moneydue.43:49 –> 43:54So when you file an extension and you know that you owe 20,000, but you knowwhat you43:54 –> 43:59filing extension either in hopes that you can raise the 20 or put it off alittle later,43:59 –> 44:00it’s not extending that money.44:00 –> 44:04So penalties and interest is starting as of the time you owe that money.44:04 –> 44:07It’s not going to extend out to October.44:07 –> 44:11Otherwise all of us would extend our taxes to October because no one wants topay their44:11 –> 44:13taxes any earlier than they have to.44:13 –> 44:14Right?44:14 –> 44:19So make sure that if you know you’ve prepared your taxes, okay, I’ve got abalance due.44:19 –> 44:24If you file the taxes, collections will start and you need to have a way ofwhat you’re44:24 –> 44:25going to do to make those payments.44:25 –> 44:32If by delaying it, you’re delaying that situation, then you just understandthat penalties interest44:32 –> 44:37is going to increase from the time that you actually had that situation.44:37 –> 44:40So we’re getting to the end of the show.44:40 –> 44:41Here’s what we got to do.44:41 –> 44:45First, if you’re interested in what we’re talking about, you can certainly goto irs.wwwdrfriday.com.44:45 –> 44:46Sorry.44:46 –> 44:52DrFriday.com is my website.44:52 –> 44:56You can find out more about who we are and what our firm does.44:56 –> 45:00If you would like to reach someone in the office, you can give us a call onMonday at45:00 –> 45:01615-367-0819.45:01 –> 45:08We can help you file an extension and then we can try to get you scheduled innext week45:08 –> 45:13or the weeks after the 15th and see if we can help you get some sort ofresolution and45:13 –> 45:19resolve your tax issue or just get 2023 filed so that way you’re in complianceand everything’s45:19 –> 45:22good if you need help with a payment plan or something.45:22 –> 45:24Some of that can be very simply handled.45:24 –> 45:28Or you can email Friday@drfriday.com.45:28 –> 45:31Again Friday@drfriday.com.45:31 –> 45:32That is what we do.45:32 –> 45:36As an enrolled agent, I’m licensed by the Internal Revenue Service.45:36 –> 45:37That’s who I am.45:37 –> 45:39Dr. Friday, enrolled agent.45:39 –> 45:41That sounds like one of those little TV show things.45:41 –> 45:45When I’m an enrolled agent licensed by the Internal Revenue Service with taxesor you45:45 –> 45:50need representation in front of the Internal Revenue Service, then you need tocall our45:50 –> 45:51firm.45:51 –> 45:53We’re going to be the best that you can have.45:53 –> 45:58And again that number will be 615-367-0819.45:58 –> 46:01If you’ve got questions because you don’t know, should I be going bankrupt?46:01 –> 46:03Should I be dealing with the IRS?46:03 –> 46:07Do I have, how long, I thought the IRS only had 10 years to collect and whyare they still46:07 –> 46:09collecting on 2011 on me?46:09 –> 46:14There are answers to those questions and if you need answers we can help youagain.46:14 –> 46:20615-367-0819 or email Friday@drfriday.com.46:20 –> 46:24That will be the simplest way for us to try to get time to get you in toresolve your46:24 –> 46:29situation or to help you understand what you need to do and what you don’thave to do.46:29 –> 46:33But most important, don’t ignore the love letters.46:33 –> 46:34As we always say in Australia.

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In this episode of Dr. Friday’s Tax Tips, the focus is on claiming tax deductions for small business startup expenses. Dr. Friday explains that these expenses don’t necessarily have to be incurred in the same year the business starts operating. Entrepreneurs who have been working on their business for a year or two prior to the official launch can still claim related expenses, such as educational materials and books, as tax deductions. However, it’s important to distinguish between legitimate business expenses and hobby-related costs, as the latter are not tax-deductible. Dr. Friday emphasizes the importance of not leaving any eligible tax deductions unclaimed.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Did you know that credit for a small business startup doesn’t mean you had to spend all the money in the year you’re talking about. So if you started a business but maybe you started thinking about the business two years ago and maybe you went ahead and set up some different education, you brought books, you did things, that’s all considered startup. So when you’re actually starting a business you want to be thinking about now if it’s a hobby or it’s a business that never happened and never go off the ground that’s not a tax deduction guys. Just because you made the mistake for the wrong that’s one thing but if you’ve been working a year or two to open a business that can be a tax deduction. Don’t leave any tax deductions on the table.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3pm right here on 99.7 WTN.

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In this episode of Dr. Friday’s Tax Tips, the importance of accurately claiming dependents on tax returns is discussed. Dr. Friday cautions listeners about claiming their girlfriend’s children as dependents, even if they are providing financial support. The eligibility of dependents depends on various factors, such as the duration of their stay and the taxpayer’s role as the sole breadwinner. Making mistakes when claiming the Earned Income Credit can result in severe consequences, including being barred from collecting the credit in the future. Taxpayers are advised to exercise caution and ensure they meet all requirements before claiming dependents on their tax returns.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

I was reviewing some taxes and one thing I have noticed is sometimes people put on children that may not be legitimate deductions. So your girlfriend lives with you and even though you’re supporting the children, are they truly your dependents? That’s a really tough question and it really depends on how long they’ve stayed with you, have you the only breadwinner in the family, what is the story, just because she didn’t make any money and they put you on as head of household because she now lives with you, be very careful. If you make a mistake on earned income credit, the IRS can stop you from ever collecting earned income credit in the future.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3pm right here on 99.7 WTN.

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In this episode of Dr. Friday’s Tax Tips, Dr. Friday addresses a common question among taxpayers who have already filed their taxes: “Where’s my refund?” She provides two convenient methods for tracking the status of your tax refund. The first option is to visit the IRS website at irs.gov and click on the “Where’s my refund?” link. Alternatively, taxpayers can download the IRS mobile app, “IRS to go,” which allows them to track their refunds, returns, and even amended returns. Dr. Friday emphasizes that these are the only reliable sources for obtaining information about potential delays or issues with your refund. If the website indicates that your return hasn’t been processed, it may suggest that the IRS hasn’t received it or that it has been flagged due to incomplete or incorrect information.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Many of you have already filed your taxes. Some of you are calling asking me, “Where’s your refund?” And there’s two ways of doing it. You can go to irs.gov, click on “Where’s my refund?” Or you can even download the app, IRS to go, and you can also track your refunds and your returns, your amended returns, all through that website. It is the only place you’re going to be able to find out if there’s been a delay. If you see that it’s not been processed, it’s probably not received unless it’s been pulled back because it doesn’t have all the correct information. But that’s where you’re going to want to check where your refund is. Again, irs.gov or download the app, IRS to go, to get the info.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3pm right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday emphasizes the importance of taking your time when filing your taxes. Many mistakes occur when people rush to file their taxes or are overly eager to receive their refund. Incomplete or inaccurate information can lead to the IRS sending “love letters” that often result in changes to your return, refund, and potential penalties and interest. Dr. Friday’s advice is simple: don’t rush, and ensure you file everything you have to avoid costly mistakes.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Think about what you’re filing. I can’t say that enough. Think about what you’re filing. Don’t just rush to file. Most of the mistakes that happen is because people are so anxious about either filing their taxes on time or they really, really want that refund so they put the money and the information in but it’s not complete. The IRS is going to send you a love letter and nobody likes them. Even though I call them love letters, maybe I should start calling them hate letters. But either way, it’s a letter that’s going to tell you most likely they have changed your return, they’ve changed your refund, now you have penalties and interest. Don’t rush. That’s the secret to tax season. Make sure you file everything you have.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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As the tax season comes to a close, it’s crucial to consider filing for an extension if you anticipate any delays in submitting your tax return. Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, emphasizes the importance of ensuring your extension is filed properly, especially if you’re a client of her firm. While an extension grants you additional time to file your paperwork, it’s essential to send in a payment to the IRS if you owe taxes. Taxpayers can easily make payments through the IRS website at irs.gov.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

It’s almost the end of tax season. We are going crazy. But, right now is the time for you to think an extension. If something were to delay, you want to make sure you have that extension. Send in some money if possible. If you’re one of my clients, you need to make sure our firm has filed that extension for you. Get confirmation, so that way you know that everything is fine. If something has to go past the April 15th, we don’t file it till the 16th, there’s no major penalties because all we’re responsible for is paperwork. If you haven’t paid your taxes, now’s the time to think about starting to send some money to Uncle Sam. You can go to irs.gov, click pay to make the payment.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3pm right here on 99.7 WTN.

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Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, offers valuable advice for those dealing with the IRS. She emphasizes the importance of persistence when communicating with the agency, noting that a single rejection letter doesn’t necessarily mean the case is closed. Dr. Friday encourages individuals to be tenacious and even consider taking their case to tax court if needed. She explains that in tax court, you’ll often deal with an IRS attorney who is well-versed in tax law and more likely to listen and make adjustments compared to the automated responses sometimes received from the IRS. If you find yourself struggling to navigate the IRS on your own, Dr. Friday invites you to reach out for assistance through her website, drfriday.com.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

If I could give you any advice about dealing with the IRS, it’s that basically one time isn’t always enough. Meaning if you send one letter and the IRS sends back a rejection, it doesn’t always mean the case is closed. You need to be a little bit more tenacious and even take it as far as tax court as far as dealing with the petitions. Because many times you’ll actually deal with an attorney that represents the IRS that knows the tax law. They’re more apt to listen, to adjust, versus sometimes you’re really dealing with a computer on some of these things. So don’t just give up if you’re dealing with the IRS on your own and you need help, you can also contact me at drfriday.com.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3pm right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday emphasizes the crucial role of proper record-keeping for self-employed individuals and small business owners. She highlights that keeping accurate records, including tracking expenses and maintaining receipts, is not only a legal requirement but also essential to avoid potential issues with the government. Dr. Friday stresses that good bookkeeping practices will be the key to success in 2024 and encourages listeners to seek help if needed by visiting her website, drfriday.com.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

As a self-employed or small business owner of an S corporation LLC sole proprietorship, we all have one thing we have to do. Keep good records. That’s in the tax law. You can’t just start a business and say, “You know what? I’m just gonna spend the money how I want, make the money how I want, and the government can’t do anything.” Yes, they can. They can basically disallow all your expenses if you’re not tracking those expenses correctly, which basically means getting receipts. Tracking the receipts, making sure they go with the money that you’re earning so that way you don’t get in trouble. So good bookkeeping is going to be the secret for 2024. Need help? Go to drfriday.com.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3pm right here on 99.7 WTN.

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April Fools! Gotcha! In this episode of Dr. Friday’s Tax Tips, Dr. Friday clarifies that while the IRS is indeed hiring new employees, they are not out to get taxpayers who file and pay their taxes on time. Dr. Friday reminds listeners that the IRS is primarily a collection agency and encourages those who need help with IRS issues to reach out to her office at 615-367-0819.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Alert! The IRS is hiring hundreds of thousands of armed revenue officers. Gotcha! April Fool’s Day! I know many of you guys have come in my office saying, “Oh my God, they’re going to come to my doors with guns out.” Come on people, this is the IRS, they’re a collection agency, that’s what they do. There is going to be some new hires, but they’re not just out for you. If you’re filing your taxes on time, paying your taxes on time, all in all, you’re in good shape. Don’t let this April Fool’s fool you, and don’t let it scare you. The IRS is here to try to handle the IRS issues. If you need help with them, just call me, 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3pm right here on 99.7 WTN.

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As the tax season draws to a close, it’s crucial to take action if you haven’t filed your taxes yet. If you’re unsure about completing your tax return on time, filing Form 4868 for an extension is a wise move. Even if you anticipate owing money, submitting the extension form with a partial payment demonstrates your intent to comply with tax obligations. However, it’s important to note that an extension only grants additional time for paperwork and does not extend the deadline for paying any taxes owed. If you need assistance navigating the tax filing process, don’t hesitate to seek professional help.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

We are getting close to the end of tax season. If you haven’t already set up your appointment you need to do it ASAP. If you’ve already started working on your taxes and you’re not sure you’re gonna get them finished, make sure you file the 4868 extension. You can’t file it too early and it doesn’t hurt if you think you’re gonna owe money even if you can’t pay the whole bill. Send in a few dollars with it. That way it makes the intent to look like you’re doing your best to try to file your taxes on time and most important pay your taxes on time. Remember when you file an extension it doesn’t extend the money you owe. It only extends the paperwork. Need help? 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday highlights the importance of understanding how selling assets can affect Medicare IRMAA (Income-Related Monthly Adjustment Amount) for individuals over 67 who are on full social security. She emphasizes that this is a crucial aspect of tax planning that people often overlook. Dr. Friday encourages listeners to visit her website, drfriday.com, for more information, worksheets, and the option to schedule an appointment. She also invites listeners to tune in to her live call-in show every Saturday afternoon on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

We’re here to help you understand taxes. That’s what I do. I’m Dr. Friday and I like to help people do taxes. It’s what I do 24/7 it feels like, maybe not quite that much, but it’s here to help you. If you need help, go to my website drfriday.com. You can click on appointment from the calendar. You can see other worksheets and things that are available on the website. If you need to understand how Irma’s affected by your taxes, you can give me a call. These are the kinds of things that people forget to talk about. If you’re going to sell something and you’re over the age of 67 and you’re on full social security, you may have to watch out for your Medicare Irma, because you’re going to end up paying more money once that happens.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this episode of Dr. Friday’s Tax Tips, the importance of maintaining accurate mileage logs for tax deductions is emphasized. Dr. Friday advises listeners to use mileage tracking apps or software, such as Mileage IQ, to ensure proper documentation of business miles driven. She warns that the IRS frequently audits tax returns claiming mileage deductions and will request mileage logs for verification. By consistently using mileage tracking tools and labeling trips as personal or business, taxpayers can maintain excellent records and support their deductions in the event of an audit.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

I’ve talked in the past and I’ll keep talking because you guys all know I love to talk. But in saying that, one of the things you need to make sure if you’re taking miles off of your tax return, you need to be using an app or a mileage log. It is one of the largest things that the IRS will audit. If they open up a tax return and they see miles, no matter what you do, they’re going to ask for your log. If you’re using something like Mileage IQ or other mileage software, that’s going to be your best bet. But make sure you’re maintaining it because at least my Mileage IQ, every time I drive, every time I stop, every time I start and I have my cell phone, it does it. So make sure you label it personal business so you have an excellent log.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this episode of the Dr. Friday Show from March 23, 2024, Dr. Friday discusses various tax-related topics and answers caller questions. As the tax deadline approaches, Dr. Friday provides valuable insights and advice for navigating the complexities of tax season.

Topics covered:

• Business tax, franchise excise tax, and annual report deadlines for small business owners
• Marginal tax rates and brackets for 2024
• Contributing to Roth IRAs and amending tax returns
• Reporting inheritance and capital gains on tax returns
• Dealing with the IRS on tax issues and amendments
• Business depreciation and bonus depreciation for 2023
• Reporting interest income from joint accounts and deceased individuals
• Handling tax debt with the IRS through payment plans

Transcript00:00:00.000 –> 00:00:07.000No, no, no, she’s not a medical doctor, but she can sure cure your taxproblems or your00:00:07.000 –> 00:00:08.000financial woes.00:00:08.000 –> 00:00:10.000She’s the how-to girl.00:00:10.000 –> 00:00:11.000It’s the Dr. Friday Show.00:00:11.000 –> 00:00:12.000If you have a question for Dr. Friday, call her now, 737-WWTN.00:00:12.000 –> 00:00:13.000That’s 737-9986.00:00:13.000 –> 00:00:14.000So here’s your host, financial counselor and tax consultant, Dr. Friday.00:00:14.000 –> 00:00:14.000[music]00:00:14.000 –> 00:00:34.000G’day, I’m Dr. Friday and the doctor is in the house.00:00:34.000 –> 00:00:36.760We are here, hopefully gonna get some fun.00:00:36.760 –> 00:00:41.400The weather outside is so nice, but it is tax season, so we need to talk aboutsome00:00:41.400 –> 00:00:47.320of the changes that are in play and also any questions that you might haveconcerning taxes00:00:47.320 –> 00:00:52.100and the issues that we might be dealing with in doing our taxes.00:00:52.100 –> 00:00:57.120Do not forget that if you are a small business owner, you also have yourfranchise excise,00:00:57.120 –> 00:01:02.740your business tax, and your annual reports that are going to be changing, soyou need00:01:02.740 –> 00:01:07.400to make sure that you have all of that in play so that you don’t get a latenotice,00:01:07.400 –> 00:01:11.640because many of those are due April 1st, which is just around the corner.00:01:11.640 –> 00:01:15.080So just making sure that you’ve got everything that you need, because a lot oftimes I know00:01:15.080 –> 00:01:18.240people will call me and say, “Oh, I just got a notice.00:01:18.240 –> 00:01:19.240Business tax wasn’t filed.00:01:19.240 –> 00:01:20.240I thought you filed it.”00:01:20.240 –> 00:01:22.480Well, business tax is only a state tax.00:01:22.480 –> 00:01:26.000We don’t deal with that in our office unless you do our monthly bookkeepingservice, then00:01:26.000 –> 00:01:28.360the bookkeepers will usually handle that.00:01:28.360 –> 00:01:33.640Annual reports, again, are not really part of bookkeeping or taxes, so it’sjust a licensing00:01:33.640 –> 00:01:37.920renewal for your charter every single year, but you need to make sure that youeither00:01:37.920 –> 00:01:42.080have your person, that whoever’s dealing with it is there, or that youunderstand what the00:01:42.080 –> 00:01:47.240choices are so you don’t get those love letters that say, “And most of thetime, I’m getting00:01:47.240 –> 00:01:54.720them when they change … It’s changing when they try to get a mortgage or arenewal line00:01:54.720 –> 00:01:56.480of credit or something like that.”00:01:56.480 –> 00:02:00.120Then they get these notices saying that you’re not in good standing.00:02:00.120 –> 00:02:03.040That’s never a good time to have that situation.00:02:03.040 –> 00:02:06.880So we just want to make sure that we’re dealing with what we need to deal withand that we00:02:06.880 –> 00:02:08.720don’t end up with that kind of situation.00:02:08.720 –> 00:02:10.560You can join the show if you want.00:02:10.560 –> 00:02:11.560We’re live, 615-737-9986.00:02:11.560 –> 00:02:20.960615-737-9986 is the number here in the studio.00:02:20.960 –> 00:02:23.040So you can join us if you want.00:02:23.040 –> 00:02:26.680Ask your questions, or at least I’ll try my best to give you the best answer.00:02:26.680 –> 00:02:30.360Just remember that any time on this show, we’re doing our best to take asituation in00:02:30.360 –> 00:02:35.560a small situation and try to give you an answer, but always double check yourinformation with00:02:35.560 –> 00:02:41.080your tax professional or attorney, because we’re not attorneys, to just makesure that00:02:41.080 –> 00:02:43.640the information applies directly to you.00:02:43.640 –> 00:02:46.760So I’ll do my best to help you, at least lead you in the right direction.00:02:46.760 –> 00:02:51.400But sometimes you need to get an expert in itself because I can’t ask youeverything.00:02:51.400 –> 00:02:56.160I don’t want everything on the radio that tells you to get you the exact samesituation.00:02:56.160 –> 00:03:03.240But if you need help with anything, join the show, 615-737-9986.00:03:03.240 –> 00:03:10.720615-737-9986 will take place, where we’re going to be doing and going fromthere.00:03:10.720 –> 00:03:16.020So there has been, obviously, we get new numbers as far as inflation and allof those.00:03:16.020 –> 00:03:21.760So many of you, the marginal rate for 2024, the top rate is still going to be37% for00:03:21.760 –> 00:03:27.200any of you that income above 609,350.00:03:27.200 –> 00:03:29.680Or if you’re married, 731,200.00:03:29.680 –> 00:03:33.200Yes, you heard that marriage penalty again.00:03:33.200 –> 00:03:37.360A single person, 609,000, married couple, 731.00:03:37.360 –> 00:03:40.320Doesn’t quite seem fair.00:03:40.320 –> 00:03:41.980But that’s the top bracket.00:03:41.980 –> 00:03:47.320But the more important brackets are usually the ones that kind of fall withinthe 22 to00:03:47.320 –> 00:03:57.00024, and that would be a single individual hits the 22% bracket at 47,150 and amarried00:03:57.000 –> 00:04:00.040couple makes it at 94,300.00:04:00.040 –> 00:04:05.000You take your standard deduction, deduct that, and then that’s where your taxbracket is.00:04:05.000 –> 00:04:10.400So again, making sure you understand because the reason the numbers are soimportant is00:04:10.400 –> 00:04:15.840if you’re doing conversions or you’re thinking about selling a piece of realestate, if it’s00:04:15.840 –> 00:04:20.840going to kick you into a different bracket, if you go out of the 12%,theoretically, the00:04:20.840 –> 00:04:24.28015% tax bracket, capital gains tax kicks in.00:04:24.280 –> 00:04:30.640And if you go into the 24%, you end up with the Medicare, the 3.8 investmenttax that00:04:30.640 –> 00:04:33.680gets added to the capital gains rates.00:04:33.680 –> 00:04:40.160And then of course, when you’re up in the 30, 35% or close to the 37, then youstart00:04:40.160 –> 00:04:45.800getting into the highest tax bracket for capital gains plus the investmenttax.00:04:45.800 –> 00:04:47.760All these numbers come in and they’re so important.00:04:47.760 –> 00:04:50.160All right, we’ve got Rosie in Nashville.00:04:50.160 –> 00:04:51.560We’re going to have her join the show.00:04:51.560 –> 00:04:52.560Hey, Rosie.00:04:52.560 –> 00:04:53.560Hey, Dr. Frey.00:04:53.560 –> 00:04:54.560Thanks for taking my call.00:04:54.560 –> 00:04:55.560First of all, I saw you on Hank’s show.00:04:55.560 –> 00:04:59.560He should have let you do more talking, but I won’t go there.00:04:59.560 –> 00:05:02.400He always hogs the show, but that’s all right.00:05:02.400 –> 00:05:06.600I try to bring a little sense of humor, but you know, he always hogs thatshow.00:05:06.600 –> 00:05:07.600But anyhow.00:05:07.600 –> 00:05:11.400I saw you flipping your papers like, “This is what we didn’t get you becauseyou were00:05:11.400 –> 00:05:12.400talking so much.”00:05:12.400 –> 00:05:16.320And I caught that flip, but anyway.00:05:16.320 –> 00:05:18.360So question.00:05:18.360 –> 00:05:23.160We’ve already done our taxes, got a refund for 2023.00:05:23.160 –> 00:05:26.560And my husband received some inheritance.00:05:26.560 –> 00:05:40.720Is it too late to do a custodial transfer to his and my Roth IRA for 2023?00:05:40.720 –> 00:05:45.720You’re not too late because you have until April 15th to do that.00:05:45.720 –> 00:05:49.640Even if you filed, you might want to amend the return, but it really have azero effect00:05:49.640 –> 00:05:51.480on the return as long as you qualify.00:05:51.480 –> 00:05:52.480Yeah, we do qualify.00:05:52.480 –> 00:05:53.480That’s what my question is.00:05:53.480 –> 00:06:03.400I looked on the IRS.gov to see if I need to report it on the return, and itdidn’t look00:06:03.400 –> 00:06:05.120like I did, but I think I do.00:06:05.120 –> 00:06:07.480I mean, I think I have done that in the past.00:06:07.480 –> 00:06:08.480There is a place.00:06:08.480 –> 00:06:10.600I mean, we always report them.00:06:10.600 –> 00:06:13.000It doesn’t show up on the basic 1040.00:06:13.000 –> 00:06:18.040I want to say, and I think it’s an 8606, but it’s going to report on a backform that just00:06:18.040 –> 00:06:23.440shows that you took it because obviously if you make too much money in somecases, but00:06:23.440 –> 00:06:24.520you’ve already checked that out.00:06:24.520 –> 00:06:26.080So I mean, why not?00:06:26.080 –> 00:06:30.320If you can put in a Roth and you qualify and you’ve got the ability to pay it,why not00:06:30.320 –> 00:06:33.920maximize that account and let it grow tax free?00:06:33.920 –> 00:06:34.920Yeah.00:06:34.920 –> 00:06:38.640Do you think it’s like, is it okay if we amend it?00:06:38.640 –> 00:06:39.640I mean, like is it a half?00:06:39.640 –> 00:06:41.560I would just do it a 1040 X.00:06:41.560 –> 00:06:43.040It’s going to be a zero change.00:06:43.040 –> 00:06:48.400So under the explanation, you’re going to put contributed before April 15th toRoth00:06:48.400 –> 00:06:51.200IRA for the tax year of 2023.00:06:51.200 –> 00:06:53.900And you may repeat that for husband and wife.00:06:53.900 –> 00:06:55.000That’s all you’re going to send in.00:06:55.000 –> 00:06:59.600And then you would attach behind the 1040 X, basically the form.00:06:59.600 –> 00:07:04.000And again, I’m not sure of the form number, but you attach, if you go in, youcan, if00:07:04.000 –> 00:07:08.440you use an online system, you should automatically get the form as well.00:07:08.440 –> 00:07:12.840So 1040 X plus one more time.00:07:12.840 –> 00:07:15.600We did the direct file through IRS, the free one.00:07:15.600 –> 00:07:16.600Okay.00:07:16.600 –> 00:07:20.280But if you were able to prop, well, you won’t be able to do a free one on thatone, but00:07:20.280 –> 00:07:23.160you could download the 1040 X.00:07:23.160 –> 00:07:25.080I mean, go to the IRS website, download it.00:07:25.080 –> 00:07:28.640And let’s see, I think it’s the 8606 reporting.00:07:28.640 –> 00:07:30.200I’m checking it out myself.00:07:30.200 –> 00:07:31.200Roth.00:07:31.200 –> 00:07:35.120I mean, again, this is really not going to big deal.00:07:35.120 –> 00:07:39.920And when your company that you use, be it whatever company that you do yourRoth.00:07:39.920 –> 00:07:40.920Yes.00:07:40.920 –> 00:07:44.680Non-deductible IRA on form 8606.00:07:44.680 –> 00:07:51.200So you’re going to have a 1040 X and 8606 for you and one for your husband,all of that00:07:51.200 –> 00:07:53.680put in a package and you can just mail that out.00:07:53.680 –> 00:07:54.680It’s really just the paper.00:07:54.680 –> 00:07:56.320I’m going to ask you, can I mail it?00:07:56.320 –> 00:07:57.320Okay.00:07:57.320 –> 00:07:58.320Thank you.00:07:58.320 –> 00:07:59.320Oh yeah.00:07:59.320 –> 00:08:00.320You can mail it.00:08:00.320 –> 00:08:01.320Okay.00:08:01.320 –> 00:08:02.320Cool.00:08:02.320 –> 00:08:03.320Thank you so much for your help.00:08:03.320 –> 00:08:04.320Hey, no problem.00:08:04.320 –> 00:08:06.240And we are on the Dr. Friday show.00:08:06.240 –> 00:08:08.200If you’ve got questions, that’s a great one.00:08:08.200 –> 00:08:09.200Actually.00:08:09.200 –> 00:08:13.480We don’t sometimes we, we don’t think about that until after the case and I’llhate to00:08:13.480 –> 00:08:18.280say it, but a lot of tax people, I’m not a financial planner, but obviously Ilike Roth00:08:18.280 –> 00:08:22.000IRAs because sooner or later we’re going to all hit retirement and it’d benice to have00:08:22.000 –> 00:08:29.160money we can take out without having to pay tax on if you’re 59 and a half orfive years,00:08:29.160 –> 00:08:32.920depending on which is longer, but you’re going to take it from there and dowhat you need00:08:32.920 –> 00:08:33.920to do.00:08:33.920 –> 00:08:35.440Um, on that situation.00:08:35.440 –> 00:08:40.240So, um, I think it’s always good if you can maximize it, but it doesn’treally, most tax00:08:40.240 –> 00:08:44.320people were selling standard IRAs because we’re looking for that instantgratification.00:08:44.320 –> 00:08:49.360Uh, but we, you know, either way, whatever works best, but always, you know,again, if00:08:49.360 –> 00:08:53.720you’re in a certain situation, you may want to talk to a financial plannercause they00:08:53.720 –> 00:08:56.400can talk about, you know, backdoor IRAs.00:08:56.400 –> 00:08:59.040They can talk about is a traditional IRA good for you.00:08:59.040 –> 00:09:01.280Should you be maximizing something else?00:09:01.280 –> 00:09:02.280Would you qualify?00:09:02.280 –> 00:09:07.280Uh, all of those are important questions because sometimes, um, you make, youknow, you make00:09:07.280 –> 00:09:08.640too much money to qualify.00:09:08.640 –> 00:09:14.600Um, but also if you’re in the lower tax bracket, if you’re in that 12% taxbracket, you can00:09:14.600 –> 00:09:20.520actually get a saver’s credit by contributing to a Roth IRA or traditional IRAor even to00:09:20.520 –> 00:09:21.840a 401k.00:09:21.840 –> 00:09:27.040So you know, again, if you have, um, I think it’s kind of a cool thing if youhave a young00:09:27.040 –> 00:09:31.860person and instead of maybe giving them Christmas presents and birthdaypresents and all that,00:09:31.860 –> 00:09:34.440maybe give them money to put into a retirement fund.00:09:34.440 –> 00:09:35.800I know that’s exciting, right?00:09:35.800 –> 00:09:39.520I’m sure the kids are going to love it, but if they’re working and they’ve gotearnings,00:09:39.520 –> 00:09:45.040theoretically you could gift them $6,000 a year and that money could go into aRoth IRA00:09:45.040 –> 00:09:47.480when they file their taxes, they’re going to get the saver’s credit.00:09:47.480 –> 00:09:50.960Plus they’re going to have a lifetime of growing tax free.00:09:50.960 –> 00:09:55.480Again, back that up with a good financial planner, but that is a direction youmight00:09:55.480 –> 00:09:56.680want to think about going.00:09:56.680 –> 00:09:57.880All right, real quick.00:09:57.880 –> 00:10:00.600Let’s hit Lynn before the break and that way she doesn’t have to wait for it.00:10:00.600 –> 00:10:01.600Hey Lynn, what’s happening?00:10:01.600 –> 00:10:07.600Hey Dr. Friday, I just have a quick question about a little over two yearsago, bought00:10:07.600 –> 00:10:08.600a piece of property out of state.00:10:08.600 –> 00:10:14.600Just a house, old house and didn’t really do anything to it, didn’t rent it oranything,00:10:14.600 –> 00:10:20.600but turned around and sold it last year, late last year and actually made$22,000 on it.00:10:20.600 –> 00:10:25.600Since it really wasn’t, I guess it’s an investment, I was going to just do aschedule D, I do00:10:25.600 –> 00:10:26.600my own taxes.00:10:26.600 –> 00:10:30.560I was going to do a schedule D and put it in that, but it don’t look right forsome00:10:30.560 –> 00:10:31.560reason.00:10:31.560 –> 00:10:32.560It’s definitely a tough way to do it.00:10:32.560 –> 00:10:34.440It is, you’re a hundred percent correct.00:10:34.440 –> 00:10:35.440Did you get a 1099S?00:10:35.440 –> 00:10:36.440Yes, that’s correct.00:10:36.440 –> 00:10:42.200Okay, so you’re going to run it through the schedule D under the form and thenyou’re00:10:42.200 –> 00:10:48.520going to put in there the closing cost fees, the property tax, anything you’vehad to pay00:10:48.520 –> 00:10:53.920theoretically into the cost basis, even, you know, so then you’d show acapital gains long00:10:53.920 –> 00:10:58.520term, 22,000 or whatever that is, but you got to list the property.00:10:58.520 –> 00:11:01.320You’re going to list the date you purchased, the date you sold, the purchaseprice, the00:11:01.320 –> 00:11:03.720sale price and any costs that went into it.00:11:03.720 –> 00:11:05.720And that’s perfect, a hundred percent.00:11:05.720 –> 00:11:06.720Okay.00:11:06.720 –> 00:11:07.720It looks just for stock.00:11:07.720 –> 00:11:11.720I haven’t normally done that on this software and it didn’t look right.00:11:11.720 –> 00:11:17.080Like that’s for stock when to sell, but there should be a place to put the1099S and then00:11:17.080 –> 00:11:18.080put that in, right?00:11:18.080 –> 00:11:19.080Should be, exactly.00:11:19.080 –> 00:11:20.560There should be, at least in our software.00:11:20.560 –> 00:11:26.480Yes, it will lead or fall back to the 1099, I’m sorry, to the schedule D, butyes, there00:11:26.480 –> 00:11:30.840should be a place in your system to put the actual 1099S.00:11:30.840 –> 00:11:34.120But the key is it should be on the D. I should look at my D and it should beon there, right?00:11:34.120 –> 00:11:36.000You should be looking at your D. Yep.00:11:36.000 –> 00:11:37.000100%.00:11:37.000 –> 00:11:38.000Thank you very much.00:11:38.000 –> 00:11:39.000No problem.00:11:39.000 –> 00:11:40.000All right.00:11:40.000 –> 00:11:42.400We’re going to get ready here to take a quick break.00:11:42.400 –> 00:11:44.440And when you come back, you can join us live.00:11:44.440 –> 00:11:47.960Any question we’re trying to help out if people are doing their own taxes,Hey, why not get00:11:47.960 –> 00:11:52.320a little help and make sure it’s in the right place because there’s nothingworse than getting00:11:52.320 –> 00:11:54.160a love letter or thinking that you have it.00:11:54.160 –> 00:11:56.840And then, oh my gosh, it’s all wrong.00:11:56.840 –> 00:11:59.720And in the tax software is usually associated with those kinds of situations.00:11:59.720 –> 00:12:06.440You can do it, but if you need help, obviously you can join the show at615-737-9986.00:12:06.440 –> 00:12:11.640615-737-9986 is the number here in the studio.00:12:11.640 –> 00:12:14.580So we can help you if maybe you’ve inherited some property and you’re not toosure how00:12:14.580 –> 00:12:18.120that’s going to report or if it’s even taxable.00:12:18.120 –> 00:12:23.160And then also there’s many times people rush to file their taxes and you didinherit.00:12:23.160 –> 00:12:27.120And then people like me are still working on those tax returns and there’s a Kone and00:12:27.120 –> 00:12:28.420then you’ll have to do an amendment.00:12:28.420 –> 00:12:30.400So just make sure you have the information.00:12:30.400 –> 00:12:33.840We’ll be right back with the Dr. Friday show.00:12:33.840 –> 00:12:35.840Alrighty.00:12:35.840 –> 00:12:39.400We are back live here in studio.00:12:39.400 –> 00:12:41.440And if you’ve got a question, you can join us here.00:12:41.440 –> 00:12:42.440It’s a beautiful day outside.00:12:42.440 –> 00:12:45.920I know you’re probably out there, but if maybe you’re driving around goingfrom store to00:12:45.920 –> 00:12:50.080store and you’ve got a question cause you’re working on your taxes or maybeyou know someone00:12:50.080 –> 00:12:54.640that has had some tax issues because even though we do taxes, I’m an enrolledagent00:12:54.640 –> 00:12:59.540licensed by the internal revenue service to do taxes and representation, whichmeans I00:12:59.540 –> 00:13:01.840do not represent the IRS.00:13:01.840 –> 00:13:04.340I represent taxpayers like you.00:13:04.340 –> 00:13:08.440So if you’ve getting love letters or you know someone that hasn’t filed taxesat a number00:13:08.440 –> 00:13:10.980of years, then you might want to give us a call.00:13:10.980 –> 00:13:12.800See if we can’t help you out.00:13:12.800 –> 00:13:14.160We are truly local.00:13:14.160 –> 00:13:17.000We don’t just say that we are actually here in Brentwood.00:13:17.000 –> 00:13:19.800It’s the only low office location we have.00:13:19.800 –> 00:13:25.320So if you’re looking for someone that might be able to help you, 615-367-0819is the office00:13:25.320 –> 00:13:26.320number.00:13:26.320 –> 00:13:30.840More importantly, if you’ve got a question, maybe you have someone that youare, you know,00:13:30.840 –> 00:13:35.120just met, or maybe you’re thinking about getting married and the person thatyou’re marrying00:13:35.120 –> 00:13:36.540hasn’t filed taxes.00:13:36.540 –> 00:13:37.540We had a situation.00:13:37.800 –> 00:13:42.400We’ve actually had a couple of them, but recently we had a couple come in andthey were on the,00:13:42.400 –> 00:13:46.800they had just gotten married and found out that she hadn’t filed taxes in anumber of00:13:46.800 –> 00:13:47.800years.00:13:47.800 –> 00:13:51.360And I will tell you this, why not have that conversation before marriage?00:13:51.360 –> 00:13:55.200I mean, it just seems like if you’re going to be merging your life at somepoint, you’d00:13:55.200 –> 00:13:57.480want to kind of know the financial situation.00:13:57.480 –> 00:13:58.640Do you have student loans?00:13:58.640 –> 00:14:03.800Do you pay off your credit cards every month or do you have $20,000 in creditcard debt?00:14:03.800 –> 00:14:06.440You know, what bills do you owe and what bills do you not?00:14:06.440 –> 00:14:07.700Do you have a car payment?00:14:07.700 –> 00:14:09.100What’s your insurance rating?00:14:09.100 –> 00:14:11.580Cause it’s based on your credit score, right?00:14:11.580 –> 00:14:16.380These seem like they would be questions that people ask, but apparently we getmarried00:14:16.380 –> 00:14:19.860and ask those questions after at least this couple and they seem to be great.00:14:19.860 –> 00:14:20.860They’re well matched.00:14:20.860 –> 00:14:26.860It seems like at least on other things, but we had to go back and deal withsome tax issues00:14:26.860 –> 00:14:29.340and I think we’ll get it resolved relatively easily.00:14:29.340 –> 00:14:33.260And one, in some cases she didn’t actually owe even though she had it filed,but she00:14:33.260 –> 00:14:37.500then became self-employed, which means she owes for a few years as well.00:14:37.500 –> 00:14:41.020Those will get resolved and life will be back on track.00:14:41.020 –> 00:14:46.420All of that being said, it’s important to understand that if you don’t filetaxes, it’s00:14:46.420 –> 00:14:49.860really hard to get things you might want.00:14:49.860 –> 00:14:54.160Maybe if you want to buy a house or maybe you have children and they’re goingto go00:14:54.160 –> 00:14:56.660to college, right?00:14:56.660 –> 00:14:58.300And then you got to go through FASFA.00:14:58.300 –> 00:15:00.660FASFA requires tax returns.00:15:00.660 –> 00:15:05.340So if you’re looking to get back on track, it doesn’t mean if you haven’tfiled taxes00:15:05.340 –> 00:15:08.540in 20 years, we can help you get your tax documents.00:15:08.540 –> 00:15:09.740We can help you get organized.00:15:09.740 –> 00:15:12.660We can help you figure out how to move forward.00:15:12.660 –> 00:15:16.540It’s not as complicated as you might think it is.00:15:16.540 –> 00:15:23.660And so in some cases it could be file the taxes, do a simple fresh start andget you00:15:23.660 –> 00:15:24.660back on track.00:15:24.660 –> 00:15:30.460It could be more complicated that maybe you own a house or have 401ks ormultiple situations00:15:30.460 –> 00:15:35.500and it may mean that it’s more of a negotiation than a simple fresh start.00:15:35.500 –> 00:15:36.740It doesn’t make a difference.00:15:36.740 –> 00:15:38.020We can help you either way.00:15:38.020 –> 00:15:43.340And if you’ve got a question, maybe you know someone, then you can join theshow.00:15:43.340 –> 00:15:44.340615-737-9986.00:15:45.340 –> 00:15:53.300It’s not as easy as you think to pick up the phone and call a radio show.00:15:53.300 –> 00:15:54.300I know that.00:15:54.300 –> 00:15:59.700I’ve been doing this now 15 plus years and it’s, you know, it’s always shocksme and00:15:59.700 –> 00:16:04.100a pleasant shocking that, that so many of you guys do take the time to callthe show00:16:04.100 –> 00:16:09.300because a lot of times people listen, they, they come in this to the officeand they’ll00:16:09.300 –> 00:16:11.220say, yeah, I heard this person asked this question.00:16:11.220 –> 00:16:16.160It was just what I needed to hear, but they, you know, they weren’t in aposition to call.00:16:16.160 –> 00:16:20.180So it’s always appreciated if you want to call and ask a question.00:16:20.180 –> 00:16:25.780We do have many, many people that are dealing with different situations.00:16:25.780 –> 00:16:31.420For any of you that are maybe self-employed and you’re looking at what we haveavailable00:16:31.420 –> 00:16:36.960in 2023 possibly for depreciation, we were hoping are still waiting.00:16:36.960 –> 00:16:42.740Many of my clients have actually filed an extension because bonus depreciationisn’t00:16:42.740 –> 00:16:44.060as high as we would like it.00:16:44.060 –> 00:16:51.040And there’s a bill that’s still waiting to see if it is going to actually getapproved.00:16:51.040 –> 00:16:54.180So you may not be getting a hundred percent or you’re not.00:16:54.180 –> 00:16:58.260If you file your taxes right now, you will not get a hundred percent of it.00:16:58.260 –> 00:17:02.860And so we, you know, it’s going to really possibly make it where you actuallyowe more00:17:02.860 –> 00:17:04.900money than you might have thought.00:17:04.900 –> 00:17:09.100It did get extended, but we didn’t get a hundred percent with the extension.00:17:09.100 –> 00:17:14.700So again, if you are a person that has a lot of vehicles or trucks or thingslike that,00:17:14.700 –> 00:17:19.220that we usually are able to take a hundred percent of bonus depreciation,there is a00:17:19.220 –> 00:17:25.220train of thought that estimate your taxes, go ahead and pay in what may bequalified00:17:25.220 –> 00:17:30.500because there’s no guarantee that it’s going to go there and then go into thenext phase,00:17:30.500 –> 00:17:36.180which is an extension and then wait and see if they actually do go through andincrease00:17:36.180 –> 00:17:37.180the depreciation.00:17:37.180 –> 00:17:38.860Because right now it’s extended.00:17:38.860 –> 00:17:41.760It’s just the phase out in 2026.00:17:41.760 –> 00:17:45.500But as we know, every year it drops down more and more and more.00:17:45.500 –> 00:17:49.420So at this point, you know, we’re at a point where it’s not a hundred percent.00:17:49.420 –> 00:17:53.220So if we need to deal something like that, then we’ll be good.00:17:53.220 –> 00:17:56.460But again, if you’re self-employed, you might want to talk to your tax person.00:17:56.460 –> 00:18:01.980I know I’m working on one now, and this is a difference of hundreds ofthousands of dollars00:18:01.980 –> 00:18:07.340worth of equipment deduction that we can’t take if it is not, if it’s notextended, which00:18:07.340 –> 00:18:11.980means the difference of these people paying a lot more money in taxes thanwhat we’ve00:18:11.980 –> 00:18:15.480had to pay in the past, because every year they have to upgrade theirequipment.00:18:15.480 –> 00:18:20.100So if you’ve got questions on that, or maybe you’ve got questions concerningother tax00:18:20.100 –> 00:18:24.060issues, one of the biggest things we deal with at this time of the year againis usually00:18:24.060 –> 00:18:25.360inheritance.00:18:25.360 –> 00:18:29.540Someone inherited a house, but if you inherited that house, let’s say youinherited two years00:18:29.540 –> 00:18:34.860ago and now you finally sold it, you may end up with additional capital gains.00:18:34.860 –> 00:18:35.900It’s a possibility.00:18:35.900 –> 00:18:40.180So you can’t just say, well, I inherited, so it’s a complete tax deductionbecause it00:18:40.180 –> 00:18:42.180may not be.00:18:42.180 –> 00:18:48.060Also I have found that we’ve had more than one case where somebody has gottenand sold00:18:48.060 –> 00:18:52.940a house and they think if they reinvest the money on that house, that theywill not have00:18:52.940 –> 00:18:54.560to pay taxes.00:18:54.560 –> 00:18:58.940That tax law ended a long time ago, guys, we do not work on the reinvestmentunless00:18:58.940 –> 00:19:02.180you’re dealing with a 1031 exchange.00:19:02.180 –> 00:19:05.540Under that circumstance, the answer is yes.00:19:05.540 –> 00:19:11.100But if it is not, then you have to deal with the fact that you have capitalgains.00:19:11.100 –> 00:19:12.100It’s that simple.00:19:12.100 –> 00:19:15.660So you want to make sure that you’re reporting all that.00:19:15.660 –> 00:19:19.860I’ve got a case where back in 2020, apparently there was a 1031.00:19:19.860 –> 00:19:24.100We reported it, but it looks like maybe it was reported twice to the IRS.00:19:24.100 –> 00:19:31.100So we ended up with a double closing and now the IRS is looking for 60 grandbecause they’re00:19:31.100 –> 00:19:33.260saying, well, there’s capital gains, but there isn’t.00:19:33.260 –> 00:19:35.180But these are the kinds of letters you’ll get.00:19:35.180 –> 00:19:39.980And it’s hard to understand sometimes why the IRS, but in this case, we’refinding out00:19:39.980 –> 00:19:44.980that they actually had two closing documents submitted for the same house.00:19:44.980 –> 00:19:48.620And so it created a double entry.00:19:48.620 –> 00:19:52.920So the IRS, you think they could look at the address and see that the samehouse was on00:19:52.920 –> 00:19:58.980both closings, but the IRS is looking at the 1099 S’s and all they care aboutis that’s00:19:58.980 –> 00:20:00.420reported twice.00:20:00.420 –> 00:20:05.060And so they’re saying, nope, this person sold that house twice for the samedollar amount.00:20:05.060 –> 00:20:09.420And obviously it didn’t happen, but this is a 2020 issue and they’re gettingaggressive00:20:09.420 –> 00:20:12.700in collections because we just found out about it.00:20:12.700 –> 00:20:15.740So we maybe found out a little in February.00:20:15.740 –> 00:20:20.840Anyhow, so if you’ve got something like that going on, there is somesituations where it’s00:20:20.840 –> 00:20:26.340very time sensitive and you may need to go directly to the IRS or the taxadvocate office,00:20:26.340 –> 00:20:30.180which is where we’re going to see if we can get someone to help address thissituation00:20:30.180 –> 00:20:34.660before they start doing liens, levies, seizures, and all the other nastythings that they put00:20:34.660 –> 00:20:37.020in their love letters to tell us about.00:20:37.020 –> 00:20:41.020So, but again, it, the, you know, the IRS is there to be dealt with.00:20:41.020 –> 00:20:43.660You do not want to ignore the IRS.00:20:43.660 –> 00:20:47.140That’s the one thing I want to point out is if you’re getting love letters, ifyou’ve00:20:47.140 –> 00:20:52.340got tax issues, if you have a situation, you do not want to ignore thembecause if you00:20:52.340 –> 00:20:57.540try to do that, then you have a situation where you’re like, oh my gosh, Ialready told00:20:57.540 –> 00:20:59.620the IRS about why are they still collecting?00:20:59.620 –> 00:21:00.620Why is this happening?00:21:00.620 –> 00:21:04.420You know, I have another one that came in less than Friday and she’s beentrying to00:21:04.420 –> 00:21:06.820get 2019 refund.00:21:06.820 –> 00:21:11.500And when we went through the documents, we found out that there might not be arefund00:21:11.500 –> 00:21:15.820for the year of 2019 because of the way the money was rolled from 2018.00:21:15.820 –> 00:21:17.580If 2018 doesn’t have it.00:21:17.580 –> 00:21:22.900So it’s not always black and white and the IRS isn’t going to send backsomething to00:21:22.900 –> 00:21:23.900you.00:21:23.900 –> 00:21:28.140It just says, well, you know, we, we didn’t in her letter, it says we’reworking on it.00:21:28.140 –> 00:21:31.300The next letter says, well, there’s, you know, we’re not refunding the money,but there’s00:21:31.300 –> 00:21:32.640no explanation.00:21:32.640 –> 00:21:33.860Why are you not refunding?00:21:33.860 –> 00:21:35.540Why did you only give us this?00:21:35.540 –> 00:21:37.160What’s the correction?00:21:37.160 –> 00:21:42.780We have we wish there was a little bit more communication on that aspect sothat they00:21:42.780 –> 00:21:45.860could tell us why do we have this situation?00:21:45.860 –> 00:21:46.860Where’s it going?00:21:46.860 –> 00:21:48.120But you know what?00:21:48.120 –> 00:21:53.020It’s our job to make sure that we to explain to the IRS, not the other wayaround, which00:21:53.020 –> 00:21:55.500kind of seems sort of silly, but it is true.00:21:55.500 –> 00:21:58.120The IRS is not there to make the explanation.00:21:58.120 –> 00:22:03.980It’s going to be us explaining to the IRS why we think this is wrong.00:22:03.980 –> 00:22:05.340Document why it’s wrong.00:22:05.340 –> 00:22:08.500Figure out what the situation might be and then take it from there.00:22:08.500 –> 00:22:12.940If you don’t do that, the IRS is going to win the case no matter what, right?00:22:12.940 –> 00:22:16.000Because it’s your job to prove that the IRS is incorrect.00:22:16.000 –> 00:22:19.340It’s not the IRS’s job to prove that they are correct.00:22:19.340 –> 00:22:22.020It’s kind of like you’re guilty before you’re proven innocent.00:22:22.020 –> 00:22:23.020That’s the way I look at it.00:22:23.020 –> 00:22:25.500Now I’m not sure the IRS may feel a different way.00:22:25.500 –> 00:22:29.500And you know, just the point of thing, when you deal with the IRS on thephone, remember,00:22:29.500 –> 00:22:34.860you’re not dealing, you’re dealing with a human being, not, um, and most ofthe time00:22:34.860 –> 00:22:39.020I have found that many of those that are, um, I don’t want to say humanbecause they00:22:39.020 –> 00:22:43.360are human beings, but they’re only going by what they can see in a computerand the computer,00:22:43.360 –> 00:22:44.820they only have so much access.00:22:44.820 –> 00:22:48.900So, you know, again, if you’ve been dealing with an issue for a period of thetax advocate00:22:48.900 –> 00:22:50.780office is the way to go.00:22:50.780 –> 00:22:52.200Seriously, they are great.00:22:52.200 –> 00:22:55.740The Tennessee tax advocate office does an awesome job.00:22:55.740 –> 00:22:59.260Um, we probably always have one or two cases with them.00:22:59.260 –> 00:23:04.220Um, and, and 90% of the chance, one way or the other, they get it resolved.00:23:04.220 –> 00:23:07.380But sometimes it may come down to where we were wrong.00:23:07.380 –> 00:23:12.060The information we were providing to them didn’t balance or match with the IRSshowed.00:23:12.060 –> 00:23:16.620So therefore they’re sitting there going, Oh wait, yeah, that’s right.00:23:16.620 –> 00:23:20.700We didn’t have this or that rollover didn’t happen because of this reason, orthey did00:23:20.700 –> 00:23:24.180a conversion and we didn’t know about all those come into play.00:23:24.180 –> 00:23:25.180Right?00:23:25.180 –> 00:23:29.100So again, just really important to make sure you have good documentation toexplain why00:23:29.100 –> 00:23:31.980you think you’re in the right with the IRS.00:23:31.980 –> 00:23:34.660If you need help with that, you can always call the show right now.00:23:34.660 –> 00:23:35.660615-737-9986.00:23:35.660 –> 00:23:44.340615-737-9986 is the number here in the studio.00:23:44.340 –> 00:23:47.580And we’re going to be taking another quick break and then we can go to thephone lines00:23:47.580 –> 00:23:49.580or the email, which is Friday@dtrfriday.com.00:23:49.580 –> 00:23:55.340If you just want to text or email something over real quick, you can do that,but we’re00:23:55.340 –> 00:23:57.020going to take a break and we get back.00:23:57.020 –> 00:24:00.860We’re going to answer more of your questions, talk a little bit about maybesome of the00:24:00.860 –> 00:24:05.420things that you might want to consider before you send off your tax return andmaking sure00:24:05.420 –> 00:24:07.660you’ve got all the documentation.00:24:07.660 –> 00:24:09.980Nothing worse than having to amend a tax return.00:24:09.980 –> 00:24:15.340For one, it could take the IRS almost six months longer to get you whateveryour refund00:24:15.340 –> 00:24:18.020or whatever your situation is, then it would be immediately.00:24:18.020 –> 00:24:21.380All right, we’re going to be right back with the Dr. Friday Show.00:24:21.380 –> 00:24:28.420Alrighty, we are back here live from the show.00:24:28.420 –> 00:24:38.100And if you want to join us, you can 615-737-9986.00:24:38.100 –> 00:24:45.060615-737-9986 is the number here in the studio.00:24:45.060 –> 00:24:49.220So if you’ve got questions or you want to just maybe give a, maybe something’scome00:24:49.220 –> 00:24:52.860up and you’ve like, Oh wait, this would be good for people to know.00:24:52.860 –> 00:24:55.140Maybe something you’ve experienced.00:24:55.140 –> 00:24:59.940You know, we have constantly have situations that we’re all going through.00:24:59.940 –> 00:25:05.100Again, just got an email this morning, a 2020 tax return that we filed anamendment back00:25:05.100 –> 00:25:06.980in October of 2021.00:25:06.980 –> 00:25:11.780The IRS now is trying to do nasty grams and we’ve been responding for twoyears on.00:25:11.780 –> 00:25:16.700So again, this will be a case that will be opened up with, you know, taxadvocate because00:25:16.700 –> 00:25:22.020it’s the only way I can usually get somebody in the IRS to be able to help usdo what we00:25:22.020 –> 00:25:23.020need to do.00:25:23.020 –> 00:25:25.220Because we’ve filed everything that we can file.00:25:25.220 –> 00:25:29.540But back at that time I wasn’t able to e-file amended return.00:25:29.540 –> 00:25:32.980So it was done by mail and according to the IRS, they did receive it.00:25:32.980 –> 00:25:34.260So we don’t know why.00:25:34.260 –> 00:25:38.920I never do really understand why sometimes it just seems to go in circles.00:25:38.920 –> 00:25:43.720So if you have one of those situations and you need some help, we can help youdo that.00:25:43.720 –> 00:25:47.060You know, but we will, you know, keep moving forward.00:25:47.060 –> 00:25:50.660It’s, I mean, once you get a good person, they’ll resolve the issue andeverything will00:25:50.660 –> 00:25:51.660move forward.00:25:51.660 –> 00:25:55.340But until then we have to deal with whatever and collections.00:25:55.340 –> 00:26:00.240Keep in mind, you could be talking to somebody on accounts and they could bedoing everything00:26:00.240 –> 00:26:02.180they can to help resolve it.00:26:02.180 –> 00:26:06.340But yet collections could be sending you love letters saying that they’recollecting one00:26:06.340 –> 00:26:09.060hand does not communicate with the other hand.00:26:09.060 –> 00:26:10.060You get lucky.00:26:10.060 –> 00:26:13.880And sometimes the person handling the case will put a hold on the case untilthey get00:26:13.880 –> 00:26:15.860some sort of resolution.00:26:15.860 –> 00:26:17.340But that doesn’t always happen.00:26:17.340 –> 00:26:21.220So whenever you’re talking to a revenue officer and you’re dealing withsomething like that,00:26:21.220 –> 00:26:23.440ask them to put a hold on the case.00:26:23.440 –> 00:26:27.120It’s very important because last thing you want is collections still thinkingthere’s00:26:27.120 –> 00:26:32.540a case out there and you’re trying to get resolution on the other hand.00:26:32.540 –> 00:26:36.580So you know, again, it’s really important that you deal with each of theselove letters00:26:36.580 –> 00:26:41.060that come in because you know, it’s not, it’s, it’s not always, and you couldbe dealing00:26:41.060 –> 00:26:42.380with something for years.00:26:42.380 –> 00:26:43.820It’s not something that’s just going to happen.00:26:43.820 –> 00:26:45.580Oh, wait, I just responded.00:26:45.580 –> 00:26:47.460That should take care of the problem.00:26:47.460 –> 00:26:51.020Sometimes they’ll send you a letter saying they need another 45 days, another60 days.00:26:51.020 –> 00:26:54.540And then after that, they send back saying, well, you know, we didn’t likethis amended00:26:54.540 –> 00:26:58.620return because you didn’t respond to this part of it, but you don’t understandwhat00:26:58.620 –> 00:26:59.620they’re saying sometimes.00:26:59.620 –> 00:27:03.240I mean, I do taxes and for almost what, 28 years.00:27:03.240 –> 00:27:05.980And sometimes I look at the letters and say, this doesn’t make sense.00:27:05.980 –> 00:27:06.980What do you mean?00:27:06.980 –> 00:27:07.980You know, this doesn’t balance.00:27:07.980 –> 00:27:10.900It’s specifically right here on, on the situation.00:27:10.900 –> 00:27:15.660So that being said, just making sure you have all your information.00:27:15.660 –> 00:27:20.180Again, documentation is the key to all these conversations.00:27:20.180 –> 00:27:22.300And then you have the ability to get resolution.00:27:22.300 –> 00:27:26.900So if you need help, or if you know someone that does right now, though, we’reall concentrating00:27:26.900 –> 00:27:35.020on our 2023, or maybe you’re even done with 23 and you’re prepping orpreparing for 24.00:27:35.020 –> 00:27:37.740We have two years left.00:27:37.740 –> 00:27:42.400And so that’s why it’s so important that this election, no matter how you wantto vote,00:27:42.400 –> 00:27:46.460just make sure it’s going to go the direction, you know, tax code that we knowtoday, the00:27:46.460 –> 00:27:53.90012%, the 22, the 24 will expire at the end of 2025, unless otherwise told.00:27:53.900 –> 00:27:58.200So, you know, keep in mind that if you like the lower tax rates, maybe you’retalking00:27:58.200 –> 00:28:02.780to someone or you’re dealing with someone that you, you know, when you’relooking at00:28:02.780 –> 00:28:07.020the candidates, are they going to be dealing with the issues you want to gowith, whatever00:28:07.020 –> 00:28:10.340that is, I’m far from a politician.00:28:10.340 –> 00:28:17.060Really what I want is just to basically be able to live my life, do, go withwhere you00:28:17.060 –> 00:28:18.860want to go and do what you want to do.00:28:18.860 –> 00:28:23.500But it’s important that we keep taxes low so that people can actually keepsome of their00:28:23.500 –> 00:28:26.220money with inflation and higher taxes.00:28:26.220 –> 00:28:30.300That means even less money in our pockets to try to pay the bills, keep themortgage,00:28:30.300 –> 00:28:31.940keep the water on all that good stuff.00:28:31.940 –> 00:28:38.780So if you have questions concerning any of that, also individuals that aredoing, again,00:28:38.780 –> 00:28:40.380business owners do a ton of you guys.00:28:40.380 –> 00:28:43.900So just trying to put some thoughts in your head a little bit.00:28:43.900 –> 00:28:47.380Remember you have your gross business receipts that are due now.00:28:47.380 –> 00:28:50.900I think basically the deadline is April 15th.00:28:50.900 –> 00:28:57.220And on those gross receipts, you have a situation where you may not oweanything, but the renewal00:28:57.220 –> 00:28:59.260fee, which is the $22.00:28:59.260 –> 00:29:05.300If you have less than 3000 or less than a hundred thousand in any one countyor situation,00:29:05.300 –> 00:29:11.340then you can just click that button and it will just automatically calculatethe money.00:29:11.340 –> 00:29:17.260So I mean, some of my clients’ cases, I could have somebody that has a milliondollars in00:29:17.260 –> 00:29:22.020sales, but they have 40 counties that they work in and they’re licensed, andit’s just00:29:22.020 –> 00:29:23.300like contractors and things.00:29:23.300 –> 00:29:29.220So they may not owe any business tax in Tennessee, but they do have to filethose to actually00:29:29.220 –> 00:29:30.820keep their permits.00:29:30.820 –> 00:29:33.740Auto sales, all of you have that same situation.00:29:33.740 –> 00:29:38.020So you just want to make sure that you have that going on.00:29:38.020 –> 00:29:42.700And so that way you don’t have to worry about dealing with that issue.00:29:42.700 –> 00:29:48.260So either way you got that happening, but make sure you file those and they’redue now,00:29:48.260 –> 00:29:50.100guys, just go out there and get them filed.00:29:50.100 –> 00:29:52.820All right, we got Linda has a tax question.00:29:52.820 –> 00:29:53.820Hey, Linda.00:29:53.820 –> 00:29:54.820Hi, Dr. Friday.00:29:54.820 –> 00:29:57.820Thank you for taking my call.00:29:57.820 –> 00:29:59.380Thanks for calling.00:29:59.380 –> 00:30:00.380Yes.00:30:00.380 –> 00:30:06.700I was getting started early with my taxes and every time things would come in,I was00:30:06.700 –> 00:30:14.140sticking them in a folder and I’m putting in my 1099 INTs.00:30:14.140 –> 00:30:18.580And I realized that two of them had my dad’s name on them.00:30:18.580 –> 00:30:21.020They were his bank account.00:30:21.020 –> 00:30:25.020He passed away in November of 22.00:30:25.020 –> 00:30:26.34022.00:30:26.340 –> 00:30:27.700Okay.00:30:27.700 –> 00:30:33.380But I mean, you may want to go back for one, you’re going to put it on yoursbecause I’m00:30:33.380 –> 00:30:36.020assuming you received the interest.00:30:36.020 –> 00:30:38.820Obviously dad couldn’t.00:30:38.820 –> 00:30:43.580Second part with it, you might want to go back to those locations becausesomehow they00:30:43.580 –> 00:30:49.180didn’t get the date of passing correct because 2022, he would have hadinterest from January00:30:49.180 –> 00:30:50.580to November or whatever.00:30:50.580 –> 00:30:54.780And then all of 23 would have been under you or his estate.00:30:54.780 –> 00:30:59.020Was it POD to you at the time of his passing paid on death or did it go to histrust or00:30:59.020 –> 00:31:00.020estate?00:31:00.020 –> 00:31:03.940One of them, it paid to me.00:31:03.940 –> 00:31:12.460And then the other one, they could not find, there was a bunch of CDs and theycould not00:31:12.460 –> 00:31:16.340find the two of the CDs that he had done that.00:31:16.340 –> 00:31:22.260But so, um, but yet they sent you an interest.00:31:22.260 –> 00:31:26.940They sent me checks and the interest was in the check.00:31:26.940 –> 00:31:29.140And so I was surprised by that.00:31:29.140 –> 00:31:36.820Um, yeah, I mean, so again, just for the paper trail purposes, you know, inall honesty,00:31:36.820 –> 00:31:42.180you don’t, I mean, cause the IRS may be looking at a, I mean, at a deceasedindividual, they’re00:31:42.180 –> 00:31:45.820going to see that come up under his social security number, which has alreadybeen turned00:31:45.820 –> 00:31:46.820off.00:31:46.820 –> 00:31:51.060So, um, you know, you’re going to do the right thing and put it on yours justbecause eventually00:31:51.060 –> 00:31:53.500it will circle around back to you.00:31:53.500 –> 00:31:58.540But it would be nice to have the form in, I mean, in the right name, just soyou have00:31:58.540 –> 00:32:00.020the proper documents.00:32:00.020 –> 00:32:04.100Cause in theory, the IRS has no idea you received that money.00:32:04.100 –> 00:32:08.940Um, even though, you know, since you do know that you did receive it, then Iwould just00:32:08.940 –> 00:32:11.620contact them and say, you guys have this in the wrong place.00:32:11.620 –> 00:32:12.700Reissue.00:32:12.700 –> 00:32:16.740You can move forward with filing your taxes that cause I’m assuming it wouldmake no dollar00:32:16.740 –> 00:32:19.780difference, but I would try to get them to reissue them.00:32:19.780 –> 00:32:20.780It may be impossible.00:32:20.780 –> 00:32:25.580But sometimes some of those companies just will not correct something evenwhen they’re00:32:25.580 –> 00:32:26.580in the wrong.00:32:26.580 –> 00:32:27.580Yeah.00:32:28.580 –> 00:32:29.580Okay.00:32:29.580 –> 00:32:31.860It’s not going to be your air.00:32:31.860 –> 00:32:35.740Cause if you ever had, if it ever comes back, you’ve got on your tax returnand you’re,00:32:35.740 –> 00:32:42.180you’ve done the right thing, but it would be perfect if they would justcorrect it.00:32:42.180 –> 00:32:43.540Yeah.00:32:43.540 –> 00:32:45.940Um, yes.00:32:45.940 –> 00:32:59.180So the one was definitely closed out in like April of 23, but it’s okay.00:32:59.180 –> 00:33:02.100I’m just going to put them on my taxes for right now.00:33:02.100 –> 00:33:06.220And I will contact them and try to get them to put my name on the 10 99.00:33:06.220 –> 00:33:07.220Right.00:33:07.220 –> 00:33:10.940As long as you, I mean, let me clarify, Linda, you want to make sure you didreceive that00:33:10.940 –> 00:33:15.340money that they are just sending you something that you have no idea, becausethen I would00:33:15.340 –> 00:33:20.140hold off and make sure, because you said they couldn’t find some of the CDs,but you know,00:33:20.140 –> 00:33:24.300they may turn around and 10 99 you for something you didn’t receive or, youknow, they sent00:33:24.300 –> 00:33:25.860it to your father theoretically.00:33:25.860 –> 00:33:30.660But, um, so just, I mean, just double check, but if, as long as you know, youphysically00:33:30.660 –> 00:33:36.220received or the estate received, hopefully through you, that information, thengo ahead00:33:36.220 –> 00:33:40.860and put it on your return and get it corrected if you can, like I said, butif, if you don’t00:33:40.860 –> 00:33:45.380think you received the money, do not put that on your return because they needto correct00:33:45.380 –> 00:33:46.380whatever they do.00:33:46.380 –> 00:33:49.380You know, I don’t want you paying taxes on money you never received.00:33:49.380 –> 00:33:50.380Right.00:33:50.380 –> 00:33:52.220I know I did receive it.00:33:52.220 –> 00:33:55.700The total of the interest was under $200.00:33:55.700 –> 00:33:56.820Okay.00:33:56.820 –> 00:33:59.060So we’re not looking at a huge effect.00:33:59.060 –> 00:34:02.820And as long as you know, you received it, then yeah, there’s no, there’snothing wrong00:34:02.820 –> 00:34:08.180with putting it on your return just the ways you should, but just wanted tomake sure that00:34:08.180 –> 00:34:11.820you weren’t just picking up interest that went to the estate or something.00:34:11.820 –> 00:34:12.820Yes.00:34:12.820 –> 00:34:13.820Thank you.00:34:13.820 –> 00:34:17.060I am happy to just put it on mine and not have to file for him.00:34:17.060 –> 00:34:20.580No, they won’t accept a return in the next year.00:34:20.580 –> 00:34:23.620I mean, sometimes we do, but they’ll, they could send it back.00:34:23.620 –> 00:34:28.380I’ve had issues with that in the year after sometimes people die in Decemberand obviously00:34:28.380 –> 00:34:31.900things go into the new year, but it’s more work than you think.00:34:31.900 –> 00:34:37.660So just put it under you and don’t bring back that tax return would be my, mytwo cents.00:34:37.660 –> 00:34:38.660Thank you very much.00:34:38.660 –> 00:34:39.660No problem.00:34:39.660 –> 00:34:40.660Thanks.00:34:40.660 –> 00:34:41.660Appreciate you.00:34:41.660 –> 00:34:42.660All right.00:34:42.660 –> 00:34:43.660That was a great question.00:34:43.660 –> 00:34:49.220And again, even though in Linda’s case is not, but sometimes we have a Statesor trust00:34:49.220 –> 00:34:54.420and the money might’ve went into those, but they should never have in the newyear.00:34:54.420 –> 00:35:00.900There should never have been a 10 99 under a deceased individual, unless ithappened00:35:00.900 –> 00:35:04.900where maybe they sent something in December and it actually didn’t passthrough or didn’t00:35:04.900 –> 00:35:06.740get posted till January.00:35:06.740 –> 00:35:10.540Sometimes I’ve had that, but most of it, if you passed away in November, thereshould00:35:10.540 –> 00:35:16.860not have been anything issued to the deceased individual in in January orFebruary or whatever00:35:16.860 –> 00:35:22.180April of the next year, because the inherited individual should have gotten inwhich this00:35:22.180 –> 00:35:24.260company is completely wrong.00:35:24.260 –> 00:35:27.500But but you don’t want to hold up your taxes sometimes too.00:35:27.500 –> 00:35:32.940And I, like I said even with death certificates and power of attorney, I’vehad a challenge00:35:32.940 –> 00:35:38.060getting some of those organizations to be willing to correct themselvesbecause it’s00:35:38.060 –> 00:35:39.860more work I guess, than it’s supposed to be.00:35:39.860 –> 00:35:40.860All right.00:35:40.860 –> 00:35:41.940We’re going to take our last break here.00:35:41.940 –> 00:35:45.860So if you’ve been holding your breath and you’re not too sure what you want todo, or00:35:45.860 –> 00:35:50.020you’re just confused or you’re like, Oh man, I really like to know the answer,but I don’t00:35:50.020 –> 00:35:51.180know if I want to call a radio.00:35:51.180 –> 00:35:53.060I totally understand.00:35:53.060 –> 00:36:05.100But if you do want to join us, 615-737-9986, 615-737-9986 number here in thestudio.00:36:05.100 –> 00:36:09.300And we’re going to be right back with the Dr. Friday show.00:36:09.300 –> 00:36:16.900All righty guys, we’re at the last part of the show.00:36:16.900 –> 00:36:27.740So if you want to join the show now would be the time 615-737-9986,615-737-9986 taking00:36:27.740 –> 00:36:31.900your calls, talking about my favorite subject, at least taxes.00:36:31.900 –> 00:36:33.120It is that season guys.00:36:33.120 –> 00:36:38.920We have about, I don’t know, less than three weeks before you either need tofile an extension00:36:38.920 –> 00:36:40.840or get your taxes filed.00:36:40.840 –> 00:36:43.100It’s going to be crazy right here.00:36:43.100 –> 00:36:49.140We have a very tight schedule and it just seems like days are flying by, butmake sure00:36:49.140 –> 00:36:53.100that if you cannot finish your tax return, I’m going to start telling you nowyou need00:36:53.100 –> 00:36:55.180to file an extension.00:36:55.180 –> 00:36:57.300Also you need to be dealing with business owners.00:36:57.300 –> 00:37:02.460Again, annual reports, gross business receipts, F&E, all of those are requirednow pretty00:37:02.460 –> 00:37:05.740much just get it done, pay the fee, get it done.00:37:05.740 –> 00:37:10.220And that way you don’t have to worry about getting things reinstated, dealingwith other00:37:10.220 –> 00:37:14.060problems when you’re busy and just trying to get other things done.00:37:14.060 –> 00:37:15.060You know what I mean?00:37:15.060 –> 00:37:16.060It’s just hard.00:37:16.060 –> 00:37:20.580So you just want to make sure that when you’re dealing with your tax issue, doyour very00:37:20.580 –> 00:37:21.580best.00:37:21.580 –> 00:37:25.220Make sure if you have questions, you know, find someone that you can ask thequestion.00:37:25.220 –> 00:37:26.780Don’t just guess.00:37:26.780 –> 00:37:31.580And probably one of the emails that came in, and I get this question a ton.00:37:31.580 –> 00:37:36.000One of the biggest questions comes in, it just says, can I file single head ofhousehold00:37:36.000 –> 00:37:37.820or married filing separately?00:37:37.820 –> 00:37:38.820What’s my choices?00:37:38.820 –> 00:37:40.860And you do need to consult with a tax person.00:37:40.860 –> 00:37:45.620It’s very important because if you make the wrong choice, one of the biggestreason people00:37:45.620 –> 00:37:48.860want head of household is because they get a much better tax deduction.00:37:48.860 –> 00:37:52.260And that is not always going to be the number one situation.00:37:52.260 –> 00:37:57.260All right, Vegas, let’s see if we can get James on the line.00:37:57.260 –> 00:37:59.460Hey James, what can I do for you?00:37:59.460 –> 00:38:02.900Hey, Dr. Friday, thanks for taking my call.00:38:02.900 –> 00:38:04.900We spoke one time before on the phone.00:38:04.900 –> 00:38:08.700I called your office actually, and you were very gracious and talked to me.00:38:08.700 –> 00:38:10.300I have a question.00:38:10.300 –> 00:38:11.780This concerns my wife.00:38:11.780 –> 00:38:20.300She has sort of like a joint savings account at a bank, and it was opened withher and00:38:20.300 –> 00:38:23.420her mother’s name on it.00:38:23.420 –> 00:38:27.540And I didn’t really know like about statements.00:38:27.540 –> 00:38:31.220I was never given like a 1099 or anything in the past.00:38:31.220 –> 00:38:34.820It’s been about five years since she’s been a permanent resident of the UnitedStates.00:38:34.820 –> 00:38:37.060She moved here from Mexico.00:38:37.060 –> 00:38:43.340And I think the origin of the account is, can I say what bank it is?00:38:43.340 –> 00:38:44.340I don’t know.00:38:44.340 –> 00:38:50.820I think it’s in Mexico, but it’s got some money in it.00:38:50.820 –> 00:38:56.940Her interest earned on it was about $750 or so for the year.00:38:56.940 –> 00:39:02.980And I’m curious, since it was sent to her, to our address with her name on itand her00:39:02.980 –> 00:39:07.340mother’s name, how do we handle that?00:39:07.340 –> 00:39:09.780I mean, because she’s a W-2 employee.00:39:09.780 –> 00:39:11.700How do we deal with that?00:39:11.700 –> 00:39:13.700You’ve got two things you need to deal with.00:39:13.700 –> 00:39:18.020One would be whoever’s name or social security number is on that statement isthe person00:39:18.020 –> 00:39:23.580that needs to be claiming it, unless she wants the 1099 interest to the otherperson, which00:39:23.580 –> 00:39:24.980means you’d have to issue that.00:39:24.980 –> 00:39:26.380And it’s a lot harder than you think.00:39:26.380 –> 00:39:31.100So if her name is first, your wife’s name is first on the paper, it’s mostlikely that’s00:39:31.100 –> 00:39:34.620who they have listed as the person that’s responsible.00:39:34.620 –> 00:39:38.380Second, we also have what’s called F-bar, your financial.00:39:38.380 –> 00:39:43.980And if there’s more than $10,000 in the conversion in this account, and thisaccount was opened00:39:43.980 –> 00:39:47.820overseas, now it may have been relocated here to the United States.00:39:47.820 –> 00:39:52.300So I don’t know this, but anyone that does have a bank account overseas, ithas more00:39:52.300 –> 00:39:56.820than 10,000 in any one day has to file an F-bar.00:39:56.820 –> 00:39:59.060And that is due pretty quickly here.00:39:59.060 –> 00:40:03.380Most of the time we file them with the tax return, but there is a F-bar siteyou can00:40:03.380 –> 00:40:04.980go to and file it separately.00:40:04.980 –> 00:40:08.900That being said, so James, you need to look at the statement and first findout if your00:40:08.900 –> 00:40:13.820wife or her mother’s name is, or the social security number is on it.00:40:13.820 –> 00:40:16.540If it’s your wife’s, I mean, you haven’t received love letters.00:40:16.540 –> 00:40:22.060So I’m going to assume in the past, at least this hasn’t become an issue asfar as under00:40:22.060 –> 00:40:26.740reporting, you know, and then I’d be more concerned with F-bar because if youdon’t00:40:26.740 –> 00:40:31.580file F-bar, they can take 50% of the money in that bank as a penalty.00:40:31.580 –> 00:40:34.420It’s a very drastic penalty.00:40:34.420 –> 00:40:39.380So you might want to talk to a tax person if you’re not sure, but it’simportant to00:40:39.380 –> 00:40:44.180first find out if mom’s responsible for this or your wife, that would be thefirst question.00:40:44.180 –> 00:40:48.420And then from there, making sure that it’s being handled properly in theUnited States,00:40:48.420 –> 00:40:53.300since they have relocated here and now are living here in the United States.00:40:53.300 –> 00:40:57.860I think the account was originally open sort of as a nest egg or some kind ofan endowment00:40:57.860 –> 00:41:03.620about 10 years ago, and it was like 40,000, but it’s grown to about 45,000,you know,00:41:03.620 –> 00:41:04.620over the years.00:41:04.620 –> 00:41:05.620So, yeah.00:41:05.620 –> 00:41:10.100So if it, I mean, if it’s, the biggest question is, has it been relocated hereto the United00:41:10.100 –> 00:41:15.060States if they’re all living here, or if, was it open, even if they lived overin Mexico,00:41:15.060 –> 00:41:16.900was it open in the United States?00:41:16.900 –> 00:41:18.740Then you don’t have to worry about F-bar.00:41:18.740 –> 00:41:25.260If it was open in Mexico or someplace else, in, even though it’s a nationalbank, theoretically,00:41:25.260 –> 00:41:29.260then that bank, wherever it was open is now not on US soil.00:41:29.260 –> 00:41:32.620And we have to talk about that on a tax return under F-bar.00:41:32.620 –> 00:41:34.460We have to tell them about it.00:41:34.460 –> 00:41:39.900So either mom or daughter, someone needs to be, get the answer to that first.00:41:39.900 –> 00:41:43.900Was it actually open in a US bank account, even though they lived overseas,possibly00:41:43.900 –> 00:41:49.180they’re in Mexico, whatever, or was it open in Mexico, transferred to a USbank, or is00:41:49.180 –> 00:41:54.260it actually still on a foreign bank that they can access through a US bank?00:41:54.260 –> 00:41:57.300I know I’m asking a lot of questions, but it’s kind of important, James, toget to the00:41:57.300 –> 00:41:58.300bottom line of that.00:41:58.300 –> 00:41:59.300Yeah.00:41:59.300 –> 00:42:05.140I think Wells Fargo operates in Mexico and I, and her mother lives in Mexicocity.00:42:05.140 –> 00:42:10.940So it could be that it’s just been sort of maybe the, the information’s beingsent to00:42:10.940 –> 00:42:13.500the, you know, the US address.00:42:13.500 –> 00:42:18.340And if this is mom’s money in a foreign bank and mom is a foreign citizen,then that’s00:42:18.340 –> 00:42:19.620a whole different conversation.00:42:19.620 –> 00:42:25.300She doesn’t have to file in the US, but if somehow the daughter, the now wifeliving00:42:25.300 –> 00:42:30.300here in the United States, it’s in her name, that opens F-bar.00:42:30.300 –> 00:42:34.620And even if she, even if she consider it’s mom, if she’s got her name on thataccount,00:42:34.620 –> 00:42:37.500we have to do F-bar no matter what.00:42:37.500 –> 00:42:38.500Okay.00:42:38.500 –> 00:42:39.500I’m going to look into that.00:42:39.500 –> 00:42:40.500Thank you so much.00:42:40.500 –> 00:42:41.500No problem.00:42:41.500 –> 00:42:42.500Thanks for the call.00:42:42.500 –> 00:42:43.500All right, really quick.00:42:43.500 –> 00:42:44.980Let’s see if we can hit Tom in Nashville.00:42:44.980 –> 00:42:46.340We got about three minutes.00:42:46.340 –> 00:42:49.660Talk fast, Tom.00:42:49.660 –> 00:42:51.060I think I can do that.00:42:51.060 –> 00:42:54.180The company I worked for last year folded up in November.00:42:54.180 –> 00:42:58.420Somehow my, my exemptions got filed, married two dependents.00:42:58.420 –> 00:42:59.620I did not see it.00:42:59.620 –> 00:43:03.620I ended up owing $4,500 to IRS.00:43:03.620 –> 00:43:07.300I have 2,500 saved.00:43:07.300 –> 00:43:12.060And of course I draw full social security and because I can and my age, but Idon’t00:43:12.060 –> 00:43:13.940pay taxes on it.00:43:13.940 –> 00:43:19.300So my question would be, is it better to file an extension and get the moneytogether or00:43:19.300 –> 00:43:27.260send them 2,500 and hope that I can accomplish the other 2,300 or whatever itis, but now00:43:27.260 –> 00:43:33.260in the end of the year and how long before they say, Oh, you got to go onpayments.00:43:33.260 –> 00:43:38.500Well, bottom line is your best bet would be to file the taxes, pay what youcan pay, and00:43:38.500 –> 00:43:43.660then maybe even set aside, maybe not pay all 25, maybe pay 1,500, set up abank account00:43:43.660 –> 00:43:46.820and set up payment plan where they can auto draft it.00:43:46.820 –> 00:43:49.020It gives you five years to pay it off.00:43:49.020 –> 00:43:51.820And that would just be a horrible little payment and you don’t have to worry.00:43:51.820 –> 00:43:53.220You can always pay it faster.00:43:53.220 –> 00:43:54.220Okay.00:43:54.220 –> 00:43:56.460You can always throw more money at it as you go.00:43:56.460 –> 00:43:59.860You don’t have to wait and make the payments, but I’m just saying that waythey don’t come00:43:59.860 –> 00:44:03.860after you because without payment plan, they can come back and take money outof your bank00:44:03.860 –> 00:44:04.860and anything else.00:44:04.860 –> 00:44:10.980That’s what I wanted because I mean, I can probably come up with a thousandsay in 9000:44:10.980 –> 00:44:13.940days and the rest of it, another 90 days.00:44:13.940 –> 00:44:14.940That puts me in.00:44:14.940 –> 00:44:18.100You could probably get away with that if you actually did, but they onlyreally give you00:44:18.100 –> 00:44:19.860a window of 90 days.00:44:19.860 –> 00:44:23.860But theoretically, if you can send them 25, it’s going to take them 30 or 40days to get00:44:23.860 –> 00:44:25.100you the next love letter.00:44:25.100 –> 00:44:29.140If you throw another thousand at them, it doesn’t mean they won’t stopcollections,00:44:29.140 –> 00:44:30.900but you’ll be at a lower dollar amount.00:44:30.900 –> 00:44:35.060Most scenarios you say, call them and say, Hey, in 90 days I’ll have anotherthousand.00:44:35.060 –> 00:44:37.660They may put a hold on it and just get it paid in full.00:44:37.660 –> 00:44:42.460And if you know, there is a fee for setting up payments, but it’s not realhigh, right?00:44:42.460 –> 00:44:43.460Correct.00:44:43.460 –> 00:44:45.380And if you do it online, I think the fees like 30 bucks.00:44:45.380 –> 00:44:46.380I mean, it’s pretty minimal.00:44:46.380 –> 00:44:47.380Okay.00:44:47.380 –> 00:44:48.380Well, I like that idea.00:44:48.380 –> 00:44:49.380I like that idea.00:44:49.380 –> 00:44:52.180Put the money, it’ll go a little interest on it too.00:44:52.180 –> 00:44:53.180Right.00:44:53.180 –> 00:44:56.660Not much, but at least I can, and I can just add to it.00:44:56.660 –> 00:45:00.860And then if I get enough by the end of the year, just pay it off.00:45:00.860 –> 00:45:01.860You got it.00:45:01.860 –> 00:45:06.020You know, I’m not going to say theoretically it’s best to pay it as fast aspossible, less00:45:06.020 –> 00:45:09.780penalties, less interest, but just go for it and take it from there.00:45:09.780 –> 00:45:10.780But you’ve got the right idea.00:45:10.780 –> 00:45:11.780All right.00:45:11.780 –> 00:45:12.780That sounds like a plan.00:45:12.780 –> 00:45:13.780Thank you then.00:45:13.780 –> 00:45:14.780Okay.00:45:14.780 –> 00:45:15.780No problem.00:45:15.780 –> 00:45:16.780Thanks bud.00:45:16.780 –> 00:45:17.780All right.00:45:17.780 –> 00:45:19.700We’re down to the last minute here.00:45:19.700 –> 00:45:22.800So let’s talk about what you can do as far as going on the website.00:45:22.800 –> 00:45:27.500You can look up drfriday.com, d r f r i d a y.com.00:45:27.500 –> 00:45:32.660If you want to find out who I am, if you want to reach us at our office, Iwill tell you00:45:32.660 –> 00:45:39.340we’re running a little slow on the phones, but 615-367-0819.00:45:39.340 –> 00:45:44.140615-367-0819.00:45:44.140 –> 00:45:49.300You can also email Friday at drfriday.com.00:45:49.300 –> 00:45:53.660Friday f r i d a y at d r f r i d a y.00:45:53.660 –> 00:45:55.020Lots of Friday in that.00:45:55.020 –> 00:45:56.020Dot com.00:45:56.020 –> 00:45:59.020That is my first name for all of you that may just tuned in and you’re like,cool.00:45:59.020 –> 00:46:00.540And the heck is this Friday?00:46:00.540 –> 00:46:01.900What’s she talking about?00:46:01.900 –> 00:46:03.300Yes, that is my first name.00:46:03.300 –> 00:46:06.300My parents were a bit fun loving and there you go.00:46:06.300 –> 00:46:09.060They decided to make their eighth child’s name Friday.00:46:09.060 –> 00:46:11.900So that makes it a pretty cool name now that I’m an adult.00:46:11.900 –> 00:46:15.380But if you’ve got tax questions, you need help, you want to deal with someissues.00:46:15.380 –> 00:46:19.500I mean, at this point I will tell you we’re not taking in any new clients.00:46:19.500 –> 00:46:24.300We can help with extensions and then we can probably get you in after theinitial tax00:46:24.300 –> 00:46:25.300season.00:46:25.300 –> 00:46:30.060So if you need to file your taxes now, we will not be able to fit you into ourschedule00:46:30.060 –> 00:46:33.940unless you already are on the schedule for our taxes.00:46:33.940 –> 00:46:39.660Hope you guys are enjoying the show as we always say in Australia, call youlater.00:46:39.660 –> 00:46:42.700♪ ♪

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In this one-minute moment, Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, emphasizes the importance of not rushing through your 2023 tax preparation. She advises ensuring you have all your tax documents to avoid common mistakes that often lead to receiving “love letters” from the IRS. These mistakes include not realizing inherited assets are taxable, failing to report sold stocks, or thinking that taxes withheld from 401k or IRA withdrawals mean you don’t have to report them. Dr. Friday offers her assistance to help you navigate these potential pitfalls.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

What do you need to know when preparing your 2023 taxes? First and foremost, don’t rush to the finish line. Make sure that you have all of your tax documents. One of the large reasons I get people in my office after tax season, maybe even sometimes during tax season, is because they’ve received a love letter saying the IRS has changed their tax return because. Many times it’s because maybe you inherited something and you didn’t realize it was taxable, or you sold some stock and you didn’t realize you had to report it. You took money out of a 401k or an IRA and you thought that since they took the taxes out you didn’t have to report it. These are the kinds of mistakes you don’t have to make. Just call me if you need help.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday, a seasoned tax expert and enrolled agent with nearly 25 years of experience, introduces herself as the president of Dr. Friday’s Tax and Financial Firm. She emphasizes her role as an educator and advocate for taxpayers, acting as a shield between them and the IRS. Dr. Friday encourages listeners who are ready to face their tax challenges to reach out to her for assistance in achieving compliance. She also invites listeners to tune in to her weekly radio show, the Dr. Friday Call-In Show, every Saturday afternoon on 99.7 WTN.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

I’ve been doing taxes in this area for almost 25 years. I have a radio show right here on the station Saturdays from 2 to 3 and I am here to help you not only help you prepare your taxes but I also like helping educate people about taxes. As an enrolled agent I’m here to represent you in front of the IRS. Think of me as a little bit of a shield. I’m superwoman. I’m gonna shield you between IRS and yourself. They have to come through me to help you but we have to work together to get you into compliance. If you’re wanting to do that, you’re ready to get ready and get ready to face the IRS, call me 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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Real estate agents can significantly reduce their tax liability by claiming auto expense deductions. The two primary methods for claiming these deductions are actual expenses or mileage, with mileage being the more common approach. However, it’s crucial to be cautious of the misconception that purchasing a large truck automatically qualifies for a 100% write-off in the year of purchase. This is false, and seeking professional guidance is essential to ensure compliance with tax regulations and maximize legitimate deductions.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

One of my larger groups of people I do taxes for are probably real estate agents and one of the biggest deductions real estate agents have are auto expense. Now that can be via actual or mileage. In most cases I will say mostly mileage but sometimes people will come in and they’re like I brought this truck and everyone knows or most of the people that probably have ever seen me or driving down the freeway I drive a fairly large truck but you have to be careful guys I will tell you there’s a big rumor going on out there anyone can buy a big truck and write off their taxes a hundred percent in the year that you have it. That is false and you need help call me.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday explains the importance of below the line deductions in reducing your taxable income. These qualified deductions, such as standard deductions, charitable contributions, medical expenses, and mortgage interest, are subtracted from your adjusted gross income to determine your taxable income. Maximizing these deductions is crucial for saving tax dollars, as most individuals have limited options for reducing their taxes. Dr. Friday encourages listeners to seek help if needed to ensure they are making the most of their available deductions.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

This is a one-minute moment. Below the line deductions, on the other hand, are qualified deductions that are subjected from your adjusted gross income to help determine your taxable income. So, for an example, that would be your standard deductions or your itemized, like charitable deductions, medical expense, mortgage interest. These can all help reduce your income. Very important, guys, we want to reduce as much as possible. Making sure that you’re maximizing those deductions is the only way you’re going to save tax dollars. Most of us don’t have a lot of other ways to reduce our taxes. So, if you need help, call me, 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday discusses the importance of above-the-line deductions in reducing your taxable income. These deductions, which include contributions to retirement accounts, health savings accounts, and student loan interest, are taken before calculating your tax liability. By maximizing these deductions, you can potentially lower your tax bill while also saving for your future. Dr. Friday emphasizes the significance of these deductions but also reminds listeners that they should not be the only factor in their financial decision-making process.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Above the line deductions. What is it? A contribution to a retirement account. That’s an above the line. Health savings accounts. You know I love my health savings accounts. Student loan interest is above the line. That means that we’re basically taking those deductions before we even look at how much money you’re going to owe in taxes. So from a tax standpoint, we’d like to get as much as we can in the above the line deduction so that you pay less in taxes and maybe you’re saving more for the future. It’s important, but not always the only thing you should be thinking about. So you should call me at 615-367-0819 or check me out at drfriday.com.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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Dr. Friday cautions taxpayers that the IRS employs software to analyze lifestyle factors when determining audit targets. Even if your tax returns are consistent and accurate, living a lifestyle that appears to exceed your reported income can raise red flags. Owning a large house, making multiple car payments, and having substantial investments while reporting a low income may trigger an audit. To protect yourself, Dr. Friday advises reporting all your information accurately to avoid discrepancies between your lifestyle and reported income.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

People are always concerned when they’re looking at their taxes, like, oh, does this look right? Can I be audited on it? And keep in mind, just because your taxes may be consistent and look, but the IRS also has a software that looks at lifestyle. That’s right, so if you’re living in a large house and you have multiple car payments, which report to the IRS, you have a lot of investments and different things, and you’re showing a very low income, you could be audited, not because you’ve done anything wrong, but because your lifestyle is showing higher than your income. So just make sure you report all of your information so that you can protect yourself.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this episode of the Dr. Friday Radio Show, Dr. Friday, a financial counselor and tax consultant, discusses various tax-related topics and answers caller questions. As the tax season is in full swing, Dr. Friday provides valuable insights and advice for listeners.

Topics covered:

• Filing deadlines for different tax forms (1065, 1120S, 1120)
• Consequences of missing tax deadlines and the importance of filing extensions
• Beneficial Ownership Information Act compliance and penalties
• Determining filing status for separated or divorced individuals
• Deducting medical expenses and mileage related to hospital visits and care
• Filing requirements for trusts and estates after a person’s death
• Importance of keeping email addresses and cell phones active when handling an estate
• Settling tax debts with the IRS and the offer in compromise process
• Accurately reporting income and expenses on tax returns

Transcript00:00:00.000 –> 00:00:06.000No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your00:00:06.000 –> 00:00:07.000financial woes.00:00:07.000 –> 00:00:09.240She’s the how-to girl.00:00:09.240 –> 00:00:10.240It’s the Dr. Friday Show.00:00:10.240 –> 00:00:16.240If you have a question for Dr. Friday, call her now, 737-WWTN.00:00:16.240 –> 00:00:17.240That’s 737-9986.00:00:17.240 –> 00:00:22.240So here’s your host, financial counselor and tax consultant, Dr. Friday.00:00:22.240 –> 00:00:34.240G’day, I’m Dr. Friday and the doctor is in the house.00:00:34.240 –> 00:00:38.960We are going to talk about my favorite subject, it is the middle of tax season.00:00:38.960 –> 00:00:45.120And if you are a 1065, an 1120S and an 1120, in some cases, some 1120s can have it until00:00:45.120 –> 00:00:46.720next month.00:00:46.720 –> 00:00:51.440You have just missed a deadline if you did not file an extension.00:00:51.440 –> 00:00:57.200Because we’re due on the 15th for all 1065 and 1120Ss, unless you’re on a fiscal year00:00:57.200 –> 00:00:58.200end.00:00:58.200 –> 00:01:00.920So you need to make sure that you file your taxes.00:01:00.920 –> 00:01:02.960The penalties can be pretty steep.00:01:02.960 –> 00:01:08.120So again, making sure that you have filed your taxes and if not, an extension.00:01:08.120 –> 00:01:13.560That’s the same goes come April 15th for everything else, unless again, you’re on a physical year00:01:13.560 –> 00:01:18.060end, makes for you to basically need to file those extensions.00:01:18.060 –> 00:01:22.520It’s such a time saver, but more it’s a money saver, right?00:01:22.520 –> 00:01:27.960Because if you haven’t filed your taxes yet, then you’re in trouble when it comes to filing00:01:27.960 –> 00:01:30.440what you need to file for all of that.00:01:30.440 –> 00:01:36.320So again, if you have a question, you can reach us here in the studio at 615-737-9986.00:01:36.320 –> 00:01:44.560615-737-9986 is the number here in the studio.00:01:44.560 –> 00:01:48.560And many of you are probably working on taxes or maybe even working towards something that’s00:01:48.560 –> 00:01:50.040happening in 2024.00:01:50.040 –> 00:01:55.080It’s never too early to start thinking about how you’re going to save tax dollars or preparing00:01:55.080 –> 00:01:56.080to pay taxes.00:01:56.080 –> 00:02:00.840I mean, many times I’ve had people inherit property, they sell it for more than the asking00:02:00.840 –> 00:02:05.280price, or there’s a situation where you decide to relocate and you sell your rental or you00:02:05.280 –> 00:02:08.200sell your primary home, whatever it might be.00:02:08.200 –> 00:02:13.080You want to make sure you understand what your capital gains if it’s over a year and00:02:13.080 –> 00:02:16.000one day, or it could be ordinary income.00:02:16.000 –> 00:02:19.880If you have people that move into a house and then decide that that wasn’t the right00:02:19.880 –> 00:02:24.680place and within less than a year, they’ve relocated to another home and they sold that00:02:24.680 –> 00:02:30.400house, which means that you don’t fall under that exclusion that you get for your primary00:02:30.400 –> 00:02:31.400home.00:02:31.400 –> 00:02:32.400Now there are exceptions to that.00:02:32.400 –> 00:02:37.000There are, if you moved on medical or for work reasons, there is the possibility or00:02:37.000 –> 00:02:40.960divorce that you could actually get part of that exclusion.00:02:40.960 –> 00:02:41.960All right.00:02:41.960 –> 00:02:45.720Let’s go to Ray in Hendersonville and see if we can get someone on the phone here.00:02:45.720 –> 00:02:46.720Hey Ray, what’s happening?00:02:46.720 –> 00:02:47.720Well, you have a Larry in Hendersonville.00:02:47.720 –> 00:02:48.720Okay.00:02:48.720 –> 00:02:49.720What?00:02:49.720 –> 00:02:50.720I’m so sorry.00:02:50.720 –> 00:02:51.720My, my, my mistake.00:02:51.720 –> 00:02:52.720Typo on my side.00:02:52.720 –> 00:02:53.720Larry on Hendersonville.00:02:53.720 –> 00:02:54.720What do you got going?00:02:54.720 –> 00:03:05.720Well, I had, like I was saying, kind of an intertwined situation to the one who answered00:03:05.720 –> 00:03:06.720the phone.00:03:06.720 –> 00:03:14.160And it’s my son is special needs and he gets social security and, but he does live with00:03:14.160 –> 00:03:16.480us and I’ve, and he has a little job.00:03:16.480 –> 00:03:20.880So I’ve always filed his tax return separate.00:03:20.880 –> 00:03:25.960But I do claim them as a dependent because he is disabled.00:03:25.960 –> 00:03:31.440So when, when this year we had to go on the affordable care act for six months to bridge00:03:31.440 –> 00:03:36.600insurance for me till I get the Medicare, they wanted all household income, including00:03:36.600 –> 00:03:40.240his social security, his little job and everything.00:03:40.240 –> 00:03:45.200And I was just wondering, am I doing wrong since I’m claiming him as a dependent on not00:03:45.200 –> 00:03:48.560claiming his social security on my income tax return?00:03:48.560 –> 00:03:50.840Or can I continue to do it that way?00:03:50.840 –> 00:03:52.920The way that I am?00:03:52.920 –> 00:03:57.520You can for, for the IRS reasons, unfortunately for the marketplace, that’s a whole different00:03:57.520 –> 00:03:58.520conversation.00:03:58.520 –> 00:04:02.200But for the, you are, you have been doing the tax return.00:04:02.200 –> 00:04:03.760It sounds like correctly.00:04:03.760 –> 00:04:06.340You would file his taxes as a dependent.00:04:06.340 –> 00:04:07.340You can check the little box.00:04:07.340 –> 00:04:10.600I’m a dependent on someone else’s return, put in his social security and his little00:04:10.600 –> 00:04:15.760W2, get back any withholdings that might exist for him.00:04:15.760 –> 00:04:19.280And then on yours, cause social security is not considered earnings.00:04:19.280 –> 00:04:22.900It’s not something that’s going to fall into the child tax or anything.00:04:22.900 –> 00:04:24.400So answer your question.00:04:24.400 –> 00:04:25.400Yes.00:04:25.400 –> 00:04:29.440And under the marketplace, they have a whole different way that they like to calculate.00:04:29.440 –> 00:04:34.760It’s not just what we might consider taxable income, but as far as taxes, it sounds like00:04:34.760 –> 00:04:35.760you’ve done a perfect job.00:04:35.760 –> 00:04:36.760Okay.00:04:36.760 –> 00:04:40.760I just wanted to make sure that when I did my tax return this year, this is the first00:04:40.760 –> 00:04:45.960time I’ve ever had to do a 1095, but it wasn’t going to build some sort of flag and say,00:04:45.960 –> 00:04:50.520Hey, you know, and, and then get, is, uh, is your son carried on the 1095 or was it00:04:50.520 –> 00:04:51.520just you?00:04:51.520 –> 00:04:53.720Uh, no, it’s just me.00:04:53.720 –> 00:04:56.200My son’s being disabled.00:04:56.200 –> 00:04:59.800He’s on Medicaid and Medicare.00:04:59.800 –> 00:05:00.800I just wanted to make sure.00:05:00.800 –> 00:05:06.120Cause sometimes children, I’m the only one on, and that’s just perfect.00:05:06.120 –> 00:05:07.960So I turned 65 in June.00:05:07.960 –> 00:05:08.960So, okay, great.00:05:08.960 –> 00:05:11.560That was a question I needed answered.00:05:11.560 –> 00:05:12.560Thank you very much.00:05:12.560 –> 00:05:13.560Thanks.00:05:13.560 –> 00:05:14.560Appreciate it very much.00:05:14.560 –> 00:05:17.560Let’s go to Dora, uh, Dory in Nevada.00:05:17.560 –> 00:05:21.280Hi Dr. Fadde.00:05:21.280 –> 00:05:24.400Hello there, sweetheart.00:05:24.400 –> 00:05:26.600Um, okay.00:05:26.600 –> 00:05:32.320What is the difference between filing head of household versus filing single?00:05:32.320 –> 00:05:39.680If you’re unmarried and you have no dependents, you don’t really have any tax advantages like00:05:39.680 –> 00:05:41.360credits or deductions and all.00:05:41.360 –> 00:05:43.360Can you help me understand that?00:05:43.360 –> 00:05:44.360Absolutely.00:05:44.360 –> 00:05:45.640And you know, that’s a great question.00:05:45.640 –> 00:05:48.480I’m actually glad you, cause a lot of times people don’t know the difference.00:05:48.480 –> 00:05:54.800So single means that you have no children, nobody that you’re supporting in your house00:05:54.800 –> 00:05:58.320that you can claim, um, as a dependent.00:05:58.320 –> 00:06:00.400So you are just, just me.00:06:00.400 –> 00:06:01.400I’m a single person.00:06:01.400 –> 00:06:02.440I don’t have anyone else.00:06:02.440 –> 00:06:03.800I’m single.00:06:03.800 –> 00:06:07.520You have head of household, which means you have to have a dependent.00:06:07.520 –> 00:06:09.300It could be a parent.00:06:09.300 –> 00:06:10.960It could be a child.00:06:10.960 –> 00:06:14.880It has to be someone that you are supporting more than 50% of their care.00:06:14.880 –> 00:06:17.240And they’ve lived with you at least six months in one day.00:06:17.240 –> 00:06:19.640That’s a huge help.00:06:19.640 –> 00:06:21.200Does that help?00:06:21.200 –> 00:06:22.200Yeah.00:06:22.200 –> 00:06:26.080And just so you know, head of household gives you a larger, I mean, head of household is00:06:26.080 –> 00:06:29.720much better because the standard deduction goes from like 13 to 18,000.00:06:29.720 –> 00:06:30.720Right.00:06:30.720 –> 00:06:31.720Yeah.00:06:31.720 –> 00:06:37.400I was super tempted by head of household, but I also know I might need to slow my roll.00:06:37.400 –> 00:06:38.400I’ll go with single.00:06:38.400 –> 00:06:39.400Thank you.00:06:39.400 –> 00:06:40.400No problem.00:06:40.400 –> 00:06:43.080Thank you very much.00:06:43.080 –> 00:06:48.640I have a, in continuation with Dory, you can, you can hang up, but I will say that I have00:06:48.640 –> 00:06:55.280ran into many of them that I have fallen into a situation where they are married, but the00:06:55.280 –> 00:07:00.080option of married is married or married filing separately, jointly or separately as your00:07:00.080 –> 00:07:01.080two options.00:07:01.080 –> 00:07:06.640But I have found many returns where a spouse claims head of household with the children,00:07:06.640 –> 00:07:10.560even though you’re legally married, because they get a better return because with married00:07:10.560 –> 00:07:13.880filing separately, there’s a lot of limitations because the IRS doesn’t know what the spouse00:07:13.880 –> 00:07:14.880is.00:07:14.880 –> 00:07:16.040So they don’t know if you’re under earned income credit.00:07:16.040 –> 00:07:17.040They don’t know anything.00:07:17.040 –> 00:07:22.600So they don’t allow it where I have found that people have checked the box head of household,00:07:22.600 –> 00:07:26.760which is completely wrong, completely illegal as far as I’m concerned.00:07:26.760 –> 00:07:29.560So if you are married, you are legally married.00:07:29.560 –> 00:07:31.000Now there are certain exceptions.00:07:31.000 –> 00:07:35.480If you have lived separately for a year from your spouse and you are definitely in the00:07:35.480 –> 00:07:39.800house taking care of your children, this other person lives in a completely different home00:07:39.800 –> 00:07:40.800for the year.00:07:40.800 –> 00:07:44.880Then you might be considered head of household because you are actually separated.00:07:44.880 –> 00:07:50.720Now the IRS may require a legal separation, but there are exclusions within that for safety00:07:50.720 –> 00:07:51.760reasons and other things.00:07:51.760 –> 00:07:53.160So that may be the case.00:07:53.160 –> 00:07:57.500There’s always an exception, but most people I’ve, I’ve actually had to go back and correct.00:07:57.500 –> 00:08:01.080They were just married and they just found out that by heading head of household, they00:08:01.080 –> 00:08:03.920could get a better return instead of being married jointly.00:08:03.920 –> 00:08:06.760All right, let’s hit Linda and Brentwood real quick.00:08:06.760 –> 00:08:07.760Hey Linda.00:08:07.760 –> 00:08:08.760Hello.00:08:08.760 –> 00:08:11.040Thank you for taking my call.00:08:11.040 –> 00:08:12.160Sure.00:08:12.160 –> 00:08:22.760I I’m 73 on social security and have had pretty much had the same tax return for the last00:08:22.760 –> 00:08:23.76010 years.00:08:23.760 –> 00:08:37.720So I get an, I get a letter from the IRS asking for a W2 and a W2G for gambling and neither00:08:37.720 –> 00:08:40.120one of those applies to me.00:08:40.120 –> 00:08:45.200And I’m, and so I sent them a letter, but to Utah.00:08:45.200 –> 00:08:54.120So I’m really confused as to why I went over my last five years tax return letter by letter00:08:54.120 –> 00:09:00.880and I don’t know where they’re getting this or why they’re asking for this information.00:09:00.880 –> 00:09:05.720Well you handled it correctly, Linda, by providing them saying, I don’t, you know, I don’t have00:09:05.720 –> 00:09:09.800any W2s or W2Gs to report under me.00:09:09.800 –> 00:09:16.640My concern will be is either there’s been a typo on a form and somehow someone else’s00:09:16.640 –> 00:09:21.060social security number is close to yours and they’ve imposed the number and it’s showing00:09:21.060 –> 00:09:26.000up under you and the IRS is trying to correct it.00:09:26.000 –> 00:09:32.160Or worse scenario, obviously, and our bigger concern is that somebody has taken your identity00:09:32.160 –> 00:09:34.360and has worked or gambled under it.00:09:34.360 –> 00:09:40.320And I wouldn’t jump to that conclusion right off the top, but but what you did was perfect.00:09:40.320 –> 00:09:46.640And if you get another letter at that time, you may want to either contact, you know,00:09:46.640 –> 00:09:51.160there’s a number to contact because it sounds like there could be a fraud situation if they00:09:51.160 –> 00:09:53.480continue to communicate with you.00:09:53.480 –> 00:09:58.240But the letter should resolve the fact that they’ll be able to see that that was the situation00:09:58.240 –> 00:10:00.560and that you did the right thing.00:10:00.560 –> 00:10:06.160But you know, if you get another love letter, then you might want to try to get a human00:10:06.160 –> 00:10:10.640to confirm because what they might do, Linda, is they might give you a six digit pin.00:10:10.640 –> 00:10:17.540So when you file your taxes, they know it’s you in case somebody has somehow inadvertently00:10:17.540 –> 00:10:21.600or advertently took your information and filed under it.00:10:21.600 –> 00:10:27.680All right, so I should just wait for a response to my letter.00:10:27.680 –> 00:10:28.760Yes, ma’am.00:10:28.760 –> 00:10:29.760Wait for a response.00:10:29.760 –> 00:10:32.360See if anyone, see if it may have resolved the issue.00:10:32.360 –> 00:10:35.800You may never hear back from them ever again, which is kind of a pain in the neck because00:10:35.800 –> 00:10:39.600you might be nice to say, hey, thank you for resolving this issue.00:10:39.600 –> 00:10:42.920That would put a lot more stress or less stress in our lives.00:10:42.920 –> 00:10:46.800But the fact is, they may say thank you for communicating on this day.00:10:46.800 –> 00:10:51.520You know, we received your letter and it went and we are resolving the issue.00:10:51.520 –> 00:10:55.040It may say something very simple like that, but it may not get a letter.00:10:55.040 –> 00:10:59.060I’ve wrote millions of letters, I swear, over 28 years.00:10:59.060 –> 00:11:03.400And sometimes we get a nice little response saying that this has resolved the issue or00:11:03.400 –> 00:11:04.680thank you for communicating.00:11:04.680 –> 00:11:06.320We’re still working on it.00:11:06.320 –> 00:11:09.920But I hope that you’ll get something that says something like that.00:11:09.920 –> 00:11:15.840But if you get another letter saying, hey, we’re either changing your tax return or,00:11:15.840 –> 00:11:22.400you know, again, we need proof of your W2 and W2G, then I would go the next step.00:11:22.400 –> 00:11:27.440Either go to the tax advocate office or just call the local IRS office so they can get00:11:27.440 –> 00:11:33.840something on it because I would say at that point, you may have a need to get a six-digit00:11:33.840 –> 00:11:35.840pin to protect yourself for the future.00:11:35.840 –> 00:11:37.840You don’t want someone working under your ID number.00:11:37.840 –> 00:11:38.840>> Yes.00:11:38.840 –> 00:11:41.760>> So, you’re in a holding cycle.00:11:41.760 –> 00:11:44.760You’re having to wait until the IRS gets back.00:11:44.760 –> 00:11:47.040>> They’re questioning my refund.00:11:47.040 –> 00:11:51.000And so, would that trigger anything?00:11:51.000 –> 00:11:53.320>> So you were questioning your refund or they were?00:11:53.320 –> 00:11:54.880>> Well, they were.00:11:54.880 –> 00:12:00.120They’re questioning my refund, which was a little bit more than I received last year.00:12:00.120 –> 00:12:08.600But I don’t know what precipitated this letter and what’s different.00:12:08.600 –> 00:12:15.080But yeah, they said they might have to amend my return or blah, blah, blah.00:12:15.080 –> 00:12:16.080>> Okay.00:12:16.080 –> 00:12:19.120So it sounds like something is under your name, to be quite honest.00:12:19.120 –> 00:12:22.640What they’re telling you is that they may actually have to change your return.00:12:22.640 –> 00:12:24.440We’re changing your refund.00:12:24.440 –> 00:12:28.600So your next best bet would be is to, you sent the letter.00:12:28.600 –> 00:12:32.120If you get another letter saying they’re changing it, you’re going to want to call the IRS and00:12:32.120 –> 00:12:38.280talk to them because it sounds like they have some information of a W2G or a W2 that was00:12:38.280 –> 00:12:39.800turned in under your name.00:12:39.800 –> 00:12:45.520And that’s why they’re saying that your return and theirs isn’t matching.00:12:45.520 –> 00:12:48.400>> So you mentioned a tax advocate.00:12:48.400 –> 00:12:51.000How do I find one?00:12:51.000 –> 00:12:54.480You can do you have access to the IRS like a Google or anything?00:12:54.480 –> 00:12:55.480Do you have internet?00:12:55.480 –> 00:12:56.480>> Yes.00:12:56.480 –> 00:12:57.480Yeah.00:12:57.480 –> 00:12:58.480>> Okay.00:12:58.480 –> 00:13:02.840If you could just text under Google, you could put in, I’m assuming you’re in Tennessee.00:13:02.840 –> 00:13:06.960So, you know, Nashville Tax Advocate Office, and they’ll give you a phone number and a00:13:06.960 –> 00:13:07.960fax number.00:13:07.960 –> 00:13:08.960>> All right.00:13:08.960 –> 00:13:09.960All right.00:13:09.960 –> 00:13:11.960Well, thank you for your information.00:13:11.960 –> 00:13:16.120I appreciate you taking my call.00:13:16.120 –> 00:13:17.120>> No problem.00:13:17.120 –> 00:13:18.120Thank you, Linda.00:13:18.120 –> 00:13:19.120All right.00:13:19.120 –> 00:13:20.120We’re going to take our first break.00:13:20.120 –> 00:13:21.120You can make more of your phone calls at 615-737-9986.00:13:21.120 –> 00:13:22.120All righty.00:13:22.120 –> 00:13:23.120We are back here live in studio.00:13:23.120 –> 00:13:24.120And you can join us if you have a question at 615-737-9986.00:13:24.120 –> 00:13:25.120615-737-9986.00:13:25.120 –> 00:13:26.120Now’s the time that we’re talking about.00:13:26.120 –> 00:13:27.120Well, we seem to talk about it year round, but obviously it is what we call tax season.00:13:27.120 –> 00:13:28.120And we’re going to talk about tax season.00:13:36.120 –> 00:14:00.120And we’re going to talk about tax season.00:14:00.120 –> 00:14:26.120And we’re going to talk about tax season.00:14:26.120 –> 00:14:55.120And we’re going to talk about tax season.00:14:55.120 –> 00:14:56.120And we’re going to talk about tax season.00:15:13.120 –> 00:15:37.120And we’re going to talk about tax season.00:15:37.120 –> 00:15:44.120And we’re going to talk about tax season.00:15:44.120 –> 00:15:45.120And we’re going to talk about tax season.00:16:01.120 –> 00:16:08.120And we’re going to talk about tax season.00:16:08.120 –> 00:16:09.120And we’re going to talk about tax season.00:16:43.120 –> 00:17:07.120And we’re going to talk about tax season.00:17:07.120 –> 00:17:14.120And we’re going to talk about tax season.00:17:14.120 –> 00:17:15.120And we’re going to talk about tax season.00:17:49.120 –> 00:18:13.120And we’re going to talk about tax season.00:18:13.120 –> 00:18:20.120And we’re going to talk about tax season.00:18:20.120 –> 00:18:21.120And we’re going to talk about tax season.00:18:37.120 –> 00:18:43.120And we’re going to talk about tax season.00:18:43.120 –> 00:18:45.120So, if you are an employed individual,00:18:45.120 –> 00:18:47.120you’ve started an LLC or some sort of entity,00:18:47.120 –> 00:18:48.120not a sole proprietorship,00:18:48.120 –> 00:18:51.120but anything that has partners or shareholders,00:18:51.120 –> 00:18:55.120that you do have to file a form now with the foreign entity,00:18:55.120 –> 00:18:57.120I guess you would say, foreign banking industry.00:18:57.120 –> 00:18:59.120There is a website for it.00:18:59.120 –> 00:19:05.120So you’re going to want to make sure that you are in compliance.00:19:05.120 –> 00:19:08.120And making sure that you have the freedom of information act is going to00:19:08.120 –> 00:19:09.120be part of it.00:19:09.120 –> 00:19:13.120But basically you’re going to have this information that you need to be00:19:13.120 –> 00:19:17.120filing. And if it’s an older company, you have until, and I say,00:19:17.120 –> 00:19:21.120older something that opened up in 22 or early 23 or whatever,00:19:21.120 –> 00:19:24.120then you have until January of 2025.00:19:24.120 –> 00:19:30.120But if you’ve just opened up this information to be in compliance and00:19:30.120 –> 00:19:33.120everything, then you need to go ahead and do that.00:19:33.120 –> 00:19:40.120Now I think you have 60 days to actually file after the date of the comp of00:19:40.120 –> 00:19:46.120your company. And you want to just go to it’s called O O I B O I00:19:46.120 –> 00:19:50.120beneficial ownership information act is what it is.00:19:50.120 –> 00:19:53.120And the reason I keep talking about this, and I know I talk about it a lot,00:19:53.120 –> 00:19:57.120it’s under the foreign banking because the penalty,00:19:57.120 –> 00:20:03.120if you don’t meet this is $500 a day for not being in compliance.00:20:03.120 –> 00:20:06.120It’s one of the steepest penalties I’ve seen.00:20:06.120 –> 00:20:10.120I’m sure there’s some other ones in this part of the world, but you know,00:20:10.120 –> 00:20:14.120so if you, if you’re not sure you can certainly contact our office,00:20:14.120 –> 00:20:18.120but you can also look it up as fed it’s under the financial crime00:20:18.120 –> 00:20:19.120enforcement network.00:20:19.120 –> 00:20:22.120And it is something that needs to be filed.00:20:22.120 –> 00:20:25.120There are a few things that are exempted,00:20:25.120 –> 00:20:29.120certain things like credit unions, insurance companies, accounting firms,00:20:29.120 –> 00:20:31.120some of them are exempt.00:20:31.120 –> 00:20:35.120So if you’re under the exemption and there’s a whole list of them and00:20:35.120 –> 00:20:40.120inactive entity is one of those, but if you don’t fall under that,00:20:40.120 –> 00:20:44.120then you do need to file the form. So again, if you need,00:20:44.120 –> 00:20:47.120you have questions, you can always call our office. All right,00:20:47.120 –> 00:20:51.120let’s hit Ricky and Mount pleasant Mount pleasant. I like that town. Hey,00:20:51.120 –> 00:20:52.120Ricky.00:20:52.120 –> 00:20:55.120Yes, ma’am. How you doing?00:20:55.120 –> 00:20:56.120I’m good.00:20:56.120 –> 00:21:00.120Good. Good. Quick question for you. I was calling from my grandson.00:21:00.120 –> 00:21:04.120He is legally still married, but they had been separated,00:21:04.120 –> 00:21:07.120live in the park for over a year. Now, how would he file?00:21:07.120 –> 00:21:09.120I want his income taxes.00:21:09.120 –> 00:21:13.120Legally he can file as single or head of household.00:21:13.120 –> 00:21:15.120If there’s a child that he can legally claim.00:21:15.120 –> 00:21:18.120Okay. There’s no children involved. Just him.00:21:18.120 –> 00:21:20.120So he can just go back to being single.00:21:20.120 –> 00:21:25.120It’s it’s a little easier because at that point, you know, he,00:21:25.120 –> 00:21:28.120he is, he’s basically single. He’s just waiting for the divorce.00:21:28.120 –> 00:21:32.120And sometimes nowadays, you know, between the system and the finances,00:21:32.120 –> 00:21:36.120it takes a little longer for people to get legally divorced. But yes,00:21:36.120 –> 00:21:40.120he is legally on the 10th tax side. He could file single if he wanted to.00:21:40.120 –> 00:21:44.120Okay. All right. I appreciate the info. And thank you. No problem.00:21:44.120 –> 00:21:48.120Appreciate that. Thank you very much. Thanks. I appreciate you. All right.00:21:48.120 –> 00:22:00.120So if you’ve got a question again, you can join the show at 6 1 5 7 3 7 9 9 8 6 6 1 5 7 3 7 9 9 8 6,00:22:00.120 –> 00:22:04.120taking your calls, talking about my favorite subject, which is taxes.00:22:04.120 –> 00:22:08.120There are so many exceptions to the exceptions that, you know, just keep in mind.00:22:08.120 –> 00:22:12.120If you are an individual and you have a specific tax situation,00:22:12.120 –> 00:22:16.120you need to talk to a tax expert. I’m giving you some outlines,00:22:16.120 –> 00:22:20.120but you need to make sure that if you have a serious or you’re getting love letters or you’re,00:22:20.120 –> 00:22:22.120you know, you’re dealing with something,00:22:22.120 –> 00:22:26.120make sure you consult with a tax expert, preferably an enrolled agency,00:22:26.120 –> 00:22:30.120PA, someone that has the credentials to make, not only prepare,00:22:30.120 –> 00:22:34.120but also represent you in front of the IRS.00:22:34.120 –> 00:22:37.120Cause it’s important that you have a shield.00:22:37.120 –> 00:22:41.120You need somebody that’s going to help you do something other than just, you know,00:22:41.120 –> 00:22:45.120prepare taxes, not put their name on a tax return. Come on guys.00:22:45.120 –> 00:22:49.120Who would prepare a tax return and not put their P10 and their name on it,00:22:49.120 –> 00:22:52.120unless they’re basically saying, Hey, I’m doing this,00:22:52.120 –> 00:22:56.120but I’m not taking any responsibility. I’m not dealing with anything.00:22:56.120 –> 00:23:00.120And that is not what you’re paying for. You’re paying for someone to do taxes,00:23:00.120 –> 00:23:04.120but to also be there when the question of something happens or anything else,00:23:04.120 –> 00:23:08.120it’s just a matter of making sure you’ve got the right information and that00:23:08.120 –> 00:23:11.120you’re doing it. You know, I mean, otherwise, you know,00:23:11.120 –> 00:23:14.120you might as well just throw a bunch of numbers on a paper and hope that it’s00:23:14.120 –> 00:23:17.120sticks. It seems a little crazy to me. Okay.00:23:17.120 –> 00:23:20.120We’re going to try to hit Sue before the break.00:23:20.120 –> 00:23:23.120So let’s go ahead and get Sue right on the line so she doesn’t have to hold.00:23:23.120 –> 00:23:24.120Hey Sue.00:23:24.120 –> 00:23:28.120Thank you. I hope you can answer that.00:23:28.120 –> 00:23:33.120What do I need to be getting together with hospital visits and also a00:23:33.120 –> 00:23:37.120skilled care this past year?00:23:37.120 –> 00:23:43.120Right. So obviously you need to get together all the money you have paid out00:23:43.120 –> 00:23:48.120of pocket. If you, do you have longterm care for your husband?00:23:48.120 –> 00:23:49.120Yes.00:23:49.120 –> 00:23:50.120Or just met. Okay.00:23:50.120 –> 00:23:54.120Turn in papers for that also what they’ve paid out.00:23:54.120 –> 00:23:57.120Okay. So obviously what they’ve paid out,00:23:57.120 –> 00:24:01.120we get to deduct from what you’ve had to pay because they’ve provided that00:24:01.120 –> 00:24:05.120money to offset, but you need to track all of his, you know,00:24:05.120 –> 00:24:08.120if he’s been in a home or just the hospital,00:24:09.120 –> 00:24:13.120if he’s had to have home care or all of, you know, and also the trips,00:24:13.120 –> 00:24:16.120you driving back and forth to the hospital or going and picking up his00:24:16.120 –> 00:24:19.120prescriptions or taking him to see physicians,00:24:19.120 –> 00:24:24.120all those miles can be added in at a 20 cents or something,00:24:24.120 –> 00:24:26.120a mile situation. But I would be tracking,00:24:26.120 –> 00:24:30.120just start an envelope if nothing else and writing on it, you know,00:24:30.120 –> 00:24:32.120how much you write a check for,00:24:32.120 –> 00:24:36.120and then keep a copy of that because sometimes the paperwork comes in and00:24:36.120 –> 00:24:40.120initially it just says how much you owe and then the insurance comes in and it00:24:40.120 –> 00:24:44.120gets reduced, you know, from what the original amounts are,00:24:44.120 –> 00:24:47.120but that you need to put all that. Cause you probably,00:24:47.120 –> 00:24:51.120if it’s anything like some of my clients, you may be able to itemize.00:24:51.120 –> 00:24:57.120Okay. And I guess sometimes I’ve had someone pick him up like in a00:24:57.120 –> 00:25:03.120wheelchair to take in their van. So that would be part of that also.00:25:03.120 –> 00:25:04.120Absolutely. Yes, ma’am.00:25:04.120 –> 00:25:08.120Anything and everything it’s taken to get your husband or keep your husband00:25:08.120 –> 00:25:10.120moving alive.00:25:10.120 –> 00:25:15.120Okay. You’ve been a big help. I enjoy your show. Thank you so much.00:25:15.120 –> 00:25:18.120I appreciate you, sweetie. Good luck. All right,00:25:18.120 –> 00:25:21.120we’re going to take our next break. You can reach us here in the studio at00:25:21.120 –> 00:25:24.120615-737-9986.00:25:24.120 –> 00:25:29.120615-737-9986. We’ll be right back.00:25:29.120 –> 00:25:34.120[inaudible]00:25:34.120 –> 00:25:38.120Alrighty. We are back here live in studio.00:25:38.120 –> 00:25:39.120We’re about halfway through the show.00:25:39.120 –> 00:25:42.120So if you’ve been holding your breath trying to figure out what we’re going to00:25:42.120 –> 00:25:44.120talk about, well, what you’re going to ask a question about.00:25:44.120 –> 00:25:47.120I kind of know what I’m going to talk about.00:25:47.120 –> 00:25:52.120Then you can actually give us a call here at 615-737-9986.00:25:52.120 –> 00:25:56.120615-737-9986.00:25:56.120 –> 00:26:01.120So I got another text through the break here and I just want to talk about00:26:01.120 –> 00:26:05.120again, if you are married,00:26:05.120 –> 00:26:09.120but it says who can be considered unmarried.00:26:09.120 –> 00:26:14.120And if you have paid the biggest part of this is lived apart from your spouse00:26:14.120 –> 00:26:18.120during the entire six months of the tax year. I’ve always made it a year.00:26:18.120 –> 00:26:19.120I don’t know why.00:26:19.120 –> 00:26:24.120And that means the spouse is considered to still live with you if they are00:26:24.120 –> 00:26:28.120incarcerated military or under some sort of educational travel or something.00:26:28.120 –> 00:26:33.120But if you have lived apart,00:26:33.120 –> 00:26:37.120maintained your own home for six months or more, again,00:26:37.120 –> 00:26:39.120I’ve always went with a year. I don’t know why.00:26:39.120 –> 00:26:43.120Something I had read back in the day. So you can qualify.00:26:43.120 –> 00:26:47.120You set the prove that you have been living separate and taking care of00:26:47.120 –> 00:26:52.120yourself in that situation. So you might want to consider that,00:26:52.120 –> 00:26:56.120but many cases that’s not always the situation. And then, you know,00:26:56.120 –> 00:26:59.120head of household, you can claim many different people.00:26:59.120 –> 00:27:00.120Sometimes people are like, well,00:27:00.120 –> 00:27:02.120I thought you can only claim a minor child for head of household.00:27:02.120 –> 00:27:04.120And that is not true. I mean,00:27:04.120 –> 00:27:09.120I have a number of clients that their parents actually either live with them or00:27:09.120 –> 00:27:14.120they pay for the facility in which their parents are living.00:27:14.120 –> 00:27:18.120So they’re providing more than 50% of that person’s care.00:27:18.120 –> 00:27:22.120So they qualify as a dependent in some cases,00:27:22.120 –> 00:27:26.120the only income some parents have is only social security and it’s not enough00:27:26.120 –> 00:27:31.120to take care of themselves or be put in a facility for that. So, you know,00:27:31.120 –> 00:27:35.120you have to deal with that situation. So again, if you have a question,00:27:35.120 –> 00:27:40.120you can join us here. 615-737-9986.00:27:40.120 –> 00:27:44.120615-737-9986.00:27:44.120 –> 00:27:47.120Let’s go right to the phone and hit Sherry in Nashville. Hey,00:27:47.120 –> 00:27:48.120Sherry what’s happening?00:27:48.120 –> 00:27:50.120Yes.00:27:50.120 –> 00:27:55.120My mother passed away and we had a trust for her and we have officially00:27:55.120 –> 00:28:00.120closed the trust now. Do we need to file income tax on that?00:28:00.120 –> 00:28:03.120Well, yes. Trust,00:28:03.120 –> 00:28:07.120you would have gotten a separate federal ID number or federal employee ID00:28:07.120 –> 00:28:10.120number, EIN number. And so to close that number,00:28:10.120 –> 00:28:15.120you would need to file a 1041 may not have any taxes due,00:28:15.120 –> 00:28:19.120but you would need to file. And if there was any interest, dividend stocks,00:28:19.120 –> 00:28:24.120you know, anything that was in the name of the trust, including a home sale,00:28:24.120 –> 00:28:26.120if it all went through the trust,00:28:26.120 –> 00:28:28.120some kinds of people get it directly to their names.00:28:28.120 –> 00:28:31.120But if anything that was in the trust that may have generated income,00:28:31.120 –> 00:28:32.120theoretically,00:28:32.120 –> 00:28:35.120it either needs to be a K one that passes through to the beneficiaries or the00:28:35.120 –> 00:28:37.120trust itself needs to pay the taxes.00:28:37.120 –> 00:28:42.120Okay. And that form to file with him is a 10?00:28:43.120 –> 00:28:44.1201041.00:28:44.120 –> 00:28:45.12041. Okay.00:28:45.120 –> 00:28:46.1201041. Yes.00:28:46.120 –> 00:28:48.120I appreciate that.00:28:48.120 –> 00:28:52.120No problem. If you need help, just give our office a call. Thanks.00:28:52.120 –> 00:28:56.120All right. So if you’ve got additional questions again, that is actually,00:28:56.120 –> 00:29:01.120we do a number of trust our states depending on if they were actually,00:29:01.120 –> 00:29:04.120both of them will end up with a federal ID number,00:29:04.120 –> 00:29:06.120but treat it a little differently, obviously,00:29:06.120 –> 00:29:09.120because in a state it’s usually opened up by the courts.00:29:10.120 –> 00:29:13.120When someone has a well, and then the state has to be opened up versus a00:29:13.120 –> 00:29:17.120trust, which is usually established prior to us passing away.00:29:17.120 –> 00:29:20.120Either way, there is tax returns that need to be filed.00:29:20.120 –> 00:29:25.120And they are annual. Sometimes they’re not on calendar years.00:29:25.120 –> 00:29:27.120They’re usually based a year after the, you know,00:29:27.120 –> 00:29:31.120every year from the date they were open extensions are available.00:29:31.120 –> 00:29:35.120And in the perfect world, we’re able to close them from a year after that,00:29:35.120 –> 00:29:36.120but sometimes they’re not.00:29:37.120 –> 00:29:39.120Perfect world. We’re able to close them from a year after that.00:29:39.120 –> 00:29:44.120But sometimes we have annuities or real estate or different things that we00:29:44.120 –> 00:29:46.120don’t have any control over to actually establish. So you,00:29:46.120 –> 00:29:48.120you need to make sure you keep it open.00:29:48.120 –> 00:29:51.120We have one that’s just being kept open now for almost a year and a half00:29:51.120 –> 00:29:54.120because the tax refund hasn’t come in yet.00:29:54.120 –> 00:29:59.120So we’re still waiting for the refund because the check is going to be in the00:29:59.120 –> 00:30:04.120name of the estate or the parent’s name, whatever. And therefore we can’t,00:30:04.120 –> 00:30:07.120we can’t do that. So you just need to make sure you don’t close that.00:30:07.120 –> 00:30:12.120Estate before you have received everything you need to.00:30:12.120 –> 00:30:18.120Another hint we deal with a large number of estates in different situations.00:30:18.120 –> 00:30:22.120And I will tell you, make sure you don’t close email addresses.00:30:22.120 –> 00:30:26.120If you have access to their email and their cell phones, keep the cell phones,00:30:26.120 –> 00:30:29.120don’t immediately just shut everything down because you’re trying to close it00:30:29.120 –> 00:30:30.120all off.00:30:30.120 –> 00:30:34.120Because a lot of times if you’re trying to get into websites or different00:30:34.120 –> 00:30:34.120things,00:30:34.120 –> 00:30:38.120they’re going to send that code to the cell phone because that’s the code they00:30:38.120 –> 00:30:39.120have on file.00:30:39.120 –> 00:30:43.120And otherwise you’ll have to get everything through the courts.00:30:43.120 –> 00:30:46.120And that can be very difficult to be quite honest.00:30:46.120 –> 00:30:47.120I’ve not had to do it that way,00:30:47.120 –> 00:30:51.120but I have seen estates that have been held up for a number of years00:30:51.120 –> 00:30:55.120actually, because information has been so slow to be able to go out.00:30:55.120 –> 00:30:58.120And so again, just make sure, you know,00:30:58.120 –> 00:31:03.120if you’re handling a parent’s situation that I mean,00:31:03.120 –> 00:31:05.120some of them are extremely simple, really.00:31:05.120 –> 00:31:08.120All they have was their, their social security, didn’t have anything else.00:31:08.120 –> 00:31:12.120That’s a, doesn’t really require an estate or anything else.00:31:12.120 –> 00:31:15.120But if your parents did have homes residents,00:31:15.120 –> 00:31:18.120and if the home was not left in a trust,00:31:18.120 –> 00:31:21.120then you usually have to go to probate,00:31:21.120 –> 00:31:25.120get the home put into the estate or into the individual beneficiaries that00:31:25.120 –> 00:31:29.120then can sell the home. And then it would report an individual.00:31:29.120 –> 00:31:33.120Usually under each person. And again, if you’re over the estate,00:31:33.120 –> 00:31:36.120one of the nicest things you can do is if there is anything that is being00:31:36.120 –> 00:31:41.120sold in the names of the beneficiaries is to have an appraisal that you00:31:41.120 –> 00:31:45.120then can hand out and say, this is the number we’re using for basis,00:31:45.120 –> 00:31:48.120because when someone passes away and we inherit that property,00:31:48.120 –> 00:31:53.120we get a step up in basis. So whatever the house was worth, for example,00:31:53.120 –> 00:31:57.120and let’s just say mom passed away last May,00:31:57.120 –> 00:31:59.120whatever the house was worth last May, and you just sold the house.00:31:59.120 –> 00:32:03.120Now you may have sold it for more. You may have sold it for less.00:32:03.120 –> 00:32:05.120Most importantly,00:32:05.120 –> 00:32:08.120you just want to make sure that it’s a break even in the perfect world.00:32:08.120 –> 00:32:12.120We don’t usually care to claim a lot of losses on something like that,00:32:12.120 –> 00:32:15.120but we do not really want to pay taxes,00:32:15.120 –> 00:32:18.120but I’ve had a couple of them where mom’s house turned into commercial00:32:18.120 –> 00:32:19.120property after she passed away.00:32:19.120 –> 00:32:23.120Therefore we ended up with a huge capital gains because during her lifetime,00:32:23.120 –> 00:32:24.120it was a residence.00:32:24.120 –> 00:32:28.120So things happen and making sure that you have good documentation,00:32:28.120 –> 00:32:31.120because if you’ve got four or five beneficiaries,00:32:31.120 –> 00:32:34.120you need to be able to provide information to all of them so they can do their00:32:34.120 –> 00:32:38.120taxes or provide K ones if there is an estate. So again,00:32:38.120 –> 00:32:40.120if you’re not sure how that all works,00:32:40.120 –> 00:32:43.120you’re going to want to make sure you had to go to an accountant,00:32:43.120 –> 00:32:47.120a CEA like myself, or, you know, if you have an attorney working with you,00:32:47.120 –> 00:32:50.120many of them handle that, that information as well.00:32:50.120 –> 00:32:53.120Just make sure they understand the tax law and your obligation.00:32:53.120 –> 00:32:57.120But if you have questions again, it is already the 16th of March.00:32:57.120 –> 00:33:00.120We’re getting down to the last four weeks of tax season.00:33:00.120 –> 00:33:04.120I know our office has pretty much been booked for a while.00:33:04.120 –> 00:33:07.120I’m sorry about that for anyone that was hoping to get a new, a new person.00:33:07.120 –> 00:33:11.120We just, we just aren’t big enough to take on the,00:33:11.120 –> 00:33:15.120the numbers that have come through our door. So if you, if you need help,00:33:15.120 –> 00:33:19.120you can still, we can still file extensions and help you after the April 15th.00:33:19.120 –> 00:33:21.120But if you need to get your taxes done before that,00:33:21.120 –> 00:33:25.120then you can always go to EA that’s00:33:25.120 –> 00:33:27.120enrolledagent.com.00:33:27.120 –> 00:33:32.120And there is other listings of enrolled agents out there that can maybe help00:33:32.120 –> 00:33:33.120you closer to your area.00:33:33.120 –> 00:33:38.120Cause I have to appreciate my clients that will travel quite a ways just to,00:33:38.120 –> 00:33:40.120to come to me. So again,00:33:40.120 –> 00:33:43.120if you have questions as an enrolled agent for any of you that might be new00:33:43.120 –> 00:33:46.120and you’re not too sure, I keep saying EA and enrolled agent.00:33:46.120 –> 00:33:49.120And enrolled agent is licensed by the internal revenue service to do taxes and00:33:49.120 –> 00:33:53.120representation, which just means guys, I do taxes all the time. I’m tested.00:33:53.120 –> 00:33:56.120I’m continuously educating myself far from perfect,00:33:56.120 –> 00:33:59.120but I probably the most I know about anything is taxes.00:33:59.120 –> 00:34:04.120So if there’s a situation where I have the, the, the tax is that’s,00:34:04.120 –> 00:34:08.120you know what we have going and you have to deal with that.00:34:08.120 –> 00:34:09.120So as an enrolled agent,00:34:09.120 –> 00:34:13.120I’ve licensed by the internal to represent and to do tax preparation.00:34:13.120 –> 00:34:18.120So if you need help and you need to be able to get some assistance,00:34:18.120 –> 00:34:19.120you’ve received love letters,00:34:19.120 –> 00:34:22.120or you’re just not too sure how to move forward because sometimes you’ve gotten00:34:22.120 –> 00:34:26.120behind and that’s all you can do about it. So you know,00:34:26.120 –> 00:34:30.120making it work for you and having it that way is all we can do to, to,00:34:30.120 –> 00:34:33.120to do, but you really want someone that is licensed.00:34:33.120 –> 00:34:38.120That’s someone that’s going to be able to help you when, and if maybe never,00:34:38.120 –> 00:34:39.120but when, and if,00:34:39.120 –> 00:34:42.120if a love letter does come in and you’re able to help you do that.00:34:42.120 –> 00:34:44.120So if you need help with that,00:34:44.120 –> 00:34:46.120you can always call my office or if you’ve got a question,00:34:46.120 –> 00:34:56.120you can join the show. 6 1 5 7 3 7 9 9 8 6 6 1 5 7 3 7 9 9 8 6.00:34:56.120 –> 00:34:59.120Many of you guys probably have heard my puppy dog barking in the background,00:34:59.120 –> 00:35:03.120but she wasn’t happy with being put outside. She wasn’t about being inside.00:35:03.120 –> 00:35:05.120Well, you know, when they’re a great day and that’s a pretty big voice.00:35:05.120 –> 00:35:08.120So she’s a, she’s settling down now. So anyway,00:35:08.120 –> 00:35:11.120so if you have a question, we’ll take a quick break, but when we get back,00:35:11.120 –> 00:35:21.120we can get to the phone lines again. 6 1 5 7 3 7 9 9 8 6 6 1 5 7 3 7 9 9 8 6.00:35:21.120 –> 00:35:25.120Again, I can’t say enough that if you aren’t ready to file your taxes,00:35:25.120 –> 00:35:30.120it’s still the absolute best thing for you to do is to prepare yourself an00:35:30.120 –> 00:35:31.120extension.00:35:31.120 –> 00:35:35.120It’s that you can go to the irs.gov and look under forms and you can file it00:35:35.120 –> 00:35:37.120right there online, I believe. And, you know,00:35:37.120 –> 00:35:42.120you can make sure that you have the ability to take a breath, you know,00:35:42.120 –> 00:35:45.120and do what you need to do.00:35:45.120 –> 00:35:47.120As far as filing your taxes,00:35:47.120 –> 00:35:51.120it’s just one of those situations that you really do need to make sure you are00:35:51.120 –> 00:35:55.120at least protecting yourself the best you can there. Yeah.00:35:55.120 –> 00:36:00.12046 48 68 and they are available to be filed online.00:36:00.120 –> 00:36:04.120So extensions are there for you. So you can, you know,00:36:04.120 –> 00:36:07.120file it right on the IRS website and make it work. All right.00:36:07.120 –> 00:36:09.120We’ll take our third break and we get back. We’ll finish out the show.00:36:09.120 –> 00:36:14.120You can reach us at 6 1 5 7 3 7 9 9 8 6. We’ll be right back.00:36:14.120 –> 00:36:23.120Alrighty. We are back live here in studio for the last little bit here.00:36:23.120 –> 00:36:26.120So if you’ve been waiting to call, now’s the time to do it. Guys.00:36:26.120 –> 00:36:31.1206 1 5 7 3 7 9 9 8 6 6 1 5 7 3 7 9 9 8 6 making a,00:36:31.120 –> 00:36:40.120this our wonderful Saturday. It’s beautiful outside guys.00:36:40.120 –> 00:36:44.120And I just had my little baby just come in and just chilling.00:36:44.120 –> 00:36:46.120Now always a little late for that.00:36:46.120 –> 00:36:50.120Come things you’d wait to come into the office after the fact. So anyways,00:36:50.120 –> 00:36:55.120if you want to join the show, 6 1 5 7 3 7 9 9 8 6.00:36:55.120 –> 00:36:58.120So I got a call or a text during the break.00:36:58.120 –> 00:37:03.120And it just asked again about the beneficial ownership information report00:37:03.120 –> 00:37:08.120that has to be filed. And again, there is a small business situation.00:37:08.120 –> 00:37:12.120So some people may be small business entities and this,00:37:12.120 –> 00:37:15.120it does have all the directions and everything on it.00:37:15.120 –> 00:37:20.120And you can just type in F I N C E N.gov.00:37:20.120 –> 00:37:23.120That’s the website that you’ll be going to.00:37:23.120 –> 00:37:27.120And then they will explain if you are required to file, like I said,00:37:27.120 –> 00:37:28.120there are some exceptions,00:37:28.120 –> 00:37:32.120but most of them seem to be something that’s basically falls under licensing.00:37:32.120 –> 00:37:35.120So they already have some of the information.00:37:35.120 –> 00:37:38.120It is something you don’t want to put on the back burner.00:37:38.120 –> 00:37:41.120As far as I’m concerned, I’d rather be filing. In fact,00:37:41.120 –> 00:37:45.120I realized that my company was exempt, but I went ahead and filed.00:37:45.120 –> 00:37:49.120Anyways, I don’t want them coming back later and saying, Oh wait, you know,00:37:49.120 –> 00:37:52.120you should have done this. And then I have a very large fine,00:37:52.120 –> 00:37:54.120not something I want to be dealing with. So,00:37:54.120 –> 00:37:58.120and I have no idea if they’re waiving any of those penalties because we have00:37:58.120 –> 00:38:02.120enough troubles trying to waive penalties just when it comes to love letters00:38:02.120 –> 00:38:05.120from the IRS. And I know this week,00:38:05.120 –> 00:38:09.120we’ve been dealing with a couple of unique situations with it comes to00:38:09.120 –> 00:38:14.120payroll taxes. I had one that we just received a letter on,00:38:14.120 –> 00:38:18.120and none of us had any prior communication, even though the letters always say,00:38:18.120 –> 00:38:20.120well, we’ve told you about this before.00:38:20.120 –> 00:38:22.120I know many of you have had the same situation,00:38:22.120 –> 00:38:26.120but this was from a nine 41 from 2011.00:38:26.120 –> 00:38:29.120I didn’t even know to be quite honest,00:38:29.120 –> 00:38:32.120I didn’t realize the IRS could go back that far. I get it.00:38:32.120 –> 00:38:36.120Fiduciary situations where it’s payroll taxes and as employers,00:38:36.120 –> 00:38:38.120we have responsibility, but I real,00:38:38.120 –> 00:38:41.120I didn’t realize they could actually just come out of the blue.00:38:41.120 –> 00:38:45.120And we have another one that was to 2017, 18 and 19,00:38:45.120 –> 00:38:49.120where they had a couple of different issues that came into play and their00:38:49.120 –> 00:38:51.120numbers didn’t even match the numbers we had.00:38:51.120 –> 00:38:54.120So we’re dealing with not only correcting that,00:38:54.120 –> 00:38:57.120but also collections on that as well. So just,00:38:57.120 –> 00:39:01.120just putting a heads up for anyone that may have done their own payroll in the00:39:01.120 –> 00:39:06.120past, maybe even use the service that there is some letters.00:39:06.120 –> 00:39:09.120At first we were thinking that maybe they were frauds,00:39:09.120 –> 00:39:12.120but we did actually speak to a representative at the IRS.00:39:12.120 –> 00:39:14.120And these were at least the case I’m dealing with.00:39:14.120 –> 00:39:18.120These are active true cases. So don’t,00:39:18.120 –> 00:39:22.120don’t ever ignore the IRS. I mean,00:39:22.120 –> 00:39:24.120I know it’s kind of a common sense situation,00:39:24.120 –> 00:39:28.120but I have a number of people that just seem to say, Hey, you know what?00:39:28.120 –> 00:39:32.120I’m just going to throw my head in the sand and not come up and just deal with00:39:32.120 –> 00:39:35.120this. Not really the direction we want you to go, right?00:39:35.120 –> 00:39:36.120We want to be able to take a look,00:39:36.120 –> 00:39:38.120see if there’s a way of getting resolution.00:39:38.120 –> 00:39:42.120There are several different types of payments. There’s collection.00:39:42.120 –> 00:39:46.120There’s obviously non-collectible and you know, again,00:39:46.120 –> 00:39:49.120everyone wishes to be able to just make a deal.00:39:49.120 –> 00:39:53.120I probably get a call a week that says, Hey, I owe the IRS, you know,00:39:53.120 –> 00:39:56.120like a hundred thousand dollars, but I have 50 of it.00:39:56.120 –> 00:40:00.120Can we just settle for 50 and make it go away? It doesn’t work that way.00:40:00.120 –> 00:40:04.120You can’t just settle with the IRS. You can make an offer to the IRS,00:40:04.120 –> 00:40:08.120but they’re going to look. And in these cases, many of them, you know,00:40:08.120 –> 00:40:11.120they have equity in their home. They have real estate,00:40:11.120 –> 00:40:16.120not only their primary home, they have assets in the bank.00:40:16.120 –> 00:40:20.120They just, you know, it’s all I ever owed him was 50. So, you know,00:40:20.120 –> 00:40:22.120now five years later, you own a hundred.00:40:22.120 –> 00:40:25.120You don’t really want to pay a whole hundred. Well, I get that.00:40:25.120 –> 00:40:27.120But the fact is you can afford to pay the IRS,00:40:27.120 –> 00:40:31.120even if it doesn’t seem like you want to, or you don’t really have the cash,00:40:31.120 –> 00:40:33.120but you have the assets to afford.00:40:33.120 –> 00:40:37.120The IRS isn’t just going to settle because you say you don’t have the money to00:40:37.120 –> 00:40:40.120pay them. Keep in mind, they know that you own real estate.00:40:40.120 –> 00:40:42.120They know how much money’s in the bank,00:40:42.120 –> 00:40:47.120or they will get that during the process of this offer. So, you know,00:40:47.120 –> 00:40:50.120it’s not just something you can deal with that simply is all I’m going to put00:40:50.120 –> 00:40:55.120out there. You have, there is a process. There is a form, a 433 has to be00:40:55.120 –> 00:40:58.120completed. It’s like a financial statement. You know,00:40:58.120 –> 00:41:01.120so just because you have your children in private school,00:41:01.120 –> 00:41:05.120I have one I’ve been dealing with for a number of years because they,00:41:05.120 –> 00:41:08.120they trying to get their child through private school before they make a deal00:41:08.120 –> 00:41:12.120with the IRS. But the IRS is saying private school is a luxury.00:41:12.120 –> 00:41:14.120It is not something that is mandated.00:41:14.120 –> 00:41:19.120And theoretically the IRS or the United States treasury is paying for your00:41:19.120 –> 00:41:22.120child’s school because you’re not paying enough taxes every year.00:41:22.120 –> 00:41:26.120So these are the kinds of things we have to deal with.00:41:26.120 –> 00:41:30.120It’s not something you can’t deal with. There is always a process.00:41:30.120 –> 00:41:34.120I just think that sometimes people just look at their own financials and say,00:41:34.120 –> 00:41:36.120well, I hear people on the radio all the time.00:41:36.120 –> 00:41:38.120How many have to pay 10 cents on the dollar?00:41:38.120 –> 00:41:40.120Why do I have to pay all of it back?00:41:40.120 –> 00:41:46.120And the plain simple is we’ve gotten people that have only had to pay $25 on00:41:46.120 –> 00:41:50.120over a hundred thousand dollars, but that’s because they had no assets.00:41:50.120 –> 00:41:52.120They had no home.00:41:52.120 –> 00:41:59.120They worked a menial job at the one time situation or they were making money,00:41:59.120 –> 00:42:02.120but you know, now they’re no longer in that profession.00:42:02.120 –> 00:42:06.120So they don’t have anything for the IRS to collect against.00:42:06.120 –> 00:42:09.120And in those situations, a deal can be made.00:42:09.120 –> 00:42:12.120But if you’ve been a good little steward of your money,00:42:12.120 –> 00:42:16.120then the IRS is going to have the ability to collect.00:42:16.120 –> 00:42:20.120And that’s why you often hear people that owe, you know,00:42:20.120 –> 00:42:24.120five or six or $7,000 and you’re like, I can’t afford to pay it.00:42:24.120 –> 00:42:27.120I get that. But the IRS does have 10 years to collect.00:42:27.120 –> 00:42:33.120So they’re not in a rush to make a deal with someone just because they have a00:42:33.120 –> 00:42:37.120debt right this second.00:42:37.120 –> 00:42:40.120You know, just because future.00:42:40.120 –> 00:42:42.120So again, just pointing out that, you know,00:42:42.120 –> 00:42:44.120there is a process just like preparing taxes,00:42:44.120 –> 00:42:47.120put the information on the tax return, everything you make,00:42:47.120 –> 00:42:51.120don’t just use your 1099 K every business, every single business.00:42:51.120 –> 00:42:56.120I don’t know any of them that probably doesn’t get well, that’s not true.00:42:56.120 –> 00:42:59.120There are online businesses, but most storefront businesses,00:42:59.120 –> 00:43:03.120let’s put it that way, receive some form of cash.00:43:03.120 –> 00:43:09.120So when you come in and say, here’s my 1099 K or here’s all the 1099s I00:43:09.120 –> 00:43:13.120received. And you are a plumber or you are a roofer.00:43:13.120 –> 00:43:17.120You’re telling me that you didn’t have any single individual that wrote you a00:43:17.120 –> 00:43:22.120check or put a cash that you didn’t have.00:43:22.120 –> 00:43:24.120The IRS is asking the same questions.00:43:24.120 –> 00:43:26.120I’m not asking anything that they’re not thinking. Right.00:43:26.120 –> 00:43:30.120So when you come in and say, here’s only my 1099s,00:43:30.120 –> 00:43:35.120and you happen to be in an industry that may have had some cash or something00:43:35.120 –> 00:43:37.120else. And again, also lifestyle.00:43:37.120 –> 00:43:42.120So with those 1099s and of course you turn in every dollar of your expense.00:43:42.120 –> 00:43:46.120Now you’re showing that you made 30, 40, 50, $60,000.00:43:46.120 –> 00:43:50.120Yet when you take your mortgage and you’re supporting two kids and a wife,00:43:50.120 –> 00:43:54.120no one else works. And you know, it doesn’t make sense.00:43:54.120 –> 00:43:59.120So making sense with your taxes is a big part of what you should be doing00:43:59.120 –> 00:44:03.120because if you’re sitting and you have a home mortgage for $3,000 a month,00:44:03.120 –> 00:44:08.120and you’re showing that you make $38,000 a year, that doesn’t make sense.00:44:08.120 –> 00:44:12.120Now, if you’ve got three roommates and they’re all paying you rent, well,00:44:12.120 –> 00:44:16.120sure, that would be a viable concept. But if you make, you know, 38,00:44:16.120 –> 00:44:21.120and mortgage is 36, you can defend yourself and that that’s your gross.00:44:21.120 –> 00:44:24.120Where’s the tax dollars. So again,00:44:24.120 –> 00:44:28.120make sure when you’re looking at your taxes and the IRS has a software that00:44:28.120 –> 00:44:32.120they actually run it through to means test to figure out, you know,00:44:32.120 –> 00:44:38.120is this a logical dollar amount that this person is making? So, you know,00:44:38.120 –> 00:44:40.120again, just reporting the proper information,00:44:40.120 –> 00:44:44.120putting it into the system is very important. All right.00:44:44.120 –> 00:44:46.120So we’re winding up the show for this Saturday.00:44:46.120 –> 00:44:49.120I hope everyone is enjoying this Saturday. It’s a beautiful,00:44:49.120 –> 00:44:52.120especially after all the rain and sort of cold weather we’ve had.00:44:52.120 –> 00:44:56.120It’s gorgeous out there. So take a few minutes and go out. If you need help,00:44:56.120 –> 00:45:00.120we can file extensions. We can help you after April 15th at my firm.00:45:00.120 –> 00:45:06.120We can try our best to answer your questions. You can go to drfriday.com.00:45:06.120 –> 00:45:10.120That’s the website drfriday.com. You can ask a question through that site.00:45:10.120 –> 00:45:17.120You can also our phone number 615-367-0819.00:45:17.120 –> 00:45:22.120615-367-0819 is the number directly to the studio or I’m sorry,00:45:22.120 –> 00:45:23.120directly to the office.00:45:23.120 –> 00:45:28.120And that way you can get the information you need trying to help you stay on00:45:28.120 –> 00:45:30.120track and not get behind on your taxes.00:45:30.120 –> 00:45:36.120As well as you can always email friday@drfriday.com.00:45:36.120 –> 00:45:38.120Again, at this busy time of the year,00:45:38.120 –> 00:45:43.120I will say that we’re slower than we normally are in responding to those00:45:43.120 –> 00:45:44.120contacts,00:45:44.120 –> 00:45:47.120but we’re doing our best to try to get back with you as soon as possible.00:45:47.120 –> 00:45:52.120So if you don’t have your tax documents, you don’t know how to move forward,00:45:52.120 –> 00:45:55.120maybe you haven’t filed for five or six years happens easily.00:45:55.120 –> 00:45:58.120Time gets away from us. You know, we can file an extension.00:45:58.120 –> 00:46:00.120Then we can help you get back on your feet,00:46:00.120 –> 00:46:04.120try to get the resolution that you need set up a payment plan.00:46:04.120 –> 00:46:07.120You cannot set up a payment plan until you’re in compliance.00:46:07.120 –> 00:46:09.120So if you get one love letter, it says you owe money,00:46:09.120 –> 00:46:13.120but you haven’t filed taxes. Remember, we do have to get you into compliance.00:46:13.120 –> 00:46:17.120All tax years filed and accepted, then file the payment plan.00:46:17.120 –> 00:46:21.120Otherwise they will not accept the payment plan to move things forward.00:46:21.120 –> 00:46:23.120All right. So we’re winding down again.00:46:23.120 –> 00:46:33.120Phone number 615-367-0819 drfriday.com is the website and friday@drfriday.com00:46:33.120 –> 00:46:34.120is my email.00:46:34.120 –> 00:46:35.120Hope you guys enjoy yourself.

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Single member LLCs, often synonymous with small businesses, require careful attention to tax obligations and compliance. While excise tax may not apply, self-employment tax is a crucial consideration. Failing to file annual reports, maintain business licenses, and stay current with franchise and excise (F&E) requirements can lead to painful penalties. Dr. Friday emphasizes the importance of setting up an account on TNTAP to ensure compliance and avoid potential pitfalls.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Single member LLCs. For most of us that really just means a small business, a Schedule C on your 1040. And then you also have what’s called franchise excise in the state of Tennessee. Now you don’t pay the excise tax but you do actually have to pay self-employment tax. Understanding that you have to file it because that’s what happens with many people. They get somehow, they go on to Secretary of State, they set themselves up in an LLC, they forget to file the annual reports which is nothing to do with taxes, along with they forget their business license, their F&E. These are all very important and the penalties are painful. So go on to TNTAP, set up an account so you stay current.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday discusses the mortgage interest deduction and its impact on tax savings. She explains that unless the mortgage interest, property taxes, and sales tax exceed the standard deduction, purchasing a new home may not result in significant tax savings. Additionally, she highlights that for homes purchased for more than $750,000, the full mortgage interest deduction may not be available. Dr. Friday emphasizes the importance of understanding tax law to maximize tax savings.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Mortgage interest deduction. And again, I understand that many of you are not itemizing, therefore buying a new home, getting a mortgage, because I have people who come in and say, “Oh, I need you to do my taxes this year because I purchased a new home.” So right now, unless your mortgage interest exceeds the standard deduction, along with your property taxes and your sales tax, you know, you’re not probably going to save a dollar by purchasing a new home. But if you purchase the home for more than $750,000, you will also not be able to take 100% of the mortgage interest. Understanding how tax law works is how I can help you save tax dollars.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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When it comes to charitable deductions, cash donations up to 60% of your income are straightforward. However, for non-cash donations like stocks, art, or furniture valued over $2,500, an appraisal is crucial. Dr. Friday shares a cautionary tale of a client who donated inherited items without a proper appraisal, leading the IRS to deny the deduction despite photographic evidence. Ensuring you have the right documentation, including a qualified appraisal for high-value non-cash donations, can save you significant tax dollars.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Charitable deductions. We usually talk about charitable deductions and most of the time we’re talking cash, right? If you give cash up to 60% of your income, it’s a straight tax deduction. But how about if you give stock, precious art, furniture, all of that. That is also, but here’s the catch. If you’re giving more than $2,500, then you need to have an appraisal. Had a gentleman that inherited some things and he gave it to donation and the IRS came back and said, wait, you didn’t have an appraisal, so we’re not giving. He had pictures, he had documents, he did not have a direct appraisal. So making sure you have the right documentation can save you tax dollars.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this episode, Dr. Friday explains the Child Dependent Care Credit, which allows you to claim up to $3,000 in expenses for a single child and a maximum of $6,000 for two or more children. However, if your employer provides a child care benefit program, you cannot claim both the credit and the employer benefit. If your employer’s benefit equals or exceeds $6,000, you will not qualify for the additional deduction. Dr. Friday emphasizes the importance of understanding tax laws and encourages listeners to seek professional help if needed.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Child Dependent Care Credit. If your employer has a program where they allow you or they pay you so much money for that benefit, remember if you’re out paying money you cannot take both. You can take up to, so you can claim up to $3,000 in expenses for a single child. The maximum is $6,000 for two children and if you have four or five you still only get $6,000. And if your employer is giving you at least $6,000 in that care then you will not qualify for this additional deduction. Understanding your taxes is what I do. If you need help you need to call me 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this episode, Dr. Friday provides valuable insights into the Lifetime Learning Credit, a tax credit designed to help offset the costs of higher education. He explains the eligibility criteria, including the income thresholds for single and married filers, and clarifies which expenses qualify for the credit. With his expertise, listeners can better understand how to take advantage of this tax-saving opportunity and potentially receive up to $2,000 in credits for qualifying educational expenses.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

You have a child in school and you’re wondering, “Can I get any of that lifetime learning credit?” And the answer is probably, let’s see, it’s 20% of the first $10,000 up to $2,000 credit, and then you have an income limitation. It’s $75,000 up to $90,000 for a single person, so if you’re making more than $90,000, you’re not going to get any of the credit. For a married couple, $155,000 up to $185,000. Again, if you’re making more than $185,000, you’re not going to get any of the credit. And this does not include, you cannot include in that money, lifestyle, so living expenses, transportation, they’re not eligible. Need help? Call me.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, of Dr. Friday’s Tax and Financial Firm, offers valuable insights on handling 1099-K forms for individuals selling personal items. The IRS allows the declaration of these sales on a Schedule 1, letting sellers write off the sold items up to the amount listed on the 1099-K. Dr. Friday cautions, however, that this can get tricky for small business owners who might mix personal sales with business transactions. She warns that the IRS could request receipts, especially for significant sales volumes, and advises sellers to maintain clear records to differentiate personal sales from business income, thereby avoiding potential audit triggers.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

What do you do if you do receive a 1099 K but it really is just selling your household goods? Well, the IRS has actually given us some information on that. They said we can file it on a Schedule 1, and you can write off those goods up to the dollar amount of the 1099 K. Here’s the catch, guys: if you’re running a small business and you’re saying, “Hey, I’ve got a bunch of old Turner chairs and lamps and all this, and you’re selling them on the internet,” the IRS could ask you for receipts. This may have been grandma’s stuff in the attic, so be careful when you’re looking at how much money you’re selling on the internet because it may be a way of catching you in an audit.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the president of Dr. Friday’s Tax and Financial Firm, clarifies the evolving situation regarding 1099-K forms, which are critical for individuals and small businesses engaging in digital transactions. After the initial announcement in 2022 of a $600 threshold, the IRS has now set a new threshold of $5,000 for 2024. This update is particularly relevant for those selling on platforms like Amazon or managing small ventures that might be considered hobbies. Dr. Friday notes that anyone with gross sales exceeding $5,000 should anticipate receiving a 1099-K form, highlighting the importance of being prepared for this change to ensure compliance and accurate tax reporting.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

We keep getting calls on 1099Ks. We all know back in 2022, they announced that they were going to actually do a threshold of $600 and then it said, “Oh wait, we’re going to extend it.” Guess what? In 2024, they have announced a $5,000 threshold. So for all of you that might be selling little things on Amazon, for all of you that have small little businesses you might think is a hobby and it’s more than 5,000 gross sales, you are likely to be getting a 1099K. I actually have people that received it this year when they only had $600 or $700.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, shares exciting news for small business owners in Tennessee. She discusses the recent Notice 2308, issued in May 2023, which significantly raises the business tax filing threshold under the Tennessee Work Tax Act. Previously, businesses with earnings of $3,000 to $10,000 were exempt from tax, but now, the threshold has been expanded to $100,000. Dr. Friday advises Tennessee small business owners to consult the Tennessee Department of Revenue or log into their TINTAP accounts to understand how this change could benefit them, potentially reducing their tax liabilities and simplifying their financial responsibilities.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Notice back in 2023 of May, notice 2308 Tennessee Work Tax Act increased business tax filing threshold. With all that being said, this is actually good news. If you are a small business in Tennessee, we’ve always had to pay a business tax. Basically $3,000 or less, up to maybe $10,000 it was zero, right? But now, up to $100,000. That’s right. Doesn’t mean you might not need your business license, it may just mean that you have a zero tax. You need to check with Tennessee Department of Revenue, go onto your TINTAP, check it out, make sure that you’re not paying taxes, you shouldn’t.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the head of Dr. Friday’s Tax and Financial Firm, highlights a significant update from the SECURE Act 2.0 regarding retirement savings. Starting December 31, 2024, individuals aged 60 through 63 will be eligible to make catch-up contributions of $10,000 to their retirement plans. This change aims to provide additional support for Americans in their retirement planning, acknowledging the rising costs of living in retirement. Dr. Friday encourages listeners to take advantage of these increased contribution limits, alongside the existing $7,500 catch-up contribution for those over 50, to bolster their retirement savings and ensure financial stability in their later years.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Secured Act 2.0, beginning December 31st, 2024, catch up contributions for age 60 through 63 is $10,000. Again, guys, the IRS or the US Treasury and all the people involved are trying to help us prepare for retirement. It’s more expensive today than it was 10 years ago. We need to really start concentrating on putting money aside. You still have up to $7,500 for those 50 years plus, but you can actually put a little bit more. So start planning today how you’re going to come up with that extra money so you can set yourself up for a great retirement.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of the Dr. Friday Show, Dr. Friday covers a wide range of tax-related topics, from individual tax situations to business tax considerations. She provides valuable insights and advice for listeners looking to navigate the complex world of taxes.

Topics covered:

• Roth conversions and their tax implications
• Taxation of Social Security benefits
• Tax considerations for surviving spouses and dependents
• Life insurance payouts and potential taxability
• Business losses and the IRS’s expectations for profitability
• Importance of filing tax returns for partnerships and S corporations
• GoFundMe accounts and their tax implications
• 1099K reporting for Venmo transactions
• Adjusting W-4 withholdings to avoid tax surprises

Transcript

00:00:00.000 –> 00:00:06.560No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your00:00:06.560 –> 00:00:07.560financial woes.00:00:07.560 –> 00:00:09.800She’s the how-to girl.00:00:09.800 –> 00:00:10.800It’s the Dr. Friday Show.00:00:10.800 –> 00:00:19.800If you have a question for Dr. Friday, call her now, 737-WWTN.00:00:19.800 –> 00:00:23.760That’s 737-9986.00:00:23.760 –> 00:00:26.760So here’s your host, financial counselor and tax consultant, Dr. Friday.00:00:26.760 –> 00:00:32.280All righty, I’m Dr. Friday.00:00:32.280 –> 00:00:33.280We are live.00:00:33.280 –> 00:00:44.320You can reach us here at 615-737-9986, 615-737-9986, taking your calls, talking about taxes.00:00:44.320 –> 00:00:47.280Many of you may be working on your taxes this weekend.00:00:47.280 –> 00:00:50.320I know I’m in the process of working on taxes.00:00:50.320 –> 00:00:54.640You may actually be running into some things that you’re thinking about for 2024.00:00:54.640 –> 00:00:56.040I mean, things are always changing.00:00:56.040 –> 00:00:58.800A lot of people are thinking about Roth conversions.00:00:58.800 –> 00:01:03.480I am not a financial advisor, so I do not get into that aspect, other than the fact00:01:03.480 –> 00:01:07.200that if you do a conversion, you will end up paying taxes.00:01:07.200 –> 00:01:10.200So you may want to talk to your tax person when you’re doing that.00:01:10.200 –> 00:01:15.240We do a lot of planning when we’re usually doing tax prep because what you have happening,00:01:15.240 –> 00:01:18.600you know, sometimes people are thinking, “Well, maybe I’ll sell a house or I’ll do this,”00:01:18.600 –> 00:01:26.000and all those kinds of things not only affect your actual taxes that are due, but your IRMA,00:01:26.000 –> 00:01:28.600if you’re in and receiving Medicare.00:01:28.600 –> 00:01:33.680So it’s very important to take into account not only what you’re going to be paying in00:01:33.680 –> 00:01:38.480actual ordinary or capital gains tax, but make sure that you talk about the IRMA as00:01:38.480 –> 00:01:43.280well because we have found over the years, many times people take into account, you know,00:01:43.280 –> 00:01:44.760how much am I going to pay in capital gains?00:01:44.760 –> 00:01:45.760I already calculated that.00:01:45.760 –> 00:01:49.800And then they get the love letter from Medicare that says, “Hey, we’ve changed the amount00:01:49.800 –> 00:01:54.500we’re taking from you because this situation is happening,” right?00:01:54.500 –> 00:01:57.300Whatever it might be, but maybe you sold something, your income went up.00:01:57.300 –> 00:02:00.100Now, I do understand there is a one-time exclusion.00:02:00.100 –> 00:02:04.060I’m not going to claim I’m an expert at it, but I’m sure you could talk to someone over00:02:04.060 –> 00:02:08.120down at Medicare or Social Security that could help you with it.00:02:08.120 –> 00:02:12.640But it’s very important that you consider how all that’s going to work because when00:02:12.640 –> 00:02:17.380you decide to take large distributions, again, I have a number of clients that are really00:02:17.380 –> 00:02:23.520trying to get more money into their Roth IRAs, reducing their traditional IRAs while taxes00:02:23.520 –> 00:02:25.320are still low.00:02:25.320 –> 00:02:29.760There is absolutely no guarantee that we know in two years that taxes will go up.00:02:29.760 –> 00:02:33.640But we assume that is what the tax law says at this point.00:02:33.640 –> 00:02:36.240Many of us never expected taxes to go down.00:02:36.240 –> 00:02:38.840So, you know, no one has a magic ball.00:02:38.840 –> 00:02:42.480But if you’re actually a person that is working towards that, then, you know, we have these00:02:42.480 –> 00:02:44.800expectations to do that.00:02:44.800 –> 00:02:48.040All right, let’s hit Alan in Spring Hill real quick.00:02:48.040 –> 00:02:49.680I think you have multitask there.00:02:49.680 –> 00:02:50.680Thanks, boss.00:02:50.680 –> 00:02:52.240Hey, Alan, what can I do for you?00:02:52.240 –> 00:02:55.000Hey, I have a question.00:02:55.000 –> 00:02:58.040My wife and I are both retired now.00:02:58.040 –> 00:03:08.280And I know that if you keep or you can confirm it, if you keep your income under 32,000,00:03:08.280 –> 00:03:13.000your Social Security won’t be taxed if you’re filing, you know, married couple.00:03:13.000 –> 00:03:14.000Is that true?00:03:14.000 –> 00:03:15.000Right.00:03:15.000 –> 00:03:19.160Well, the provisional tax code takes half of your Social Security as part of that.00:03:19.160 –> 00:03:24.960So that is true, the 32K, but half of that is Social Security or half of your Social00:03:24.960 –> 00:03:31.560so if you make $20,000 a year, 10 of that 32 would come from your Social Security.00:03:31.560 –> 00:03:36.760Okay, so here’s the situation.00:03:36.760 –> 00:03:39.840And I’m not sure I understand what you just said there.00:03:39.840 –> 00:03:42.800Go ahead and give me your numbers maybe or roughly.00:03:42.800 –> 00:03:45.880You don’t have to give me exact.00:03:45.880 –> 00:03:53.720So I’m looking at possibly taking some funds from my wife’s IRA.00:03:53.720 –> 00:04:00.320Okay, our only income is some interest income that will be about $11,000.00:04:00.320 –> 00:04:05.400Okay, how much do you guys get in Social Security?00:04:05.400 –> 00:04:09.360About 48,000 a year.00:04:09.360 –> 00:04:17.680All right, so theoretically, you’re already over the zero percent capital gain.00:04:17.680 –> 00:04:23.720I mean, the zero tax for Social Security because the provisional tax code says, take all of00:04:23.720 –> 00:04:26.160your Social Security divided in half.00:04:26.160 –> 00:04:30.200So that would be 48 divided in half is 24,000, right?00:04:30.200 –> 00:04:34.560And then add all of your other income, in this case, 11,000.00:04:34.560 –> 00:04:40.560So we would be at $35,000 income before you do anything else.00:04:40.560 –> 00:04:46.840So you are most likely going to have at least some, not all, because they can only tax up00:04:46.840 –> 00:04:50.280to 85% of your Social Security.00:04:50.280 –> 00:04:54.080I know it sounds silly, but they can take 85% of it in tax.00:04:54.080 –> 00:04:57.480At this point, you’d probably only be at like 20% or even less.00:04:57.480 –> 00:05:00.440It’s progressive a little bit.00:05:00.440 –> 00:05:06.160But you’re already going to be over that 32K before you take any other distributions.00:05:06.160 –> 00:05:10.000So, okay, I understand that.00:05:10.000 –> 00:05:18.480So if I take, say, another 12 from the IRA, then I’ll be at what, 47?00:05:18.480 –> 00:05:21.760Yeah, well, yeah, you’d be at 47.00:05:21.760 –> 00:05:26.840And then of course, as far as, I mean, not all 24.00:05:26.840 –> 00:05:32.360So probably about, to be honest, probably about 15, 11, and 12, that’s seven, eight,00:05:32.360 –> 00:05:33.360about 38.00:05:33.360 –> 00:05:34.360And what is it about?00:05:34.360 –> 00:05:36.320Almost, are you guys over 65 or under?00:05:36.320 –> 00:05:37.960We are over 65.00:05:37.960 –> 00:05:40.240Okay, so you almost have what, 31?00:05:40.240 –> 00:05:46.480So you’d be maybe looking at about six or $7,000 at what, three or 4%.00:05:46.480 –> 00:05:52.760So you’re looking at a very small tax bracket that we’d actually be hitting, because you00:05:52.760 –> 00:05:56.400have the standard deduction, assuming you take the standard and that you don’t exceed00:05:56.400 –> 00:05:57.400that.00:05:57.400 –> 00:06:03.280So that’s taking off the top, and then whatever’s left of that is taxable is what you’re saying.00:06:03.280 –> 00:06:04.280You got it.00:06:05.280 –> 00:06:06.280110.00:06:06.280 –> 00:06:07.280Okay, sounds perfect.00:06:07.280 –> 00:06:08.280Thank you so much.00:06:08.280 –> 00:06:09.280No problem.00:06:09.280 –> 00:06:10.960Appreciate the phone call.00:06:10.960 –> 00:06:11.960Thank you.00:06:11.960 –> 00:06:13.960All right, let’s hit Bill in Tennessee.00:06:13.960 –> 00:06:14.960Hey, Bill.00:06:14.960 –> 00:06:15.960Yeah, hi, Dr. Favius.00:06:15.960 –> 00:06:16.960Bill from Nolensville.00:06:16.960 –> 00:06:17.960Hello.00:06:17.960 –> 00:06:23.840I got a question for you, reference RMDs.00:06:23.840 –> 00:06:25.200Okay.00:06:25.200 –> 00:06:26.200I forgot.00:06:26.200 –> 00:06:30.200Okay, you forgot to take it.00:06:30.200 –> 00:06:36.120In other words, yeah, I mixed up between myself and the company I have them with.00:06:36.120 –> 00:06:37.360I thought it was automatic.00:06:37.360 –> 00:06:40.220It wasn’t, and I didn’t take them.00:06:40.220 –> 00:06:43.260And I discovered it around the 15th of February.00:06:43.260 –> 00:06:45.720So I called them, took it then.00:06:45.720 –> 00:06:49.560So how do I get out of this mess, basically?00:06:49.560 –> 00:06:55.180I have found, I’m not going to say it works for everyone, but I have found that by attaching,00:06:55.180 –> 00:07:01.800we attach a PDF letter to the return explaining what happened and asking them to please waive00:07:01.800 –> 00:07:03.080the penalty.00:07:03.080 –> 00:07:08.840We have done this for a number of years, and knock on wood, right now we are batting 85%00:07:08.840 –> 00:07:10.360of never having to deal with the penalties.00:07:10.360 –> 00:07:14.480And the ones that didn’t, normally it was multiple years that we ran into it.00:07:14.480 –> 00:07:16.180So someone forgot completely, right?00:07:16.180 –> 00:07:19.280They didn’t know until something happened, normally a financial.00:07:19.280 –> 00:07:22.880So in your case, I would just kind of just beg forgiveness.00:07:22.880 –> 00:07:23.880Hey, you know what?00:07:23.880 –> 00:07:26.760I got, they got, thought it was this misunderstanding.00:07:26.760 –> 00:07:27.760Here’s the situation.00:07:27.760 –> 00:07:28.760Boom.00:07:28.760 –> 00:07:32.400You know, I did take, because the biggest thing is they want you to take it out immediately00:07:32.400 –> 00:07:37.680as, as you know it, because obviously it has a few extra, in your case, barely two months00:07:37.680 –> 00:07:42.220of growth, but there was a little extra growth in there on their time.00:07:42.220 –> 00:07:46.540So I would, and then just wait and see what will come of it.00:07:46.540 –> 00:07:52.740But like I said, I have found the IRS not to be, and to be quite honest with you, Bill,00:07:52.740 –> 00:07:56.820I mean, if you haven’t really had any IRS issues in the last 31 months, we’ve asked00:07:56.820 –> 00:07:58.300them for forgiveness.00:07:58.300 –> 00:08:02.660There’s always the get out of jail card free, I call it, but there’s always that one, you00:08:02.660 –> 00:08:05.580know, everyone’s entitled to one forgiveness, right?00:08:05.580 –> 00:08:10.160Either way, you’ll probably get away with not worrying about it, but that’s the way00:08:10.160 –> 00:08:11.160we’ve done it.00:08:11.160 –> 00:08:15.340And like I said, we’ve been very, very fortunate with the IRS just coming back and waiving00:08:15.340 –> 00:08:16.340that penalty.00:08:16.340 –> 00:08:19.020But most of my people haven’t had a lot of issues.00:08:19.020 –> 00:08:23.980So it’s, it’s kind of just forgiven because it was a once in a lifetime problem kind of00:08:23.980 –> 00:08:24.980thing.00:08:24.980 –> 00:08:25.980Okay.00:08:25.980 –> 00:08:30.220Now, if I’m in this form 5329, am I supposed to fill that out as well?00:08:30.220 –> 00:08:31.220No.00:08:31.220 –> 00:08:33.540You don’t need to do that?00:08:33.540 –> 00:08:34.540You don’t need to do that.00:08:34.540 –> 00:08:35.540Okay.00:08:35.540 –> 00:08:42.080And, you know, I usually file it, you know, just send it through the new e-file, just00:08:42.080 –> 00:08:43.080a simple return.00:08:43.080 –> 00:08:48.520Now, am I going to have to, you know, print it out and send it in this time with the letter?00:08:48.520 –> 00:08:50.400You know, that’s a great question.00:08:50.400 –> 00:08:55.480If you’re our system allows us to attach, if the system doesn’t allow it, then I would00:08:55.480 –> 00:08:58.240probably wait, bill and see if they even send you anything.00:08:58.240 –> 00:09:00.080It’s not going to change the fact.00:09:00.080 –> 00:09:03.400And then if they do send you a letter, then you can always respond to that letter.00:09:03.400 –> 00:09:08.000Cause e-file is definitely going to be still the most efficient way to file your taxes,00:09:08.000 –> 00:09:10.780but see if they allow you to attach a PDF to it.00:09:10.780 –> 00:09:11.780Some software.00:09:11.780 –> 00:09:15.040Well, like I said, ours does, but it doesn’t mean all the software does.00:09:15.040 –> 00:09:16.040Okay.00:09:16.040 –> 00:09:24.240So I should go ahead and e-file my return and then only send the letter if they tell00:09:24.240 –> 00:09:25.560me I need to send the letter.00:09:25.560 –> 00:09:26.560Yeah.00:09:26.560 –> 00:09:28.100Wait and see if they even assess you.00:09:28.100 –> 00:09:29.100Just wait for it.00:09:29.100 –> 00:09:30.100See if they even comes back.00:09:30.100 –> 00:09:31.100Okay.00:09:31.100 –> 00:09:36.620Now I guess I just put the taxes and the gains on this year’s form.00:09:36.620 –> 00:09:38.460No, do not do that.00:09:38.460 –> 00:09:43.660Do not report anything until next year as far as you’ll put a double RMD on your 24.00:09:43.660 –> 00:09:44.660Okay.00:09:45.660 –> 00:09:49.380Cause then if they match it up, they won’t know how to match it otherwise.00:09:49.380 –> 00:09:50.380I got you.00:09:50.380 –> 00:09:51.380I appreciate it, man.00:09:51.380 –> 00:09:52.380Thank you very much.00:09:52.380 –> 00:09:53.380Thanks boss.00:09:53.380 –> 00:09:54.380Have a great weekend.00:09:54.380 –> 00:09:55.380Alrighty.00:09:55.380 –> 00:09:56.380Yeah.00:09:56.380 –> 00:09:57.380You too.00:09:57.380 –> 00:09:58.380Doug and Franklin.00:09:58.380 –> 00:09:59.380Let’s get him before the break.00:09:59.380 –> 00:10:00.380Hey Doug.00:10:00.380 –> 00:10:01.380How are you?00:10:01.380 –> 00:10:02.380I’m doing awesome.00:10:02.380 –> 00:10:03.380And yourself?00:10:03.380 –> 00:10:04.380Fine.00:10:04.380 –> 00:10:05.380Thank you.00:10:05.380 –> 00:10:06.380Thank you for taking my call.00:10:06.380 –> 00:10:07.380Sure.00:10:08.380 –> 00:10:09.380What I’ve got is this.00:10:09.380 –> 00:10:10.380Yes.00:10:10.380 –> 00:10:16.700My mother passed away in February of 2023 and that was in early February and we filed00:10:16.700 –> 00:10:20.380her taxes March the 27th of last year.00:10:20.380 –> 00:10:22.700And I’ve been going back.00:10:22.700 –> 00:10:24.620I’ve been going back on the, thank you.00:10:24.620 –> 00:10:29.580I’ve been going back and looking at your website every day or two and it’s still showing in00:10:29.580 –> 00:10:35.820process and I was just curious why, how long will this take?00:10:35.820 –> 00:10:40.220It’s not a substantial amount, but it’s, you know, two things.00:10:40.220 –> 00:10:44.300One, did you file the 13,001 or whatever?00:10:44.300 –> 00:10:47.020Was there a refund coming back on that return?00:10:47.020 –> 00:10:53.220There was a small refund coming back of $1,131 and we filed the 1310 form.00:10:53.220 –> 00:10:58.620So you have two things.00:10:58.620 –> 00:11:03.820One, you filed her 2022 on March 27th of 2023.00:11:03.820 –> 00:11:06.660Did you file her 23 return yet?00:11:06.660 –> 00:11:07.660We’ve not filed that yet.00:11:07.660 –> 00:11:10.260No, we’ve just now got all of her paperwork.00:11:10.260 –> 00:11:11.260Right.00:11:11.260 –> 00:11:14.380A small amount, but we’ve got that, but we’ve not, I’m not filing that for another couple00:11:14.380 –> 00:11:15.380of weeks.00:11:15.380 –> 00:11:16.380Yeah, that’s perfect.00:11:16.380 –> 00:11:19.420I just want to make sure you were going to file it because sometimes people forget.00:11:19.420 –> 00:11:24.260The second thing is normally when it’s a deceased, it’s hand processed because we have to mail00:11:24.260 –> 00:11:25.260them in.00:11:25.260 –> 00:11:26.260We can’t e-file them.00:11:26.260 –> 00:11:32.340So they do take a long time, but you know, I would be curious.00:11:32.340 –> 00:11:34.700It’s taken a year almost.00:11:34.700 –> 00:11:37.060That’s a little over time, Doug.00:11:37.060 –> 00:11:38.060This was e-filed.00:11:38.060 –> 00:11:39.060They took it.00:11:39.060 –> 00:11:43.220They accepted that that day that it was filed.00:11:43.220 –> 00:11:46.940It shows accepted and in process.00:11:46.940 –> 00:11:51.940I can honestly say my software does not allow us if the last person, if there’s married,00:11:51.940 –> 00:11:54.180yes, but it’s one of the members still alive.00:11:54.180 –> 00:11:56.500Or is your mom by herself?00:11:56.500 –> 00:12:04.940She was 99 when she passed away and she was, her husband, my stepfather was deceased.00:12:04.940 –> 00:12:05.940Okay.00:12:05.940 –> 00:12:10.620So, well, your software is a little different than mine, but so I guess I would do this.00:12:10.620 –> 00:12:13.220You have power of attorney, correct, Doug?00:12:13.220 –> 00:12:14.220That’s correct.00:12:14.220 –> 00:12:15.220Okay.00:12:15.220 –> 00:12:19.780I do want to make one of those fun, long phone calls because I’d be curious to see, even00:12:19.780 –> 00:12:23.100though it’s showing that it’s processing, I wonder if they could tell you if it’s in00:12:23.100 –> 00:12:24.100their system.00:12:24.100 –> 00:12:25.100It’s a long time.00:12:25.100 –> 00:12:29.620So I’m wondering if we need to certify a copy to them.00:12:29.620 –> 00:12:35.100I have tried to reach them by phone, which has not been successful.00:12:35.100 –> 00:12:38.100Is there a number that you have that I could call?00:12:38.100 –> 00:12:42.020Unfortunately, I don’t have any additional numbers.00:12:42.020 –> 00:12:44.900We do have a representative number, but you wouldn’t be able to use that one.00:12:44.900 –> 00:12:51.140So your only best bet is the, you know, the 1-800-829-1040.00:12:51.140 –> 00:12:52.780That’s the typical number.00:12:52.780 –> 00:12:55.180But it is, they should be open today.00:12:55.180 –> 00:12:59.540I mean, just as a thought, maybe you could call them not during the weekday.00:12:59.540 –> 00:13:02.540And can’t say one isn’t already on the phone with them, Doug.00:13:02.540 –> 00:13:06.180I usually find doing it seven o’clock in the morning is my best bet because people haven’t00:13:06.180 –> 00:13:07.900quite got functioning at that time.00:13:07.900 –> 00:13:11.900But that’s the only way, because I’m just really curious after this long a time, and00:13:11.900 –> 00:13:15.940we were nearly at a year marker and they haven’t really sent you anything saying they’re still00:13:15.940 –> 00:13:16.940working on it.00:13:16.940 –> 00:13:19.180You’re looking online saying they’ve received it.00:13:19.180 –> 00:13:22.780The alternative would be, is just to certify a copy to them.00:13:22.780 –> 00:13:27.260As a, you know, put on the top, second copy, put it in the mail, certify it to the IRS00:13:27.260 –> 00:13:30.140so you have a second proof of them receiving it.00:13:30.140 –> 00:13:34.060And then that way, I’m just wondering if it would get processed.00:13:34.060 –> 00:13:36.140Because I have a feeling something’s held it up.00:13:36.140 –> 00:13:39.940And since you haven’t gotten any love letters, I’m wondering if it’s actually just not processing.00:13:39.940 –> 00:13:42.340I mean, like it’s fallen out of the loop.00:13:42.340 –> 00:13:43.340Right.00:13:43.340 –> 00:13:47.740She was in assisted living when she passed away and I put them on notice.00:13:47.740 –> 00:13:50.580I did do a change of address and everything like that.00:13:50.580 –> 00:13:54.940I will, I’m going to meet with my tax preparer in about two weeks.00:13:54.940 –> 00:13:59.740I’ll discuss this with him if I don’t see anything from the IRS and have him do that00:13:59.740 –> 00:14:00.740then.00:14:00.740 –> 00:14:03.580Yeah, I think that, I mean, it can’t hurt at that point, but all right.00:14:03.580 –> 00:14:04.580Thank you for the phone call, Doug.00:14:04.580 –> 00:14:05.580I appreciate you.00:14:05.580 –> 00:14:06.580Thank you for your help.00:14:06.580 –> 00:14:07.580Bye bye.00:14:07.580 –> 00:14:08.580Thanks.00:14:08.580 –> 00:14:09.580Bye bye.00:14:09.580 –> 00:14:10.580All right.00:14:10.580 –> 00:14:11.580We’re going to take a quick break.00:14:11.580 –> 00:14:12.580When we come back, you can join the show at 615-737-9986.00:14:12.580 –> 00:14:13.580This is the Dr. Friday Show.00:14:13.580 –> 00:14:14.580We’ll be right back.00:14:14.580 –> 00:14:15.580G’day.00:14:15.580 –> 00:14:16.580All right.00:14:16.580 –> 00:14:17.580We are back here live in studio.00:14:17.580 –> 00:14:18.580I’m Dr. Friday.00:14:18.580 –> 00:14:31.980I’m an enrolled agent licensed with the Internal Revenue Service to do taxes and representation.00:14:31.980 –> 00:14:35.220If you’re having someone help you with your taxes, make sure you have someone that’s up00:14:35.220 –> 00:14:36.660to date on taxes.00:14:36.660 –> 00:14:37.660I mean, I get it.00:14:37.660 –> 00:14:42.420If you only have a W-2, you probably don’t need an expert to just do your taxes, but if00:14:42.420 –> 00:14:48.740you have got rental properties or you have an Airbnb and you have a business or an LLC,00:14:48.740 –> 00:14:52.620these kinds of things, you might need a second opinion on making sure you’re taking the right00:14:52.620 –> 00:14:53.980expenses.00:14:53.980 –> 00:14:58.360Another thing is if you’re running a business, but you’re not making a profit, you know,00:14:58.360 –> 00:15:01.980that is one of those areas that is very, very complicated.00:15:01.980 –> 00:15:06.980Yes, some businesses lose money and the IRS expects that, but they don’t expect you to00:15:06.980 –> 00:15:12.180lose thousands and thousands of dollars year after year, unless the business is something00:15:12.180 –> 00:15:17.880maybe like a farm that has nut trees that take five or 10 years to mature.00:15:17.880 –> 00:15:23.260There are certain exceptions to every rule, but if you’re in a business and every year00:15:23.260 –> 00:15:27.940you’re saying you’ve lost money, I will tell you, you might have gotten away with it, but00:15:27.940 –> 00:15:33.460at some point the IRS is going to come back and probably audit to get the justification00:15:33.460 –> 00:15:35.660behind that business.00:15:35.660 –> 00:15:40.620And at that point you’ll be paying penalties, failure to report, failure to understate.00:15:40.620 –> 00:15:45.580The penalties can add up to almost a hundred percent of what you owed in the first place.00:15:45.580 –> 00:15:48.180So saving money today, it always sounds great.00:15:48.180 –> 00:15:52.560I had a young person that came in the other day and they’ve been doing their own taxes00:15:52.560 –> 00:15:54.740and they’ve been showing for years a loss.00:15:54.740 –> 00:15:59.380And we’re not just talking a couple hundred dollars, we’re talking several thousand dollars,00:15:59.380 –> 00:16:03.500but without the business loss, they are owing money every year.00:16:03.500 –> 00:16:07.860So I mean, they think, okay, well we’re in business, but legitimately they weren’t in00:16:07.860 –> 00:16:09.820business based on the IRS.00:16:09.820 –> 00:16:14.980Just because you think you’re going out to an art show or you’re putting money into inventory.00:16:14.980 –> 00:16:17.460And again, inventory is not a tax.00:16:17.460 –> 00:16:22.340So if your garage is full of a product, that is not a tax deduction.00:16:22.340 –> 00:16:24.820It is in the garage, therefore the ability to sell.00:16:24.820 –> 00:16:29.380So it’s inventory, which means at some point later on you might end up selling it.00:16:29.380 –> 00:16:35.060But keep, you know, again, keep in mind, I am not saying that losses are not a tax deduction.00:16:35.060 –> 00:16:39.220I am saying that if you’re making it year after year, theoretically, they say three00:16:39.220 –> 00:16:46.020out of five years, if you haven’t made a profit, then you’re not trying to be in business.00:16:46.020 –> 00:16:50.660So just be aware, I guess is my best answer on that.00:16:50.660 –> 00:16:54.860Just because you can put it on your tax return and you get away with it, doesn’t necessarily00:16:54.860 –> 00:16:56.660mean it’s the right answer.00:16:56.660 –> 00:17:00.820And at some point that could come back, invite you and create more headache than what you00:17:00.820 –> 00:17:04.540might’ve had if you’d just been filing and paying your taxes.00:17:04.540 –> 00:17:07.700So I’m just kind of putting that out there.00:17:07.700 –> 00:17:10.580Business when we start them up, almost every business has a loss.00:17:10.580 –> 00:17:14.860Sure, some people will open up a business and immediately start having sales, or even00:17:14.860 –> 00:17:20.220if they have million dollars in sales, doesn’t mean they didn’t lose money in making the00:17:20.220 –> 00:17:21.220business.00:17:21.220 –> 00:17:26.740But you know, if you’ve done $50 in sales and you spent $12,000 to make it, doesn’t00:17:26.740 –> 00:17:28.860necessarily use some common sense.00:17:28.860 –> 00:17:33.500It doesn’t make sense unless that was all education and buying into a franchise.00:17:33.500 –> 00:17:36.820And maybe you did it at the end of the year and it didn’t really get started, but then00:17:36.820 –> 00:17:39.820that’s considered startup and you can’t take a hundred percent of that loss.00:17:39.820 –> 00:17:44.180So again, just keep in mind how that’s all going to work.00:17:44.180 –> 00:17:49.500Also understanding how tax law kind of comes through onto your own personal tax return,00:17:49.500 –> 00:17:56.700because we all have different tax situations and some of it will comply to your income.00:17:56.700 –> 00:18:02.180If you’re making $200,000 as a single person or $250,000, most of the time there’s some00:18:02.180 –> 00:18:08.700tax deductions that you will not qualify for that if someone’s making $100,000 or $150,00000:18:08.700 –> 00:18:09.700they might.00:18:09.700 –> 00:18:13.420So understanding how taxes affect your individual tax.00:18:13.420 –> 00:18:17.460A lot of times people will get into rentals and I’m talking long-term rentals.00:18:17.460 –> 00:18:21.300And if you’re into those, a lot of times you don’t get to deduct the loss because of your00:18:21.300 –> 00:18:22.300income.00:18:22.300 –> 00:18:23.740It doesn’t mean it’s not a good thing.00:18:23.740 –> 00:18:25.540I love my rentals.00:18:25.540 –> 00:18:28.860But it is something that you have to consider as rolling forward.00:18:28.860 –> 00:18:32.700So when you actually sell those rentals, that will become a loss for you.00:18:32.700 –> 00:18:37.940It may not be instant gratification, more long-term gratification.00:18:37.940 –> 00:18:41.180So if you’re working on your own taxes and you’ve got questions, you can certainly join00:18:41.180 –> 00:18:50.620the show, 615-737-9986, 615-737-9986 is the number here in the studio.00:18:50.620 –> 00:18:54.660And that will give you the information if you’ve inherited something this year and you’re00:18:54.660 –> 00:18:56.280not too sure.00:18:56.280 –> 00:19:01.520You may want to hold off on filing your taxes because you may be receiving a K-1 and that00:19:01.520 –> 00:19:02.900may not have been issued yet.00:19:02.900 –> 00:19:07.740I know we handle many estates and some of them are not ready yet to be submitted.00:19:07.740 –> 00:19:13.420So the individuals that had received money from there are on hold until we get through00:19:13.420 –> 00:19:14.420that.00:19:14.420 –> 00:19:18.060And then, you know, just making sure that prepping for 2024.00:19:18.060 –> 00:19:22.420We’re two months getting ready to start our third month here of 2024.00:19:22.420 –> 00:19:28.620So if you filed your taxes for ’23, but you’re still prepping for ’24, as I was saying earlier,00:19:28.620 –> 00:19:33.240if you’re over the, if you’re over age 65 and you’re on Medicare, whatever decisions00:19:33.240 –> 00:19:37.660you make also add into those decisions when you’re talking to your financial planner or00:19:37.660 –> 00:19:42.300if you’re doing your own, make sure you’re looking at the IRMA as well.00:19:42.300 –> 00:19:46.180Because that can, it feels like to me, it’s almost a two-year penalty.00:19:46.180 –> 00:19:50.740They do a two-year look back whenever they set you up on your fees.00:19:50.740 –> 00:19:56.040And it just seems like it takes them, you know, 24 months to really make that alteration00:19:56.040 –> 00:19:57.040in there.00:19:57.040 –> 00:20:01.180So I just want to make sure that you are looking at not only what you have, but where you’re00:20:01.180 –> 00:20:04.500at and how much money that can affect.00:20:04.500 –> 00:20:10.500And if you actually have a situation where you could end up paying taxes on some of that,00:20:10.500 –> 00:20:11.500right?00:20:11.500 –> 00:20:16.060So just, just keeping all that because I mean, maybe Medicare is not a tax and many of us00:20:16.060 –> 00:20:20.000can’t itemize it, but, and that’s also worse.00:20:20.000 –> 00:20:21.300But it is out of your pocket.00:20:21.300 –> 00:20:22.300It’s money out of your pocket.00:20:22.300 –> 00:20:24.380All right, let’s hit Lisa in Nashville.00:20:24.380 –> 00:20:25.380See if I can help her out.00:20:25.380 –> 00:20:27.420Hey, Lisa, what can I do for you?00:20:27.420 –> 00:20:29.100Hey, Dr. Friday.00:20:29.100 –> 00:20:37.820My husband passed away this past month and we received some life insurance money from00:20:37.820 –> 00:20:38.820him.00:20:38.820 –> 00:20:41.340Will that be considered taxable?00:20:41.340 –> 00:20:46.180The life insurance itself will not, but we have had, unfortunately some of my clients00:20:46.180 –> 00:20:51.420have recently lost some of their, and so sometimes from the moment that the insurance company00:20:51.420 –> 00:20:53.340actually kind of closes the account.00:20:53.340 –> 00:20:58.080And then when they issue you a check, sometimes that sits in an interest bearing account.00:20:58.080 –> 00:21:02.820And so we have gotten interest just for those 30 days or whatever.00:21:02.820 –> 00:21:07.820So there is a possibility of getting a small interest, but the actual insurance is not00:21:07.820 –> 00:21:08.820taxable.00:21:08.820 –> 00:21:09.820Okay.00:21:09.820 –> 00:21:17.900And I will be drawing my son and I both, he’s disabled, so he will be drawing survivor benefits00:21:17.900 –> 00:21:19.580from my husband.00:21:19.580 –> 00:21:24.580And since I care for him, I am also now going to be getting survivor benefits.00:21:24.580 –> 00:21:25.580Right.00:21:25.580 –> 00:21:31.000So will my son’s be taxable if that’s all that he has?00:21:31.000 –> 00:21:36.560No, and he can still be your dependent because social security is not considered earnings.00:21:36.560 –> 00:21:41.840So he can still be your dependent and no, he won’t have any need to file a tax return00:21:41.840 –> 00:21:45.680or report that, or you wouldn’t report it on your tax return either.00:21:45.680 –> 00:21:46.680Okay.00:21:46.680 –> 00:21:49.940So I won’t have to include that as income?00:21:49.940 –> 00:21:50.940Not his.00:21:50.940 –> 00:21:55.400No, yours you will because it’s you and you may have other income, but from your son being00:21:55.400 –> 00:21:59.360the fact that he’s disabled and that’s the only income he has, there is no taxability00:21:59.360 –> 00:22:00.360on his.00:22:00.360 –> 00:22:01.360Great.00:22:01.360 –> 00:22:05.000But I will, I will have to include it on my return.00:22:05.000 –> 00:22:06.520No, that’s what I’m saying.00:22:06.520 –> 00:22:09.120No, you will not report his on your return.00:22:09.120 –> 00:22:13.400You will claim him as a dependent, but you won’t pick his social security up at all.00:22:13.400 –> 00:22:14.400Right.00:22:14.400 –> 00:22:17.600But I’m talking about what I will be receiving as survivor benefit.00:22:17.600 –> 00:22:18.600Yes, ma’am.00:22:18.600 –> 00:22:19.600Yeah, you will.00:22:19.600 –> 00:22:21.040You will put it on yours.00:22:21.040 –> 00:22:25.360You’ll get a social security statement and you’ll report that along with any other incomes00:22:25.360 –> 00:22:27.000that may be reportable.00:22:27.000 –> 00:22:28.000It may be your income.00:22:28.000 –> 00:22:31.340If that’s all you have, obviously you won’t have to report, but hopefully you have some00:22:31.340 –> 00:22:33.440other sources of income as well.00:22:33.440 –> 00:22:34.440Yeah.00:22:34.440 –> 00:22:41.120A small amount, his pension and just a small income because I have to work from home.00:22:41.120 –> 00:22:43.000So it won’t be much.00:22:43.000 –> 00:22:44.000Yeah.00:22:44.000 –> 00:22:45.000To take care of him.00:22:45.000 –> 00:22:46.000Yeah.00:22:46.000 –> 00:22:47.000And we, we lost our health insurance.00:22:47.000 –> 00:22:50.480And so we signed, I signed up for that eHealth insurance.00:22:50.480 –> 00:22:51.480Yes.00:22:51.480 –> 00:22:52.480Yeah.00:22:52.480 –> 00:22:53.480The marketplace.00:22:53.480 –> 00:22:54.480And they gave us a subsidy.00:22:54.480 –> 00:22:55.480Yeah.00:22:55.480 –> 00:23:00.720So is that, does that create a taxable event when you are getting that subsidy for that?00:23:00.720 –> 00:23:04.560It should, because I’m assuming your income is just going to be low enough where that’s00:23:04.560 –> 00:23:06.560not going to be a problem.00:23:06.560 –> 00:23:09.720If for some reason, um, that’s one of those situations.00:23:09.720 –> 00:23:14.320If for some reason you took out, let’s just say your deceased husband had money in an00:23:14.320 –> 00:23:18.000IRA and you said, you know what, I’m going to take 20 grand out.00:23:18.000 –> 00:23:21.080They will consider that potentially a taxable income.00:23:21.080 –> 00:23:25.200Therefore they may penalize you for making more money than you told them.00:23:25.200 –> 00:23:31.200But all in all, as long as whatever you told them your income is, which is middle, low,00:23:31.200 –> 00:23:35.040you know, then there should not be any penalty to you.00:23:35.040 –> 00:23:39.700Um, unless again, you get a better job or something changes where that happens.00:23:39.700 –> 00:23:42.680But right now I don’t think that’s a worry that you’ll have to take on.00:23:42.680 –> 00:23:43.680Yeah.00:23:43.680 –> 00:23:49.360Because I mean, it’ll all be that I’ll be dealing with this time next year for 2024,00:23:49.360 –> 00:23:50.360not 2023.00:23:50.360 –> 00:23:51.600Right, right.00:23:51.600 –> 00:23:54.960All this is just started this, this year, obviously for you.00:23:54.960 –> 00:23:55.960Correct.00:23:55.960 –> 00:24:00.800But still, um, you know, I don’t think you’ll have whatever they, when you signed up for00:24:00.800 –> 00:24:05.420e-services or whatever, they asked you a bunch of financial questions and then they gave00:24:05.420 –> 00:24:09.120you what they could give you for a voucher or a dollar amount or whatever.00:24:09.120 –> 00:24:12.320Um, and so, you know, at that point you were fine.00:24:12.320 –> 00:24:13.840So you should be in good shape.00:24:13.840 –> 00:24:18.680But if something changes financially, you get lucky and there’s a better job or whatever.00:24:18.680 –> 00:24:21.440Um, you just want to notify them if that happens.00:24:21.440 –> 00:24:24.880So that way it might, might have an effect at that time, Lisa.00:24:24.880 –> 00:24:25.880Right.00:24:25.880 –> 00:24:26.880Okay.00:24:26.880 –> 00:24:27.880Thank you so much.00:24:27.880 –> 00:24:28.880No problem, sweetheart.00:24:28.880 –> 00:24:29.880All right.00:24:29.880 –> 00:24:32.920We’re going to take another quick break here and we get back, we can go to our phone calls00:24:32.920 –> 00:24:33.920again.00:24:33.920 –> 00:24:34.920615-737-9986.00:24:35.920 –> 00:24:36.920We’ll be right back.00:24:36.920 –> 00:24:42.320We have the Dr. Friday Show.00:24:42.320 –> 00:24:45.320All right.00:24:45.320 –> 00:24:53.480We are back here live in studio.00:24:53.480 –> 00:24:58.960If you want to join the show, you can.00:24:58.960 –> 00:24:59.960615-737-9986.00:25:00.960 –> 00:25:09.320I do want to put out there for people that do run partnerships or sub S corporations00:25:09.320 –> 00:25:12.600that you know, it is going to be deadline very quick.00:25:12.600 –> 00:25:17.800March 15th is the deadline for 1065s and 1120s.00:25:17.800 –> 00:25:19.080Some C corporations.00:25:19.080 –> 00:25:24.000But if you run those type of entities, you want to be able to make sure that you have00:25:24.000 –> 00:25:29.200either an extension filed or that you have filed the taxes.00:25:29.200 –> 00:25:30.200One or the other.00:25:30.200 –> 00:25:33.480And then obviously you have your annual reports.00:25:33.480 –> 00:25:38.080Many of you that have business entities, don’t forget to file the annual report.00:25:38.080 –> 00:25:42.000Your gross business receipts, your franchise excise, all of those are going to be due here00:25:42.000 –> 00:25:43.200in April.00:25:43.200 –> 00:25:46.160So get them done early if you can.00:25:46.160 –> 00:25:50.040So that way then you don’t get that love letter that says you didn’t file something.00:25:50.040 –> 00:25:53.320Really important that we file it, just letting you know.00:25:53.320 –> 00:25:55.440Because then the penalties and things come up.00:25:55.440 –> 00:25:59.720And as individuals, obviously the beautiful thing of living in Tennessee, all we really00:25:59.720 –> 00:26:01.280have to do is deal with the fed.00:26:01.280 –> 00:26:04.080But many people work in different areas.00:26:04.080 –> 00:26:08.760I have many clients that actually live here, but work theoretically in California, according00:26:08.760 –> 00:26:13.000to California law, which basically means if you earn your income in California, even if00:26:13.000 –> 00:26:18.800you don’t put a step into the state of California, that income is taxable to the state of California.00:26:18.800 –> 00:26:23.400So don’t forget your state filings along with your federal filings.00:26:23.400 –> 00:26:26.760Making sure you understand different states, different rules.00:26:26.760 –> 00:26:28.920Most of them like to tax as much as they can.00:26:28.920 –> 00:26:33.880So make sure that you have that situation going if possible.00:26:33.880 –> 00:26:38.000If you’ve got questions, I’m an enrolled agent licensed by the Internal Revenue Service to00:26:38.000 –> 00:26:43.680do taxes and representation, which just basically means, guys, I do taxes every day.00:26:43.680 –> 00:26:47.760And it feels like at this time of the year, every day.00:26:47.760 –> 00:26:48.980And all year round.00:26:48.980 –> 00:26:52.720So if you haven’t filed taxes, or if you have a situation where you’re trying to figure00:26:52.720 –> 00:26:58.880out when’s the last time the IRS received your taxes, or do you need to make a deal00:26:58.880 –> 00:26:59.880with them?00:26:59.880 –> 00:27:01.040They have many different ways.00:27:01.040 –> 00:27:03.200You can do fresh start.00:27:03.200 –> 00:27:04.760You can do an offer in compromise.00:27:04.760 –> 00:27:06.880You can do a non-collectible.00:27:06.880 –> 00:27:09.520You can make a payment plan, a partial payment plan.00:27:09.520 –> 00:27:15.280There are options out there, and no one option is going to work for every single person.00:27:15.280 –> 00:27:20.000So you need to make sure you understand what your options are, what is available to you00:27:20.000 –> 00:27:22.600based on your income, your assets.00:27:22.600 –> 00:27:27.200You might not make any money, but your assets may be high enough to justify certain things.00:27:27.200 –> 00:27:31.360So you have to put all of it in perspective to make sure that you’re getting the best00:27:31.360 –> 00:27:34.360situation that you can.00:27:34.360 –> 00:27:38.800Because let’s be honest, it isn’t one of those situations where you can turn around and say,00:27:38.800 –> 00:27:44.040“Oh, more than one person has walked in my office and said, ‘Well, I have $20,000.00:27:44.040 –> 00:27:48.600Can I just pay that to the IRS and they owe $50,000?'”00:27:48.600 –> 00:27:53.560Sure you can, but it’s not going to necessarily eliminate the other $30,000 you owe.00:27:53.560 –> 00:27:58.360It may be good if you get below $25,000, then we can remove liens and things, but it isn’t00:27:58.360 –> 00:28:00.800going to change the situation.00:28:00.800 –> 00:28:04.160Just because all you want to give them is $20,000 doesn’t mean that’s all you really00:28:04.160 –> 00:28:06.280have access to.00:28:06.280 –> 00:28:08.200So the rules are pretty straightforward.00:28:08.200 –> 00:28:13.440There are many ways of making deals with the IRS, but just because you don’t necessarily00:28:13.440 –> 00:28:15.880want to pay them isn’t one of those situations.00:28:15.880 –> 00:28:18.040So they will look at your assets.00:28:18.040 –> 00:28:19.780They will look at your 401ks.00:28:19.780 –> 00:28:21.520They will look at your bank accounts.00:28:21.520 –> 00:28:22.880They’ll look at your expenditures.00:28:22.880 –> 00:28:29.840And if you have a mortgage for $500,000 or $5,000, well, $500, that’d be a lot of mortgage,00:28:29.840 –> 00:28:34.780but monthly $5,000, if you’re doing an offer and compromise, they will say that that’s00:28:34.780 –> 00:28:36.220too high.00:28:36.220 –> 00:28:39.480They will request you to try to get a different situation.00:28:39.480 –> 00:28:44.560So you will have to add it back in because they consider that extravagant for Tennessee,00:28:44.560 –> 00:28:47.060which is interesting if nothing else.00:28:47.060 –> 00:28:52.480So know what the game is so you can better figure out how you’re going to play the game,00:28:52.480 –> 00:28:54.480I guess is the best way to put that.00:28:54.480 –> 00:28:59.040If you’ve got questions, again, if you’re helping someone else try to get straight with00:28:59.040 –> 00:29:06.640the IRS, the best thing to do is the first get the opportunity to understand what those00:29:06.640 –> 00:29:12.240things are, and then make sure that we have the ability to, I don’t know, just understand00:29:12.240 –> 00:29:14.960how it’s going to affect you, I guess is the easiest way to put that.00:29:14.960 –> 00:29:19.220So if you need help with that, again, obviously I’m an enrolled agent.00:29:19.220 –> 00:29:24.320My firm is Dr. Friday Tax and Financial Firm, and we are here to help you understand not00:29:24.320 –> 00:29:29.520only what you need to do now, but also for the future and for the past, because sometimes00:29:29.520 –> 00:29:30.800things have happened.00:29:30.800 –> 00:29:33.400How far back do you have to go to file taxes?00:29:33.400 –> 00:29:37.100Can the IRS do assessments on you even if you never filed taxes?00:29:37.100 –> 00:29:38.360What are your rights?00:29:38.360 –> 00:29:42.760All of those things can be interesting, but very confusing for some people.00:29:42.760 –> 00:29:47.160So you need to make sure you understand that and we can help you do that.00:29:47.160 –> 00:29:53.520If you’re working on your 2024 taxes, again, make sure you’re not rushing through the process.00:29:53.520 –> 00:29:56.360Make sure that you’ve double checked your numbers.00:29:56.360 –> 00:30:02.440Make sure that you’ve reported all of your income, even if you didn’t receive something.00:30:02.440 –> 00:30:07.400Probably one of the big things the IRS is always looking at is a lot of times, especially00:30:07.400 –> 00:30:12.660like construction businesses and things, they’ll only report what they’ve received 1099s on.00:30:12.660 –> 00:30:18.200The IRS has come out in many cases and showing statistically most people that work in construction00:30:18.200 –> 00:30:20.520don’t get 1099 for all of their income.00:30:20.520 –> 00:30:25.560If you run an electrical firm or you run a plumbing firm and you only report what came00:30:25.560 –> 00:30:32.560through to you on 1099Ks or 1099NECs or MISs, then likely is at some point you could get00:30:32.560 –> 00:30:35.900audited for potentially understatement of income.00:30:35.900 –> 00:30:38.880If the money went through the bank, you should report it.00:30:38.880 –> 00:30:39.880That’s simple.00:30:40.100 –> 00:30:43.600If it’s cash, theoretically you should report it.00:30:43.600 –> 00:30:46.960It was money paid to you for your service and then you’ve got the expenses that go out00:30:46.960 –> 00:30:47.960against it.00:30:47.960 –> 00:30:52.480But making sure you understand what the IRS is looking at, they do have the ability or00:30:52.480 –> 00:30:55.760the request to pull your banking information.00:30:55.760 –> 00:30:59.960Now, they can’t just go into your bank account, even for levying or anything else without00:30:59.960 –> 00:31:05.280notification, but once they’ve notified you, they do have the ability to take a levy.00:31:05.280 –> 00:31:07.000You want to always get ahead of that.00:31:07.000 –> 00:31:12.080So if you’ve got a love letter from the IRS that says, “We intend to levy,” you haven’t00:31:12.080 –> 00:31:15.000responded to our letters, then you want to respond.00:31:15.000 –> 00:31:19.320You want to at least see if you can deal with something, make a payment plan.00:31:19.320 –> 00:31:24.200Also though, you cannot make a payment plan if you haven’t filed all of your tax returns.00:31:24.200 –> 00:31:26.040You have to be in compliance.00:31:26.040 –> 00:31:30.720Otherwise, they won’t set up, say, “I’m going to start in 2023 and I’m just going to start00:31:30.720 –> 00:31:33.820filing taxes and not worry about the past.”00:31:33.820 –> 00:31:34.820Great idea.00:31:34.820 –> 00:31:39.020That means you’re making the effort to start and do everything, but that doesn’t mean the00:31:39.020 –> 00:31:41.820IRS is going to be able to set up a payment plan.00:31:41.820 –> 00:31:46.140Same thing as if you actually do go through the Fresh Start program and we get the deal00:31:46.140 –> 00:31:47.820and you make everything.00:31:47.820 –> 00:31:52.440Once that deal is accepted, you have to stay current and not have a payment plan or anything00:31:52.440 –> 00:31:54.300else for the next five years.00:31:54.300 –> 00:32:00.580Otherwise, they can add it all back up, back onto you if you fail to follow those rules.00:32:00.580 –> 00:32:04.780So again, there are rules, but you have to make sure you understand those rules and how00:32:04.780 –> 00:32:09.420you’re going to make those rules work for you, but understanding what they have.00:32:09.420 –> 00:32:16.340The IRS has also put out a list of things that I guess you would say is beware.00:32:16.340 –> 00:32:22.540One thing is under charitable deductions, if you are giving to a GoFundMe account that00:32:22.540 –> 00:32:28.540is not representing a nonprofit, so maybe you gave money to, well, there’s two sides00:32:28.540 –> 00:32:29.540to this.00:32:29.540 –> 00:32:33.260You gave money to maybe a neighbor or someone that’s trying to raise money for medical help00:32:33.260 –> 00:32:38.420or maybe their house got destroyed and they went on there to start a GoFundMe account,00:32:38.420 –> 00:32:40.380so you’re trying to help them out.00:32:40.380 –> 00:32:48.100That is not a tax-deductible charitable deduction because they’re not a legitimate 501(c)(3).00:32:48.100 –> 00:32:49.420They’re an individual.00:32:49.420 –> 00:32:50.660You can certainly give it to them.00:32:50.660 –> 00:32:51.660It’s more like gifting.00:32:51.660 –> 00:32:57.060And as long as it’s under $17,000, there’s nothing really that has to be reported.00:32:57.060 –> 00:33:01.260Second part of that is if you’re one of those individuals that hear about a neighbor or00:33:01.260 –> 00:33:04.980a friend or a family member that needs that kind of help and you say, “I’m going to go00:33:04.980 –> 00:33:11.100start a GoFundMe account,” let other people help because, I mean, America is probably00:33:11.100 –> 00:33:15.340one of the most giving places in the world and a lot of people will usually help somebody00:33:15.340 –> 00:33:17.880that they feel is in deserving of that.00:33:17.880 –> 00:33:22.780So if that’s the case, then you have to turn around and say, “Make sure that that is not00:33:22.780 –> 00:33:25.660set up under your social security number.00:33:25.660 –> 00:33:30.720Make sure that it’s set up under either the person you’re doing it for or that you run00:33:30.720 –> 00:33:31.720it through.”00:33:31.720 –> 00:33:35.520GoFundMe does have nonprofit setups to do that.00:33:35.520 –> 00:33:38.740Make sure it’s being set up as a giftable giving.00:33:38.740 –> 00:33:43.300Even if it’s not tax-deductible, make sure it’s being set up as a gift giving because00:33:43.300 –> 00:33:48.340otherwise I have two cases now that actually both of them set up GoFundMe accounts.00:33:48.340 –> 00:33:50.740The IRS is coming back to them to pay taxes.00:33:50.740 –> 00:33:55.660The people are saying, “Wait, we gave all of that money to these people for a reason,”00:33:55.660 –> 00:34:01.660but the IRS is saying, “But nobody, you know, it’s taxable to my client because they didn’t00:34:01.660 –> 00:34:06.380set it up correct and it’s gifting it back to that family, but no one’s paid the taxes00:34:06.380 –> 00:34:08.900because of the way it was set up.”00:34:08.900 –> 00:34:14.820So very, very important to make sure you understand setting up the GoFundMe accounts, awesome00:34:14.820 –> 00:34:18.740idea, but do not put it under your own social security number.00:34:18.740 –> 00:34:21.380Do not, make sure you go with the option.00:34:21.380 –> 00:34:27.220Again, I know there are nonprofits that they will help set up the FundMe situation.00:34:27.220 –> 00:34:30.900I don’t know what the fees and things are, but if you’re not careful, like I said, I00:34:30.900 –> 00:34:35.820have two cases where people have gotten letters from the IRS because the GoFundMe has now00:34:35.820 –> 00:34:42.500reported it under their social security number as income because it wasn’t set up properly.00:34:42.500 –> 00:34:48.180Going backwards, you can only imagine how hard that is and hopefully anyone that’s giving00:34:48.180 –> 00:34:51.220money to those funds are not trying to deduct them.00:34:51.220 –> 00:34:55.620Again, they’re gifts, but they are not tax deductible gifts.00:34:55.620 –> 00:34:57.500Kind of an important thing to understand.00:34:57.500 –> 00:35:00.740So if you have questions, we’re all taking another quick break here, then that will be00:35:00.740 –> 00:35:01.740it, guys.00:35:01.740 –> 00:35:02.780We’ll be almost done with the show.00:35:02.780 –> 00:35:05.860So if you have questions and you’re not too sure, now will be the time to jump on the00:35:05.860 –> 00:35:06.860phone lines.00:35:06.860 –> 00:35:12.620Phone number here is 615-737-9986.00:35:12.620 –> 00:35:18.860615-737-9986 number here in the studio.00:35:18.860 –> 00:35:20.220We are talking about taxes.00:35:20.220 –> 00:35:25.980Again, I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.00:35:25.980 –> 00:35:28.380That’s what we do all year round.00:35:28.380 –> 00:35:32.780So if you have questions on that kind of element, I’m not a financial planner, but I can help00:35:32.780 –> 00:35:34.020you with your taxes.00:35:34.020 –> 00:35:36.820So after this break, we’ll take some more of your calls.00:35:36.820 –> 00:35:37.820615-737-9986.00:35:37.820 –> 00:35:50.140All right, we are back here live in studio.00:35:50.140 –> 00:35:54.140So if you’ve got questions, you can help join the show.00:35:54.140 –> 00:35:55.140615-737-9986.00:35:56.140 –> 00:36:03.340And we’re going to go right to our phones.00:36:03.340 –> 00:36:05.420It looks like we have Dan from Gallatin.00:36:05.420 –> 00:36:07.420Let’s see if I can help him with his question.00:36:07.420 –> 00:36:10.260Hey, Dan, what can I do for you?00:36:10.260 –> 00:36:11.260I have a question.00:36:11.260 –> 00:36:19.580I just turned the radio on and caught the end of your conversation about the GoFundMe.00:36:19.580 –> 00:36:25.820And I wanted to know about the Venmo, people Venmoing you money.00:36:25.820 –> 00:36:28.940How’s that looked at at this point?00:36:28.940 –> 00:36:35.740Well, right now, the current tax law that will be in effect in 2024 is $5,000.00:36:35.740 –> 00:36:41.780Now Venmo does have the ability to be friend transfer, which that doesn’t count.00:36:41.780 –> 00:36:46.740But if you do it through business to business, they basically call it, it’s $5,000.00:36:46.740 –> 00:36:50.300So if you’re transferring to your, like me transferring to my brother and my brother00:36:50.300 –> 00:36:57.020transferring it back, then that will not show up as part of that $5,000.00:36:57.020 –> 00:37:00.500As far as anything through Square or PayPal, I don’t know.00:37:00.500 –> 00:37:02.560I don’t use them as much.00:37:02.560 –> 00:37:09.500But the rule is $5,000 or 200 transactions, whichever come in under that situation.00:37:09.500 –> 00:37:14.900As far as Venmo, it’s called a 1099K, I think is what you’re talking about.00:37:14.900 –> 00:37:20.940So if you sell products or if you’ve done anything through, again, if you’re selling00:37:20.940 –> 00:37:25.900something, I think it’s going to probably come back and get you, especially if you are00:37:25.900 –> 00:37:32.220using something like Facebook or I don’t know if anyone used eBay or any of those.00:37:32.220 –> 00:37:35.660I think that’s going to come back if you’ve got a little shop and people are sending you00:37:35.660 –> 00:37:36.660money.00:37:36.660 –> 00:37:40.220I believe those people are going to actually, so if you have more than 5,000 in a year of00:37:40.220 –> 00:37:44.940selling household things, you might want to spread that out because otherwise it’s going00:37:44.940 –> 00:37:46.780to get reported as a business.00:37:46.780 –> 00:37:47.780Okay.00:37:48.780 –> 00:37:52.060That answers my question.00:37:52.060 –> 00:37:53.060Thank you.00:37:53.060 –> 00:37:54.060Cool.00:37:54.060 –> 00:37:55.060Thanks for listening.00:37:55.060 –> 00:37:56.060All right, let’s go to Katie in Nashville.00:37:56.060 –> 00:38:09.620I cashed in my life insurance plan and the cash I got was 4,500.00:38:09.620 –> 00:38:12.900Do I need to count that as income?00:38:12.900 –> 00:38:15.420So that’s a tricky one.00:38:15.420 –> 00:38:20.940Since you cashed in your own, it depends on how much you paid originally for, because00:38:20.940 –> 00:38:25.140we usually pay for our life insurance with after tax dollars.00:38:25.140 –> 00:38:28.460So if all the money, if that’s all you paid in, then that’s fine.00:38:28.460 –> 00:38:31.460But if there was growth, then that will be taxable.00:38:31.460 –> 00:38:37.980So let’s say you only paid in $2,000 and they gave you 4,500, 2,500 of that could be taxable00:38:37.980 –> 00:38:39.420income.00:38:39.420 –> 00:38:41.460They should send you a form.00:38:41.460 –> 00:38:46.620I’m pretty sure that’s going to fall on a 1099R, but they should be sending you a form00:38:46.620 –> 00:38:48.900that will show it potentially.00:38:48.900 –> 00:38:53.760I would personally set aside a little money of that money just to find out or get someone00:38:53.760 –> 00:38:57.660on the phone and see if they can tell you how much of that distribution was taxable00:38:57.660 –> 00:39:01.820so you can estimate it or report it if it was from last year.00:39:01.820 –> 00:39:09.020Well, I paid in a whole lot more than even the $15,000 for the life insurance policy.00:39:09.020 –> 00:39:11.580I mean, you don’t get what you paid.00:39:11.580 –> 00:39:12.660You know what I mean?00:39:12.660 –> 00:39:16.860You get very little back from what you paid in over all the years.00:39:16.860 –> 00:39:19.300Does that make any sense?00:39:19.300 –> 00:39:20.300It kind of does.00:39:20.300 –> 00:39:25.120It seems to me we should at least get what we paid for, but I’ve not ever cashed in one00:39:25.120 –> 00:39:29.760and most of my people, to be quite honest, Katie, get it only when someone’s passed away.00:39:29.760 –> 00:39:35.440But again, I would say that the way things usually are in life, that part of that money00:39:35.440 –> 00:39:36.880could be taxable.00:39:36.880 –> 00:39:41.160You would definitely want to talk to, if nothing else, call back the insurance company and00:39:41.160 –> 00:39:45.480say, “Hey, all this 4,500, is any of this taxable income or is it all my own money you’re00:39:45.480 –> 00:39:46.480giving back to me?00:39:46.480 –> 00:39:47.880Therefore, it’s zero tax.”00:39:47.880 –> 00:39:51.500I just hate to see you spend it and then find out when you file your taxes that you owe00:39:51.500 –> 00:39:53.660a couple hundred dollars because of it.00:39:53.660 –> 00:39:59.660Well, I will call them, but I mean, every penny I got back, I paid into.00:39:59.660 –> 00:40:04.340I’m not disagreeing, but they may say some of it was for growth and for services and00:40:04.340 –> 00:40:05.820they only distributed growth.00:40:05.820 –> 00:40:09.260And if that’s the case, then they could come back and bite you later possibly.00:40:09.260 –> 00:40:11.460So just double check it.00:40:11.460 –> 00:40:13.220I guess I should put it down.00:40:13.220 –> 00:40:19.440I mean, I wouldn’t report it unless they give you something to report it with because I’m00:40:19.440 –> 00:40:20.440assuming it’s not taxable.00:40:20.440 –> 00:40:21.440Okay.00:40:21.440 –> 00:40:22.440Thank you so much, Dr. Friarty.00:40:22.440 –> 00:40:23.440Thank you.00:40:23.440 –> 00:40:24.440No problem.00:40:24.440 –> 00:40:25.440Thank you.00:40:25.440 –> 00:40:26.440Sure.00:40:26.440 –> 00:40:27.440Thanks, sweetie.00:40:27.440 –> 00:40:28.440Bye.00:40:28.440 –> 00:40:29.440All right.00:40:29.440 –> 00:40:30.840We are winding down the show a little bit.00:40:30.840 –> 00:40:33.080We’ve got about five minutes left.00:40:33.080 –> 00:40:36.760So we want to make sure that again, just kind of covering a couple things.00:40:36.760 –> 00:40:42.080One, I had a number of people that had been filling out W-4 forms.00:40:42.080 –> 00:40:46.960And on those forms, they are so different that many of us, I mean, obviously if you00:40:46.960 –> 00:40:50.640just started working, you wouldn’t know the difference, but we had, you know, prior to00:40:50.640 –> 00:40:57.640the 2000 pretty, or 2020, then after 2020, the new ones, instead of saying married and00:40:57.640 –> 00:41:03.040two, now, if you’re married, you click that and then you would put $4,000 under the number00:41:03.040 –> 00:41:04.040of kids.00:41:04.040 –> 00:41:07.960And if the child is over age 17, you put $500 for each child.00:41:07.960 –> 00:41:12.580And then there’s a box on there that says, do you have a spouse that’s working or are00:41:12.580 –> 00:41:15.000you working more than one job?00:41:15.000 –> 00:41:19.960And that’s a tricky one guys, because what we have to be very careful of, especially00:41:19.960 –> 00:41:25.000for all of you guys that do work multiple jobs, and I can’t tell you how many times00:41:25.000 –> 00:41:29.300it’s hard when you switch jobs, the tax code doesn’t usually work.00:41:29.300 –> 00:41:32.440So you want to make sure that you have enough money coming out.00:41:32.440 –> 00:41:36.240When you switch jobs halfway through the year, you’re thinking, well, it’s just going to00:41:36.240 –> 00:41:37.240keep taking out.00:41:37.240 –> 00:41:41.780But look at that pay stub because you might find out that they’re taking very little out00:41:41.780 –> 00:41:46.680of federal withholdings because they’re looking at it as if this is the first job for the00:41:46.680 –> 00:41:51.860year and you’ve, you know, you’re just making 5,000, 10,000, $20,000, which basically it00:41:51.860 –> 00:41:53.720almost be a zero tax.00:41:53.720 –> 00:41:56.480So we, you want to first, you want to check that box.00:41:56.480 –> 00:42:01.080So if you are working a second job or you are married, even though it says married at00:42:01.080 –> 00:42:07.920the top, your spouse is working, it will help take out additional money for federal withholdings.00:42:07.920 –> 00:42:13.800I am more of an advocate for the next box, box four, I believe it is, or line four that00:42:13.800 –> 00:42:17.080says, do you want to have additional withholdings?00:42:17.080 –> 00:42:22.000So I am a big advocate for saying, let’s figure out roughly how much do we think we’re going00:42:22.000 –> 00:42:26.000to make and how much do we need to make sure has come out of these jobs?00:42:26.000 –> 00:42:31.360Especially if you plan to be working two jobs almost the whole year, then you can actually00:42:31.360 –> 00:42:35.380put in there, you know, maybe you got your first pay stub and you see that they only00:42:35.380 –> 00:42:40.880withheld $30, but yet calculating it all the way through the year with both jobs, you need00:42:40.880 –> 00:42:44.340that job to be taking $60 a paycheck out.00:42:44.340 –> 00:42:48.960Then on that box four, you would fill it out and just put, you know, $30.00:42:48.960 –> 00:42:50.680So that way $60 would be coming.00:42:50.680 –> 00:42:53.760So an additional amount will come out every time.00:42:53.760 –> 00:42:56.240Keep in mind you pay now or you pay later.00:42:56.240 –> 00:42:59.400It’s not going to be, you never pay.00:42:59.400 –> 00:43:02.760And then worst scenario, you overcompensate, you get a small amount back.00:43:02.760 –> 00:43:04.600I’m not looking for large refunds.00:43:04.600 –> 00:43:08.760That doesn’t help anyone as far as I’m concerned, but it’s never nice to have to write a check00:43:08.760 –> 00:43:12.640for a thousand dollars when you’re on a tight budget.00:43:12.640 –> 00:43:15.640If you can’t afford to pay it, you either putting it on your credit card or you’re paying00:43:15.640 –> 00:43:18.680the IRS, which means penalties and interest.00:43:18.680 –> 00:43:21.860Easier to have a little extra come out every single week.00:43:21.860 –> 00:43:28.080It’s a lot smaller, take $30 out than to pay 3000, you know, in April when you file your00:43:28.080 –> 00:43:31.040taxes again, just calculate the numbers.00:43:31.040 –> 00:43:36.680And if you did your 2023 and pretty much the same thing’s going to happen in 24 year income00:43:36.680 –> 00:43:43.080and you wrote a check in 23, then maybe again, go and refile your W-4, leave everything the00:43:43.080 –> 00:43:45.820same, but go down the box four and say, you know what?00:43:45.820 –> 00:43:48.640I wrote a check for, you know, a thousand dollars.00:43:48.640 –> 00:43:53.860I’d rather have $35 a week coming out or whatever it works out to being so that that thousand00:43:53.860 –> 00:43:55.380dollars is now coming out.00:43:55.380 –> 00:43:56.700It’s out of your bank account.00:43:56.700 –> 00:44:01.460You now have gotten the IRS out of your bank and whatever is in there theoretically is00:44:01.460 –> 00:44:07.060yours and it’s just easier to live than having the IRS’s money in your bank account.00:44:07.060 –> 00:44:11.420I know it’s hard to, you know, but it’s sooner or later the IRS is going to get their money.00:44:11.420 –> 00:44:14.980And if you can’t pay it on time, then you’re going to be paying penalties and interest,00:44:14.980 –> 00:44:17.540which is almost a minimum of 25%.00:44:17.540 –> 00:44:18.820That’s pretty steep.00:44:18.820 –> 00:44:22.860So she, if you’re already having financial or just living on that edge where we, most00:44:22.860 –> 00:44:26.180of us started trying to make sure we have the money in the right place.00:44:26.180 –> 00:44:31.020So again, always do your taxes, then double check your W-4.00:44:31.020 –> 00:44:36.380If any reason you, I had a couple that got a huge refund this year because we overcompensated00:44:36.380 –> 00:44:38.800and we didn’t make as much money this year as we did last year.00:44:38.800 –> 00:44:39.800So what did we do?00:44:39.800 –> 00:44:44.040We went back to the W-4 and reduced box four because I don’t want a big refund.00:44:44.040 –> 00:44:50.420I want them to get enough money to break even, but I don’t want $4,000 coming back at the00:44:50.420 –> 00:44:51.420end of the year.00:44:51.420 –> 00:44:53.780I, they could have used that money every month and that would be silly.00:44:53.780 –> 00:44:54.780All right guys.00:44:54.780 –> 00:44:56.940So this is that we’re going to be winding down.00:44:56.940 –> 00:45:01.980So if you want to reach us, you can reach my office Monday morning at 615-367-0819.00:45:01.980 –> 00:45:04.020Again, 615-367-0819.00:45:04.020 –> 00:45:14.020If you have absolutely no idea who I am, you can actually just go to the web to drfriday.com.00:45:14.020 –> 00:45:17.180D-R-F-R-I-D-A-Y.com.00:45:17.180 –> 00:45:18.720Check out the website.00:45:18.720 –> 00:45:24.100And also if you want to just send us an email, you can do Friday@drfriday.com.00:45:24.100 –> 00:45:28.740That way if you have a question, we’ll do our best to get to you as fast as possible.00:45:28.740 –> 00:45:33.820It is kind of the busy season here, so it may not be as quick as we’d like, but make00:45:33.820 –> 00:45:37.540sure that if you haven’t filed your tax, go ahead and file an extension.00:45:37.540 –> 00:45:41.620If you don’t plan to file that way, maybe we can get to you and help you get all organized00:45:41.620 –> 00:45:43.580with the IRS as an enrolled agent.00:45:43.580 –> 00:45:44.580That’s what we want to do.00:45:44.580 –> 00:45:48.660We want to help represent you in front of the IRS, giving you that shield, but also00:45:48.660 –> 00:45:53.740to give you the power to get out of IRS problems so you can go buy a house, put your kid through00:45:53.740 –> 00:45:56.020college, whatever it is you’re looking to do.00:45:56.020 –> 00:45:58.660I hope you guys are enjoying this Saturday.00:45:58.660 –> 00:46:01.020It’s actually turned out to be a pretty nice day.00:46:01.020 –> 00:46:02.820It’s not too bad out there.00:46:02.820 –> 00:46:07.060And I hope that you guys are going to enjoy the rest of the week.00:46:07.060 –> 00:46:09.580As we always say here in Australia, “Cop you later.”

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, delves into the recent updates of the SECURE Act 2.0, particularly focusing on the postponed changes to catch-up contributions. She explains that the implementation, initially set for 2023, has been deferred to 2026, allowing employers additional time to adjust. Specifically, individuals earning $145,000 or more and aged 50 or above are required to direct their catch-up contributions exclusively into a Roth account. Dr. Friday emphasizes the importance of early planning for these changes, advising listeners to consult with their financial planners to ensure these adjustments positively impact their retirement strategies.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Secured Act 2.0. On August 25, 2023, they pushed out a two-year delay now for 2026 for employers to change the way the catch-up contributions have to be handled. So in the Secured Act 2.0, it was supposed to be starting in 2023, they pushed it out till 2026. $145,000 or more, any catch-up, that means if you’re over the age of 50 and you want to contribute money, you can do that, but it can only go into a Roth. Now you might want to start planning that now, because these kind of changes can really affect how you retire. Talk to your financial planner for more information on this.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the leader of Dr. Friday’s Tax and Financial Firm, discusses the recent changes to the Required Minimum Distributions (RMDs) age threshold. She explains that individuals who turned 72 after December 31, 2022, are now required to start their RMDs at 73. This adjustment aligns with increased life expectancies and aims to simplify the determination of when to commence RMDs. Dr. Friday clarifies that the year you turn 73 is when your RMDs should begin, with a specific mention of the initial year’s exclusion allowing deferral until April of the following year. This episode is essential for anyone navigating the complexities of retirement planning and RMDs.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Required minimum distribution. Now for all those that have turned 72 after the year of December 31st, 2022, you will now start your RMDs at 73. Which is great, because people are living longer and then having it at 70 and a half made it difficult for some people to really figure out what year they should be taking their RMDs. So at this point, it’s at 73, the year that you turn 73, if you have December 31st, you need to take it in that year. There is an exclusion for the first year up until April the following, but basically let’s keep it simple. Year you turn 73, you need to take your RMD.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the president of Dr. Friday’s Tax and Financial Firm, takes listeners on a historical journey through the origins of Tax Day in the United States. She reveals that the first federal income tax was filed in 1913 on March 1st, which later shifted to March 15th in 1918, and ultimately settled on the April 15th deadline we know today starting in 1955. This insightful look into the past underscores the longstanding tradition of tax filing and serves as a reminder of the importance of meeting tax obligations. Dr. Friday emphasizes that, while Tax Day has evolved, the responsibility to file remains constant, highlighting the potential consequences of non-compliance.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Here’s an interesting fact. A lot of times people don’t realize in 1913 was the first year we filed taxes and the tax day was March 1st. Then came a few other things and in 1918 they said, “Wait, the first is a little hard. Let’s make it March 15th.” All the way until April of 1955, they changed it to April 15th in the year of 1955. So we’ve been only doing that for a period of years and so it’s important to understand tax day is tax day and we’ve been doing it for a long time. So for all of you that think, “Well, you know what? I don’t really need to file taxes.” Sooner or later you might find tax day a lot harder than you think.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, an experienced enrolled agent and president of Dr. Friday’s Tax and Financial Firm, delves into the process of helping individuals become compliant with the IRS. She shares a compelling case study of a client who hadn’t filed taxes in 20 years, accumulating a debt of $150,000. Dr. Friday explains the strategy of filing the last six years of taxes unless there are prior assessments, as in this case, where they had to rectify filings as far back as 2001. This episode sheds light on the critical role of enrolled agents in negotiating with the IRS, especially in complex cases that preclude straightforward solutions like an offer in compromise.

Transcript: G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

As an enrolled agent what we do is help individuals get into compliance with the IRS, which usually means we only have to go back six years and file taxes if the IRS hasn’t already assessed you for the years before. So if you have an assessment, and in the case I’m going to tell you about this gentleman, he owed about $150,000. He hadn’t filed taxes in 20 years, so most of them were assessments, and we had to go back as far as 2001 to make a deal because the assessment had been done and it was completely wrong and he wasn’t going to be able to do an offer and compromise. This is the kind of stuff we can do to help you.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the head of Dr. Friday’s Tax and Financial Firm, warns about the dangers of incorrectly choosing your tax filing status to boost your refund. She specifically addresses the common misconception among married individuals who might be tempted to file as head of household for a bigger refund. Dr. Friday underscores the severe repercussions of such actions, including the potential for audits up to six years retroactively and the risk of being barred from future earned income credits. Her advice is clear: honesty in tax filing is not just a legal obligation but a necessity to avoid significant financial penalties.

Transcript: G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

When preparing your taxes, don’t take the option of clicking different boxes and saying, “Wait, I get more of a refund if I hit this and I get more of a refund if I hit this.” One of the biggest ones, if you are married, you have to claim married. Okay? So one year I can be head of household and then the next year married or even though you’ve been married for five years, you’ve been claiming head of household because you have children and you get a larger refund versus claiming married. This is a big no-no, guys, and they can go back and audit you for up to six years and have you pay back all of that and eliminate you from ever having to get earned income credit again.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, highlights the significance of regularly reviewing your W-4, especially before filing your taxes for 2023. She points out a common issue where individuals aren’t withholding enough taxes from their W-2s, which could lead to a tax bill shock. Dr. Friday advises on the timely adjustments to your W-4 to prevent owing substantial amounts at year-end and stresses the importance of this review for those with multiple jobs or who have changed jobs within the year. Ensuring the correct withholding can lead to a smoother tax season and prevent financial surprises.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

And I’m going to keep bringing out probably every month one important thing. You need to be reviewing your W-4. If you haven’t filed your taxes yet for 2023, you might need to wait until you file, but if you’re waiting until October, there’s not going to be an easy fix. If you’re going to file in the next month or so, we can probably make an adjustment because so far, what I’m finding is a lot of people are not having enough money coming out of their W-2s. Maybe they have multiple jobs, maybe you change jobs part way through the year. It’s important, otherwise you’re going to have to set up a bank account for taxes, so when I tell you you owe a couple thousand dollars, it doesn’t put you in a tailspin.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the head of Dr. Friday’s Tax and Financial Firm, issues a crucial warning about prevalent tax scams involving IRS impersonation. She elucidates how scammers may call, pretending to be the IRS, and attempt to extract personal information or intimidate you into believing you’re under audit. Dr. Friday emphasizes that the IRS typically communicates through mail, not phone calls, and advises listeners to hang up and verify any suspicious claims to protect themselves from fraud. Tune in for practical advice on staying vigilant and secure during tax season.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

And the IRS is saying, “Watch out for tax scams.” Come on, right now, if the IRS were to call you right this second, they said, “This is the Internal Revenue Service on the phone and we need some answers,” and they say, “Okay, to prove that you are, here’s your Social Security number, this is what, this is this,” and you start answering their questions because you think you’re really talking to the IRS or they say that, “We’ve reviewed your taxes and we’re going to be auditing you.” Now, this is over the phone, right? Be careful. IRS doesn’t usually call if you’re just starting to get information. You’re going to get a love letter, you’re going to have information, you can then call. And no one stops you from hanging up on the IRS to make sure you’re not being scammed.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this engaging episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the esteemed president of Dr. Friday’s Tax and Financial Firm, highlights the bustling activity within her office as tax season progresses. Despite a potentially full calendar, Dr. Friday assures listeners that her team is dedicated to assisting with tax inquiries and issues as promptly as possible. She encourages contacting her office directly via phone or email for personalized tax support, ranging from filing tax returns to resolving complex tax dilemmas. Additionally, Dr. Friday invites listeners to tune into her call-in show every Saturday for live advice, reinforcing her commitment to making tax filing as seamless as possible for everyone.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

It is getting busy here in my office. I won’t tell you that probably by now I think our calendar is probably full, but it doesn’t mean that I might not be able to help you. I want to let you know you can always call my office at 615-367-0819. We will do our best to get back with you as fast as possible. Also, you can email your questions at Friday@drfriday.com. That is my email, and then we’ll do again do our best to respond as fast as possible. This way we can try to help you resolve your tax issues. Maybe you’re trying to file your own tax returns and we’ll do our best to help you make sure those taxes were filed to the best of your ability.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this quick yet informative episode of the ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, highlights the critical tax deadlines for 2023, emphasizing the primary filing deadline of April 15th. She clarifies that individuals can file for an extension by April 15th, granting them until October 15th to file their taxes. Additionally, Dr. Friday explains the due dates for businesses with franchise excise taxes, marking March 15th as the filing deadline and September 15th as the extension deadline, stressing the importance of extending both state and federal taxes in Tennessee. The episode wraps up by inviting listeners to Dr. Friday’s live call-in show every Saturday afternoon for more tax insights.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

2023 tax deadlines. We’ve spoken in the past. The biggest one is April 15th. This year it is on April 15th. And then we also have extensions that if you file an extension by April 15th, you will have until October 15th. Those are the important dates for filing taxes. Now it doesn’t mean if you are a franchise, if you have a franchise excise and you are a company or business, when is that due date? March 15th, right? And then you file the extension until September 15th. But you have to extend the state as well as the Fed in Tennessee. And remember, that is not as simple as you might think.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday delves into the intricacies of deducting business use of a car, comparing the mileage deduction to actual expenses. Covering the essentials of Section 179, fuel, insurance, and other costs associated with maintaining a vehicle for business purposes, she provides a detailed explanation on calculating deductions based on the percentage of business use. A critical highlight is the caution against purchasing vehicles over 6,000 pounds for non-essential business needs, specifically targeting professionals in accounting. This insightful segment is a must-listen for anyone considering the best method to deduct their business vehicle expenses.

Transcript: G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Business use of car, miles or actual? We’ve covered miles in the last number of, if you’ve been listening to my one minute moments we’ve covered all of those. What is actual deduction for a vehicle? So that’s when we get into section 179, that’s when we get into actual fuel, get into your insurance, all the cost it takes to keep that car. And you’re going to do it based on a percentage of usage, unless of course you use it 100%. What I have to warn you about is if you go out and buy yourself over a 6,000 pound truck and you do accounting, you better make sure that truck is justified because an accountant doesn’t need it.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this insightful episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, president of Dr. Friday’s Tax and Financial firm, delves into the complexities of business vehicle expenses, specifically focusing on the choice between standard mileage and actual costs. Dr. Friday clarifies the limitations of using the standard mileage deduction, such as the restriction on fleets exceeding five vehicles and the ineligibility for claiming both depreciation and mileage. She emphasizes the mutual exclusivity of actual expenses and standard mileage deductions, highlighting the prohibition of claiming section 179, special depreciation, and actual expenses for leased vehicles since 1997. For those opting for mileage deductions, Dr. Friday advises against mixing it with other claims, offering guidance for those considering the actual cost method. For personalized tax advice, Dr. Friday encourages listeners to reach out for professional assistance. Tune into the Dr. Friday call-in show live every Saturday afternoon for more tax tips.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Business use of car. Standard miles, we all know, you must not operate more than five cars in your business. It’s considered a fleet and you cannot take the standard business. You cannot claim depreciation on a vehicle and miles. That’s self-defeating people. Actual and miles do not match. You cannot claim a section 179. You cannot claim a special depreciation and you cannot claim actual expenses for your vehicle if it’s leased since 1997. These are what you want to do. If you’re taking miles, you can’t do all the rest. If you’re going to take actual, we’ll cover that in a bit. If you need help, call me, Dr. Friday.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of “Dr. Friday Radio Show”, Dr. Friday, an enrolled agent licensed by the IRS, offers valuable tax advice and financial counseling to listeners dealing with various tax situations. Topics covered include:

• Understanding the difference between federal and state tax laws, especially regarding the sale of property and capital gains tax.
• The importance of timely tax preparation, with a focus on business tax returns and the upcoming March 15 deadline for LLCs and corporations.
• Navigating state tax obligations and the implications for businesses operating across state lines.
• Guidance on filing annual reports, business licenses, and navigating franchise excise taxes.
• Tips for handling 1099 forms, both for businesses and individuals, to ensure compliance with IRS requirements.
• Advice for individuals working remotely for out-of-state employers and the tax implications thereof.
• The episode also features listener call-ins, providing personalized advice on specific tax queries, including rental property depreciation, the taxation of social security and pensions for seniors, and the tax treatment of income from YouTube content creation.

Transcript

00:00:00.000 –> 00:00:06.480No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your00:00:06.480 –> 00:00:08.080financial woes.00:00:08.080 –> 00:00:09.680She’s the how-to girl.00:00:09.680 –> 00:00:11.680It’s the Dr. Friday Show.00:00:11.680 –> 00:00:18.560If you have a question for Dr. Friday, call her now.00:00:18.560 –> 00:00:19.560737-WWTN.00:00:19.560 –> 00:00:23.560That’s 737-9986.00:00:23.560 –> 00:00:27.360So here’s your host, financial counselor and tax consultant, Dr. Friday.00:00:27.920 –> 00:00:30.600Good day.00:00:30.600 –> 00:00:33.360This is Dr. Friday and we’re live here in studio.00:00:33.360 –> 00:00:39.640And if you have a question, you can join us live as well at 615-737-9986.00:00:39.640 –> 00:00:46.480615-737-9986.00:00:46.480 –> 00:00:49.440For many of you that may not or maybe it’s your first time listening to me on the radio,00:00:49.440 –> 00:00:54.280I’m an enrolled agent licensed by the Internal Revenue Service to do taxes andrepresentation.00:00:54.280 –> 00:00:56.080That is pretty much all I do.00:00:56.080 –> 00:01:00.960So if you’re working on your taxes this wonderful weekend, or maybe you’re making some taxplanning00:01:00.960 –> 00:01:06.120for 2024 and you’ve got a question, possibly something to do with inheritance or selling00:01:06.120 –> 00:01:12.520or buying property, paying the capital gains tax, that kind of situation, making sure you00:01:12.520 –> 00:01:17.080understand what the federal tax law is compared to the state.00:01:17.080 –> 00:01:21.960Kind of found out an interesting situation because we seem to have had a large number,00:01:21.960 –> 00:01:27.440in my opinion, a large number of individuals that were thinking that if they reinvested00:01:27.440 –> 00:01:32.760the money from the sale of their home, they weren’t going to have to pay any kind offederal00:01:32.760 –> 00:01:33.760taxes.00:01:33.760 –> 00:01:40.640I did find out that California state income tax has that available transaction on it.00:01:40.640 –> 00:01:43.120It is not a federal law, but a state.00:01:43.120 –> 00:01:49.560So you really do need to understand what is state, what is federal and how that works.00:01:49.560 –> 00:01:52.320So that way you understand how you’re going to be able to save.00:01:52.320 –> 00:01:55.920In most cases, you don’t want to reinvest the federal money if you’re going to have00:01:55.920 –> 00:01:59.960to go pay 50 or 60 or $70,000 in capital gains.00:01:59.960 –> 00:02:03.800You don’t want that tied up in something you can’t get back.00:02:03.800 –> 00:02:06.640Very hard to, and no one wants to finance.00:02:06.640 –> 00:02:10.080Interest rates with the IRS is now almost 12%.00:02:10.080 –> 00:02:14.400Penalties run between 25 and theoretically there could be three or four different ones00:02:14.400 –> 00:02:18.280and eventually could be over 100% of what you owe them.00:02:18.280 –> 00:02:21.020So depending on how long and what the penalty is.00:02:21.020 –> 00:02:26.220So it’s important to understand how that’s working and what you’re going to do.00:02:26.220 –> 00:02:31.240So right now we’re here in the office ourselves working on tax preparation.00:02:31.240 –> 00:02:35.040First things we’re working on of course mostly is business tax returns.00:02:35.040 –> 00:02:38.100We only have till March 15th to file these tax returns.00:02:38.100 –> 00:02:45.280Be that a 1065 or an 1120 S assuming that they’re on calendar years and that they would00:02:45.280 –> 00:02:47.520be due on March 15th.00:02:47.520 –> 00:02:48.520That’s right.00:02:48.520 –> 00:02:50.400LLCs, now I’m not talking single.00:02:50.400 –> 00:02:56.980These are the multi-member LLCs that file on form 1065 or ones that elected to becorporations00:02:56.980 –> 00:03:05.640on 1120 S. Both of them need to file the returns or the extension by March 15th.00:03:05.640 –> 00:03:08.440And then don’t forget to do your state tax returns.00:03:08.440 –> 00:03:15.020Anybody that is an entity in Tennessee will need to make sure that they have filed with00:03:15.020 –> 00:03:16.760the secretary of state.00:03:16.760 –> 00:03:23.140You will have a business license, gross business receipts, as well as a franchise excise.00:03:23.140 –> 00:03:27.320It could be as little of a hundred dollars, never will be less than $100.00:03:27.320 –> 00:03:32.740That’s the minimum fee, but it could always be up to 15, 20 to large numbers depending00:03:32.740 –> 00:03:36.720on the type of business and how much gains that you have.00:03:36.720 –> 00:03:38.940So again, very important to make sure.00:03:38.940 –> 00:03:43.040And then if you’re working in other states, it is the law.00:03:43.040 –> 00:03:47.560Like if you work in Kentucky, if you have a business that even though you’re a Tennessee00:03:47.560 –> 00:03:54.040business, but you’re working and physically earning money in the state of Kentucky,Kentucky00:03:54.040 –> 00:03:58.160says, wait a second, we want our share of that money.00:03:58.160 –> 00:04:00.960So you would have to file a Kentucky and a Tennessee.00:04:00.960 –> 00:04:06.400Now there are ways of splitting that by percentages so that you can not have to necessarilypay00:04:06.400 –> 00:04:11.640tax in both states, but it’s important not to let those kinds of things slide.00:04:11.640 –> 00:04:17.120We ended up with a lot of different audits that often start out as one state or one entity00:04:17.120 –> 00:04:18.120doing something.00:04:18.120 –> 00:04:23.600Then we find out that, you know, multiple states come into play in different situations.00:04:23.600 –> 00:04:28.360So, and also right now your annual report, if you’re an LLC or corporation, go ahead00:04:28.360 –> 00:04:29.360and get it filed.00:04:29.360 –> 00:04:33.800I believe we tell have until April 1st, but time flies when we’re having fun.00:04:33.800 –> 00:04:38.640And so you got your annual reports, your gross receipts or business licenses.00:04:38.640 –> 00:04:41.540Those could be multiples because you have county and city.00:04:41.540 –> 00:04:45.720And if you did less than a hundred thousand, in most cases, you’re not going to have to00:04:45.720 –> 00:04:53.860pay anything but the fee, the $15 fee for a renewal county, and it could be 15 for city.00:04:53.860 –> 00:04:59.300And then you also have your franchise excise and of course sales tax always due.00:04:59.300 –> 00:05:02.720And if you’re on an annual, you’re late already, cause that would have been due on January00:05:02.720 –> 00:05:03.86020th.00:05:03.860 –> 00:05:05.900So all kinds of little things.00:05:05.900 –> 00:05:10.600The first quarter of this, of the year is always the complicated one.00:05:10.600 –> 00:05:14.680If you did not file 1099s, you’re sitting there going, I know I’m supposed to, but I00:05:14.680 –> 00:05:16.140didn’t do it now it’s too late.00:05:16.140 –> 00:05:17.800It is not too late.00:05:17.800 –> 00:05:23.560I am a firm believer that the 1099, no matter when you’re preparing your taxes to go ahead00:05:23.560 –> 00:05:25.400and submit those 1099s.00:05:25.400 –> 00:05:30.240Keep in mind, if you are a person that receives money from somebody else as a self-employed00:05:30.240 –> 00:05:36.080individual, tax law does not say you have to wait for that 1099 to file your taxes.00:05:36.080 –> 00:05:37.980What it says is you have to be accountable.00:05:37.980 –> 00:05:41.600You need to know how much money you have earned throughout everything.00:05:41.600 –> 00:05:46.260You don’t need to wait for those 1099s and say, Oh, this must be all I earned because00:05:46.260 –> 00:05:52.200the odds are the IRS also knows that if you only report what’s on 1099s, unless you can00:05:52.200 –> 00:05:57.380show that you worked for one or two people and they, so the two people that 1099 you00:05:57.380 –> 00:06:02.460and you didn’t do any small jobs, they’re going to do an assessment, possibly assuming00:06:02.460 –> 00:06:04.840that you did not report all of your income.00:06:04.840 –> 00:06:07.100It’s like what the 1099 case came out.00:06:07.100 –> 00:06:12.400I had a lot of people that saw the reported cause that was, that was mandated.00:06:12.400 –> 00:06:14.300This is cause it went through the bank account.00:06:14.300 –> 00:06:19.720But in all reality, again, the IRS has come down on many different cases saying that was00:06:19.720 –> 00:06:27.040an underreported income because of the situation where you have, uh, checks, cash that come00:06:27.040 –> 00:06:32.520in and just because you did not receive any documentation on it, it is your job as abusiness00:06:32.520 –> 00:06:36.240owner to track all income in and all expenses out.00:06:36.240 –> 00:06:37.700So just putting it out there.00:06:37.700 –> 00:06:41.460If you’re a business owner and you haven’t finished your 1099s, well yes, you should00:06:41.460 –> 00:06:46.100have had them out by the end of January, but it is better to do it late than not to do00:06:46.100 –> 00:06:48.080it at all in this situation.00:06:48.080 –> 00:06:49.460So you should still do it.00:06:49.460 –> 00:06:53.540And if the persons already filed their taxes, they should have picked it up alreadyanyways.00:06:53.540 –> 00:06:58.660So it have a zero effect on the people you’re 1099, but you would be in compliance with00:06:58.660 –> 00:07:01.220what the internal revenue wants.00:07:01.220 –> 00:07:02.300Very important guys.00:07:02.300 –> 00:07:04.860It’s something that you don’t want to just let slide through.00:07:04.860 –> 00:07:09.560Again, if you want to join the show, if you’re listening on this very chilly Saturday and00:07:09.560 –> 00:07:13.140you’re working on your taxes or you’ve got some sort of tax situation, maybe you’re even00:07:13.140 –> 00:07:17.560helping out your parents or friends and they have some situations where they’ve either00:07:17.560 –> 00:07:21.480cashed out 401ks or maybe they they’ve lost the loved one.00:07:21.480 –> 00:07:23.360How does that affect the tax returns?00:07:23.360 –> 00:07:27.980Um, to be able to make sure you’re getting the right tax advice or if you’ve got a basic00:07:27.980 –> 00:07:29.880question, we’ll do our best to lead you there.00:07:29.880 –> 00:07:36.120The phone number here is six one five seven three seven nine nine eight six six one five00:07:36.120 –> 00:07:39.920seven three seven nine nine eight six.00:07:39.920 –> 00:07:44.480Um, another thing happened this week, which I think is kind of interesting where nowadays00:07:44.480 –> 00:07:51.020we have a lot of individuals that work from home, but the companies they work for are00:07:51.020 –> 00:07:52.900in other States.00:07:52.900 –> 00:07:58.680So again, let’s use, I have one that came in and the, the wife works for the company00:07:58.680 –> 00:07:59.680in Tennessee.00:07:59.680 –> 00:08:01.600I mean, she, she works here in Tennessee.00:08:01.600 –> 00:08:09.000The company is in North Carolina, so they’re taking taxes out on her income because that00:08:09.000 –> 00:08:11.520is the state law.00:08:11.520 –> 00:08:16.520Anyone that earns income in North Carolina, no matter where you live, you’re going to00:08:16.520 –> 00:08:17.920file taxes.00:08:17.920 –> 00:08:23.440So of course we filed the taxes and instead of getting all of her state refund back,because00:08:23.440 –> 00:08:28.800she has to report what was earned in that state, even if she never stepped foot in it,00:08:28.800 –> 00:08:35.540she ended up with $62 refund out of a $600 a withdraw from her check.00:08:35.540 –> 00:08:40.920So again, if you’re going to work for other States, some States aren’t quite so bad, or00:08:40.920 –> 00:08:44.760if you live in South Carolina and you work in North, sometimes they’ll give you credit00:08:44.760 –> 00:08:46.560for one side or the other.00:08:46.560 –> 00:08:51.760The hard side is when you live in Tennessee where there is no state income tax and so00:08:51.760 –> 00:08:56.560there’s no brotherhood or sisterhood where you can exchange, okay, I won’t pay South00:08:56.560 –> 00:09:00.720Carolina tax, I’ll pay North Carolina, et cetera.00:09:00.720 –> 00:09:06.440California is another firm believer in that concept where you have a situation where if00:09:06.440 –> 00:09:11.560you work from here, you can file a non-resident in California, but you’re never going toget00:09:11.560 –> 00:09:17.960dollar for dollar back of that money because even they’ve earned the money in California,00:09:17.960 –> 00:09:20.580no matter if you live there or not.00:09:20.580 –> 00:09:25.780So that is a very, very important thing to understand how the tax law works and how you’re00:09:25.780 –> 00:09:31.260going to be able to get it because most employers are going to have to follow state law.00:09:31.260 –> 00:09:35.980And so when you get a job out of state and still live in Tennessee, make sure you build00:09:35.980 –> 00:09:41.500in the idea that you might be paying an out of state tax situation.00:09:41.500 –> 00:09:44.600Just because you don’t live there doesn’t mean they’re not going to take your share.00:09:44.600 –> 00:09:47.360Are we ready for Ann, Anna?00:09:47.360 –> 00:09:50.040All right, let’s hit Anna.00:09:50.040 –> 00:09:51.040Hey Anna.00:09:51.040 –> 00:09:53.520Hello there, Dr. Friday.00:09:53.520 –> 00:09:59.820My question would be if I have a place that is cleaned by someone and she has her own00:09:59.820 –> 00:10:04.560cleaning business, am I required to attend her a 1099?00:10:04.560 –> 00:10:09.300And if so, can you explain that to me a little bit and what the amount is and whatever?00:10:09.300 –> 00:10:10.300Yes ma’am.00:10:10.300 –> 00:10:16.300And answer is yes, she is providing you a service and that’s how we kind of define 1099.00:10:16.300 –> 00:10:21.020Someone like my lawn person, my guy that comes through and trims all my trees, as long as00:10:21.020 –> 00:10:29.460I pay them over $600 a year, then I need to be paying, sending them a 1099 for thoseservices.00:10:29.460 –> 00:10:34.520If this is your in-house cleaning person, again, you are supposed to, but in my case00:10:34.520 –> 00:10:37.640is some of the stuff would fall on a business like it’s a rental, right?00:10:37.640 –> 00:10:42.480If the person goes out and does my lawns and cuts my trees and I’m going to deduct that00:10:42.480 –> 00:10:47.800on my tax return, I can’t deduct if I didn’t 1099 them in all honesty.00:10:47.800 –> 00:10:52.640I mean, you can, but if you’re caught, there’s a penalty for not doing it correctly.00:10:52.640 –> 00:10:58.160So if this is your home cleaning lady, that may be a little harder because most people00:10:58.160 –> 00:11:05.680don’t, but any in-home person that we pay, cook, cleaning person, sometimes we havesomebody00:11:05.680 –> 00:11:10.800that might be like an assistant that helps out with an older parent, all of them should00:11:10.800 –> 00:11:15.200be getting 1099s or household employee W-2s.00:11:15.200 –> 00:11:16.200Okay.00:11:16.200 –> 00:11:19.520Well, I think that answers my question.00:11:19.520 –> 00:11:25.440And if that has not been done before, then how would you end up prior years?00:11:25.440 –> 00:11:27.080I wouldn’t.00:11:27.080 –> 00:11:30.880I would actually just move forward doing it correctly at the time that you found out about00:11:30.880 –> 00:11:31.880it.00:11:31.880 –> 00:11:32.880Okay.00:11:32.880 –> 00:11:33.880All right.00:11:33.880 –> 00:11:34.880Very good.00:11:34.880 –> 00:11:35.880Thank you so much for your time today.00:11:35.880 –> 00:11:37.040I appreciate it.00:11:37.040 –> 00:11:38.040Thank you for calling.00:11:38.040 –> 00:11:39.040I appreciate that.00:11:39.040 –> 00:11:40.040Okay.00:11:40.040 –> 00:11:41.040Let’s try Steve in the borough.00:11:41.040 –> 00:11:42.040Hey, Stan, what’s happening?00:11:42.040 –> 00:11:43.040Would it be Steve?00:11:43.040 –> 00:11:44.040Oh, it could be Steve.00:11:44.040 –> 00:11:45.040Let’s try Steve in the borough.00:11:45.040 –> 00:11:46.040Hey, Dr. Brody, how are you doing?00:11:46.040 –> 00:11:47.040I’m doing awesome.00:11:47.040 –> 00:11:48.040Thanks, Steve.00:11:48.040 –> 00:11:49.040Hey, this is awesome.00:11:49.040 –> 00:11:50.040I finally get to call you.00:11:50.040 –> 00:11:51.040I hope it’s going to work out good.00:11:51.040 –> 00:11:52.040Hey, I’ve always filed.00:11:52.040 –> 00:11:53.040My wife and I both work hourly.00:11:53.040 –> 00:11:54.040We just file.00:11:54.040 –> 00:11:55.040I’ve been filing it every year because it’s nice and simple.00:11:55.040 –> 00:11:56.040Well, we bought a little farm a few years ago.00:11:56.040 –> 00:11:57.040It’s a long farm.00:12:03.040 –> 00:12:10.040It’s a long farm.00:12:10.040 –> 00:12:13.040It’s a long farm.00:12:13.040 –> 00:12:14.040It’s a long farm.00:12:59.040 –> 00:13:02.040It’s a long farm.00:13:02.040 –> 00:13:04.040It’s a hobby farm, if nothing else.00:13:04.040 –> 00:13:07.040Most of us prefer not to be hobby farms.00:13:07.040 –> 00:13:11.040Most of us like to be considered a working farm because then, I mean,00:13:11.040 –> 00:13:16.040besides the fact that a green belt does require $500.00:13:16.040 –> 00:13:19.040I want to say it’s $1,500 every three years, $500 a year,00:13:19.040 –> 00:13:22.040something like that to keep our green belts.00:13:22.040 –> 00:13:26.040And so theoretically that could still be a hobby farm.00:13:26.040 –> 00:13:29.040But I think it’s a good thing.00:13:29.040 –> 00:13:30.040I think it’s a good thing.00:13:49.040 –> 00:14:03.040I think it’s a good thing.00:14:03.040 –> 00:14:04.040I think it’s a good thing.00:16:09.040 –> 00:16:15.040We depreciate or we enter assets or things when the business physically starts.00:16:15.040 –> 00:16:21.040So if you start the business in 2024, you can move all that into the business in the00:16:21.040 –> 00:16:25.040year of 2024 when it actually was used to do it.00:16:25.040 –> 00:16:27.040So that would be my suggestion.00:16:27.040 –> 00:16:31.040If you still plan to open a business, actually open it, see if it can make it successful00:16:31.040 –> 00:16:34.040and generate business.00:16:34.040 –> 00:16:38.040And if you can, then it’s legitimate business and then you can depreciate or write offthese00:16:38.040 –> 00:16:40.040expenses depending on what they were.00:16:40.040 –> 00:16:42.040Okay.00:16:42.040 –> 00:16:44.040Well, that’s great.00:16:44.040 –> 00:16:49.040I was worried that I would lose every bit of the write off that I bought last year.00:16:49.040 –> 00:16:51.040So I was worried about that.00:16:51.040 –> 00:16:52.040Yeah.00:16:52.040 –> 00:16:53.040No, you’re good.00:16:53.040 –> 00:16:54.040You just need to do it.00:16:54.040 –> 00:16:59.040I didn’t make a dime last year, but this year I’ve made some money.00:16:59.040 –> 00:17:00.040Okay.00:17:00.040 –> 00:17:01.040So the attempt was made.00:17:01.040 –> 00:17:06.040So it sounds like in 2024, you’ll be able to take that investment and pay yourself back00:17:06.040 –> 00:17:10.040or use it as a tax loss, whatever it might be.00:17:10.040 –> 00:17:20.040As far as business, would you suggest DBA or LLC or?00:17:20.040 –> 00:17:23.040I would start with a DBA in most cases.00:17:23.040 –> 00:17:27.040If you want to get a good general liability insurance, I don’t know what you’re doing,00:17:27.040 –> 00:17:31.040but at least let’s make sure the business is going to be a viable business before you00:17:31.040 –> 00:17:35.040start investing into LLCs, which then you have a $300 annual fee.00:17:35.040 –> 00:17:39.040There’s a whole different cost you, you know, a thousand dollars a year to keep that one00:17:39.040 –> 00:17:42.040open basically or paying and doing things.00:17:42.040 –> 00:17:46.040So you want to be able to make sure that’s it, you know, that’s really going to work00:17:46.040 –> 00:17:47.040as a business.00:17:47.040 –> 00:17:51.040Then I would suggest moving into probably a single member LLC.00:17:51.040 –> 00:17:52.040Okay.00:17:52.040 –> 00:17:53.040So that works.00:17:53.040 –> 00:17:54.040Okay.00:17:54.040 –> 00:17:55.040Thank you.00:17:55.040 –> 00:17:56.040Thanks.00:17:56.040 –> 00:17:57.040Appreciate it.00:17:57.040 –> 00:17:58.040All right.00:17:58.040 –> 00:18:10.040So if you want to join the show, you can at 615-737-9986, 615-737-9986.00:18:10.040 –> 00:18:12.040We’re taking your calls here live in studio.00:18:12.040 –> 00:18:13.040Those are great questions.00:18:13.040 –> 00:18:20.040And, you know, bringing back the farm, not in Steven’s case necessarily, but many people00:18:20.040 –> 00:18:22.040have working farms.00:18:22.040 –> 00:18:24.040You may have bees, you may have lumber.00:18:24.040 –> 00:18:26.040You may, it may not be what you think.00:18:26.040 –> 00:18:33.040Always the more traditional is cattle or crops of some sort, but you know, if you’reworking00:18:33.040 –> 00:18:38.040and making money and most of us for the greenbelt have to have some money coming in toqualify,00:18:38.040 –> 00:18:41.040you may want to make sure that you’re maximizing those.00:18:41.040 –> 00:18:45.040But like anything else, it doesn’t necessarily meet with businesses.00:18:45.040 –> 00:18:48.040You, you have basically three years to make a profit.00:18:48.040 –> 00:18:52.040If you don’t make a profit within three years, the IRS is pretty much looking at it as if00:18:52.040 –> 00:18:54.040you’re just, it’s a hobby.00:18:54.040 –> 00:18:57.040You’re not really attempting to make money.00:18:57.040 –> 00:19:01.040You’re just using it to somehow generate a tax loss.00:19:01.040 –> 00:19:07.040And let me clarify that as well, is that if you’re losing money every single year, I had00:19:07.040 –> 00:19:13.040an auditor once say to me, what kind of person, seven, 10 years, I think this one company00:19:13.040 –> 00:19:15.040had had a loss 10 years in a row.00:19:15.040 –> 00:19:19.040And she said, who in their good mind would want to have a business that keeps losing00:19:19.040 –> 00:19:20.040money?00:19:20.040 –> 00:19:27.040Who can afford to lose a hundred and plus thousand dollars in 10 years on a business?00:19:27.040 –> 00:19:31.040So you know, I mean, if you’re really in business, you’re not in business to lose money.00:19:31.040 –> 00:19:33.040You’re in business to make money.00:19:33.040 –> 00:19:34.040So keep that in mind.00:19:34.040 –> 00:19:37.040That is the mentality that the IRS is looking.00:19:37.040 –> 00:19:42.040Now farms, especially with ones that do certain types of crops.00:19:42.040 –> 00:19:46.040I mean, I know my nut crops can take almost 10 years to have a mature tree.00:19:46.040 –> 00:19:50.040So, you know, one of those situations where you want to be able to make that work for00:19:50.040 –> 00:19:51.040you.00:19:51.040 –> 00:19:57.040So tracking, making sure you’re managing it and everything else is going to be important00:19:57.040 –> 00:20:00.040for the thing that you have happening.00:20:00.040 –> 00:20:04.040So tracking all your expenses and doing that is a great idea.00:20:04.040 –> 00:20:14.040If you want to join the show, you can at 615-737-9986, 615-737-9986.00:20:14.040 –> 00:20:18.040Of course, at this time of the year, we get a lot of different types of businesses and00:20:18.040 –> 00:20:20.040situations.00:20:20.040 –> 00:20:23.040And often we deal a lot with trust and estates.00:20:23.040 –> 00:20:28.040And so I do want to let you know that most of them being that they’re not always on a00:20:28.040 –> 00:20:33.040physical year end or a calendar year and they’re on a physical year and maybe that youdidn’t00:20:33.040 –> 00:20:39.040get yet your K-1 or your distribution information.00:20:39.040 –> 00:20:41.040Make sure you’re holding on to that.00:20:41.040 –> 00:20:42.040All right.00:20:42.040 –> 00:20:46.040So you have and they can be the same thing with any investment or anything else.00:20:46.040 –> 00:20:51.040Just make sure that you’ve got your investments, that you’re dealing with your situation.00:20:51.040 –> 00:20:56.040So you’re able to take care of your taxes.00:20:56.040 –> 00:21:00.040You don’t want the IRS coming back and saying, oh, wait a second, we’re going to changeyour00:21:00.040 –> 00:21:05.040taxes and this is how we’re going to make this happen because you didn’t report something.00:21:05.040 –> 00:21:10.040So change of income is never a good idea by the IRS.00:21:10.040 –> 00:21:12.040I don’t like the IRS changing my tax returns.00:21:12.040 –> 00:21:18.040So don’t rush to file just because you want to make sure you have you want to make surethat00:21:18.040 –> 00:21:21.040you have everything on your tax returns before you hit that send button.00:21:21.040 –> 00:21:25.040Because a lot of times those schedule B’s, those 1099 B’s from your investment companies,00:21:25.040 –> 00:21:27.040we’re still getting some in.00:21:27.040 –> 00:21:30.040So it’s important that you have that going for you.00:21:30.040 –> 00:21:31.040All right.00:21:31.040 –> 00:21:33.040Let’s hit Doug before the break if we can.00:21:33.040 –> 00:21:34.040Doug in Bowling Green.00:21:34.040 –> 00:21:36.040Hey, Doug, what’s happening?00:21:36.040 –> 00:21:37.040Hi, Dr. Friday.00:21:37.040 –> 00:21:38.040Thank you for taking my call.00:21:38.040 –> 00:21:41.040I have a quick question about business mileage.00:21:41.040 –> 00:21:43.040I’m set up as a corporation.00:21:43.040 –> 00:21:45.040I own my own business.00:21:45.040 –> 00:21:51.040As far as business mileage goes, am I wiser to just tabulate my mileage during the year00:21:51.040 –> 00:21:59.040and take it as a federal deduction or reimburse myself from the business on a monthlybasis?00:21:59.040 –> 00:22:02.040Is this a C Corp or sub S Corp?00:22:02.040 –> 00:22:03.040It’s a C Corp.00:22:03.040 –> 00:22:07.040OK, I’m going to say and I operate as a C Corp too.00:22:07.040 –> 00:22:10.040I do it all through expense reports on a monthly basis.00:22:10.040 –> 00:22:15.040And then that way it reimburses me and I don’t have to deal with any of that on becauseit’s00:22:15.040 –> 00:22:21.040hard to do a C Corp on your own personal side because you’d almost have to do it as because00:22:21.040 –> 00:22:23.040on K1s we can do it.00:22:23.040 –> 00:22:26.040But when it’s a C Corp, we only take our W2s.00:22:26.040 –> 00:22:28.040You’re really just an employee otherwise.00:22:28.040 –> 00:22:32.040And there’s no deduction on your personal tax return for your miles as an employee.00:22:32.040 –> 00:22:36.040So you have to have a corporate setting which basically says we’ll do reimbursements,00:22:36.040 –> 00:22:42.040a reimbursement program where you can do expense reports for meals and miles and hotels,whatever00:22:42.040 –> 00:22:44.040might have come.00:22:44.040 –> 00:22:49.040And then every month the corporation writes off the expenses and they reimburse youpersonally.00:22:49.040 –> 00:22:50.040Perfect.00:22:50.040 –> 00:22:51.040OK, that’s what I thought.00:22:51.040 –> 00:22:53.040I thank you so very much.00:22:53.040 –> 00:22:54.040Hey, great question.00:22:54.040 –> 00:22:55.040Thank you.00:22:55.040 –> 00:22:58.040Let’s hit Linda really quick.00:22:58.040 –> 00:22:59.040Hey, Linda.00:22:59.040 –> 00:23:05.040Hey, I’m a senior and I was wondering, do I have to file taxes?00:23:05.040 –> 00:23:07.040Well, what do you have for income?00:23:07.040 –> 00:23:09.040Can you give me a rough rundown?00:23:09.040 –> 00:23:10.040Social Security.00:23:10.040 –> 00:23:18.040I draw about 18000 a year from Social Security, Social Security or other.00:23:18.040 –> 00:23:19.040And pension.00:23:19.040 –> 00:23:20.040Yeah.00:23:20.040 –> 00:23:21.040OK.00:23:21.040 –> 00:23:27.040So how much if you were to just educate guests, what is your pension per month or per year?00:23:27.040 –> 00:23:30.040Well, that was including it too.00:23:30.040 –> 00:23:31.040I know.00:23:31.040 –> 00:23:36.040So I mean, because the problem is, so just give me what your pension is compared to Social00:23:36.040 –> 00:23:37.040Security.00:23:37.040 –> 00:23:38.040Either one.00:23:38.040 –> 00:23:41.040What’s the pension for a month or a year?00:23:41.040 –> 00:23:45.040My pension is like 378 a month.00:23:45.040 –> 00:23:46.040OK.00:23:47.040 –> 00:23:50.040And my social is about.00:23:50.040 –> 00:23:53.040So you’re not required to file.00:23:53.040 –> 00:23:56.040You are not required to file.00:23:56.040 –> 00:23:58.040When, when is it?00:23:58.040 –> 00:23:59.040What does it get to?00:23:59.040 –> 00:24:00.040What limit to file?00:24:00.040 –> 00:24:05.040So you take half of your Social Security and and add all your other income.00:24:05.040 –> 00:24:13.040And if you come up to twenty five thousand dollars, then you will be in a taxablesituation.00:24:13.040 –> 00:24:14.040Oh, OK.00:24:14.040 –> 00:24:15.040OK.00:24:15.040 –> 00:24:17.040If I do yours, it’s not going to get there.00:24:17.040 –> 00:24:19.040So we should be good.00:24:19.040 –> 00:24:20.040Oh, ma’am.00:24:20.040 –> 00:24:21.040Thank you.00:24:21.040 –> 00:24:22.040Thank you very much.00:24:22.040 –> 00:24:23.040Yeah.00:24:23.040 –> 00:24:24.040All right.00:24:24.040 –> 00:24:25.040We’re going to take our second break here.00:24:25.040 –> 00:24:29.040When we get back, we’ll get some more of your phone calls at six one five seven three seven00:24:29.040 –> 00:24:35.040nine nine eight six six one five seven three seven nine nine eight six.00:24:35.040 –> 00:24:43.040We’ll be right back.00:24:43.040 –> 00:24:44.040All right.00:24:44.040 –> 00:24:47.040We are back here live in studio already halfway through the show.00:24:47.040 –> 00:24:57.040So if you are thinking about a tax question you might want to have asked or if you’rethinking about what you need to be doing to start considering for twenty twenty four.00:24:57.040 –> 00:25:06.040I do want to bring out because a lot of times when people are M.D.s require minimumdistributions because of the age difference in the changes there has been.00:25:06.040 –> 00:25:12.040You know, it used to be 70 and a half and then it was 72 and then it was 73, which is thecurrent law.00:25:12.040 –> 00:25:13.040Seventy three.00:25:13.040 –> 00:25:17.040The year in which you turn 73, you’ll start taking your RMBs.00:25:17.040 –> 00:25:30.040But the quality of qualified charitable deductions or the QC D has been instill in effectfor people that are 70 and a half or older.00:25:30.040 –> 00:25:39.040So even if you’re not taking requirement of distributions, you can take one and do a QC Dfor qualified charitable deduction.00:25:39.040 –> 00:25:49.040Nowadays, it’s very difficult. I have some clients. I mean, I really do think Tennessee hasprobably some of the most amazing people that do charitable work and contributions.00:25:49.040 –> 00:25:55.040But in many cases, based on income, you don’t always meet that standard deduction thatcomes.00:25:55.040 –> 00:26:02.040You may be giving eighteen thousand dollars a year, but you don’t have a mortgage and yourproperty taxes are only three or four thousand.00:26:02.040 –> 00:26:07.040You could not have an actual deduction on your tax return.00:26:07.040 –> 00:26:15.040And again, let me clarify. I know many of you do not do those deductions just for the hopeto save a few dollars in taxes.00:26:15.040 –> 00:26:20.040But does anyone say that doing it is going to hurt you? You could even give more.00:26:20.040 –> 00:26:29.040So you might want to talk with your financial planner, with the custodian of yourretirement IRA or 401K.00:26:29.040 –> 00:26:32.040Tell them that you’ve heard about qualified charitable deductions.00:26:32.040 –> 00:26:36.040You want to do this because it’s a 100 percent deduction.00:26:36.040 –> 00:26:44.040So if you take ten thousand dollars out at the age of 70 or half or older and you use it asyour requirement of distribution,00:26:44.040 –> 00:26:49.040you can then contribute that to a charity with no tax.00:26:49.040 –> 00:26:54.040You won’t pay tax on it. It will pass straight through. It’s just a great tool to have.00:26:54.040 –> 00:27:03.040It’s not for everyone. And especially if you think about it and the people that maybe don’teven you give two or three thousand dollars a year00:27:03.040 –> 00:27:07.040and you’re not going to get that deduction on your tax return in any way.00:27:07.040 –> 00:27:13.040So this would be a way of doing it through your RMD, requirement of distribution.00:27:13.040 –> 00:27:17.040Again, that’s a qualified charitable deduction. It does exist.00:27:17.040 –> 00:27:25.040And even if you’re not yet old enough for a RMD, you can take them and do a QCD.00:27:25.040 –> 00:27:32.040So you’re not sure. I would definitely suggest talking to your financial planner.00:27:32.040 –> 00:27:37.040See if there’s anything that might be able to be done, because again, many of you arealready giving money.00:27:37.040 –> 00:27:43.040The difference is you’re writing a check out of your checkbook after you take the moneyfrom your IRA.00:27:43.040 –> 00:27:47.040So you get a distribution, you put it in the bank and then you write the check to thecharity.00:27:47.040 –> 00:27:52.040By doing that, this money is now taxable and you’d have to deduct the charity afterwards.00:27:52.040 –> 00:27:58.040By having them write the check directly to the charity and it’s a QCD, then guess what?00:27:58.040 –> 00:28:03.040We don’t have to pay tax. So it’s not changing anything major in your life.00:28:03.040 –> 00:28:07.040It really is just a matter of doing what you need to do and how you need to do it.00:28:07.040 –> 00:28:13.040So do it the right way and put a few more dollars in your pocket or if you really wantedto,00:28:13.040 –> 00:28:16.040you could even give more money to charity. Your choice.00:28:16.040 –> 00:28:21.040So again, talk to your financial planner or the custodial over your IRA.00:28:21.040 –> 00:28:25.040They’ll be the best to help you or lead you through how that works.00:28:25.040 –> 00:28:30.040If you have a question and you’re not too sure where to start, I will be more than glad totry to help it out.00:28:30.040 –> 00:28:38.040615-737-9986, 615-737-9986.00:28:38.040 –> 00:28:44.040Again, we are in the process of completing 2023 taxes and in many cases,00:28:44.040 –> 00:28:48.040we’re having some people that don’t have all their documents, so we’re having to get them.00:28:48.040 –> 00:28:54.040If for some reason you do not receive a W-2 from your employer00:28:54.040 –> 00:29:00.040and they say they’ve sent it or they want you to pay or you have to physically come by andgo pick it up00:29:00.040 –> 00:29:07.040and that’s not a possibility for you, you can sign on to the IRS,00:29:07.040 –> 00:29:14.040irs.gov and click on transcripts and you can get a copy of that W-2.00:29:14.040 –> 00:29:21.040It’s a different printout, but it will give you the information to be able to put itthrough your —00:29:21.040 –> 00:29:24.040so you can finish your tax return.00:29:24.040 –> 00:29:29.040Sometimes you can use your final paycheck, but not always do people know if it’s reallytheir final or not,00:29:29.040 –> 00:29:31.040because sometimes the numbers don’t match.00:29:31.040 –> 00:29:37.040So it is important to make sure you do have your final paycheck, not just one in Decemberthinking it’s close enough.00:29:37.040 –> 00:29:43.040And if you quit sometime between the year, your best bet is to try to go to the IRS.00:29:43.040 –> 00:29:48.040You can fill out a form on the — if you’re doing your own taxes, there is a place thatsays I did not receive the W-200:29:48.040 –> 00:29:52.040and you put the numbers in and then you’re able to process that.00:29:52.040 –> 00:29:55.040And if you have worked for them in the past, that’s fine.00:29:55.040 –> 00:29:59.040If you don’t, you do need the federal ID number to do that.00:29:59.040 –> 00:30:05.040So you’d have to call them and get the federal ID number or, you know, nowadays it’samazing.00:30:05.040 –> 00:30:13.040I had a client, again, came in yesterday and he’s like, well, his friend needed a copy ofhis own W-2,00:30:13.040 –> 00:30:16.040the work he worked at, this gentleman no longer has a car, he can’t get across town to goget it.00:30:16.040 –> 00:30:21.040They refused to email it or fax it or even send a picture of it to him.00:30:21.040 –> 00:30:25.040So I don’t know why employers can be somewhat difficult.00:30:25.040 –> 00:30:29.040I’m sure it’s because they weren’t happy maybe with the way things got left.00:30:29.040 –> 00:30:36.040But I will tell you, if you are an employer holding a W-2 for ransom in essence, which iswhat I call this,00:30:36.040 –> 00:30:40.040there is a fine that can be charged against you for doing that.00:30:40.040 –> 00:30:43.040So, again, your job is to deliver this.00:30:43.040 –> 00:30:45.040Now, you don’t have to chase down that employee.00:30:45.040 –> 00:30:51.040If they’ve relocated and you mailed the W-2, it is not your job to go and find themsomewhere else.00:30:51.040 –> 00:30:55.040It is your job to make sure that they’ve received the distribution.00:30:55.040 –> 00:31:01.040That’s why so many now have actually went to getting their W-2s electronically.00:31:01.040 –> 00:31:08.040So people, no matter if you’ve moved the wrong address, and let me clarify, if the W-2 hasthe wrong address on it00:31:08.040 –> 00:31:14.040and your employer is not necessarily obligated to correct that address,00:31:14.040 –> 00:31:20.040and you should have updated it with them prior to the end of the year, just so you know.00:31:20.040 –> 00:31:23.040The Social Security number does need to be correct.00:31:23.040 –> 00:31:31.040The legal name that you’ve provided to them, because sometimes people work off of namesthat are not their legal names.00:31:31.040 –> 00:31:36.040They are only their nicknames, I guess is what I’m going to call them.00:31:36.040 –> 00:31:43.040But they do need to make sure that the person is not going by a different name.00:31:43.040 –> 00:31:49.040So just so you know, whatever name you put on your W-4 is supposed to be your legal name.00:31:49.040 –> 00:31:56.040That will be the name the W-2 will be issued at, and then you’ll have to go from there andtake care of your situation.00:31:56.040 –> 00:32:00.040But please, look at your pay stubs throughout the year.00:32:00.040 –> 00:32:07.040Check. If you’ve relocated, contact those people and let them know that you have relocated.00:32:07.040 –> 00:32:10.040Give them a, just send them a little postcard.00:32:10.040 –> 00:32:14.040Say, “Hey, can you update my file when you get ready to send the W-2s?”00:32:14.040 –> 00:32:21.040You know, because if you don’t get the W-2, then it’s almost impossible for you to fileyour taxes properly.00:32:21.040 –> 00:32:30.040And same thing if you’re dealing with an older parent, and if they have relocated, SocialSecurity statements don’t come out, stock portfolios.00:32:30.040 –> 00:32:32.040All of that has to be changed.00:32:32.040 –> 00:32:39.040If they’ve got a pension from somewhere else, that all needs to be updated so that they’regetting their year-end paperwork.00:32:39.040 –> 00:32:42.040And then they can see if they need to file taxes or not.00:32:42.040 –> 00:32:46.040But if you’re helping them, that’s something a lot of times people don’t do.00:32:46.040 –> 00:32:51.040So it’s really important that if they’re doing that, that you help them out with that.00:32:51.040 –> 00:32:55.040And most of these things can be done online, on the internet.00:32:55.040 –> 00:33:03.040Most of the pensions and all those have where you can submit change of address for people.00:33:03.040 –> 00:33:06.040But you just need to figure out what you have or what you need to do.00:33:06.040 –> 00:33:09.040All right, you know what, before the break, let’s hit Ann in Hermitage.00:33:09.040 –> 00:33:11.040Hey, Ann, what can I do for you, sweetie?00:33:11.040 –> 00:33:17.040Oh, hi, Dr. Friday. I’m trying to find out about rental property depreciation.00:33:17.040 –> 00:33:31.040Do I? I just bought it this past year, and I’m wondering if I use the appraised value orthe actual cost minus the land.00:33:31.040 –> 00:33:38.040Right. We use actual cost for purpose of depreciation, and then the land cost.00:33:38.040 –> 00:33:47.040And a lot of times you can get that from an appraisal or the property tax assessors, whatthe land value is, or if you know it.00:33:47.040 –> 00:33:53.040But yes, so you want to put in what you paid less, back out the land, so you’re reallydepreciating the building only.00:33:53.040 –> 00:34:03.040Okay, because of course we know the appraisal, the amount for property on tax records isway lower than the actual fair value.00:34:03.040 –> 00:34:10.040Absolutely. In the perfect world, hopefully you paid a very low price for it and itappraises for a lot more now.00:34:10.040 –> 00:34:17.040But that only comes into play, an appraised value only comes into play when someone passesaway and we get a step up in basis.00:34:17.040 –> 00:34:19.040I mean, for the tax side of things.00:34:19.040 –> 00:34:22.040Otherwise, we’re always working off actual pay.00:34:22.040 –> 00:34:30.040Okay. And is the table for 27.5 years or has it changed to 30?00:34:30.040 –> 00:34:34.040No, it’s still at 27, I think, or 28, something like that.00:34:34.040 –> 00:34:36.04027.5? Okay.00:34:36.040 –> 00:34:41.040Commercial is on the 30, it’s almost 30, but the 39.00:34:41.040 –> 00:34:44.040Commercial is 39 because I’m working on commercial.00:34:44.040 –> 00:34:51.040But residential I do believe is still at the 27.8 because I always just think of it as 30.00:34:51.040 –> 00:35:02.040Okay. Now, what they’ve said on some of the things that I’ve been trying to read about thisis it’s 25 percent land.00:35:02.040 –> 00:35:10.040So if I take the value of whatever I paid and do 25 percent of that, I should come up withhow much land to deduct.00:35:10.040 –> 00:35:11.040Would that be right?00:35:11.040 –> 00:35:13.040That would be correct. Yes.00:35:13.040 –> 00:35:22.040So they’re saying that 75 percent of the value of the house or whatever is the house and 25percent was land.00:35:22.040 –> 00:35:23.040Yes.00:35:23.040 –> 00:35:25.040And land we don’t depreciate.00:35:25.040 –> 00:35:26.040Right. Of course not.00:35:26.040 –> 00:35:27.040Okay. Wow.00:35:27.040 –> 00:35:28.040That helped me very much.00:35:28.040 –> 00:35:29.040I appreciate it.00:35:29.040 –> 00:35:30.040Have a good day.00:35:30.040 –> 00:35:31.040No problem.00:35:31.040 –> 00:35:32.040Thanks for listening.00:35:32.040 –> 00:35:33.040Appreciate you.00:35:33.040 –> 00:35:36.040All right, guys, we’re going to get ready to take our last break for the day.00:35:36.040 –> 00:35:41.040So if you’ve got some questions, you’re not too sure what you’re doing or just maybe if Ican help you.00:35:41.040 –> 00:35:45.040A lot of times you guys know the answer, but you know, you need a little assistance onthat.00:35:45.040 –> 00:35:46.040No worries at all.00:35:46.040 –> 00:35:51.040Six one five seven three seven nine nine eight six is a number here in studio.00:35:51.040 –> 00:35:56.040Six one five seven three seven nine nine eight six.00:35:56.040 –> 00:36:05.040When we get back, we’re going to talk about your tax questions and cover a few moredifferent situations that may be coming up for a few of you that might be listening.00:36:05.040 –> 00:36:08.040And hopefully you guys are enjoying this wonderful Saturday.00:36:08.040 –> 00:36:10.040We’re going to be right back with the Dr. Friday show.00:36:10.040 –> 00:36:17.040All righty.00:36:17.040 –> 00:36:20.040We are back here live in studio for the last part of the show.00:36:20.040 –> 00:36:23.040So if you have a question, you might want to jump on board.00:36:23.040 –> 00:36:32.040Six one five seven three seven nine nine eight six six one five seven three seven nine nineeight six.00:36:32.040 –> 00:36:36.040Taking calls, talking about my favorite subject of taxes.00:36:36.040 –> 00:36:39.040And so it looks like we’ve got Chuck and Franklin.00:36:39.040 –> 00:36:41.040We’ll just got to pop him on there and get him through.00:36:41.040 –> 00:36:43.040Hey, Chuck.00:36:43.040 –> 00:36:45.040Hello, ma’am.00:36:45.040 –> 00:36:46.040Yes, sir.00:36:46.040 –> 00:36:47.040The question I had was on.00:36:47.040 –> 00:36:48.040Yes, ma’am.00:36:48.040 –> 00:36:54.040All my income comes in from rental property and my mother just recently my mother justrecently moved in with me.00:36:54.040 –> 00:36:55.040She’s never elderly.00:36:55.040 –> 00:36:59.040So my can I take her as a text right off?00:36:59.040 –> 00:37:10.040If your mother only receives Social Security, the answer is yes. But if she has pensionsand other investments, then she’s probably pulling in more than 50 percent of her own care.00:37:10.040 –> 00:37:12.040She only has Social Security only coming in.00:37:12.040 –> 00:37:15.040Then, yes, you can claim her as a dependent.00:37:15.040 –> 00:37:17.040OK, thank you very much.00:37:17.040 –> 00:37:20.040Great question. Thank you.00:37:20.040 –> 00:37:23.040All righty. Let’s see. Can we get Randy real quick?00:37:23.040 –> 00:37:24.040Hey, Randy.00:37:24.040 –> 00:37:25.040Hey, Doug.00:37:25.040 –> 00:37:27.040Hey, how’s it going?00:37:27.040 –> 00:37:29.040I’m living the wildlife, my love.00:37:29.040 –> 00:37:32.040Oh, yeah. You know, it’s got a quick question for you.00:37:32.040 –> 00:37:43.040I think it’ll be quick. But I’m the executive in a state that I opened last October and itwill be closing out fairly soon this year.00:37:43.040 –> 00:37:50.040When I opened the estate account, of course, I didn’t really mean for it to open to open anestate and interest bearing account.00:37:50.040 –> 00:37:55.040But the bank with good intentions, they did open an account that was interest bearing.00:37:55.040 –> 00:38:01.040I think I had there was seventy four dollars interest last year and on that account.00:38:01.040 –> 00:38:06.040And I got to thinking about the taxes and I thought, well, I checked into it, did a littleresearch.00:38:06.040 –> 00:38:10.040It looked like I don’t have to pay taxes on that as long as it’s less than one hundreddollars.00:38:10.040 –> 00:38:14.040Correct. Is that correct? Yes, sir.00:38:14.040 –> 00:38:20.040OK. The next part of it is this year, I didn’t think about this, but she had a lifetimeannuity.00:38:20.040 –> 00:38:36.040And I got a 1095 something in the mail the other day that shows that there was about twentyfive to thirty five hundred dollars, I guess, gain that she had gotten prior to passing.00:38:36.040 –> 00:38:42.040And that that is that came in and then I got thinking more about it.00:38:42.040 –> 00:38:45.040And I thought, well, there was interest on accounts that she had.00:38:45.040 –> 00:38:51.040And so last year there was probably some amount of money on interest.00:38:51.040 –> 00:39:00.040And I did check at the bank and got those got those numbers as well with with thestatement, in fact.00:39:00.040 –> 00:39:04.040And then also I got the thing about Social Security.00:39:04.040 –> 00:39:12.040And so my question is, in a situation with me as the executor, how does that work withtaxes?00:39:12.040 –> 00:39:18.040Do I need to file taxes on the estate with what she actually made last year or depends onthe.00:39:18.040 –> 00:39:21.040So you actually you actually have two tax returns.00:39:21.040 –> 00:39:29.040You’ll be looking at Randy. You have her when she was alive, possibly January throughSeptember, October before she passed away.00:39:29.040 –> 00:39:31.040You will file a regular 1040 market.00:39:31.040 –> 00:39:37.040I mean, those we have ability to put in her date of death that that will print across thetop of the return.00:39:37.040 –> 00:39:45.040And that would be her final tax return. And then you pay any said tax that could be due forher on her behalf from the estate.00:39:45.040 –> 00:39:50.040Then from October through usually estates work on physical year end.00:39:50.040 –> 00:39:54.040So it could be October through September, depending on whatever you have for that one.00:39:54.040 –> 00:40:01.040But when that one is due, unless you chose calendar year, you will file an estate taxreturn and 1041.00:40:01.040 –> 00:40:14.040And that will be the one that will pay tax on anything that happened after she passed awaythat may have been interest bearing and or capital gains or anything else that might have happened within the state.00:40:14.040 –> 00:40:17.040The estate after her death.00:40:17.040 –> 00:40:23.040OK, so like as far as I know, there was a there’s not really anything.00:40:23.040 –> 00:40:32.040Well, there’s no that interest I told you about. And then everything else has been likereimbursements or that kind of thing as far as money that has been gotten back.00:40:32.040 –> 00:40:39.040Right. There was a capital credit payout from a corporation, a telephone corporatecooperative.00:40:39.040 –> 00:40:43.040She was a member of. I don’t think that I don’t think that’s income.00:40:43.040 –> 00:40:51.040But so basically on the estate, we’re not looking at any taxes, but I will need to file forher personally.00:40:51.040 –> 00:40:58.040You need to file for her. And even if there is no taxes, you’re still going to have toclose the estate with a final tax return.00:40:58.040 –> 00:41:08.040Yeah. Yeah. When you got that letter from this from the IRS that says here’s your Ephinnumber, it will tell you that you need to file your 1041 by this due date.00:41:08.040 –> 00:41:13.040And and that will be how you it sounds like you won’t need to keep it open for multipleyears.00:41:13.040 –> 00:41:22.040So you’ll close it unless it’s on a calendar year. And then you may actually have to fileone for twenty three and one for twenty four. Just depends on the dates.00:41:22.040 –> 00:41:27.040OK. All right. Appreciate the help. No problem. Thank you.00:41:27.040 –> 00:41:34.040All right. Let’s see. Daniel and Old Hickory, really quick. Hey, Daniel, I got a fewminutes. What do you have for me?00:41:34.040 –> 00:41:42.040Well, what I’m curious about, my daughter started doing YouTube last year in January andshe’s a traveling YouTuber.00:41:42.040 –> 00:41:50.040She’s basically starting her own business and she spent thirty thirty thousand dollars withno no money coming back in.00:41:50.040 –> 00:41:59.040How does that work in taxes? Well, the fact is, it’s not really a business if she’sspending all the money and she hasn’t made any money.00:41:59.040 –> 00:42:06.040It could be considered startup where she be able to take a portion of it this year. And ifshe’s going to continue it, hopefully she’ll be able to make money next year.00:42:06.040 –> 00:42:18.040That would offset even if she shows a loss again. But she needs to show that she’s makingthe attempt, especially as an influencer or a tick tock or whatever she is.00:42:18.040 –> 00:42:26.040Go ahead. She did. She did a hundred videos and they say it takes an average of two yearsto actually start showing a profit.00:42:26.040 –> 00:42:30.040This month, she’s going to get her first check coming in.00:42:30.040 –> 00:42:37.040Now, there you go. A lot more knowledge than I know about Daniel on that one. But as she sothe first year she can consider startup,00:42:37.040 –> 00:42:43.040but they won’t allow her to depreciate all of that. She’ll only be able to take like thirtyeight hundred dollars of the thirty thousand.00:42:43.040 –> 00:42:49.040She won’t lose it. It will roll into the next year and she’ll be able to spread that overas amateurized startup costs,00:42:49.040 –> 00:42:55.040because in theory, you’re saying is knowingly it’s going to take us two years before we’regoing to see a dollar.00:42:55.040 –> 00:43:07.040Right. I mean, in essence. So she’s got a lot of investments going in and hopefully she’llbe able to use that cost and start writing it off against other profits.00:43:07.040 –> 00:43:16.040Is the hope. Or she’ll not. But yeah, so she may want to have a tax professional help herwith setting that up properly.00:43:16.040 –> 00:43:24.040So she doesn’t end up showing thirty thousand dollar loss in the first year, having anegative tax return and then possibly get herself audited because of it.00:43:24.040 –> 00:43:38.040OK. All right. Well, I do appreciate it. Like I said, you know, we figure two year loss,you know, we were and she’s already coming into, you know, it’s not going to be a lot, but she’s going to get herfirst check.00:43:38.040 –> 00:43:48.040You know, this month. Awesome. No, that’s awesome. That’s great. It’s a difficult business.It’s a you know, it’s not it’s not an easy business to be in as far as I’m concerned.00:43:48.040 –> 00:43:54.040I have some that are successful, but more of them that write the apps that seem to be more,you know, I mean, to be quite honest.00:43:54.040 –> 00:44:03.040But, you know, they can make good money. So and as long as she’s enjoying it, let her do itand see where it leads.00:44:03.040 –> 00:44:11.040All right. Thank you so much. Thanks, Daniel. I appreciate it. All righty, guys. That’spretty much going to wind up our show for this Saturday.00:44:11.040 –> 00:44:20.040It is a beautiful Saturday outside. So hope all of you take a little time, go outside,enjoy the sun’s getting warmer as well, which will be nice.00:44:20.040 –> 00:44:25.040Good for tax season, right? Once you guys all be able to make it to my office so I canperform and do my job.00:44:25.040 –> 00:44:33.040If you are an existing client and have not yet set up a tax appointment, please call ouroffice on Monday and let’s get those appointments set up.00:44:33.040 –> 00:44:41.040If you are not a new client or if you are a new client, you can certainly give us a call.We may not be able to fit you in.00:44:41.040 –> 00:44:47.040We can try to help you find someone else to help you do your taxes so you have aprofessional working with you.00:44:47.040 –> 00:44:53.040For all of you that don’t know who I really am or if you haven’t actually heard this sillyvoice on the radio in the past,00:44:53.040 –> 00:45:00.040I am Dr. Friday, an enrolled agent licensed by the Internal Revenue Service to do taxes andrepresentation.00:45:00.040 –> 00:45:08.040So if you have received love letters, if you are in the midst of getting liens and leviesand you don’t really know what you want to do,00:45:08.040 –> 00:45:14.040how you are going to resolve it, well, I say let’s take a free consult. Let’s talk aboutit. Let’s see if we can help you.00:45:14.040 –> 00:45:19.040I will tell you we are very different than a lot of those other companies you will hear onthe radio.00:45:19.040 –> 00:45:26.040We are ones that basically are going to talk about how, what, when and where and then wewill deal with payments.00:45:26.040 –> 00:45:31.040But you are not going to get, before you even talk to someone and some of these, oh, it’sgoing to cost you $5,000.00:45:31.040 –> 00:45:34.040How much can you put down? Then you need to pay us $500 a month.00:45:34.040 –> 00:45:39.040And once we get paid up to date, then we will start working your case. We work a littledifferently.00:45:39.040 –> 00:45:48.040So if you need help with dealing with tax issues, if you need to resolve or you want tojust get out from under the IRS or you need help with taxes,00:45:48.040 –> 00:45:59.040just give our office a call at 615-367-0819. 615-367-0819.00:45:59.040 –> 00:46:06.040You can also go to the web, drfriday.com. That’s d-r-f-r-i-d-a-y dot com.00:46:06.040 –> 00:46:14.040And you can check me out, figure out who I am. It gives you some information out there ofwho and you can even send a notice through there,00:46:14.040 –> 00:46:26.040a question through the web page so you can get your things. Or you can emailfriday@drfriday.com, friday@drfriday.com.00:46:26.040 –> 00:46:32.040And again, make sure if you haven’t done your taxes, you don’t know if you’re going to beable to get them done, file an extension, guys.00:46:32.040 –> 00:46:37.040Gives yourself a little breathing room and we’ll be able to help you out. Hope you havethis wonderful Saturday.00:46:37.040 –> 00:46:40.040And as we always say in Australia, copy later.00:46:40.040 –> 00:46:41.800(upbeat music)

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In this enlightening episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, a seasoned tax expert, delves into one of the most significant tax deductions for many clients: mileage. With the current rate at 65.5 cents per mile, understanding how to properly claim this deduction can lead to substantial savings. However, Dr. Friday emphasizes the importance of distinguishing between deductible business mileage and non-deductible commuting miles, such as traveling from home to a consistent work location, like a dry cleaner. This distinction is crucial to avoid complications during audits. Dr. Friday also reminds listeners to tune into the live call-in show every Saturday afternoon for more tax advice.

Transcript: G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Probably the number one tax deduction for a lot of my clients is actually miles. Mileage is a big tax deduction and at 65.5 cents a mile that can be a huge deduction. But should everybody be taking miles? Remember we don’t get paid or we’re not able to deduct commuting miles. So if you are going from home and your home office is home but you always go to the same location, let’s say you own a dry cleaners, even though you have a home office from home to the dry cleaners is still commuting. So make sure you understand so you’re not caught in an audit or something because you don’t understand the mileage deduction.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this enlightening ‘Dr. Friday Tax Tips – One Minute Moment’ episode, Dr. Friday, the head of Dr. Friday’s Tax and Financial Firm, delves into the complexities of Section 179 and bonus depreciation, two critical tax incentives aimed at encouraging business investment. While Section 179 allows businesses to obtain an immediate tax benefit by investing in new equipment, bonus depreciation offers a longer-term strategy for accelerated depreciation. Dr. Friday emphasizes the importance of consulting a tax expert to navigate these options effectively, especially considering the varying implications on federal and state tax returns. For those perplexed by these tax strategies, Dr. Friday offers her expertise to clarify and guide business investments for optimal tax benefits.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Section 179 versus bonus depreciation. Section 179 is the incentive designed by the IRS to encourage businesses to invest in themselves by purchasing new equipment, receiving an immediate tax benefit, where bonus depreciation is a substitute or a longer-term way of taking accelerated depreciation. Now, some of you are sitting there going, “What are you talking about?” This is something you really do need a tax expert to talk about. And sometimes, if you take a 179 on your federal return, the state will now allow it on your franchise excise. Understanding taxes is what I do, so call me if you need any help.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, an experienced tax professional and president of Dr. Friday Tax and Financial Firm, shares her extensive expertise in handling IRS issues. With over 25 years of experience in the tax field, Dr. Friday emphasizes her role as an enrolled agent licensed by the IRS to represent taxpayers. She describes herself as a protective shield for her clients, offering services to settle disputes, navigate tax compliance, and provide guidance on how to effectively deal with the IRS. Furthermore, Dr. Friday invites listeners to tune into her live call-in show every Saturday from 2 to 3 p.m. on 99.7 WTN, where she provides more insights into managing tax concerns and staying compliant with IRS regulations.

Transcript: G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I am Dr. Friday with Dr. Friday Tax and Financial Firm. Been doing taxes in this area for more than 25 years. Live on the radio every Saturday from 2 to 3. If you have issues with the IRS, I’m an enrolled agent. I am licensed by the IRS. That means I am not working for the IRS. I am licensed by them to help represent you. I’m kind of like a shield between you and the IRS. So I can help you deal with your IRS issues, settle the issues, figure out what the next step is, or I can just help you file taxes and get caught up. It’s important to stay in compliance if you ever want to deal directly with the IRS.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Summary: In this special Valentine’s episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the president of Dr. Friday’s Tax and Financial firm, delves into the not-so-romantic side of February 14th by discussing the influx of IRS correspondence, humorously referred to as “love letters.” These letters can range from collection notices to errors and seizure warnings. Dr. Friday empathizes with recipients and offers her expertise to help interpret and address these daunting messages. She emphasizes the importance of taking action by consulting with her directly, highlighting potential solutions like offers in compromise. Additionally, listeners are reminded they can engage with Dr. Friday live during her call-in show every Saturday on 99.7 WTN for real-time advice.

Transcript: G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Happy Valentines. And for many of you, you may actually get some love letters in the mail. That’s right, the IRS is renowned for sending out love letters, letters for collections, letters for how you made a mistake, letters on how they’re going to seize levy, anything they really want when it comes to that. So if you are getting those kind of love letters this Valentines, one, I want to say, I’m so sorry. Two, you need to give me a call 615-367-0819. What we need to do is sit down face to face and let’s figure out what those love letters really mean. Are they collecting? Are you a non-collection? Can we do something? Offer and compromise, I’m here for you.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this Dr. Friday Tax Tips – One Minute Moment, Dr. Friday demystifies the difference between tax deductions and tax credits, crucial for effective tax planning. Tax deductions reduce your taxable income based on your tax bracket, offering proportional savings. For instance, a $1,000 deduction in a 20% tax bracket saves you $200. On the other hand, tax credits directly reduce your tax bill dollar-for-dollar, making them highly valuable. Dr. Friday emphasizes the strategy of prioritizing tax credits to maximize savings before leveraging deductions. This insightful session underscores the importance of understanding these tax elements to optimize your tax payments. Tune into Dr. Friday’s call-in show every Saturday from 2 to 3 p.m. on 99.7 WTN for more tax advice.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

What is a tax deduction? You guys always hear me talking about tax credits, tax deductions, and you really kind of need to understand the difference, right? Tax deductions are good. It’s gonna reduce your tax based on your tax bracket. So if you get a thousand dollar tax deduction and you’re in the 20% tax bracket, you’re gonna save $200. Tax credits are awesome. If you’re gonna get a tax credit for a thousand dollars, you’re going to save a thousand dollars. So what we really want to do is chase all the tax credits first, then maximize our tax deductions, and then we’ll pay our taxes. Talk to you later.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this insightful episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, dives into the latest updates on electric vehicle (EV) tax credits for 2023. Listeners will learn about the non-refundable tax credit ranging from $3,750 to $7,500 available for new EV purchases, alongside an unprecedented opportunity to receive up to $4,000 in tax credits for used EV cars—a first in the industry. This episode highlights the eligibility criteria, emphasizing the importance of the vehicle being a first transfer to qualify for the used EV tax credit. Additionally, Dr. Friday touches on the cap for new EVs, which applies to the first 200,000 vehicles manufactured. Tune in to unravel these financial incentives designed to promote eco-friendly transportation.

Transcript:

“G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

A non-refundable EV tax credit ranging from $3,750 to $7,500 for the year of 2023. What’s great about this, they’ve also added a tax credit up to $4,000 for used EV cars. Up until now, they haven’t really had that. It has to be a first transfer, so if this person was the person that purchased it and you purchased it from them, you may qualify up to $4,000 of the used vehicle. If not, if this is a second or third transfer, you’re not going to qualify. And of course, new cars still qualify up to 200,000 cars already made.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.”

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday explores the unchanged solar tax credit, offering a personal perspective on the viability of solar energy in Tennessee. Despite her enthusiasm for green initiatives, Dr. Friday shares concerns over the lack of a buyback program and potential costs associated with solar energy in certain counties. She highlights that individuals interested in going solar can benefit from a 30% tax credit on installation costs, a provision that extends through 2032. This episode is essential for those considering solar energy investments and looking for tax-saving opportunities.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

No big changes on this one since 2022, the solar tax credit. Now, you guys all know I’m such a green individual that solar is going to be something I’m going to jump out and probably do, but honestly, no, because here in Tennessee, we don’t have a buyback. We have to regenerate it, we have to put it into batteries, and if you happen to blow a transformer, they’re going to bill you personally. So at least in Murray County, not going to go solar. That being said, if you are someone that wants to do solar, you can take up to 30% of the installation in the first year, and that’s going to ride out through 2032, and therefore you can save money by solar.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this insightful episode, Dr. Friday extends a heartfelt appreciation to teachers, emphasizing their invaluable role in shaping futures. Highlighting a significant update for educators, she discusses the increased tax deduction for classroom supplies, which rose from $250 to $300 in 2022. This vital tax tip is specifically for qualified teachers, clarifying that homeschoolers and au pairs are not eligible for this benefit. Dr. Friday underscores the importance of this deduction as a small token of recognition for teachers’ dedication and commitment. Tune into the Dr. Friday call-in show every Saturday from 2 to 3 PM on 99.7 WTN for more tax tips and financial advice.

Transcript:

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

And this is for all my teachers. A, thank you for being a teacher because without them, let’s be honest, none of us would be who we are today. And you wanting to work as a teacher, I think is a way above the call of duty, not very good at teaching as you guys have probably figured out listening to my radio show every Saturday from 2 to 3. That being said, we know in 2022 they moved your whopping $250 up to $300 for classroom supplies. Again, this year you will get that $300. This is for anyone that is a qualified teacher, not a homeschooler, not someone that’s just sitting in as an au pair, but an actual teacher. You can take $300 on your tax return.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

View Details

In this episode of the Dr. Friday Radio Show, Dr. Friday tackles the latest in tax legislation and offers expert advice on managing your finances in light of new changes. Key highlights include:

• Overview of the Tax Relief Act of 2024: An introduction to the new tax legislation and its key components.
• Changes to Child Tax Credit: Detailed explanation of the expanded child tax credit and how it affects families.
• 100% Depreciation Rules Extended: Insight into the extension of 100% depreciation through 2025 and its benefits for business owners.
• Adjustments Based on Inflation: Discussion on the adjustment of refundable tax credits in response to inflation, including the specific figures for 2024.
• Implications for Early Tax Filers: Advice for those who have already filed their taxes and how they might be affected by the new changes.
• Retirement Savings Strategies: Solutions for retirees looking to contribute to a Roth IRA through earned income, including tips for those with unique circumstances like farm income.

This episode is essential for anyone looking to stay informed on the latest tax laws and learn strategies to optimize their tax filing and financial planning for the upcoming year.

Transcript00:00:00.000 –> 00:00:06.480No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your00:00:06.480 –> 00:00:07.480financial woes.00:00:07.480 –> 00:00:09.720She’s the how-to girl.00:00:09.720 –> 00:00:10.720It’s the Dr. Friday Show.00:00:10.720 –> 00:00:20.000If you have a question for Dr. Friday, call her now, 737-WWTN.00:00:20.000 –> 00:00:23.720That’s 737-9986.00:00:23.720 –> 00:00:27.400So here’s your host, financial counselor and tax consultant, Dr. Friday.00:00:27.400 –> 00:00:34.200Good day, I’m Dr. Friday and the doctor is in the house.00:00:34.200 –> 00:00:36.680We have some breaking news.00:00:36.680 –> 00:00:44.160Back on the 31st of January, we finally got a new, the Tax Relief of American Families00:00:44.160 –> 00:00:49.160and Workers Act of 2024 came through.00:00:49.160 –> 00:00:53.880It’s going to be interesting to see exactly how that’s going to affect some.00:00:53.880 –> 00:00:59.680If you already filed your taxes, you may find that there could be some new changes.00:00:59.680 –> 00:01:06.720Most of it’s going to come into 2024, but they did change the child tax credit.00:01:06.720 –> 00:01:08.400They expanded some of that.00:01:08.400 –> 00:01:12.680They extended some of the 100% depreciation through 2025.00:01:12.680 –> 00:01:17.880And this year, if you’d already filed your taxes, you would have only had an 80% on most00:01:17.880 –> 00:01:19.460of your depreciation.00:01:19.460 –> 00:01:21.980So that will be a big situation.00:01:21.980 –> 00:01:28.240So again, if you have already filed, they did do some things that went backwards and00:01:28.240 –> 00:01:31.640we’re going to cover some of that as we move forward.00:01:31.640 –> 00:01:34.520And it may affect if you’ve already filed.00:01:34.520 –> 00:01:38.120Again, opened on January 29th, the tax season.00:01:38.120 –> 00:01:40.200And so I guess, you know, it’s like hunting season.00:01:40.200 –> 00:01:47.200I always say the tax season started on that, but you know, there is always new and exciting00:01:47.200 –> 00:01:49.000things continuously happening.00:01:49.000 –> 00:01:53.500A portion of the refundable tax credit is based on inflation.00:01:53.500 –> 00:01:56.400So the amount of 1600, they did change that.00:01:56.400 –> 00:02:04.740So again, if you filed your taxes already in 2024 for the year of 2023, there has been00:02:04.740 –> 00:02:05.740some changes.00:02:05.740 –> 00:02:10.140So you may want to double check now, according to the IRS, any changes that happen, they00:02:10.140 –> 00:02:14.860will be count and they will be making the adjustment on your behalf.00:02:14.860 –> 00:02:17.880But we all know how well that often works for many of us.00:02:17.880 –> 00:02:23.180So we just want to make sure that we understand all these things that went into effect, how00:02:23.180 –> 00:02:25.460it went into effect and where we’re at.00:02:25.460 –> 00:02:28.900If you have questions, of course you can join the show.00:02:28.900 –> 00:02:29.900615-737-9986.00:02:30.900 –> 00:02:40.900And we’re going to talk about this new change that came along.00:02:40.900 –> 00:02:45.100The bill that went into effect due to the Senate, there was a little quabbling of the00:02:45.100 –> 00:02:49.900GOP, some wanted to extend additional tax credits of other sorts.00:02:49.900 –> 00:02:56.580They agreed to push some of this in and move forward versus holding the entire bill up,00:02:56.580 –> 00:02:59.420which would have been a bit of a problem.00:02:59.420 –> 00:03:06.180Again, the biggest part is currently the depreciation was 80% in 2023, that extended up to 100%00:03:06.180 –> 00:03:07.860up through 2025.00:03:07.860 –> 00:03:11.780So if you’re a business owner or something, that could put more money in your pocket,00:03:11.780 –> 00:03:14.500helping you in this tougher time with inflation.00:03:14.500 –> 00:03:16.860All right, we’re going to go right to the phones.00:03:16.860 –> 00:03:20.980We’ve got Joyce just in Tennessee here and we’ll see if we can help Joyce and we’ll talk00:03:20.980 –> 00:03:23.180more about this new tax relief bill.00:03:23.180 –> 00:03:25.760Hey Joyce, what can I do for you?00:03:25.760 –> 00:03:28.980Thank you for taking my call.00:03:28.980 –> 00:03:35.420We are retired, but we live on a farm, so we sell hay and that’s how we get our earned00:03:35.420 –> 00:03:38.060income to put money in a rod.00:03:38.060 –> 00:03:40.180But we’re getting to the age where we may not be able to do that.00:03:40.180 –> 00:03:45.140And I was just wondering why it’s considered earned income so we can keep putting money00:03:45.140 –> 00:03:46.140into a rod.00:03:46.140 –> 00:03:49.900We have an 11-year-old grandson that’s autistic and we want to leave that for him.00:03:49.900 –> 00:03:53.500So we have, social security doesn’t count, does it?00:03:53.500 –> 00:03:54.500No, no.00:03:54.500 –> 00:03:59.100You have to have some sort of earning and it really can’t be passive.00:03:59.100 –> 00:04:01.060It needs to be earning.00:04:01.060 –> 00:04:06.980So like you say, selling the hay or something like that would qualify, farm income would00:04:06.980 –> 00:04:09.780qualify in that.00:04:09.780 –> 00:04:15.380And even though you have a child that is autistic, I have a niece that is also, does he have00:04:15.380 –> 00:04:19.900any ability on the farm to do any, I mean, you guys have a farm, I’m assuming, right?00:04:19.900 –> 00:04:21.380Yeah, yeah, we do.00:04:21.380 –> 00:04:25.660No, he lives with our son and daughter-in-law in a different county.00:04:25.660 –> 00:04:29.460No, but I’m afraid he will never be able to hold a job.00:04:29.460 –> 00:04:32.460So that’s why we’re trying to leave that.00:04:32.460 –> 00:04:33.460All right.00:04:33.460 –> 00:04:37.100Now, we have a pension from the Tennessee Consolidated Retirement thing.00:04:37.100 –> 00:04:38.820That doesn’t count either, does it?00:04:38.820 –> 00:04:44.060No, again, those are all non-passive or incomes that you’re getting after the fact.00:04:44.060 –> 00:04:45.060That’s correct.00:04:45.060 –> 00:04:49.580So someone either has to be agreed or at Home Depot or something through the farm would00:04:49.580 –> 00:04:52.060be the only, you know, considered earnings.00:04:52.060 –> 00:04:53.060Okay.00:04:53.060 –> 00:04:58.740Now, if we get to where we’re getting, where we can get a pay, if we were to rent the farm00:04:58.740 –> 00:05:01.440to a neighbor, will that count?00:05:01.440 –> 00:05:04.460It’s rental income and that’s not really considered earned income.00:05:04.460 –> 00:05:07.100So the answer again is no, unfortunately.00:05:07.100 –> 00:05:13.260Now maybe you can get, I do have some where you may be able to have someone else work00:05:13.260 –> 00:05:14.900the farm and they share the profits.00:05:14.900 –> 00:05:16.900Okay, do a split then.00:05:16.900 –> 00:05:20.540Exactly, and that way then you wouldn’t have to worry about it.00:05:20.540 –> 00:05:21.540Yep.00:05:21.540 –> 00:05:25.420What about we have an extra house on the farm, so rental income doesn’t count?00:05:25.420 –> 00:05:31.220No, it does not, even though it’s a nice secondary little income potentially, but no.00:05:31.220 –> 00:05:33.020And what about interest income?00:05:33.020 –> 00:05:34.020Nope.00:05:34.020 –> 00:05:36.820Again, none of that is from earnings.00:05:36.820 –> 00:05:37.820I know, you’re trying.00:05:37.820 –> 00:05:38.820Unfortunately, I mean.00:05:38.820 –> 00:05:44.260Yeah, we might be able to get a neighbor to do it and split it.00:05:44.260 –> 00:05:45.260Right.00:05:45.260 –> 00:05:48.180Because we can do hay now, but I can tell our health is going down and so I was just00:05:48.180 –> 00:05:49.180trying to figure out.00:05:49.180 –> 00:05:56.980Oh, now what about, well, we have a 401(k) where he’s deferred income years ago and we’re00:05:56.980 –> 00:05:58.460having to take an RMD.00:05:58.460 –> 00:05:59.860Would that count?00:05:59.860 –> 00:06:05.220No, requirement of, required distribution would not work either.00:06:05.220 –> 00:06:06.220Okay.00:06:06.220 –> 00:06:08.340Well, boy, that just struck out.00:06:08.340 –> 00:06:09.340I know.00:06:09.340 –> 00:06:10.340Anyway, I thank you for the information.00:06:10.340 –> 00:06:11.340It really requires, hey, no problem.00:06:11.340 –> 00:06:16.340Sorry, I wasn’t a lot of help there, but I like the way you’re thinking.00:06:16.340 –> 00:06:17.860You were a lot of help.00:06:17.860 –> 00:06:18.860Thank you.00:06:18.860 –> 00:06:19.860Okay, thank you.00:06:19.860 –> 00:06:21.500All right, let’s hit Ron in Manchester.00:06:21.500 –> 00:06:24.220Hey, Ron, what can I do for you?00:06:24.220 –> 00:06:25.220Hi.00:06:25.220 –> 00:06:28.220Can you hear me?00:06:28.220 –> 00:06:30.220Yes, sir.00:06:30.220 –> 00:06:31.620Okay.00:06:31.620 –> 00:06:42.620For the lady that’s looking for self-employment income, she might consider renting out personal00:06:42.620 –> 00:06:43.900property.00:06:43.900 –> 00:06:48.740Like a tractor or something?00:06:48.740 –> 00:06:55.140I’m not sure that will work, but if you rent personal property, I do know that you have00:06:55.140 –> 00:06:58.620a self-employment tax on it.00:06:58.620 –> 00:06:59.620Right.00:06:59.620 –> 00:07:05.780So, yeah, and that’s a great definition, Ron, that I’d say, but the difference between the00:07:05.780 –> 00:07:12.540RMDs, the interest, all of those is that they’re passive, which I said, but you don’t pay self-employment.00:07:12.540 –> 00:07:16.900So the only time you can give into a Roth is any income that is earned, and therefore00:07:16.900 –> 00:07:18.620you pay self-employment tax.00:07:18.620 –> 00:07:20.620So that’s a great example.00:07:20.620 –> 00:07:23.740Yeah, that’s just for her.00:07:23.740 –> 00:07:31.940I’m not 100% sure that would work, but I do know that self-rental and personal property00:07:31.940 –> 00:07:36.940rental is considered self-employment or self-employment tax.00:07:36.940 –> 00:07:38.940Okay, I like that.00:07:38.940 –> 00:07:40.500Thank you so much.00:07:40.500 –> 00:07:41.500No problem.00:07:41.500 –> 00:07:42.500Thank you.00:07:42.500 –> 00:07:43.500All right.00:07:43.500 –> 00:07:46.020That was great advice.00:07:46.020 –> 00:07:50.140Hopefully Joyce, you heard that where he’s saying potentially if it’s personal property00:07:50.140 –> 00:07:55.940and you can find some way to rent that out to somebody, it is considered self-employed.00:07:55.940 –> 00:08:01.380And that’s what we’re looking for, farm income, self-employed income, both follow the self-employed00:08:01.380 –> 00:08:07.420side and as long as you earn up to, theoretically, I guess if you’re over 65, I think it’s 7,000.00:08:07.420 –> 00:08:13.340So seven and seventy, you put $14,000 a year into that Roth while you’re still earning.00:08:13.340 –> 00:08:18.220All right, let’s hit Rosie real quick and then we’ll be heading to our first break.00:08:18.220 –> 00:08:19.220Hey, Rosie.00:08:19.220 –> 00:08:20.220Hey, Dr. Friday.00:08:20.220 –> 00:08:21.220Thanks for taking my call.00:08:21.220 –> 00:08:22.220Quick question.00:08:22.220 –> 00:08:30.220Can you explain sometime during the show how the new free IRS filing works?00:08:30.220 –> 00:08:41.020Because from what I’ve read, we’re a test pilot in Tennessee, but it’s only for federal00:08:41.020 –> 00:08:45.980and state employees and only if we have W-2s.00:08:45.980 –> 00:08:46.980Right.00:08:46.980 –> 00:08:53.780So I can tell you if I know that the free filing has an income bracket that it will,00:08:53.780 –> 00:08:57.820I mean, you know, for anyone that’s filing for free, I want to say, and I’m going to00:08:57.820 –> 00:09:02.500look on the IRS website real quick, I think it’s 65,000 and that is individual or joint,00:09:02.500 –> 00:09:03.500I believe.00:09:03.500 –> 00:09:04.500It doesn’t make a definition.00:09:04.500 –> 00:09:11.100So you’re just, oh, sorry, just a gross income, 79,000 or less.00:09:11.100 –> 00:09:15.660And then it has to be only basically W-2.00:09:15.660 –> 00:09:20.220So if you’re self-employed, you’ve got rentals, even let me double check.00:09:20.220 –> 00:09:25.820I’m pretty sure that even if it’s earned income credit, it doesn’t apply.00:09:25.820 –> 00:09:28.220The new one does have state filings.00:09:28.220 –> 00:09:33.060So if you’re in California or Kentucky or something, apparently you will get a free00:09:33.060 –> 00:09:36.380state filing with that.00:09:36.380 –> 00:09:37.380Other than that.00:09:37.380 –> 00:09:38.380I’m sorry.00:09:38.380 –> 00:09:42.500I thought, I thought that this was a brand new, like there was, there was one for the00:09:42.500 –> 00:09:45.540income bracket of 79,000.00:09:45.540 –> 00:09:49.740And there’s direct filing, which people have to know how to do their taxes to use that,00:09:49.740 –> 00:09:50.740which that’s what I use.00:09:50.740 –> 00:09:53.660But isn’t there like a brand, brand new one?00:09:53.660 –> 00:09:57.300No, the only other one I know is where you can go out.00:09:57.300 –> 00:10:03.420I mean, some of the it’s like AAA and some of them have, you know, services where they00:10:03.420 –> 00:10:05.060can go out, but you’re right.00:10:05.060 –> 00:10:07.380When I’m on the website, I’m looking at the IRS website.00:10:07.380 –> 00:10:13.180They’re giving me two, one a fillable, free fillable form, which I would not suggest if00:10:13.180 –> 00:10:14.180it does the math.00:10:14.180 –> 00:10:16.860Maybe you can e-file it, but you’d have to really understand your taxes.00:10:16.860 –> 00:10:17.860It may, if it’s only a W-2.00:10:17.860 –> 00:10:22.220Second is, it says, yeah, okay, well that’s great.00:10:22.220 –> 00:10:27.020But I mean, it isn’t for everyone that that one could lead to, if you don’t know for sure00:10:27.020 –> 00:10:29.580where the numbers go on the forms, you know what I mean?00:10:29.580 –> 00:10:31.700It may not be as simple as all I’m saying.00:10:31.700 –> 00:10:36.060And then option one was an adjusted gross AGI or with the 79 or less.00:10:36.060 –> 00:10:42.580That’s the only two options they’re providing to us at this time on the IRS website.00:10:42.580 –> 00:10:43.660Interesting.00:10:43.660 –> 00:10:46.220I’m going to look up the article and I’ll.00:10:46.220 –> 00:10:50.660Give me, yeah, either email it to me, cause it’d be great to know Rosie, cause I’m all00:10:50.660 –> 00:10:53.060for if you don’t have to pay to have your taxes done.00:10:53.060 –> 00:10:58.700I mean, as much as I love doing taxes, I mean, it’s silly for someone that just has a W-200:10:58.700 –> 00:11:03.020or you know, very simple return to pay someone, you know, a hundred bucks to do their taxes00:11:03.020 –> 00:11:04.860when they could do it for free.00:11:04.860 –> 00:11:06.820I mean, that’s a lot of money.00:11:06.820 –> 00:11:07.820So I’m with you on that.00:11:07.820 –> 00:11:11.220Yeah, the article I read, yeah, the article I read said a direct file with a fillable00:11:11.220 –> 00:11:14.340form only 2% of the taxpayers do it.00:11:14.340 –> 00:11:15.340And that’s why I do it.00:11:15.340 –> 00:11:17.940Cause I I’m retired CPA, so I can do that.00:11:17.940 –> 00:11:18.940Okay.00:11:18.940 –> 00:11:19.940Yeah.00:11:19.940 –> 00:11:23.820So you understand it, but I mean, you also know, you know, and again, I think that would00:11:23.820 –> 00:11:30.020be, I mean, but I think it’d be more difficult for a lot of people just considering the mistakes00:11:30.020 –> 00:11:33.100that walk in the door in my office where people have done it.00:11:33.100 –> 00:11:34.220So yeah.00:11:34.220 –> 00:11:37.380And I can tell you’re not working, but I mean, if you do have the background or understand00:11:37.380 –> 00:11:40.700them and I have people that still print the forms, actually fill them out and then come00:11:40.700 –> 00:11:43.820us to us and see how, you know, then we put them in electronically.00:11:43.820 –> 00:11:47.740But so there are people that do, but still 79 or less.00:11:47.740 –> 00:11:51.980And that’s if you’re married or single, that’s tough because married couples are more up00:11:51.980 –> 00:11:52.980to exceed that.00:11:52.980 –> 00:11:53.980I’m going to pull up that article.00:11:54.980 –> 00:11:55.980Yes.00:11:55.980 –> 00:11:56.980Send it to me.00:11:56.980 –> 00:11:57.980And Tennessee as a pilot program.00:11:57.980 –> 00:11:58.980Okay, cool.00:11:58.980 –> 00:11:59.980I’ll do that.00:11:59.980 –> 00:12:00.980Send it to me.00:12:00.980 –> 00:12:01.980Okay.00:12:01.980 –> 00:12:02.980Thanks Rosie.00:12:02.980 –> 00:12:03.980Okay.00:12:03.980 –> 00:12:04.980Thanks for calling.00:12:04.980 –> 00:12:05.980Okay.00:12:05.980 –> 00:12:06.980So we’re going to get ready to take our first break.00:12:06.980 –> 00:12:08.100And if Rosie gets that information, I will share it guys.00:12:08.100 –> 00:12:13.460But there’s more than one, because again, sometimes the income bracket locks out some00:12:13.460 –> 00:12:15.580of my clients, even if they could do them.00:12:15.580 –> 00:12:21.260And if you have to go buy the software and do it yourself, not everyone has the aptitude00:12:21.260 –> 00:12:22.260to do that.00:12:22.260 –> 00:12:26.940So, um, but if there’s another pilot program out there, we will push that and see what00:12:26.940 –> 00:12:27.940we have.00:12:27.940 –> 00:12:31.180Meanwhile, we’re going to take our first break and we’ll be right back with the Dr. Friday00:12:31.180 –> 00:12:32.180show.00:12:32.180 –> 00:12:33.180All right, everybody.00:12:33.180 –> 00:12:41.900We are back here live in studio.00:12:41.900 –> 00:12:43.540And I did want to put a heads up.00:12:43.540 –> 00:12:47.100I do know that VITA with United Way is another place.00:12:47.100 –> 00:12:53.540If you want someone to help you do your taxes, they are out there doing taxes as well.00:12:53.540 –> 00:12:58.780Um, so if, uh, if you want to look up on the internet, well, United Way and tax prep or00:12:58.780 –> 00:13:03.860VITA, V I T A, you can probably find locations that might be in there.00:13:03.860 –> 00:13:10.340Cause I know in 2020 and 21, I think they didn’t have as many locations, but, um, I00:13:10.340 –> 00:13:12.580believe they’re back at it full force.00:13:12.580 –> 00:13:18.580So, um, if you have a need to have someone help you, I don’t know if they have any limitations00:13:18.580 –> 00:13:24.620or anything like that, but, um, that being said, they’re a good organization.00:13:24.620 –> 00:13:30.260So if you need someone to help you do your taxes for free, also know farm, uh, farm credit00:13:30.260 –> 00:13:33.140does some taxes, uh, in some of the areas as well.00:13:33.140 –> 00:13:37.140So just saying it’s great to have, you know, a tax person.00:13:37.140 –> 00:13:42.900And I will not, I will say this as a caveat to all that this is for simple tax.00:13:42.900 –> 00:13:48.960If you have someone that you need, you’re doing rental properties, you have investments00:13:48.960 –> 00:13:54.020into stocks or you’re buying and selling stocks, or you’ve got K ones, or you’ve got a little00:13:54.020 –> 00:13:58.700bit more of a complicated tax return, then yes, I think you need to have someone like00:13:58.700 –> 00:14:04.180myself, an enrolled agent, a CPA, someone that is going to know and understand taxes,00:14:04.180 –> 00:14:08.980not only doing the taxes correctly, but also in case someone sends you a love letter, we00:14:08.980 –> 00:14:10.860all know the IRS likes to do that.00:14:10.860 –> 00:14:15.380They can be there to help explain and help you understand what the problem is and help00:14:15.380 –> 00:14:17.180you get the resolution.00:14:17.180 –> 00:14:21.020And sometimes when you go to some of these other organizations, they’re good about preparing,00:14:21.020 –> 00:14:24.340but a lot of times they’re not there to, to be year round.00:14:24.340 –> 00:14:28.460So it’s not always easy to get help in some of those situations.00:14:28.460 –> 00:14:33.620So just saying, uh, but again, you need to file taxes, number one.00:14:33.620 –> 00:14:38.020And if you’re not sure you need to file taxes, um, it’s, it’s a pretty straight mathematics00:14:38.020 –> 00:14:39.020situation.00:14:39.020 –> 00:14:42.940So, um, our office can help you or again, you can call any of those organizations and00:14:42.940 –> 00:14:47.900they’ll tell you, you do not always have to file taxes under certain circumstances.00:14:47.900 –> 00:14:53.700Taxes are only required if your income is at a certain or you received your income at00:14:53.700 –> 00:14:54.820a certain point.00:14:54.820 –> 00:15:02.220So, um, you know, you have that situation and you know, it comes up to, uh, where you’re00:15:02.220 –> 00:15:03.220at.00:15:03.220 –> 00:15:14.060So if you want to join the show, you can 615-737-9986, 615-737-9986.00:15:14.060 –> 00:15:19.420Taking more of your calls, um, a portion of the 2000 can be applied to refundable credits00:15:19.420 –> 00:15:23.820up to inflation rates, about $1,600 in 2023.00:15:23.820 –> 00:15:27.700And for taxpayers who want to more children, the refundable portion is limited to the excess00:15:27.700 –> 00:15:32.180of the balance of the tax credit amount from which taxpayers would otherwise be entitled00:15:32.180 –> 00:15:33.180to base.00:15:33.180 –> 00:15:40.780So the number of children or 15% of which the earned income exceeds over $2,500.00:15:40.780 –> 00:15:46.100That is the child portion of the refundable child tax credits.00:15:46.100 –> 00:15:51.420Um, so some of that is changing and we’re going to get a little bit into how some of00:15:51.420 –> 00:15:56.100that and some of this, um, applied to 23, 24 and 25.00:15:56.100 –> 00:15:58.980Again, prior to this 23 was not in on it.00:15:58.980 –> 00:16:04.020And so, you know, you want to make sure that you, if you filed your 2023 tax return, you00:16:04.020 –> 00:16:10.100might want to just revisit, um, based on some of the new numbers and new changes.00:16:10.100 –> 00:16:17.060Most people will not be affected by these, but I often find individuals that file on00:16:17.060 –> 00:16:22.180January 29th this year or before that are people that usually are expecting a very large00:16:22.180 –> 00:16:29.100income refund or, uh, should say a refundable tax credits and all that.00:16:29.100 –> 00:16:33.380And so, you know, they’re looking and it’s possible that you left a few dollars on the00:16:33.380 –> 00:16:34.380table.00:16:34.380 –> 00:16:35.380Possible.00:16:35.380 –> 00:16:37.480I can’t say it’s, it’s perfect, but possible.00:16:37.480 –> 00:16:43.060So just make sure that any of the current changes, if you went to someone and did your00:16:43.060 –> 00:16:49.300taxes, then again, just make sure that those taxes are done properly and that you’re in00:16:49.300 –> 00:16:54.260awesome shape to move forward and get everything done the way you want it done.00:16:54.260 –> 00:16:57.260So you have no problems in dealing with that issue.00:16:57.260 –> 00:16:58.260All right.00:16:58.260 –> 00:16:59.260You want to join the show?00:16:59.260 –> 00:17:00.260You can 615-737-9986.00:17:00.260 –> 00:17:01.260Let’s hit Jerry in Pulaski.00:17:01.260 –> 00:17:02.260Hey bud, how’s it going?00:17:02.260 –> 00:17:05.260Good morning.00:17:05.260 –> 00:17:11.480How are you doing?00:17:11.480 –> 00:17:12.480I am doing awesome.00:17:12.480 –> 00:17:13.480And yourself?00:17:13.480 –> 00:17:14.480I’m doing good.00:17:14.480 –> 00:17:27.020On taking an RRMD, does the IRS require you to kind of spread the parts you’re going to00:17:27.020 –> 00:17:34.780send them in or can you wait till the end of the year and send that to them?00:17:34.780 –> 00:17:40.660So that is, I mean, bottom line, easy answer is they want their share as you take it out,00:17:40.660 –> 00:17:42.660but it would depend on when you take it.00:17:42.660 –> 00:17:47.500So if you take it out, if you owe more than 500 over the year, then theoretically you’re00:17:47.500 –> 00:17:50.160required to pay quarterly.00:17:50.160 –> 00:17:54.820So it’d be easier just to have them take it out at the time that you take the distribution00:17:54.820 –> 00:17:56.500then than to wait.00:17:56.500 –> 00:18:00.620But it just depends if you take it out in December, you have until, you know, basically00:18:00.620 –> 00:18:01.900April to make the payment.00:18:01.900 –> 00:18:02.900So the first estimate.00:18:02.900 –> 00:18:03.900Okay.00:18:03.900 –> 00:18:04.900All right.00:18:04.900 –> 00:18:05.900I certainly appreciate it.00:18:05.900 –> 00:18:06.900Thank you for calling me several times.00:18:06.900 –> 00:18:07.900Thank you.00:18:07.900 –> 00:18:08.900All right.00:18:08.900 –> 00:18:09.900Thanks, buddy.00:18:09.900 –> 00:18:10.900I appreciate it.00:18:10.900 –> 00:18:11.900All right.00:18:11.900 –> 00:18:12.900Let’s see if we can get Nick in Manchester.00:18:12.900 –> 00:18:13.900Hey, Nick, what’s happening?00:18:13.900 –> 00:18:14.900Not much.00:18:14.900 –> 00:18:15.900Just had a question for you.00:18:15.900 –> 00:18:16.900Okay.00:18:16.900 –> 00:18:17.900I know dependencies on tax returns.00:18:17.900 –> 00:18:29.980Stuff like that usually don’t include wives, but my wife has been a stay at home mom for00:18:29.980 –> 00:18:33.700four years and I’ve been the sole income provider for the family.00:18:33.700 –> 00:18:37.740Is there any way I can claim her as a dependent?00:18:37.740 –> 00:18:41.100Well you do when you click the box saying you’re married.00:18:41.100 –> 00:18:46.140So in essence, if you didn’t claim her as your wife, you would be single or head of00:18:46.140 –> 00:18:49.600household, which are both less than being married.00:18:49.600 –> 00:18:52.980So you get the credit because you’re checking the box and putting married.00:18:52.980 –> 00:18:55.380So you get a higher deduction because of that.00:18:55.380 –> 00:19:00.300So you are claiming her as a dependent, just not in the same way you may claim your children00:19:00.300 –> 00:19:01.300as dependents.00:19:01.300 –> 00:19:02.300Okay.00:19:02.300 –> 00:19:07.100So there’s, there’s no actual like tax return or like, you know, like with a child, I think00:19:07.100 –> 00:19:12.540it’s the answer to that question would be is there is no child credit or any credit00:19:12.540 –> 00:19:15.460for any dependent over the age of 17 basically.00:19:15.460 –> 00:19:22.180So if your child is your parent or anyone else is a dependent, you won’t be able to00:19:22.180 –> 00:19:25.900claim any additional credit other than what you’re getting on that situation.00:19:25.900 –> 00:19:26.900Okay.00:19:26.900 –> 00:19:27.900All right.00:19:27.900 –> 00:19:28.900Let’s hit Tom in Nashville.00:19:28.900 –> 00:19:29.900Hey Tom, what’s happening?00:19:29.900 –> 00:19:34.540This is quite complicated, but I’ll try and keep it very simple.00:19:34.540 –> 00:19:42.420I purchased a property like two years ago and well, it turns out it’s virtually worthless.00:19:42.420 –> 00:19:46.580Structurally it’s garbage and would have to be torn down and basically rebuilt to be of00:19:46.580 –> 00:19:47.580any value.00:19:47.580 –> 00:19:54.780And I’m curious how that loss or if it can be spread over time, cause I’m still going00:19:54.780 –> 00:19:55.780to be owning the property.00:19:55.780 –> 00:20:01.100And so is there a way to spread that or how do I realize there’s losses?00:20:01.100 –> 00:20:03.140In selling, right?00:20:03.140 –> 00:20:08.940So the only way to realize it would be to physically sell it or to give it to a charity,00:20:08.940 –> 00:20:13.540which may be the proper great property to do, not to say the charity would love it.00:20:13.540 –> 00:20:19.100But you have to physically have the loss, even though you know it’s a loss.00:20:19.100 –> 00:20:22.660I mean, until it really hits you and you’re able to say, okay, I sold it for a dollar00:20:22.660 –> 00:20:24.540and I paid a hundred thousand.00:20:24.540 –> 00:20:27.380I have a $99,000 loss.00:20:27.380 –> 00:20:32.020Then at that time you will actually have the loss and then we can put that on your tax00:20:32.020 –> 00:20:35.900return and you can offset other gains with that loss.00:20:35.900 –> 00:20:36.900Okay.00:20:36.900 –> 00:20:42.300And in the meantime, the only actualized losses would be like money that is spent on directly00:20:42.300 –> 00:20:43.300on the property, right?00:20:43.300 –> 00:20:44.300Theoretically.00:20:44.300 –> 00:20:50.140I mean, if it’s not a rental property, then there’s really no place or a second residence.00:20:50.140 –> 00:20:55.480The property taxes, if you’re itemizing could go off, but any other improvements you’re00:20:55.480 –> 00:21:01.220doing to that property, if it’s not your primary or second home or a rental, it’s really just00:21:01.220 –> 00:21:06.060adding to the value when you decide to either develop, rent it or sell it.00:21:06.060 –> 00:21:09.620Well, it’s a primary home and a rental, the duplex.00:21:09.620 –> 00:21:10.620Oh, catch 22.00:21:10.620 –> 00:21:11.620Right.00:21:11.620 –> 00:21:12.620Okay.00:21:12.620 –> 00:21:17.220So, you know, obviously at this point, yes, if it’s your primary and it fits under the00:21:17.220 –> 00:21:22.580energy credits, your best bet is the, is the rental side of the duplex would have the better00:21:22.580 –> 00:21:29.020tax deduction per se, because anything you do on that half or on that share of property,00:21:29.020 –> 00:21:33.620be it, maybe you do one big improvement and it’s 50/50 or based on square footage, then00:21:33.620 –> 00:21:39.740you’d be able to deal with the, um, the loss or depreciate that repair over a period of00:21:39.740 –> 00:21:41.300time, depending on what it is.00:21:41.300 –> 00:21:42.300Interesting.00:21:42.300 –> 00:21:46.180That was, that was very informative and, uh, I appreciate it.00:21:46.180 –> 00:21:47.180Thanks Tom.00:21:47.180 –> 00:21:48.180If you need any more questions.00:21:48.180 –> 00:21:49.180Thanks.00:21:49.180 –> 00:21:50.180Thank you.00:21:50.180 –> 00:21:51.180All right.00:21:51.180 –> 00:21:52.180Let’s see if Rosie is back real quick.00:21:52.180 –> 00:21:53.180I mean, she’s got an answer for me.00:21:53.180 –> 00:21:54.180Hey, Dr. Rosie, real quick.00:21:54.180 –> 00:21:55.180Um, I found the article.00:21:55.180 –> 00:22:00.900I’m going to email it to you and I’m friday@dfriday.com and I’m perfect.00:22:00.900 –> 00:22:05.700And uh, it’s an NPR article and then I, I had, you know, links to the IRS, you know,00:22:05.700 –> 00:22:10.180the, um, the, uh, internet, um, how it happens.00:22:10.180 –> 00:22:15.860And so I, um, drill down and it appears that it might not be available until mid-March00:22:15.860 –> 00:22:21.780and it, um, also appears I won’t be able to use it anyway because, um, it’s only 1099.00:22:21.780 –> 00:22:30.540Um, it has a 1099 interest, 1500 hour cap, but it doesn’t have any other 1099 provisions00:22:30.540 –> 00:22:33.620for, um, like pensions or anything or retirement.00:22:33.620 –> 00:22:36.860But I will, I will email you the article.00:22:36.860 –> 00:22:37.860Thank you, Rosie.00:22:37.860 –> 00:22:38.860I really appreciate it.00:22:38.860 –> 00:22:39.860Thank you.00:22:39.860 –> 00:22:40.860You’re welcome.00:22:40.860 –> 00:22:41.860Talk soon.00:22:41.860 –> 00:22:42.860Thanks for your help.00:22:42.860 –> 00:22:43.860Thanks.00:22:43.860 –> 00:22:44.860Okay.00:22:44.860 –> 00:22:45.860All right.00:22:45.860 –> 00:22:46.860Um, so we’re going to take some more calls at 615-737-9986.00:22:46.860 –> 00:22:52.780If you’ve got questions or comments, I mean, it’s helpful because a lot of people are listening00:22:52.780 –> 00:22:57.100now and they’re in the same situation that you might be, or they’re thinking about these00:22:57.100 –> 00:22:58.100different situations.00:22:58.100 –> 00:23:03.340So it’s very helpful when people are willing to call the radio show, um, because not everybody00:23:03.340 –> 00:23:06.220has that DNA to, to want to do that.00:23:06.220 –> 00:23:11.100So again, the phone number here in the studio for the radio is 615-737-9986.00:23:11.100 –> 00:23:18.980We’ll talk, take your calls concerning obviously the 2023 taxes, but some people may be planning00:23:18.980 –> 00:23:19.980for 2024.00:23:19.980 –> 00:23:26.340And, um, I’m going to do some breakdown a little bit here on what we have expected with00:23:26.340 –> 00:23:28.060the new, uh, again, they did pass.00:23:28.060 –> 00:23:33.820A new law in January 20, a new new act, I guess you would say it’s the tax relief of00:23:33.820 –> 00:23:36.860American families and workers act of 2024.00:23:36.860 –> 00:23:39.500I think it’s a funny name.00:23:39.500 –> 00:23:42.300American families of workers who else would be we’re in the United States.00:23:42.300 –> 00:23:43.300All right.00:23:43.300 –> 00:23:44.660So we’re going to take this break and we get back.00:23:44.660 –> 00:23:49.740We get some more of your phone calls again, 615-737-9986.00:23:49.740 –> 00:23:51.060We’ll be right back.00:23:51.060 –> 00:23:52.060Alrighty.00:23:53.060 –> 00:23:59.060We are back here live in studio and lucky me, I have a couple of waiters.00:23:59.060 –> 00:24:02.820So let’s see if we have Brian that tilled the longest in the borough.00:24:02.820 –> 00:24:06.180Hey Bri, what’s happening and how can I help you?00:24:06.180 –> 00:24:08.540Uh, Hey, Dr. Friday.00:24:08.540 –> 00:24:09.540Yeah.00:24:09.540 –> 00:24:16.860The question is this, I work for a company that’s headquartered out of town and I have00:24:16.860 –> 00:24:19.820my own office at my house that I work out of.00:24:19.820 –> 00:24:23.500Is that deductible in any way, shape or form on my taxes?00:24:23.500 –> 00:24:29.660No, because you’re a W I’m making a guess, Brian, that you’re a W2 employee.00:24:29.660 –> 00:24:31.100Yes, I am.00:24:31.100 –> 00:24:32.100Okay.00:24:32.100 –> 00:24:37.380So as long as you’re a W2 under the current laws, that is not something that’s on the00:24:37.380 –> 00:24:42.700table to be rescinded, which we used to be able to use a 2106 and be able to write off00:24:42.700 –> 00:24:45.740expenses that would apply in that situation.00:24:45.740 –> 00:24:50.620But under the current tax law, if you have a W2, there are no deductions allowed to you.00:24:50.620 –> 00:24:51.620Gotcha.00:24:51.620 –> 00:24:53.620That’s what I thought.00:24:53.620 –> 00:24:54.620Just wanted to confirm it.00:24:54.620 –> 00:24:56.180I sure appreciate that help.00:24:56.180 –> 00:24:57.180Thanks.00:24:57.180 –> 00:24:58.180I appreciate the phone call.00:24:58.180 –> 00:25:00.180All right, let’s hit George in Mount Juliet.00:25:00.180 –> 00:25:01.180Yes.00:25:01.180 –> 00:25:02.180Mount Juliet.00:25:02.180 –> 00:25:03.180Hi Dr. Friday.00:25:03.180 –> 00:25:06.180I have a quick question for you.00:25:06.180 –> 00:25:10.300I’m retired and I just, I don’t work or anything.00:25:10.300 –> 00:25:13.420I just draw my social security.00:25:13.420 –> 00:25:20.740And if I’m not mistaken, I haven’t had to file taxes in the last couple of years because00:25:20.740 –> 00:25:25.900I haven’t made the maximum to have to file taxes.00:25:25.900 –> 00:25:30.580But this year I made $30,756.00:25:30.580 –> 00:25:33.980Will I have to file taxes this year?00:25:33.980 –> 00:25:34.980Yes.00:25:34.980 –> 00:25:35.980Okay.00:25:35.980 –> 00:25:41.500And will that be on the overage over the 25?00:25:41.500 –> 00:25:42.500Are you married or single?00:25:42.500 –> 00:25:43.500Single, well, my wife deceased.00:25:43.500 –> 00:25:44.500Okay.00:25:44.500 –> 00:25:45.500Sorry.00:25:45.500 –> 00:25:55.500It would be, you would have the like 14,000 standard deduction that you would deduct.00:25:55.500 –> 00:26:00.340A portion, maybe a small portion of your social security would be taxed.00:26:00.340 –> 00:26:06.300But theoretically, you’d be looking at probably around, I don’t know, 16, 17,000 and maybe00:26:06.300 –> 00:26:10.540your social 20, 20,000 paying tax on.00:26:10.540 –> 00:26:12.940That’s a quick mathematics there.00:26:12.940 –> 00:26:15.340And that should probably be a couple thousand maybe.00:26:15.340 –> 00:26:22.020Well, see, I didn’t, I didn’t pay, you know, I just, the only thing that run me over really00:26:22.020 –> 00:26:25.060was the interest off the money I have in the bank.00:26:25.060 –> 00:26:26.060Okay.00:26:26.060 –> 00:26:29.140So is the 30,756 including your social security?00:26:29.140 –> 00:26:30.140Yes.00:26:30.140 –> 00:26:31.140Oh, yes.00:26:31.140 –> 00:26:33.140I made, I made about 25,000.00:26:33.140 –> 00:26:37.380I think social security, I’ve got it right here.00:26:37.380 –> 00:26:38.380I got you.00:26:38.380 –> 00:26:42.500So you only made like five or 6,000 above your social security.00:26:42.500 –> 00:26:43.500Right.00:26:43.500 –> 00:26:46.500Ah, you don’t need to file.00:26:46.500 –> 00:26:53.940I made last year, I made 25,000, 800 and I’m $582.00:26:53.940 –> 00:26:58.860And that was because of getting that low range that we got back in 23, we didn’t get much00:26:58.860 –> 00:26:59.860at 24.00:26:59.860 –> 00:27:00.860Right.00:27:00.860 –> 00:27:06.540And then I, then I had 2000 on one savings account and a couple thousand on another one.00:27:06.540 –> 00:27:09.740But the total for all of that was 30,756.00:27:09.740 –> 00:27:10.740Okay.00:27:10.740 –> 00:27:13.460Yeah, you confuse me, Georgie.00:27:13.460 –> 00:27:14.460Okay.00:27:14.460 –> 00:27:17.620So the way the provisional tax code works though, is we have to know how much is the00:27:17.620 –> 00:27:19.700social security and how much is everything else.00:27:19.700 –> 00:27:26.220So in this conversation, you’ve got 6,000 roughly of money that is not social security.00:27:26.220 –> 00:27:29.060And then we take half of that and it’s less than 25.00:27:29.060 –> 00:27:32.780So you do not have to file.00:27:32.780 –> 00:27:33.780No filing required.00:27:33.780 –> 00:27:41.460You mean, other words, not what let me give you the total total amount.00:27:41.460 –> 00:27:45.460One bank account was 200, uh, $2,212 interest.00:27:45.460 –> 00:27:46.460Okay.00:27:46.460 –> 00:27:49.460And one was $2,960.85 interest.00:27:49.460 –> 00:28:01.540And then it was 25,882 in social security money.00:28:01.540 –> 00:28:02.660All right.00:28:02.660 –> 00:28:07.540So what we have to do is we take the two, uh, 25,882.00:28:07.540 –> 00:28:10.220We have to divide that by two, which gives us 12,000.00:28:10.220 –> 00:28:14.720I’m just going to use whole numbers, which gives us about $13,000.00:28:14.720 –> 00:28:21.460And then we take the little less than 6,000 that you had an interest that adds up to $18,000.00:28:21.460 –> 00:28:26.980You have the ability to earn up to 25 before you have to file taxes.00:28:26.980 –> 00:28:30.260Oh, see, I thought it was, I thought.00:28:30.260 –> 00:28:33.660I know, I know it’s a different tax code.00:28:33.660 –> 00:28:37.500It’s called the provisional tax code for people that are in retirement and live mostly off00:28:37.500 –> 00:28:38.500social security.00:28:38.500 –> 00:28:44.220So in your situation, you are still okay not to file taxes and may different for different00:28:44.220 –> 00:28:46.300people, but for my Georgie, he is okay.00:28:46.300 –> 00:28:52.500Well, that’s good because I didn’t want to have to pay for filing it if I didn’t need00:28:52.500 –> 00:28:53.500to.00:28:53.500 –> 00:28:59.140And of course, the only two times I never filed taxes was the last two years.00:28:59.140 –> 00:29:01.420I mean, I filed every year when I worked.00:29:01.420 –> 00:29:05.300So, you know, I kind of made me nervous.00:29:05.300 –> 00:29:10.420I don’t want to get in trouble with them, but I hear you totally off of social security.00:29:10.420 –> 00:29:11.420I don’t have.00:29:11.420 –> 00:29:12.420All right.00:29:12.420 –> 00:29:13.420Thanks for calling Georgie.00:29:13.420 –> 00:29:14.420I appreciate you.00:29:14.420 –> 00:29:17.420We’re going to go to Jamie in Laverne.00:29:17.420 –> 00:29:20.380Hey, Jamie.00:29:20.380 –> 00:29:21.380Can you hear me, Jamie?00:29:21.380 –> 00:29:22.380Laverne?00:29:22.380 –> 00:29:23.380I had the wrong name.00:29:23.380 –> 00:29:24.380Hey, there’s a voice.00:29:24.380 –> 00:29:25.380That’s all right.00:29:25.380 –> 00:29:32.380My truck, my truck stole the phone from me, but I’m here now.00:29:32.380 –> 00:29:37.380I sold two pieces of property last year.00:29:37.380 –> 00:29:45.380One was my primary residence, but I had it for a year and a half instead of two years.00:29:45.380 –> 00:29:48.460Am I going to have to pay capital gains on that?00:29:48.460 –> 00:29:53.380And my second question is also sold a piece of vacant land.00:29:53.380 –> 00:29:59.140And I got a 1099 from the title company on that.00:29:59.140 –> 00:30:04.100And I’m not sure if I need to file that 1099 or not.00:30:04.100 –> 00:30:05.100So both of them.00:30:05.100 –> 00:30:08.780I mean, no matter what, if you sell your primary home, you still need to report it.00:30:08.780 –> 00:30:11.180So the IRS was knowing it’s your primary.00:30:11.180 –> 00:30:16.500Can I ask when you sold the house, was there a reason for selling or just you decided to00:30:16.500 –> 00:30:17.500relocate?00:30:17.500 –> 00:30:20.580I mean, not for work or, you know, like advancement or something.00:30:20.580 –> 00:30:22.620Yeah, we just decided to relocate.00:30:22.620 –> 00:30:23.620Okay.00:30:23.620 –> 00:30:26.380So you already know.00:30:26.380 –> 00:30:29.060Primary home, you’re going to have to pay capital gains because you didn’t live there00:30:29.060 –> 00:30:31.420two out of the last five years.00:30:31.420 –> 00:30:37.860So whatever the gain on that and the same thing on the vacant land, the 1099S that you00:30:37.860 –> 00:30:40.620received is saying how much you sold it for.00:30:40.620 –> 00:30:41.660It should be.00:30:41.660 –> 00:30:43.700And then whatever you paid for, you’d still report.00:30:43.700 –> 00:30:47.100And the difference would be our capital gain on both sides, right?00:30:47.100 –> 00:30:49.780So whatever you have on both sides would be capital gain.00:30:49.780 –> 00:30:51.020So same on your primary.00:30:51.020 –> 00:30:55.180How much you paid for any major improvements that it would have increased value.00:30:55.180 –> 00:30:59.860And then what you sold it for, closing cost fees, et cetera, et cetera, get you to your00:30:59.860 –> 00:31:03.300capital gains or your investment.00:31:03.300 –> 00:31:06.420And how do I prove to them what I put into it?00:31:06.420 –> 00:31:11.740Like if I, if I did some improvements, pay cash for that, am I just out of luck there?00:31:11.740 –> 00:31:13.380You, you kind of are.00:31:13.380 –> 00:31:18.180If you can get a receipt from the company that did it, you know, your guy or whoever00:31:18.180 –> 00:31:19.180did it.00:31:19.180 –> 00:31:22.980Otherwise, yes, I try to tell people if even if you’re paying cash, I don’t have a problem00:31:22.980 –> 00:31:23.980necessarily with that.00:31:23.980 –> 00:31:28.340It’s just that you need to have a receipt showing what was done and who did it.00:31:28.340 –> 00:31:29.340Okay.00:31:29.340 –> 00:31:30.340All righty.00:31:30.340 –> 00:31:32.180We’re going to know if that’s what I needed.00:31:32.180 –> 00:31:33.180Thank you.00:31:33.180 –> 00:31:34.180Cool.00:31:34.180 –> 00:31:35.180All right.00:31:35.180 –> 00:31:36.180Let’s go to Teddy.00:31:36.180 –> 00:31:37.180Teddy and is it Devin Hickson?00:31:37.180 –> 00:31:38.180Maybe my eyesight’s not so good.00:31:38.180 –> 00:31:39.180I need a bigger monitor.00:31:39.180 –> 00:31:40.180Yeah.00:31:40.180 –> 00:31:41.180Hey, Teddy.00:31:41.180 –> 00:31:42.180Thanks for taking my call.00:31:42.180 –> 00:31:49.180I was wondering if you’re making a, if you’re transferring money from your savings into00:31:49.180 –> 00:31:53.060your check, and is that considered an income?00:31:53.060 –> 00:31:54.060No, sir.00:31:54.060 –> 00:31:56.060That’s just a transfer of income, a transfer of funds.00:31:56.060 –> 00:31:59.060Well, that’s all I need to know then.00:31:59.060 –> 00:32:00.060I appreciate it.00:32:00.060 –> 00:32:01.060Wow, Teddy.00:32:01.060 –> 00:32:02.060That was a good one.00:32:02.060 –> 00:32:03.060Thanks.00:32:03.060 –> 00:32:04.060I appreciate the call.00:32:04.060 –> 00:32:07.300And I will say, even though it seemed like an easy answer for Teddy, I’ve had more than00:32:07.300 –> 00:32:12.680one person think because they’ve moved money from one type of investment to another that00:32:12.680 –> 00:32:17.820they’ve created a taxable, and you can sometimes, but not just from a checking to savings or00:32:17.820 –> 00:32:18.820like kind.00:32:18.820 –> 00:32:22.780If you have a Roth IRA and you move it to another Roth, or you have a standard IRA and00:32:22.780 –> 00:32:26.560you move it to another standard again, those are not taxable situations usually unless00:32:26.560 –> 00:32:33.020you keep any money out, then it can become a taxable situation on how it works or where00:32:33.020 –> 00:32:34.280it’s going to come out of.00:32:34.280 –> 00:32:36.800So we have that to work with.00:32:36.800 –> 00:32:39.280So if you have any questions, those are great calls, guys.00:32:39.280 –> 00:32:40.280I appreciate it.00:32:40.280 –> 00:32:47.460And just again, anytime you have any kind of property sale, just a point of interest,00:32:47.460 –> 00:32:52.940that information, even if in the case of Jamie, he said he received a 1099.00:32:52.940 –> 00:32:57.140I have had many people never received 1099s.00:32:57.140 –> 00:33:02.540And so it’s really important that if you sell something like that, the government does get00:33:02.540 –> 00:33:03.540the information.00:33:03.540 –> 00:33:04.740Title changes names.00:33:04.740 –> 00:33:06.400That is all trackable.00:33:06.400 –> 00:33:10.700So just so you know, it’s important to put it on your tax return, report the income or00:33:10.700 –> 00:33:16.060loss and take it from there from the extent of what you want done or how you’re going00:33:16.060 –> 00:33:17.440to want it done.00:33:17.440 –> 00:33:20.400But make sure, and again, Jamie also had a good point.00:33:20.400 –> 00:33:25.260I can’t tell you how many people come in and when we all do major improvements, just added00:33:25.260 –> 00:33:30.580another building to my property, you need to save those receipts because all we have00:33:30.580 –> 00:33:35.460when we start is whatever we purchased the home for, or in my case, if I built the house,00:33:35.460 –> 00:33:40.340I have the original loan, what we paid for it, the contractor’s agreement, et cetera,00:33:40.340 –> 00:33:41.340et cetera.00:33:41.340 –> 00:33:45.980So at that point, the house was done, but then we added this and we did this.00:33:45.980 –> 00:33:50.980All of those increased the value of the property, paving the driveway, whatever.00:33:50.980 –> 00:33:55.900And every time you do those, if you don’t keep those receipts, the IRS doesn’t know00:33:55.900 –> 00:33:59.780how you did it as far as they know you could do it yourself and it didn’t cost you anything.00:33:59.780 –> 00:34:05.780So again, important part of that conversation and trying to go back is hard, especially00:34:05.780 –> 00:34:11.780some of my clients, I mean, they’ve lived in the houses for 20, 30 years and it’s hard00:34:11.780 –> 00:34:18.140to go back and say, “Oh yeah, we remodeled the kitchen five years ago,” or “We put a00:34:18.140 –> 00:34:19.140new roof on.”00:34:19.140 –> 00:34:24.140Now again, in some cases, insurance covers it and that is not an improvement if you didn’t00:34:24.140 –> 00:34:25.580pay for it.00:34:25.580 –> 00:34:29.620The insurance company paid for it, therefore it didn’t increase it because of your out00:34:29.620 –> 00:34:30.620of pocket costs.00:34:30.620 –> 00:34:34.960So this is stuff that you did out of pocket costing out of your pocket.00:34:34.960 –> 00:34:37.300So then, you know, and don’t forget your closing cost fees.00:34:37.300 –> 00:34:39.840When we buy and sell, we usually pay some sort of fees.00:34:39.840 –> 00:34:45.520So it’s good to have those, maintain those statements so that you have them on file.00:34:45.520 –> 00:34:50.100So if you decide to sell something, you have the records of the original purchase and all00:34:50.100 –> 00:34:53.660the fees that might have been part of that because that adds to it as well.00:34:53.660 –> 00:34:56.300All right, so we’re going to take another quick break here.00:34:56.300 –> 00:34:57.300You can join the show.00:34:57.300 –> 00:35:00.940We’re getting to the last section, but if you’ve got any questions, you can certainly00:35:00.940 –> 00:35:12.220call us right now in the studio at 615-737-9986, 615-737-9986, taking your calls, talking about00:35:12.220 –> 00:35:13.220taxes.00:35:13.220 –> 00:35:17.500I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.00:35:17.500 –> 00:35:18.980That is all I do.00:35:18.980 –> 00:35:22.220So if you’ve got questions about that, I’m pretty good at it.00:35:22.220 –> 00:35:24.060I’ve been doing it for about 25 years.00:35:24.060 –> 00:35:28.500So if you’ve got a question, give us a call and we’ll be right back with the Dr. Friday00:35:28.500 –> 00:35:29.500Show.00:35:29.500 –> 00:35:30.500All righty, we are back here.00:35:30.500 –> 00:35:38.500I’ve got to put a little bit of a caveat out there.00:35:38.500 –> 00:35:44.140I’ve been saying the Tax Relief of American Families and Workers Act of 2024, it has not00:35:44.140 –> 00:35:45.580been signed into the bill.00:35:45.580 –> 00:35:47.180President has not yet signed it.00:35:47.180 –> 00:35:48.620So I might be ahead of myself.00:35:48.620 –> 00:35:54.180I saw that it had passed the Ways and Meanings and the Congress and the Senate.00:35:54.180 –> 00:35:56.460So we’re waiting to see what the next step is.00:35:56.460 –> 00:36:02.140Who knows, it may change, but it would give a couple hundred dollars per child credit,00:36:02.140 –> 00:36:04.100refundable credit to some people.00:36:04.100 –> 00:36:08.740So if you haven’t filed your taxes, you might want to hold back just to see because it’s00:36:08.740 –> 00:36:11.540easier to get all your money at one time than to file early.00:36:11.540 –> 00:36:16.100All right, let’s go to Glenn in Brentwood, please.00:36:16.100 –> 00:36:18.780Glenn in Brentwood.00:36:18.780 –> 00:36:19.780Hi there.00:36:19.780 –> 00:36:20.780Hey there, bud.00:36:20.780 –> 00:36:21.780Hello.00:36:21.780 –> 00:36:22.780Hi.00:36:22.780 –> 00:36:26.500OK, I came down in 2018 from Canada.00:36:26.500 –> 00:36:29.180I’ve been working here since.00:36:29.180 –> 00:36:36.540I collect a pension from Canada and I just did my taxes, well, actually, the 18, 19,00:36:36.540 –> 00:36:42.90020 and 21 a couple of weeks ago in Canada.00:36:42.900 –> 00:36:49.260And I got dinged pretty bad because there was no allowance given because I’m classified00:36:49.260 –> 00:36:51.940as a non-resident of Canada.00:36:51.940 –> 00:37:00.700I have a friend down here in Ohio and he actually he does any income that he gets from pension,00:37:00.700 –> 00:37:04.820he does on his when he does the IRS thing.00:37:04.820 –> 00:37:08.340I’ve never done I’ve never claimed it.00:37:08.340 –> 00:37:14.700So I’m getting taxed 25 percent of everything off my pension.00:37:14.700 –> 00:37:19.660So would it be wiser to just add it to what I make here?00:37:19.660 –> 00:37:23.100Well, are you a U.S. citizen or a Canadian?00:37:23.100 –> 00:37:25.300Well, no, I’m a permanent resident.00:37:25.300 –> 00:37:27.820They’ve classified me as because I have a green card.00:37:27.820 –> 00:37:29.700OK, yeah, that’s I just wasn’t sure.00:37:29.700 –> 00:37:32.420So you’re you’re filing a non-resident return here.00:37:32.420 –> 00:37:36.300But yes, it would be easier probably to claim it here.00:37:36.300 –> 00:37:39.540And then I’m assuming your your friend is also doing the IRS.00:37:39.540 –> 00:37:43.380He might be doing FBAR because you actually have bank accounts and overseas.00:37:43.380 –> 00:37:46.540But I would think you would have to.00:37:46.540 –> 00:37:53.140I mean, again, as a non-resident, I don’t do a lot of non-resident 1040s.00:37:53.140 –> 00:37:58.100But in the case of that, I would say you would be reporting it here and then you would get00:37:58.100 –> 00:38:03.220the credit for paying tax here, I would think, in Canada, since we have a treaty between00:38:03.220 –> 00:38:04.220the company.00:38:04.220 –> 00:38:05.220Yes.00:38:05.220 –> 00:38:11.260But would it would end up by end up having to pay the same whether I did it here or there?00:38:11.260 –> 00:38:12.260I don’t think so.00:38:12.260 –> 00:38:13.260I think you might pay.00:38:13.260 –> 00:38:15.900And again, you’d want to find out before you do this, OK?00:38:15.900 –> 00:38:20.020But I think you might pay less because of the credit.00:38:20.020 –> 00:38:21.020They give a certain percentage.00:38:21.020 –> 00:38:23.300So I think you might actually end up paying less.00:38:23.300 –> 00:38:26.580OK, well, thank you very much for the thank you.00:38:26.580 –> 00:38:27.580Great question.00:38:27.580 –> 00:38:28.580All right.00:38:28.580 –> 00:38:29.580Let’s go to Linda in Columbia.00:38:29.580 –> 00:38:31.460Hey, Linda, what can I do for you?00:38:31.460 –> 00:38:33.500Hi, Dr. Friday.00:38:33.500 –> 00:38:37.140I have some questions having to do.00:38:37.140 –> 00:38:40.060There’s been a number of deaths in the family lately.00:38:40.060 –> 00:38:45.500And my biggest issue right now is that my husband and I had purchased a rental house00:38:45.500 –> 00:38:49.700in like 2014 for about twenty thousand dollars.00:38:49.700 –> 00:38:54.100OK, then he passed in February of twenty one.00:38:54.100 –> 00:38:55.100OK.00:38:55.100 –> 00:39:01.260And then I sold the house last year in June for two hundred and seventy five.00:39:01.260 –> 00:39:02.260All right.00:39:02.260 –> 00:39:04.780But there’s kind of a couple of steps in there.00:39:04.780 –> 00:39:07.060You guys own that rental jointly.00:39:07.060 –> 00:39:08.060Yes.00:39:08.060 –> 00:39:09.060OK.00:39:09.060 –> 00:39:13.020So theoretically, at the time you inherited his share.00:39:13.020 –> 00:39:16.180Yeah, that’s my question.00:39:16.180 –> 00:39:18.180So there would be a step up in basis, theoretically.00:39:18.180 –> 00:39:24.140So you’d need to know the value of the home back in twenty twenty one to be able to find00:39:24.140 –> 00:39:26.300out what 50 percent of that home was earth.00:39:26.300 –> 00:39:30.260So you’d have the one twenty you actually had sixty thousand and he had sixty thousand00:39:30.260 –> 00:39:32.060according to tax law.00:39:32.060 –> 00:39:37.540And then in twenty one, when we lost him, whatever the house was worth, you would increase00:39:37.540 –> 00:39:41.220it his share because you inherited his share at that time.00:39:41.220 –> 00:39:45.380So you might have a higher basis than the one hundred twenty is what I’m saying, Linda.00:39:45.380 –> 00:39:50.660OK, very good that I was kind of hoping that but only on his half, only on his half.00:39:50.660 –> 00:39:51.660Right.00:39:51.660 –> 00:39:53.260Because it was jointly held.00:39:53.260 –> 00:39:54.420OK.00:39:54.420 –> 00:39:56.700And then I have another question.00:39:56.700 –> 00:40:05.540My dad passed away in November of twenty two and I had a bunch of US savings bonds, the00:40:05.540 –> 00:40:06.980double E series.00:40:06.980 –> 00:40:11.780And I went ahead and cashed them in last year.00:40:11.780 –> 00:40:14.220And there was there was a profit of it.00:40:14.220 –> 00:40:19.460And I got a ten ninety nine, I guess it is from the federal government stating that there00:40:19.460 –> 00:40:20.460was a profit.00:40:20.460 –> 00:40:26.940But since he passed, is there a step up in that?00:40:26.940 –> 00:40:28.580That’s taxable income to you.00:40:28.580 –> 00:40:31.900OK, so there’s no change in that.00:40:31.900 –> 00:40:34.020OK, no step up in that one.00:40:34.020 –> 00:40:38.100Yeah, the main thing was that house, if there’s a house with that, because that that was a00:40:38.100 –> 00:40:39.820huge chunk there.00:40:39.820 –> 00:40:40.820It is.00:40:40.820 –> 00:40:41.820Yeah.00:40:41.820 –> 00:40:44.300So I would try to get some estimates and see if you can work that out, you know, from twenty00:40:44.300 –> 00:40:46.340one and then get yourself a basis.00:40:46.340 –> 00:40:47.340OK.00:40:47.340 –> 00:40:48.340Yes.00:40:49.340 –> 00:40:50.340Thank you very much.00:40:50.340 –> 00:40:52.660Let’s say Jack in Springfield real quick.00:40:52.660 –> 00:40:53.660Hey, Jack.00:40:53.660 –> 00:40:57.660OK, I’ve got a similar question.00:40:57.660 –> 00:40:59.460I had a deal last year.00:40:59.460 –> 00:41:00.460We inherit.00:41:00.460 –> 00:41:06.700Well, actually, me and my brother inherited my mother’s estate and had a piece of property00:41:06.700 –> 00:41:09.700there and we sold the property last year.00:41:09.700 –> 00:41:10.700Excuse me.00:41:10.700 –> 00:41:11.700Last year.00:41:11.700 –> 00:41:15.980And but it was a lifetime estate for her.00:41:15.980 –> 00:41:22.620Now, do how much tax implications because we we inherit, we actually the death was last00:41:22.620 –> 00:41:26.260year and we sold it last year.00:41:26.260 –> 00:41:31.180So at the time your mama died, you would have the value of the home.00:41:31.180 –> 00:41:33.100I’m just going to use a number, Jack, for examples.00:41:33.100 –> 00:41:34.100Right.00:41:34.100 –> 00:41:38.020So at the time Mama passed, that property was worth two hundred thousand dollars.00:41:38.020 –> 00:41:40.140And then that same year you sold it.00:41:40.140 –> 00:41:42.500So the value is pretty much the same.00:41:42.500 –> 00:41:44.620But let’s just say you sold it for two hundred thousand.00:41:44.620 –> 00:41:47.020That means you’d have a zero capital gains.00:41:47.020 –> 00:41:48.020OK.00:41:49.020 –> 00:41:52.340I was just wondering because we actually she dated it.00:41:52.340 –> 00:41:54.420You know, it was a lifetime estate for her.00:41:54.420 –> 00:41:55.420Right.00:41:55.420 –> 00:42:00.140So she I was wondering if we would have to go back to the time that she gave us that00:42:00.140 –> 00:42:01.380lifetime estate.00:42:01.380 –> 00:42:05.860No, lifetime estates usually require that you can’t sell it.00:42:05.860 –> 00:42:06.860You’re locked out.00:42:06.860 –> 00:42:07.860Yeah, right.00:42:07.860 –> 00:42:08.860We’re going to get it.00:42:08.860 –> 00:42:10.900So at the time of death is when we take those over.00:42:10.900 –> 00:42:11.900OK.00:42:12.180 –> 00:42:14.380One other quick question.00:42:14.380 –> 00:42:18.220The thing with eBay this year, what did they ever decide to do on that?00:42:18.220 –> 00:42:21.180They stuck to the twenty thousand two hundred for twenty twenty three.00:42:21.180 –> 00:42:26.140This coming year, twenty twenty four will be five thousand or two hundred transactions.00:42:26.140 –> 00:42:28.940Two hundred transactions or five thousand twenty twenty four.00:42:28.940 –> 00:42:29.940What did you say?00:42:29.940 –> 00:42:30.940Yes, sir.00:42:30.940 –> 00:42:33.660Twenty thousand or five or two hundred transactions.00:42:33.660 –> 00:42:35.740I didn’t do nearly that much.00:42:35.740 –> 00:42:36.740OK.00:42:36.740 –> 00:42:37.740All right.00:42:37.740 –> 00:42:38.740OK.00:42:38.740 –> 00:42:39.740All right.00:42:39.740 –> 00:42:40.740Let’s see if we can hit Rebecca in Tennessee real quick.00:42:40.740 –> 00:42:41.740We got two minutes.00:42:41.740 –> 00:42:42.740Rebecca, what do you got for me?00:42:42.740 –> 00:42:43.740Yes.00:42:43.740 –> 00:42:44.740I’m back.00:42:44.740 –> 00:42:50.860I got a settlement with back pay from Social Security and then I got a settlement from00:42:50.860 –> 00:42:54.060work for my disability.00:42:54.060 –> 00:43:01.020And my question is, should I have been charged taxes on the back pay from Social Security?00:43:01.020 –> 00:43:03.580That’s my first question.00:43:03.580 –> 00:43:09.340And well, my second question, I owe twenty thousand dollars and I’m on disability.00:43:09.340 –> 00:43:14.300So what are my chances of getting IRS to settle?00:43:14.300 –> 00:43:19.820Because I’m wanting to get married, but I don’t want them to put a lien on his house00:43:19.820 –> 00:43:20.820or anything.00:43:20.820 –> 00:43:22.500So that’s a concern.00:43:22.500 –> 00:43:23.500All right.00:43:23.500 –> 00:43:26.380Well, first question, Social Security disability.00:43:26.380 –> 00:43:28.740It would depend on how much other income you made.00:43:28.740 –> 00:43:32.700If you only got Social Security disability, period, it’d be zero no matter how much they00:43:32.700 –> 00:43:33.700paid you.00:43:33.700 –> 00:43:38.220But since you got a settlement from your employer at the same time, theoretically up to eighty00:43:38.220 –> 00:43:40.420five percent could be taxable.00:43:40.420 –> 00:43:42.060OK, of your Social Security.00:43:42.060 –> 00:43:44.540So I don’t know the story on that one, too.00:43:44.540 –> 00:43:48.820They cannot put a lien against your new husband’s house if you’re not an owner on that house,00:43:48.820 –> 00:43:53.740because he does not become responsible for your tax debt.00:43:53.740 –> 00:43:58.020I would suggest talking to an enrolled agent or someone and see if you can get it all resolved00:43:58.020 –> 00:44:02.900before the marriage just makes life a little easier because you may have to file separately00:44:02.900 –> 00:44:06.400just to keep your debt off of him and not in the sense.00:44:06.400 –> 00:44:10.580But his refunds could end up going back towards your debt just the way it’s filed, unless00:44:10.580 –> 00:44:13.680you do an injured spouse or innocent spouse, depending.00:44:13.680 –> 00:44:16.060So there is some windows on that one.00:44:16.060 –> 00:44:20.820But other than that, you probably just need to talk to someone to see how much you would00:44:20.820 –> 00:44:23.020owe in the combination of taxes.00:44:23.020 –> 00:44:25.420OK, thank you so much.00:44:25.420 –> 00:44:26.420Thanks.00:44:26.420 –> 00:44:27.420Appreciate it, Rebecca.00:44:27.420 –> 00:44:29.220OK, that was a fast one.00:44:29.220 –> 00:44:31.500And we only have about a minute or so left here.00:44:31.500 –> 00:44:34.220So again, I love it when you guys call in.00:44:34.220 –> 00:44:35.820I appreciate that.00:44:35.820 –> 00:44:37.220And some really great questions.00:44:37.220 –> 00:44:42.660So hopefully if you weren’t able to get through or I wasn’t able to get to your questions,00:44:42.660 –> 00:44:49.060you can email Friday at DR Friday dot com again Friday at DR Friday dot com.00:44:49.060 –> 00:44:50.980And then we’ll do our best to get back with you.00:44:50.980 –> 00:44:54.000I will tell you, it’s a very busy time.00:44:54.000 –> 00:44:56.060So we’re a little slower than we normally are.00:44:56.060 –> 00:45:03.900And then also, if you want to reach our office, you can call Monday morning at 615-367-0819.00:45:03.900 –> 00:45:07.140Hopefully any of my returning clients make sure you call if you don’t have an appointment00:45:07.140 –> 00:45:08.140yet.00:45:08.140 –> 00:45:09.140We’ll get you on the calendar.00:45:09.140 –> 00:45:12.940615-367-0819.00:45:12.940 –> 00:45:16.220If you have no idea who I am and you’ve just kind of turned on the radio and you heard00:45:16.220 –> 00:45:20.540this crazy lady talking about taxes and you’re like, oh my God, you can check us out on the00:45:20.540 –> 00:45:23.700Web at DR Friday dot com.00:45:23.700 –> 00:45:27.780That’s DR Friday dot com.00:45:27.780 –> 00:45:32.300Again, I’m an enrolled agent licensed with the Internal Revenue Service.00:45:32.300 –> 00:45:34.900I do taxes and representation.00:45:34.900 –> 00:45:36.780That is what I do all the time.00:45:36.780 –> 00:45:39.780I’ve been doing it for almost 25 plus years.00:45:39.780 –> 00:45:42.020It has been I enjoy it.00:45:42.020 –> 00:45:45.940And there’s always a lot of changes and things happening, just like I kind of jumped ahead00:45:45.940 –> 00:45:52.860on that tax relief of American Families and Work Act of 2024 because it has 2023.00:45:52.860 –> 00:45:54.180I was hoping they passed it.00:45:54.180 –> 00:45:55.620They had not passed it yet.00:45:55.620 –> 00:45:57.700Apparently has not been signed by the president.00:45:57.700 –> 00:46:01.900So we’re going to wait and see what comes of that and you know where we want to move00:46:01.900 –> 00:46:02.900with it.00:46:02.900 –> 00:46:06.660But if you need help with tax issues, you haven’t filed taxes in a number of years,00:46:06.660 –> 00:46:08.100you need help with resolution.00:46:08.100 –> 00:46:13.500Give our office a call again at 615-367-0819.00:46:13.500 –> 00:46:14.820Hope you guys have a great Saturday.00:46:14.820 –> 00:46:16.220Cop you later.00:46:16.220 –> 00:46:18.800(upbeat music)

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, with over 25 years of experience in tax and financial advising, debunks common myths surrounding the home office deduction. Often feared to be an audit trigger by taxpayers, Dr. Friday clarifies that claiming a home office on tax returns is no more likely to invite an IRS audit than any other deduction, such as miles or office expenses. The emphasis is on the accuracy and method of reporting rather than the deductions themselves. Dr. Friday encourages listeners not to forego legitimate deductions due to audit fears and offers her expertise to those needing guidance. Tune in to Dr. Friday’s call-in show every Saturday afternoon for more insightful tax advice.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Home office deduction. Now guys, I’ve been doing taxes for 25 plus years and I remember the years where people would come in and say, “No, no, no, no. I can’t take a home office. That’s going to lead to an audit and I don’t want the IRS to audit me, so I’d rather not take a deduction versus get audited.” Now I will tell you, I’ve never been a big firm believer of that and now it’s been proven. Home offices do not trigger any more of an audit than if you take miles or if you take office costs. It’s important to understand that the numbers you’re putting on your tax return aren’t necessarily leading to an audit. It’s the way you report the information, right or wrong, in that return. If you need help, call me.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this engaging episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the president of Dr. Friday’s Tax and Financial Firm, underscores the paramount importance of meticulous expense tracking for entrepreneurs and self-employed individuals. With a focus on ensuring every expense and deduction is accounted for, Dr. Friday provides valuable advice on leveraging various methods for efficient tracking, from digital receipts to accounting software like QuickBooks. Emphasizing that proper expense management directly translates to significant tax savings, this episode is a must-listen for anyone looking to optimize their financial health and tax efficiency. Tune in to the Dr. Friday call-in show live every Saturday afternoon for more insightful advice.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

And this one for my entrepreneur, self-employment, having those expenses and those deductions. Very very important, making sure you’ve tracked everything throughout the year. Now I meet with you guys throughout the entire year and I can say, some people are really good at tracking expenses, some people maybe not so good. It is one of those deals that you really do want to become good at. You need to be able to save your expenses, that can be either through taking pictures and saving them on your phone as PDFs or pics or making it as a system like QuickBooks or even a cheaper Intuit, any product you want. But bottom line is tracking those expenses saves you money.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this insightful episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday emphasizes the enduring value of Health Savings Accounts (HSAs) for both single and married individuals. For 2023, the contribution limits are set at $3,850 for singles and $7,750 for married couples, with an additional $1,000 allowance for those over 55. Dr. Friday highlights the tax-free benefits of contributing to and spending from HSAs, underscoring their significance in a comprehensive tax-saving strategy. Though not an insurance seller, Dr. Friday urges listeners to consult with their insurance advisors to fully leverage HSAs’ benefits. Catch more tax-saving tips on the Dr. Friday Call-In Show every Saturday on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Health savings account, contribution deductions, HSA, you’ve heard me talk about before. I will not stop talking about them. In 2023, we can contribute $3,850 as a single person, $7,750 as a married. Plus, if you’re over the age of 55, you can do another $1,000. And again, in 2024, it’s went up again. So what’s so important about HSAs? We save tax free, we spend it tax free, it’s all a part of the big package. Now, I don’t sell insurance, guys, and you need to talk to your insurance advisor, make sure it works. But I can tell you this, it is a great way to save taxes.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday highlights the often overlooked Saver’s Credit, an essential tax break for low to moderate income earners. Tailored for individuals and couples earning below certain thresholds, the Saver’s Credit offers a significant opportunity to reduce tax liability by contributing to retirement accounts such as 401(k)s, IRAs, and Roths. Dr. Friday breaks down the income limits and potential savings – up to $2,000 for individuals and $4,000 for married couples, emphasizing the impact this credit can have on your financial well-being. Additionally, the episode sheds light on the percentage of contribution matched by the credit, especially beneficial for those able to set aside money for future savings. Tune into the Dr. Friday Call-In Show every Saturday for more insightful tax advice.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Savers credit, I never hear a lot of people talk about it, partly because it really is for the lower income. So if you’re married making less than $73,000 and you put money into a 401k or an IRA or a Roth or whatever, you can save up to $2,000, $4,000 for a married couple. Head of household, you have to have less than $54,750, single $36,500. Single people get up to 50% of what you contribute, up to $2,000. That’s a lot of money, especially if you have the ability to set it aside. That again can be a 401k, an IRA, a Roth, anything that you can set aside the money for later savings.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the president of Dr. Friday’s Tax and Financial Firm, emphasizes the importance of timely 401(k) contributions for tax savings. Highlighting a crucial reminder for the year 2024, Dr. Friday points out that contributions to employer-sponsored 401(k) plans must be made through W-2 earnings and cannot be retroactively added. For those in higher tax brackets, specifically mentioning the 24% tax bracket, each dollar contributed to a 401(k) plan could result in significant tax savings, equating to 24 cents saved per dollar contributed. This episode serves as a valuable piece of advice for individuals looking to reduce their tax liabilities through strategic financial planning.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

401k contribution deductions. First let me put a caveat out there. If we’re already in 2024, so we can’t go backwards if you’re in an employer plan. It must come from your W-2 or the way that they’re paying you. We can’t just go and throw money into an employer 401k. So this may be planning for 2024 and it may be important because if you are in a higher tax bracket, let’s say you’re in the 24% tax bracket, every dollar you can put into your 401k could save you 24 cents. That’s almost a quarter guys. That’s a lot of money in savings if you want to reduce your tax liabilities.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of the Dr. Friday Radio Show, Dr. Friday delves into crucial tax updates and financial strategies. From the essentials of tax preparation to navigating new IRS regulations, this episode offers valuable advice for both individuals and businesses. Key highlights include:

• Preparation for Tax Season: Importance of gathering W-2s and 1099s without rushing the filing process to ensure accuracy.
• 1099-K Form Thresholds: Updated requirements for digital and small-scale sellers, emphasizing its effect on gig economy participants.
• Tax Filing Requirements: Guidance on who needs to file taxes, focusing on income thresholds and specific financial circumstances.
• Dependents and Education Credits: Tips on claiming dependents and maximizing education-related credits.
• Digital Assets and IRS Regulations: Overview of new IRS guidelines on reporting digital assets.
• Business Tax Compliance: Insights into beneficial ownership information compliance and clean energy credits under new tax laws.

This episode is packed with expert advice to help listeners efficiently navigate their tax responsibilities and optimize financial planning for the year ahead.

Transcript00:00:00.000 –> 00:00:06.280No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your00:00:06.280 –> 00:00:07.280financial woes.00:00:07.280 –> 00:00:09.540She’s the how-to girl.00:00:09.540 –> 00:00:11.120It’s the Dr. Friday Show.00:00:11.120 –> 00:00:19.800If you have a question for Dr. Friday, call her now, 737-WWTN.00:00:19.800 –> 00:00:23.520That’s 737-9986.00:00:23.520 –> 00:00:29.520So here’s your host, financial counselor and tax consultant, Dr. Friday.00:00:29.520 –> 00:00:34.600G’day, I’m Dr. Friday and the doctor is in the house today.00:00:34.600 –> 00:00:38.920We’re going to be talking about my favorite subject, which of course is taxes.00:00:38.920 –> 00:00:44.120There has been a few minor upchanges on a few things that might be on the other, ununique00:00:44.120 –> 00:00:47.480side of things, but we’re going to cover that.00:00:47.480 –> 00:00:51.960And of course, many of you are probably getting all of your tax records together, so it’s00:00:51.960 –> 00:00:56.280time for you to probably start thinking about, I wouldn’t rush still because I know many00:00:56.280 –> 00:00:57.840people are still waiting.00:00:57.840 –> 00:01:00.760W-2s do not have to be out quite yet.00:01:00.760 –> 00:01:05.1201099s are still being processed, at least in our office.00:01:05.120 –> 00:01:11.360So many of those will be something that may hold you up in processing that information00:01:11.360 –> 00:01:15.520and don’t rush to file something until you have all of your documentation.00:01:15.520 –> 00:01:20.760It’s not worth the IRS turning around and changing your tax return, which is something00:01:20.760 –> 00:01:26.380that can happen anytime they don’t have the right information on the right lines that00:01:26.380 –> 00:01:28.160matches what they think you should have.00:01:28.160 –> 00:01:30.360All right, we’re going to go right to the phone lines.00:01:30.360 –> 00:01:31.360We’ve got Ryan.00:01:31.360 –> 00:01:34.040I love it when my phone lines start lighting up early.00:01:34.040 –> 00:01:35.040Hey Ryan, what’s happening?00:01:35.040 –> 00:01:36.040I hope it’s Brian because that’s me.00:01:36.040 –> 00:01:37.040Oh, okay.00:01:37.040 –> 00:01:38.040Brian, I am so sorry.00:01:38.040 –> 00:01:39.040My typo on that one.00:01:39.040 –> 00:01:50.040Let me give you my total and see if I need to say federal.00:01:50.040 –> 00:01:51.04029,865.00:01:51.040 –> 00:01:55.820Social Security of that is 27,816.00:01:55.820 –> 00:02:00.820And the other is PBC and just a little bit of bank interest.00:02:00.820 –> 00:02:01.820Is that all you have total?00:02:01.820 –> 00:02:02.820Unfortunately, that’s it.00:02:02.820 –> 00:02:06.620Okay, then you don’t need to file taxes.00:02:06.620 –> 00:02:10.060Oh, I’ll take that as the gospel.00:02:10.060 –> 00:02:11.060Thank you so much.00:02:11.060 –> 00:02:12.060No worries.00:02:12.060 –> 00:02:13.060Thanks, babe.00:02:13.060 –> 00:02:14.060All right.00:02:14.060 –> 00:02:17.260And that’s always a good question because sometimes life changes every year, right?00:02:17.260 –> 00:02:19.020I mean, sometimes you get a little more interest.00:02:19.020 –> 00:02:20.200Interest rates have come up.00:02:20.200 –> 00:02:24.680So people might actually get a little interest for the money that they have in the bank.00:02:24.680 –> 00:02:28.640It’s also one of those situations where you just want to make sure that, you know, the00:02:28.640 –> 00:02:32.320biggest thing is most of his income was coming through Social Security.00:02:32.320 –> 00:02:37.320Social Security in itself is not taxable unless you have other income, then it can be made00:02:37.320 –> 00:02:41.140taxable up to 85% of what you receive.00:02:41.140 –> 00:02:46.580So it’s just important to make sure you understand how that works and what you have going on.00:02:46.580 –> 00:02:50.880So the IRS has released just recently the 1099K.00:02:50.880 –> 00:02:53.140I think I’ve brought that up in the past.00:02:53.140 –> 00:02:56.100That’s the one that started out back in 2021.00:02:56.100 –> 00:03:01.940If you guys remember, they were going to basically do $600 or 20 transactions, whichever you00:03:01.940 –> 00:03:06.300had and they pushed it out.00:03:06.300 –> 00:03:11.320And now it’s going to be $5,000 or 20 transactions.00:03:11.320 –> 00:03:19.020So if you’re using eBay, PayPal, some sort of cash app to receive money through doing00:03:19.020 –> 00:03:25.100different things, the max is if you have overall, not just one transaction, but if you have00:03:25.100 –> 00:03:32.100more than $5,000 in a 12 month cycle of January through December or 20 transactions, they00:03:32.100 –> 00:03:35.960will be issuing you a 1099K.00:03:35.960 –> 00:03:42.780Now I’m going to tell you that I’ve already had one person receive one that was based00:03:42.780 –> 00:03:45.060on the $600.00:03:45.060 –> 00:03:52.220So one of the companies, I guess had already set up and started to try to do the loss and00:03:52.220 –> 00:03:59.100they had issued one to her and she had had more than $600, but she did not yet have 5,00000:03:59.100 –> 00:04:05.420last year, but yet she did receive the 1099K from one of the cash app organizations.00:04:05.420 –> 00:04:11.520So that’s going to be an interesting situation that you want to make sure that, again, this00:04:11.520 –> 00:04:17.480is really for individuals that maybe are big on garage selling through the internet.00:04:17.480 –> 00:04:22.580I call it garage selling, taking things from your own house and selling it, or people that00:04:22.580 –> 00:04:27.880like to go out shop and then put them on the internet to sell, which is truly a legitimate00:04:27.880 –> 00:04:28.880business.00:04:28.880 –> 00:04:33.700And if you’re selling 20 or 30 things a year, I would say the IRS would probably consider00:04:33.700 –> 00:04:37.720that a business, even if it was your own, because most people have a very difficult00:04:37.720 –> 00:04:43.480time finding the proof that that was something you purchased 10 years ago, not something00:04:43.480 –> 00:04:49.280you may have put up at a garage sale or something you got some other way.00:04:49.280 –> 00:04:55.120So it’s really important if you’re an individual that really likes the idea of, you know, buying00:04:55.120 –> 00:04:59.460something, living with it for a while, and then instead of just storing it or whatever00:04:59.460 –> 00:05:03.840you put it on the internet, you need to start tracking your personal expenses.00:05:03.840 –> 00:05:07.920So that way, because that’s what the IRS, otherwise they’ll say your basis is zero and00:05:07.920 –> 00:05:09.440you sell it for $500.00:05:09.440 –> 00:05:14.040Now you’re paying tax on $500, which would be normally zero because you probably paid00:05:14.040 –> 00:05:15.320a thousand for that item.00:05:15.320 –> 00:05:17.520All right, let’s hit Laura in Gallatin.00:05:17.520 –> 00:05:20.480Hey Laura, what can I do for you, sweetheart?00:05:20.480 –> 00:05:26.600Hey, I would like to know, I have a 21 year old daughter who was in full time college00:05:26.600 –> 00:05:27.600last year.00:05:27.600 –> 00:05:37.480She had, she made $5,000 on her W-2 and I am just wondering, can I still claim her as00:05:37.480 –> 00:05:40.360a dependent or is she past that age?00:05:40.360 –> 00:05:42.440Yeah, age, I know one.00:05:42.440 –> 00:05:43.440Yes.00:05:43.440 –> 00:05:44.440I mean, here’s the true test.00:05:44.440 –> 00:05:47.040Did you provide more than 50% of her care?00:05:47.040 –> 00:05:50.480And if she lived at home, that means room and board.00:05:50.480 –> 00:05:54.040If she’s still on your health insurance, then you’ve covered that.00:05:54.040 –> 00:05:57.560If she has a car and she’s on your car, all of those things would add up.00:05:57.560 –> 00:06:03.760And if she only earned $5,000, I’m going to guess that you did actually, even if she didn’t00:06:03.760 –> 00:06:07.700live in the house, but she lived on campus cause she was away, they still consider that00:06:07.700 –> 00:06:11.600at home for the purpose of the test.00:06:11.600 –> 00:06:16.520So she would still qualify as your dependent for that year.00:06:16.520 –> 00:06:20.360And you might want to make sure she may have some college credits that you could qualify00:06:20.360 –> 00:06:23.440for as well.00:06:23.440 –> 00:06:24.440All right.00:06:24.440 –> 00:06:27.640So yeah, that was another question that I had.00:06:27.640 –> 00:06:28.640What kind of credits?00:06:28.640 –> 00:06:35.240I saw something last year for you could get credit for books.00:06:35.240 –> 00:06:36.840We bought her a new laptop.00:06:36.840 –> 00:06:39.380So she would get a form.00:06:39.380 –> 00:06:44.160She will get a form from the college called the 1098-T. It’s going to show how much her00:06:44.160 –> 00:06:50.000tuition and then if she had any grants, scholarships, whatever, you know, that may have been paid00:06:50.000 –> 00:06:51.760back on her behalf.00:06:51.760 –> 00:06:56.520And if there is a difference and then you can add in some college, if you do lifetime,00:06:56.520 –> 00:07:01.960you could add in the books, tutors, things like that, that may have also come into play.00:07:01.960 –> 00:07:05.480And it doesn’t make a difference if there was college loans or if you paid for it one00:07:05.480 –> 00:07:09.320way or the other, it will be paid with after tax dollars, assuming they don’t give everyone00:07:09.320 –> 00:07:15.120a free ride then, you know, so she would still be a dependent and you can use that 1098-T00:07:15.120 –> 00:07:20.080to see up to $2,500 depending on income and situations.00:07:20.080 –> 00:07:22.520All right, great.00:07:22.520 –> 00:07:23.520Thank you so much.00:07:23.520 –> 00:07:24.520I appreciate that.00:07:24.520 –> 00:07:25.520Thanks for listening.00:07:25.520 –> 00:07:26.520I appreciate you.00:07:26.520 –> 00:07:27.520All right.00:07:27.520 –> 00:07:29.520If you want to join the show, you can.00:07:29.520 –> 00:07:30.520615-737-9986.00:07:31.520 –> 00:07:42.640This next section we’ll talk about is for qualified business, mostly tax exempt organizations00:07:42.640 –> 00:07:47.520or entities such as state or tribal, which doesn’t really apply in most of ours.00:07:47.520 –> 00:07:50.200There’s the new elective payment and transfer credit.00:07:50.200 –> 00:07:55.160This is really dealing with, they’re starting to really get into the clean energy accounts.00:07:55.160 –> 00:08:01.240If you are a business that deals with the clean energy, you do want to go on to the00:08:01.240 –> 00:08:02.240IRS.00:08:02.240 –> 00:08:07.800There’s a website and you want to go ahead and get registered under the IRS, the Inflation00:08:07.800 –> 00:08:11.940Reduction Act, as well as the CHIPS Act of 2022.00:08:11.940 –> 00:08:15.240You can pre-file registration right there on the website.00:08:15.240 –> 00:08:17.520The publication is 5884.00:08:17.520 –> 00:08:20.000Reason I’m bringing it up, it’s just opening.00:08:20.000 –> 00:08:24.600There are more people than you think that are really working, trying to get qualified00:08:24.600 –> 00:08:28.400and get the credits because those are credits that you can use.00:08:28.400 –> 00:08:31.960Even in a nonprofit that doesn’t pay tax, you may still want to register if you’re dealing00:08:31.960 –> 00:08:33.920with the clean energy.00:08:33.920 –> 00:08:36.560That way you can start applying those credits.00:08:36.560 –> 00:08:41.920That way you also get certain qualifications that come along with that as well.00:08:41.920 –> 00:08:44.800That may be useful if you’re in that particular type of business.00:08:44.800 –> 00:08:49.240We all know that there’s a lot more going towards clean energy and battery operated00:08:49.240 –> 00:08:50.960vehicles and all that good stuff.00:08:50.960 –> 00:08:55.240All right, real quick, let’s hit Chase in the borough and then we’ll come to Mary.00:08:55.240 –> 00:08:56.240Hey, Chase.00:08:56.240 –> 00:08:57.240Hey.00:08:57.240 –> 00:09:03.440My question is, me and my wife got a divorce three years ago.00:09:03.440 –> 00:09:07.760Our four-year-old goes to daycare.00:09:07.760 –> 00:09:15.760The tax credit that you get for paying daycare or whatever, the credit, do we both get to00:09:15.760 –> 00:09:17.480file that?00:09:17.480 –> 00:09:19.480Every other year we file.00:09:19.480 –> 00:09:22.320One of us filed last year.00:09:22.320 –> 00:09:23.640This year I get to do it.00:09:23.640 –> 00:09:24.640Right.00:09:24.640 –> 00:09:28.720Every other year you may qualify as head of household, but you both won’t be able to take00:09:28.720 –> 00:09:29.720that credit.00:09:29.720 –> 00:09:35.640If it’s a 50/50 deal, someone theoretically, according to the IRS, has one day longer than00:09:35.640 –> 00:09:39.600the other because of the way the calendar is.00:09:39.600 –> 00:09:40.880You guys already decided that.00:09:40.880 –> 00:09:43.560Even years is yours, odds hers, whatever.00:09:43.560 –> 00:09:45.600You guys get the child every other year.00:09:45.600 –> 00:09:48.000That’s the year you’re ending up with the child credit.00:09:48.000 –> 00:09:49.840Too bad.00:09:49.840 –> 00:09:53.160If you’re in a great relationship with a spouse, it would be great if you could do the same00:09:53.160 –> 00:09:57.120year you pay it and then she gets 100% and you get 100% in the years that you claim the00:09:57.120 –> 00:09:59.120child because I don’t know how much you pay.00:09:59.120 –> 00:10:00.120Okay.00:10:00.120 –> 00:10:05.160The half of daycare that she pays for, do I get to file for her half that she pays?00:10:05.160 –> 00:10:06.160No.00:10:06.160 –> 00:10:07.160You don’t get that credit?00:10:07.160 –> 00:10:08.160No.00:10:08.160 –> 00:10:10.840Now do I get to file the full amount of $7,000 or?00:10:10.840 –> 00:10:11.840No.00:10:11.840 –> 00:10:13.640You get to claim what you paid.00:10:13.640 –> 00:10:15.480You don’t get to claim the part that she paid.00:10:15.480 –> 00:10:16.480That’s what I said.00:10:16.480 –> 00:10:21.660Unfortunately, if you’re in a team effort trying to outdo the IRS, which I have some00:10:21.660 –> 00:10:25.240clients that are really good at doing that, the years that you claim the child are the00:10:25.240 –> 00:10:30.240years that you pay 100% and the years she claims and she pays 100% and then that way.00:10:30.240 –> 00:10:34.200To be honest with you, it cuts off at $2,500.00:10:34.200 –> 00:10:37.160The maximum credit is like $500 you get.00:10:37.160 –> 00:10:39.160You don’t get all of the money you pay.00:10:39.160 –> 00:10:43.040You may already be maximizing Chase the amount anyways.00:10:43.040 –> 00:10:46.720It may not be something you have to worry about chasing because $7,000 is above the00:10:46.720 –> 00:10:47.720number.00:10:47.720 –> 00:10:48.720Okay.00:10:48.720 –> 00:10:50.320Well, thank you so much.00:10:50.320 –> 00:10:51.320No worries.00:10:51.320 –> 00:10:52.320Thanks.00:10:52.320 –> 00:10:54.560Let’s hit Mary really quick so she doesn’t have to go through the break.00:10:54.560 –> 00:10:55.560Hey, Mary.00:10:55.560 –> 00:10:56.560Hi.00:10:56.560 –> 00:10:59.560I have a question.00:10:59.560 –> 00:11:03.320Yes.00:11:03.320 –> 00:11:04.320From the first caller.00:11:04.320 –> 00:11:10.400The first caller asked about the need to file taxes and he only made so much so did he have00:11:10.400 –> 00:11:11.400to file?00:11:11.400 –> 00:11:12.400Right.00:11:12.400 –> 00:11:19.640So my question is, doesn’t social security make and if shouldn’t he file to get that00:11:19.640 –> 00:11:20.640back?00:11:20.640 –> 00:11:24.920No, because social security, I mean, right now we don’t have any refundable credits.00:11:24.920 –> 00:11:29.840We don’t have any, he doesn’t pay in any federal withholdings with his social security because00:11:29.840 –> 00:11:32.080he’s in a zero tax bracket.00:11:32.080 –> 00:11:36.080Now I will have say some clients of mine have federal withholding come out because they00:11:36.080 –> 00:11:41.160know they’re in a tax bracket that they’re going to pay tax on their social security.00:11:41.160 –> 00:11:46.420This gentleman from my experience does not have anything coming out.00:11:46.420 –> 00:11:48.280So Mary, you’re correct.00:11:48.280 –> 00:11:53.680If someone’s listening and you had any kind of federal withholdings come out of either00:11:53.680 –> 00:11:57.880the small pension that he may have been getting or your social security, you always want to00:11:57.880 –> 00:12:00.000file to get your own money back.00:12:00.000 –> 00:12:02.280But I would also say change your withholdings.00:12:02.280 –> 00:12:03.280Okay.00:12:03.280 –> 00:12:04.280All right.00:12:04.280 –> 00:12:05.280Thank you.00:12:05.280 –> 00:12:06.280No problem.00:12:06.280 –> 00:12:07.280Thank you so much.00:12:07.280 –> 00:12:08.280Great question.00:12:08.280 –> 00:12:11.600All right guys, I’m going to get back here, but reiterate what Mary was saying just so00:12:11.600 –> 00:12:12.880I make sure I’m straight.00:12:12.880 –> 00:12:14.140She’s correct.00:12:14.140 –> 00:12:18.320If you’re having any type of withholdings, even if you’re at that lower income bracket.00:12:18.320 –> 00:12:23.020So Brian who had called in, if you have a small amount of money or small pension or00:12:23.020 –> 00:12:28.120something and they’re withholding or on your social security, any federal withholdings,00:12:28.120 –> 00:12:30.500you always want to file to get that money back.00:12:30.500 –> 00:12:32.420You don’t want to leave money on the table.00:12:32.420 –> 00:12:36.740But I would also say in Brian’s case, at least don’t have any withholding.00:12:36.740 –> 00:12:38.380You don’t owe any taxes.00:12:38.380 –> 00:12:41.380Therefore don’t give them any money and therefore you don’t have to file.00:12:41.380 –> 00:12:45.580So just make sure that you understand if you do or don’t have to file.00:12:45.580 –> 00:12:50.820I’m not saying there’s not a lot of people that don’t get to file, but just putting that00:12:50.820 –> 00:12:51.820out there.00:12:51.820 –> 00:12:52.820All right.00:12:52.820 –> 00:12:53.820We’re going to take a quick break.00:12:53.820 –> 00:13:01.100We’ll be right back in studio 615-737-9986.00:13:01.100 –> 00:13:06.380We’ll be right back with the Dr. Friday show.00:13:06.380 –> 00:13:09.400All righty.00:13:09.400 –> 00:13:12.760We are back here live in studio.00:13:12.760 –> 00:13:15.700You can join us live if you want it.00:13:15.700 –> 00:13:16.700615-737-9986.00:13:16.700 –> 00:13:23.540Do you want to make an announcement?00:13:23.540 –> 00:13:27.620Monday is the day that the IRS is opening up for e-file.00:13:27.620 –> 00:13:29.300That’s the 29th.00:13:29.300 –> 00:13:33.700Then we can start actually sending out tax returns.00:13:33.700 –> 00:13:36.380That would actually be for 21, 22, and 23.00:13:36.380 –> 00:13:42.220E-file officially reopens for the years in that situation that are allowed to be e-filed,00:13:42.220 –> 00:13:44.260which is three years at this point.00:13:44.260 –> 00:13:45.940So just putting that out there.00:13:45.940 –> 00:13:48.940And the IRS does have free filing.00:13:48.940 –> 00:13:56.300You can go to irs.gov, available for, they say millions of taxpayers can get free filing.00:13:56.300 –> 00:13:57.300Just be careful.00:13:57.300 –> 00:13:58.300Make sure.00:13:58.300 –> 00:14:01.620I’ve had people say that they went on thinking they were going to get free filing and it00:14:01.620 –> 00:14:04.420turned out that they tried to have to pay.00:14:04.420 –> 00:14:09.620I don’t know what the qualification for free filing is.00:14:09.620 –> 00:14:12.100It used to be $65,000 or less.00:14:12.100 –> 00:14:14.900No schedule C’s, no earned income credit.00:14:14.900 –> 00:14:15.900Here we go.00:14:15.900 –> 00:14:21.500It’s $79,000 or less for individuals on most of them.00:14:21.500 –> 00:14:25.540And that would double, I would think if it was a married couple, but it’s really only00:14:25.540 –> 00:14:26.660for W-2s.00:14:26.660 –> 00:14:31.820If you have rental properties or you have children and you qualify for earned income00:14:31.820 –> 00:14:37.380credit, my understanding, all of those would come back into play where you would actually00:14:37.380 –> 00:14:40.940possibly have to have to pay something.00:14:40.940 –> 00:14:45.500Also on the IRS website, I want to lead you guys to that site, especially now when you’re00:14:45.500 –> 00:14:51.500getting ready to file your taxes and you see that you owe money and you’re a W-2.00:14:51.500 –> 00:14:56.460So in most cases you shouldn’t owe money because you’re basically taking out every paycheck00:14:56.460 –> 00:14:58.540enough to cover your taxes.00:14:58.540 –> 00:15:02.700Unless you of course have a side kick or a side business where you do some Uber or you00:15:02.700 –> 00:15:05.940do something and you make a little money on the side, then sure, you’re going to owe money00:15:05.940 –> 00:15:07.820on the profit of that business.00:15:07.820 –> 00:15:10.620But normal W-2 individuals should not owe.00:15:10.620 –> 00:15:18.180And if you don’t, or you do owe money, excuse me, you can go to irs.gov, click under individuals,00:15:18.180 –> 00:15:22.120and then you can actually do a paycheck checkup.00:15:22.120 –> 00:15:25.280So you can recalculate maybe what you’re doing.00:15:25.280 –> 00:15:30.460The biggest reason I find that people have a situation where they do two things.00:15:30.460 –> 00:15:34.520One, sometimes they work off a lot of bonuses and sometimes people will play with it a little00:15:34.520 –> 00:15:40.140bit because if you get a $40,000 bonus on one check, they’re going to take 28%.00:15:40.140 –> 00:15:45.620And maybe you only made a total for the year of 80,000 and therefore it would have taken00:15:45.620 –> 00:15:47.740way too much tax out at the time.00:15:47.740 –> 00:15:52.060But it’s also a game that’s very difficult to play, especially with the new W-4.00:15:52.060 –> 00:15:57.080The other side of it is, is one of you make more than, for a married couple, let’s say00:15:57.080 –> 00:16:03.420a married couple, one of you make more than 150 or your combined income is over the 150,00:16:03.420 –> 00:16:05.300then you’re actually in another tax bracket.00:16:05.300 –> 00:16:10.200So if you’re claiming married in two and your husband’s playing married in two and you’re00:16:10.200 –> 00:16:13.860married with two children, you’re not going to have enough taxes coming out if you’re00:16:13.860 –> 00:16:17.300in the higher tax brackets because both of you are claiming children.00:16:17.300 –> 00:16:21.460Well, only one person can claim the children and actually get the right amount of tax to00:16:21.460 –> 00:16:22.460come out, right?00:16:22.460 –> 00:16:23.460Because it makes sense.00:16:23.460 –> 00:16:28.180And you’re both claiming married, which means in essence, according to tax code, married00:16:28.180 –> 00:16:32.740means you’re supporting a spouse and two children with married in two.00:16:32.740 –> 00:16:37.540Well, if you’re married and the other person’s making as much or more than you, then you00:16:37.540 –> 00:16:39.100really don’t want to always be claiming married.00:16:39.100 –> 00:16:42.180I’ve had people walk in my office more than once because I’ll say, you know what?00:16:42.180 –> 00:16:45.860You should be claiming single in zero and you should be claiming single in two because00:16:45.860 –> 00:16:50.300single means one person and then the dependents being whatever they are.00:16:50.300 –> 00:16:55.780And again, this really affects more people that are making more than 150 combined because00:16:55.780 –> 00:16:57.660now you get into the other taxations.00:16:57.660 –> 00:17:02.660Once you’re over 250, then there’s the penalty for making more than 250,000 as a married00:17:02.660 –> 00:17:04.140couple and there’s additional tax.00:17:04.140 –> 00:17:08.980So as you go up, it is definitely going to be more of a game of understanding.00:17:08.980 –> 00:17:13.820If you’re in the lower tax brackets and you’re both making 20 or 30,000 and you’re both claiming00:17:13.820 –> 00:17:18.340married and two kids, it’s probably not having a huge effect because by the time you get00:17:18.340 –> 00:17:21.020your standard deduction out, you’re probably having enough.00:17:21.020 –> 00:17:25.860But I have people that will somehow they’ll make 30 or $40,000 and they’ll pay three or00:17:25.860 –> 00:17:30.500a hundred dollars, but yet they say they’re claiming married in one or married in two00:17:30.500 –> 00:17:31.940and that’s where it gets distorted.00:17:31.940 –> 00:17:36.220So very important to check your paychecks and now’s the perfect time.00:17:36.220 –> 00:17:37.220It’s January.00:17:37.220 –> 00:17:40.740Any changes you make now will pretty much affect you all the way through to the end00:17:40.740 –> 00:17:41.740of the year.00:17:41.740 –> 00:17:45.480If you wait till April or May when you actually finish your filing, some people will file00:17:45.480 –> 00:17:48.460in April, then you’ve already missed the first quarter.00:17:48.460 –> 00:17:53.060So now you’re, you know, you may have to accelerate a little extra withholding just to compensate00:17:53.060 –> 00:17:56.140for the first four months that you had going there.00:17:56.140 –> 00:18:00.860So very important to basically look at your income information now and say, okay, if I00:18:00.860 –> 00:18:07.060file my taxes and I’m owing more than $500, more than a thousand, whatever that comfort00:18:07.060 –> 00:18:11.720zone is, cause you anything over 500 you can get hit with a penalty depending on prior00:18:11.720 –> 00:18:12.940year amounts.00:18:12.940 –> 00:18:14.860So we don’t want penalties, right?00:18:14.860 –> 00:18:15.960I mean, that’s just silly.00:18:15.960 –> 00:18:19.740Give the government more money just because you had it sitting in the bank or something.00:18:19.740 –> 00:18:23.460I know it’s nice to have your own money in your bank, but theoretically it’s the IRS00:18:23.460 –> 00:18:24.460money.00:18:24.460 –> 00:18:25.700So why not give them the money?00:18:25.700 –> 00:18:27.780And then that way you don’t have to worry about it.00:18:27.780 –> 00:18:31.540So it’s kind of important to make sure that you’re not just sending out money to have00:18:31.540 –> 00:18:34.580it in the bank just in case.00:18:34.580 –> 00:18:39.100And then you turn around and you’re like, oh wait, now I have to pay them plus a penalty00:18:39.100 –> 00:18:40.100and interest.00:18:40.100 –> 00:18:44.500And that is never a good thing for any of us.00:18:44.500 –> 00:18:49.860So just making sure that you have that information and how that’s going to work.00:18:49.860 –> 00:18:55.860And for the individual that likes to go and buy a big truck every year, every few years,00:18:55.860 –> 00:19:02.500you need to understand, you know, the rule allowing 100% deductible capital expenditures,00:19:02.500 –> 00:19:03.500how that’s going to work.00:19:03.500 –> 00:19:08.940Cause right now you’re going to get 80% under bonus depreciation.00:19:08.940 –> 00:19:14.180And bonus depreciation in 2024 is going to drop to 60%.00:19:14.180 –> 00:19:19.420And by the, you know, they’re trying by year 2027 to bring that down to 20%.00:19:19.420 –> 00:19:22.900So the person that basically runs out and says, you know what, I’m going to go and buy00:19:22.900 –> 00:19:26.060my 40,000, 60, $80,000 truck.00:19:26.060 –> 00:19:29.520And I’m going to put it on cause I need a truck for my business and I use it all only00:19:29.520 –> 00:19:32.660for my business, a legitimate true tax deduction.00:19:32.660 –> 00:19:34.740And you’re, you’re used to writing that off.00:19:34.740 –> 00:19:36.280That is not going to happen this year.00:19:36.280 –> 00:19:40.780You are not going to hit that 100% of that tax deduction.00:19:40.780 –> 00:19:43.140You’re going to get 80% this year.00:19:43.140 –> 00:19:47.300So again, in your mathematics, when you’re doing this and can’t go backwards.00:19:47.300 –> 00:19:53.100So if you thought you were going to get a full deduction of your section 179 situation,00:19:53.100 –> 00:19:57.620you’re going to find out that those rules allow 100%, but they’re going to change bonus00:19:57.620 –> 00:20:03.020depreciation, clarified bonus depreciation phases out.00:20:03.020 –> 00:20:04.900That was based on the 2017.00:20:04.900 –> 00:20:08.600And right now bonus depreciation is at 80%.00:20:08.600 –> 00:20:16.540So kind of important to know, you know, section 179 is allowed for certain things placed in00:20:16.540 –> 00:20:22.380business, but that’s going to start kicking out because if you purchase 130, assuming00:20:22.380 –> 00:20:27.28035% tax bracket, you’re going to free up about $70,000.00:20:27.280 –> 00:20:31.300Section 179 will have some limitations based on income.00:20:31.300 –> 00:20:35.140So they’re trying to move that down.00:20:35.140 –> 00:20:41.760So again, section 179 allows business to deduct 100% of the product, but that’s not bonus00:20:41.760 –> 00:20:45.640bonus depreciation is only going to allow 80%.00:20:45.640 –> 00:20:49.400Section 179 will allow a hundred percent, but that has to be qualified equipment and00:20:49.400 –> 00:20:52.540software placed in during the year.00:20:52.540 –> 00:20:53.540And that’s going to change.00:20:53.540 –> 00:20:59.180And again, it may test you as far as if your income is higher.00:20:59.180 –> 00:21:02.100It may bring it out where we’re not going to get a hundred percent on those.00:21:02.100 –> 00:21:03.820So just putting that out there.00:21:03.820 –> 00:21:09.720So start looking at not only 2023, but you’re in 2024 and you may need to start evaluating00:21:09.720 –> 00:21:16.140if you’re going to be qualifying for 100%, 80%, 60%, depending on the year we’re talking.00:21:16.140 –> 00:21:19.820So it’s very important that, you know, the wonderful thing about tax law changes all00:21:19.820 –> 00:21:20.820the time.00:21:20.820 –> 00:21:30.380Your SUV does have to be over 6,000 pounds is $28,900 for section one.00:21:30.380 –> 00:21:31.380Okay.00:21:31.380 –> 00:21:32.380So let me clarify.00:21:32.380 –> 00:21:37.020Section 179 had someone just send me saying, well, can I deduct my a hundred thousand maximum00:21:37.020 –> 00:21:47.900depreciation you can take is $28,900 for the tax year of 2024, $30,500 on a section 17900:21:47.900 –> 00:21:50.400for a heavy SUV.00:21:50.400 –> 00:21:52.240So there is some changes on here.00:21:52.240 –> 00:21:54.660So just make sure you’re doing your taxes.00:21:54.660 –> 00:21:58.380If you do them yourself, or I’m sure your tax person should know this.00:21:58.380 –> 00:22:02.860But just, you know, make sure that you understand that you may not be qualifying for as much00:22:02.860 –> 00:22:09.740as you had in the past on some of the depreciation that was on the books prior to this time period.00:22:09.740 –> 00:22:12.060So again, tax law changes.00:22:12.060 –> 00:22:23.900If you want to join the show, you can 615-737-9986, 615-737-9986, taking your calls, talking about00:22:23.900 –> 00:22:27.780all kinds of different types of limitations.00:22:27.780 –> 00:22:34.700I had someone send an email earlier this week that also asked about a like kind exchange.00:22:34.700 –> 00:22:37.380And she was trying to do it on her primary home.00:22:37.380 –> 00:22:41.900And just so you know, like kind is a business, not an individual.00:22:41.900 –> 00:22:46.020So it is a, it’s part of real personal tangible property.00:22:46.020 –> 00:22:47.940It is investment property.00:22:47.940 –> 00:22:55.540So and you do want to make sure that you are handling that completely right.00:22:55.540 –> 00:23:01.100Most likely you want to hire an attorney that does 1031 exchanges, and then they can handle00:23:01.100 –> 00:23:04.820putting the money in escrow, transferring it to the new property.00:23:04.820 –> 00:23:05.820Everything is kosher.00:23:05.820 –> 00:23:09.780So that way you don’t have to get in the middle of did you ever touch the money?00:23:09.780 –> 00:23:12.740Was the money ever a part of your situation?00:23:12.740 –> 00:23:16.360Very important to see how all that’s going to work and what that’s going to be.00:23:16.360 –> 00:23:20.260Because 1031s, I’m totally an advocate for.00:23:20.260 –> 00:23:23.700But if it’s handled wrong, then it’s not going to be a good day for us.00:23:23.700 –> 00:23:27.100So just making sure that you have some of those, we’re going to come back and talk about00:23:27.100 –> 00:23:30.720some of the changes to fringe benefits and a couple new credits that’s available for00:23:30.720 –> 00:23:32.620businesses with employees.00:23:32.620 –> 00:23:36.700And you can also join the show at 615-737-9986.00:23:36.700 –> 00:23:37.700615-737-9986.00:23:37.700 –> 00:23:49.560I’m Dr. Friday, an enrolled agent licensed by the Internal Revenue Service to do taxes00:23:49.560 –> 00:23:50.560and representation.00:23:50.560 –> 00:23:52.860I’ve been doing this for 20 plus years.00:23:52.860 –> 00:23:56.980So if you have questions and you’re not too sure, even if I don’t know the exact answer,00:23:56.980 –> 00:24:01.380I guarantee you I can find someone that’s an expert most likely, or at least someone00:24:01.380 –> 00:24:06.580that handles that part of tax law or business law that can help you get your situation straightened00:24:06.580 –> 00:24:07.580out.00:24:07.580 –> 00:24:08.580So we’re going to take a break.00:24:08.580 –> 00:24:11.580We get back, we’ll take to your call 615-737-9986.00:24:11.580 –> 00:24:19.620Alrighty, we are back here live in studio.00:24:19.620 –> 00:24:25.620And if you’ve got questions, you can join the show 615-737-9986.00:24:25.620 –> 00:24:27.620615-737-9986.00:24:27.620 –> 00:24:38.500As I said before, Monday will be the beginning of actually filing taxes from that point on.00:24:38.500 –> 00:24:45.220Most people should be able to see their refunds within 21 days from the date of filing.00:24:45.220 –> 00:24:46.540Some people get it faster.00:24:46.540 –> 00:24:47.840Some people get slower.00:24:47.840 –> 00:24:55.060They have told that people with earned income or child credits may be out till mid February.00:24:55.060 –> 00:24:59.780That being the fact because they’re trying to verify the children and just making sure00:24:59.780 –> 00:25:05.780that they are giving the credit to the right information for all of that.00:25:05.780 –> 00:25:09.020There is actually a big movement on that.00:25:09.020 –> 00:25:12.940Another important thing is the IRS is also saying, reminding taxpayers that they must00:25:12.940 –> 00:25:18.700again, answer the digital asset question and report it on your 2023.00:25:18.700 –> 00:25:23.380That would mean cryptocurrency or other digital assets that you might have.00:25:23.380 –> 00:25:24.600You have to ask.00:25:24.600 –> 00:25:27.100Now they’re asking, have you ever purchased it?00:25:27.100 –> 00:25:30.540Have you ever sold it?00:25:30.540 –> 00:25:34.460It’s quite the question that we have to deal with on that one.00:25:34.460 –> 00:25:36.820So it’s a little bit more than last time.00:25:36.820 –> 00:25:40.720I think it started out basically 2021 was pretty simple.00:25:40.720 –> 00:25:43.940Did you sell any virtual currency?00:25:43.940 –> 00:25:48.620Now they’re moving into, and also more questions on that.00:25:48.620 –> 00:25:55.860Also for business owners, they are double checking your NIC number to make sure they’ve00:25:55.860 –> 00:25:59.620changed some of those regulations as far as what fits into what.00:25:59.620 –> 00:26:03.640So when you file the return, you’ll need to double check the code.00:26:03.640 –> 00:26:08.540It’s a six digit code that they have out there that you’ll have on your tax return.00:26:08.540 –> 00:26:17.860So if you have any questions, again, you can join the show, 615-737-9986.00:26:17.860 –> 00:26:19.220Let’s go to Pat in Cookville.00:26:19.220 –> 00:26:22.100Hey Pat, what can I do for you?00:26:22.100 –> 00:26:28.660Yeah, I’m just wondering, I heard on your show that when you gift your required minimum00:26:28.660 –> 00:26:33.060distribution to a charity, it’s non-taxable to you.00:26:33.060 –> 00:26:34.780So I’m wondering how that would work.00:26:34.780 –> 00:26:38.360Is it a separate form to fill out on tax return?00:26:38.360 –> 00:26:41.380It falls under the 8606.00:26:41.380 –> 00:26:44.500So basically you’re going to have, it is, it’s a continuation.00:26:44.500 –> 00:26:49.620So if you’re filling out the 1099-R, where you put that in the tax software, there is00:26:49.620 –> 00:26:53.580a section that will ask what your qualified charitable deduction is.00:26:53.580 –> 00:26:58.100And then if you’re multiple, I usually list the charities that it went to and how much.00:26:58.100 –> 00:27:00.980Some of my people do multiple if it’s only one.00:27:00.980 –> 00:27:07.780And then that information then will immediately reduce it from the 1040 on the front page.00:27:07.780 –> 00:27:12.220So it’s a hundred percent tax deduction.00:27:12.220 –> 00:27:15.540So the form is 8606 that I would need to fill out?00:27:15.540 –> 00:27:16.540Right, right.00:27:16.540 –> 00:27:21.100You’re going to complete the 1099-R, but it will bounce over to the 8606, which is where00:27:21.100 –> 00:27:26.380all the information for retirement end up working its way through.00:27:26.380 –> 00:27:32.900Yeah, I don’t, I don’t complete the 1099-R.00:27:32.900 –> 00:27:35.820You receive it and then you have to put it into your tax software.00:27:35.820 –> 00:27:37.420I’m assuming you use a tax software.00:27:37.420 –> 00:27:40.220I don’t know if you use paper or do you do tax software?00:27:40.220 –> 00:27:42.340No, I do it on paper.00:27:42.340 –> 00:27:43.340Okay.00:27:43.340 –> 00:27:45.340So then you’re going right onto the 1040.00:27:45.340 –> 00:27:50.340So in your case, you’re just going to, let’s see here.00:27:50.340 –> 00:27:53.600You’re going to complete, you’re going to, since you don’t, you know, this is what happens00:27:53.600 –> 00:27:55.100when you put that on.00:27:55.100 –> 00:28:01.340Because on ours, basically all you’re going to do is you’re just going to put it in under00:28:01.340 –> 00:28:03.220gross distribution on the 1040.00:28:03.220 –> 00:28:07.900You know, on the first side, there’s usually two boxes for the 10 on the 1040, what’s gross00:28:07.900 –> 00:28:09.740and what’s taxable.00:28:09.740 –> 00:28:14.300You’re going to put the total amount of your gross under the gross one and then taxable00:28:14.300 –> 00:28:18.220will be zero or the remaining amount be that if you didn’t give a hundred percent of your00:28:18.220 –> 00:28:19.2201099.00:28:19.220 –> 00:28:20.220Okay.00:28:20.220 –> 00:28:21.220That makes sense.00:28:21.220 –> 00:28:26.940So box, I think it’s 5A would be the gross amount.00:28:26.940 –> 00:28:28.9005B would be less the charity.00:28:28.900 –> 00:28:29.900Yeah.00:28:29.900 –> 00:28:30.900Okay.00:28:30.900 –> 00:28:31.900Thank you very much.00:28:31.900 –> 00:28:32.900No problem.00:28:32.900 –> 00:28:33.900All right.00:28:33.900 –> 00:28:36.420Let’s go to Lisa in Nashville and see if I can help.00:28:36.420 –> 00:28:37.420Hey, Lisa.00:28:37.420 –> 00:28:38.420Hi, Dr. Friday.00:28:38.420 –> 00:28:39.420You’re awesome.00:28:39.420 –> 00:28:40.420I just absolutely love you.00:28:40.420 –> 00:28:41.420I had a quick question.00:28:41.420 –> 00:28:42.420My mom’s 84.00:28:42.420 –> 00:28:51.740She collects social security for, you know, for years she’s retired, but she works about00:28:51.740 –> 00:28:57.42035 hours at Sam’s club just to keep busy and they take social security, you know, out of00:28:57.420 –> 00:28:58.420her paycheck.00:28:58.420 –> 00:29:01.420Are they supposed to be?00:29:01.420 –> 00:29:02.420Yes.00:29:02.420 –> 00:29:06.940Unfortunately, there is nothing in tax law that says just because you’re a worker and00:29:06.940 –> 00:29:10.820you don’t want to sit at home and watch the grass grow that you don’t have to pay into00:29:10.820 –> 00:29:11.820social security.00:29:11.820 –> 00:29:16.520Theoretically every year they reevaluate, but the fact is, let’s be honest, she made00:29:16.520 –> 00:29:23.420more money or her husband probably made higher income back in the day than it did, you know,00:29:23.420 –> 00:29:24.420than she is now.00:29:24.420 –> 00:29:28.380So she probably, but yes, there’s no time that you don’t pay social security no matter00:29:28.380 –> 00:29:29.380how old you are.00:29:29.380 –> 00:29:30.380It’s just a shame.00:29:30.380 –> 00:29:35.300So it’s, so it’s, so it’s correct coming out of her paycheck even though she’s like social00:29:35.300 –> 00:29:36.300security.00:29:36.300 –> 00:29:37.300Okay.00:29:37.300 –> 00:29:38.300That’s it.00:29:38.300 –> 00:29:39.300Okay.00:29:39.300 –> 00:29:40.300Love your show.00:29:40.300 –> 00:29:41.300Great question.00:29:41.300 –> 00:29:42.300Thank you so much.00:29:42.300 –> 00:29:43.300All right.00:29:43.300 –> 00:29:44.300Bye.00:29:44.300 –> 00:29:47.860Again, I was talking about the digital assets says at this time during 2023, did you receive00:29:47.860 –> 00:29:54.740as a reward award or payment of property or service, sell, exchange, otherwise dispose00:29:54.740 –> 00:30:00.100of digital assets or financial interest in digital assets?00:30:00.100 –> 00:30:06.420So pretty much if you have any digital assets, even if you’re just sitting on it, you pretty00:30:06.420 –> 00:30:11.060much need to say yes to that question as far as I’m concerned, because most people have00:30:11.060 –> 00:30:16.380either purchased it, you know, um, and what they’re, they’re really looking for, not the00:30:16.380 –> 00:30:19.700person that went out and brought Bitcoin because that’s an exchange.00:30:19.700 –> 00:30:24.760What they’re looking for is somebody receiving it in a form of a tax or award that normally00:30:24.760 –> 00:30:30.460would come through the tax return on a 1099 MIS or some other format.00:30:30.460 –> 00:30:34.420And so they’re trying to make sure that people are not, not reporting income, right?00:30:34.420 –> 00:30:36.380I mean, that’s what it comes down to, right guys.00:30:36.380 –> 00:30:41.560They’re just looking to make sure that people aren’t working on the world of digital and00:30:41.560 –> 00:30:42.560ignoring it.00:30:42.560 –> 00:30:49.960I will say that more and more of the digital wallets are now reporting to the IRS.00:30:49.960 –> 00:30:53.960So just keep that again out there.00:30:53.960 –> 00:30:58.640If you know, if you are a person that does things in digital currency, you know, you’re00:30:58.640 –> 00:31:00.540not really hiding, it’s up to you.00:31:00.540 –> 00:31:04.520But as far as your tax person, if I’m your tax person, I’m going to ask that question00:31:04.520 –> 00:31:05.920and you’re going to answer it.00:31:05.920 –> 00:31:10.980And that will be the answer I go with, because I will have no way of knowing, um, if you00:31:10.980 –> 00:31:15.960have virtual currency or not, but I do believe the IRS is getting more and more access to00:31:15.960 –> 00:31:17.720more and more of that information.00:31:17.720 –> 00:31:20.440So I don’t think you’re really hiding.00:31:20.440 –> 00:31:21.920And you know, I’m just, I’ll be honest.00:31:21.920 –> 00:31:23.400I’ve always been one of those people.00:31:23.400 –> 00:31:27.680I like to sleep at night and I, I just never been one of those people that I’m going to00:31:27.680 –> 00:31:31.960turn around and you know, I’ll be the one call that, uh, just say no to something and00:31:31.960 –> 00:31:34.320then find out that you didn’t have it.00:31:34.320 –> 00:31:39.600Um, and if you do have cryptocurrency and maybe some of it has went, um, completely00:31:39.600 –> 00:31:46.200down to zero, keep in mind that converting, um, and changing, um, to, to some of that00:31:46.200 –> 00:31:52.520digital currency, you may not be able to deduct it because it wasn’t possibly reported properly.00:31:52.520 –> 00:31:54.720Or if you’re holding digital in your wallet.00:31:54.720 –> 00:31:59.000Um, so the IRS says if you’re holding digital currency in a wallet or an account, you can00:31:59.000 –> 00:32:01.080say no to that question.00:32:01.080 –> 00:32:04.160Transfer digital assets from one wallet to another account.00:32:04.160 –> 00:32:05.560You can say no.00:32:05.560 –> 00:32:09.960Purchase the digital assets using a US or other currency, including through electronic00:32:09.960 –> 00:32:11.160platforms.00:32:11.160 –> 00:32:16.160You can say no, but if you receive digital as a payment of property, yes.00:32:16.160 –> 00:32:19.960If you received assets resulting from award or reward, yes.00:32:19.960 –> 00:32:24.360Digital currency asset resulting from mining, which means if you’re creating digital currency00:32:24.360 –> 00:32:27.200stakes or similar activities, you have to say yes.00:32:27.200 –> 00:32:31.920Digital assets resulting from hard fork, a branch of the crypto black chain that is a00:32:31.920 –> 00:32:34.160split, probably a little more than most of them.00:32:34.160 –> 00:32:37.400I know a few of you guys are hardcore, so I shouldn’t say that.00:32:37.400 –> 00:32:41.620Sold any digital currency or disposed of any financial digital currency.00:32:41.620 –> 00:32:44.140The answer to that question would be yes.00:32:44.140 –> 00:32:47.520So if you’ve got questions, you can always call the show or you can email me at Friday00:32:47.520 –> 00:32:49.720at drfriday.com.00:32:49.720 –> 00:32:55.160I will be more than glad to do my best to answer those questions and do the best that00:32:55.160 –> 00:33:01.280we can to get you on the right track because that’s the important part of everything, right?00:33:01.280 –> 00:33:03.280Just making sure that we’re all reporting our things.00:33:03.280 –> 00:33:08.320We don’t want to be looking over our shoulder dealing with the IRS two or three years later00:33:08.320 –> 00:33:11.960had a situation where normally six years is the window.00:33:11.960 –> 00:33:15.000As long as you stay in compliance, most things are good.00:33:15.000 –> 00:33:18.760But I’ve had a gentleman come in and he was self-employed for a number of years and we’re00:33:18.760 –> 00:33:23.680having to go back to 2012, 2013 dealing with some of those issues because they weren’t00:33:23.680 –> 00:33:24.800dealt with.00:33:24.800 –> 00:33:30.440And so making sure that you have all of your taxes and you know, even if you can’t pay00:33:30.440 –> 00:33:33.360them, filing them are kind of important.00:33:33.360 –> 00:33:38.320If you file, then the time clock starts and then you know, they only have 10 years to00:33:38.320 –> 00:33:42.800collect unless we stop the time clock doing something like an offer and compromise or00:33:42.800 –> 00:33:44.420something like that.00:33:44.420 –> 00:33:50.320It’s just really important that you understand how the time for collection works in 10 years00:33:50.320 –> 00:33:51.320is a long time.00:33:51.320 –> 00:33:54.840You know, right now you’d be having a really, really hard time, which might be a perfect00:33:54.840 –> 00:33:59.920time to have the conversation with the IRS because when you’re not at your best is when00:33:59.920 –> 00:34:01.520you kind of want to have the call.00:34:01.520 –> 00:34:06.380If you wait till you’re back on your feet and you’ve got equity in a home and your jobs00:34:06.380 –> 00:34:10.760are back up, then you can end up having to pay more or not even be able to really make00:34:10.760 –> 00:34:11.760a deal.00:34:11.760 –> 00:34:12.760Just pay off the total amount.00:34:12.760 –> 00:34:13.760All right.00:34:13.760 –> 00:34:17.480Let’s go really quick to Jerry in McMinnville and see if I could answer his question before00:34:17.480 –> 00:34:18.480the break.00:34:18.480 –> 00:34:19.480Hey, Jerry, what’s happening?00:34:19.480 –> 00:34:20.480Not much.00:34:20.480 –> 00:34:27.800I was wondering if I sold some land and made a profit off of it and I reinvest the money00:34:27.800 –> 00:34:35.160in some property in Florida, let’s say in Tennessee, can I count the profit off of the00:34:35.160 –> 00:34:37.480purchase price of the other place?00:34:37.480 –> 00:34:39.680No, we don’t have that on the tax code.00:34:39.680 –> 00:34:43.960In fact, I had a young lady come in that had thought that that was the case and she’d sold00:34:43.960 –> 00:34:46.440and brought and sold and bought.00:34:46.440 –> 00:34:48.920Right now it would be straight capital gains.00:34:48.920 –> 00:34:54.560Now you might be an individual that might want to talk to someone about a 1031 exchange00:34:54.560 –> 00:34:56.920if this isn’t your primary home.00:34:56.920 –> 00:35:00.360Is it your primary or is this just some dirt, some land that you own?00:35:00.360 –> 00:35:06.880Well, the land was just the investment and the home is like a vacation home that I bought00:35:06.880 –> 00:35:08.200in Florida.00:35:08.200 –> 00:35:14.200So if the land can turn into a vacation home, as long as it’s a vacation home in which you’re00:35:14.200 –> 00:35:15.840Airbnb or renting out.00:35:15.840 –> 00:35:20.840If it’s just a vacation home for you and your family, then a 1031 would not be allowed.00:35:20.840 –> 00:35:25.640But if you go from investment property to investment property, you could do a 1031,00:35:25.640 –> 00:35:31.280not pay tax on the land sale, change the basis on the new house based on that, and then you00:35:31.280 –> 00:35:32.280can keep that.00:35:32.280 –> 00:35:36.200And then when that one sells, you basically pay capital gains on the whole thing or continue00:35:36.200 –> 00:35:38.760doing 1031 exchanges.00:35:38.760 –> 00:35:41.400But that would be something to think about, Jerry.00:35:41.400 –> 00:35:45.560If it’s a decent amount of capital gains, if we’re only looking at 20 or 30,000, it’s00:35:45.560 –> 00:35:47.000probably not worth the headache.00:35:47.000 –> 00:35:52.180But if you’re looking at $100,000 or more, it may be worth the conversation of having00:35:52.180 –> 00:35:57.160a 1031 exchange, taking your investment land and investing it into an investment property00:35:57.160 –> 00:35:58.160in Florida.00:35:58.160 –> 00:36:00.080I’ve got a number of people that have done it very successfully.00:36:00.080 –> 00:36:04.360Well, I didn’t say in the forties, what would you do?00:36:04.360 –> 00:36:05.840If the profit was 40?00:36:05.840 –> 00:36:10.280Yeah, I mean, the capital gain would have been 40, what I’ve made out of the land.00:36:10.280 –> 00:36:15.200Well, I’m just saying, if the capital gains like $40,000 and you’ve got 15%, that’s like00:36:15.200 –> 00:36:19.080$6,000, $7,000 in taxes.00:36:19.080 –> 00:36:25.480So personally, I probably would just pay it and not have the government in any of my investment.00:36:25.480 –> 00:36:26.480You know, that would be-00:36:26.480 –> 00:36:27.480Okay, thank you.00:36:27.480 –> 00:36:28.480No problem, buddy.00:36:28.480 –> 00:36:29.480Thanks.00:36:29.480 –> 00:36:31.040All right, we’re going to take another break here.00:36:31.040 –> 00:36:33.080We get back, we can take more of your calls.00:36:33.080 –> 00:36:36.400615-737-9986.00:36:36.400 –> 00:36:37.400We’ll be right back.00:36:37.400 –> 00:36:38.400All righty, we are back.00:36:38.400 –> 00:36:43.680This is the last part of the show.00:36:43.680 –> 00:36:47.080So if you’ve been holding your breath and you’re like, “Oh my gosh, I’ve got a question00:36:47.080 –> 00:36:52.760and I’m not sure if I want to ask,” go ahead and pick up the phone.00:36:52.760 –> 00:36:53.760615-737-9986.00:36:54.760 –> 00:37:00.800It’s going to start getting busier and busier.00:37:00.800 –> 00:37:02.400You should have most of your returns.00:37:02.400 –> 00:37:06.680So employers, make sure you’ve got your W-2s.00:37:06.680 –> 00:37:09.920Now keep in mind, many employers are sending out links.00:37:09.920 –> 00:37:13.360They’re not actually having to print them and send them in the mail.00:37:13.360 –> 00:37:14.680It’s very expensive.00:37:14.680 –> 00:37:20.280They’re actually going to just basically be sending you a link to download your W-2.00:37:20.280 –> 00:37:24.400And so just keep looking for that if you haven’t received it yet.00:37:24.400 –> 00:37:30.080Know organizations like ADP, which is who we use, or Paycheck or any of the other ones,00:37:30.080 –> 00:37:33.560most of them have links for the employees to download their pay stubs along with their00:37:33.560 –> 00:37:36.200W-2s and those were available weeks ago.00:37:36.200 –> 00:37:38.640So you’re able to get your W-2s.00:37:38.640 –> 00:37:45.520If you have 1099s, 1099 miscellaneous or 1099 NECs, that as an employer, any service that00:37:45.520 –> 00:37:51.200someone provides to you that they are not a corporation, then you need to be 1099ing00:37:51.200 –> 00:37:52.200them.00:37:52.200 –> 00:37:56.960So that means if you’re a person that has rentals, I use this a lot, but I know many00:37:56.960 –> 00:38:03.640people forget, rental properties and you had a new repair on your AC unit, or you have00:38:03.640 –> 00:38:09.920a lawn person that cuts the grass, or whatever you may have had done, windows replaced, then00:38:09.920 –> 00:38:13.560those people should be receiving 1099s.00:38:13.560 –> 00:38:16.000So that way they have the information for what you have.00:38:16.000 –> 00:38:20.600Now, if they’re a corporation, you do not need to 1099 them.00:38:20.600 –> 00:38:28.240Also for all of those that might’ve applied for the ERTC credits or the ERC credits, you00:38:28.240 –> 00:38:32.920need to make sure there’s, for one, there’s huge a number of audits going on.00:38:32.920 –> 00:38:38.560So you may get a love letter that says they’re auditing your employee retention.00:38:38.560 –> 00:38:43.240And if you didn’t use a CPA firm, maybe you just use one of those that advertised.00:38:43.240 –> 00:38:47.400I don’t know if they’re going to stand behind the work that they did.00:38:47.400 –> 00:38:52.200I know that we actually contracted out to a CPA firm for this reason, to make sure things00:38:52.200 –> 00:38:57.080were filed properly, that the information was submitted properly, and that that way00:38:57.080 –> 00:39:02.120they also someone that would stand behind the work if something were to happen.00:39:02.120 –> 00:39:06.120Because this is a very specific part of the code and it’s very important to make sure00:39:06.120 –> 00:39:12.060that you had 941Xs that got filed, all kinds of different things that had to go.00:39:12.060 –> 00:39:18.280And so it’s really important that if you file for it, and April is basically the end of00:39:18.280 –> 00:39:20.340when they’re going to be giving those credits.00:39:20.340 –> 00:39:25.380And I know they’re way behind on some of the processing, but they’ve also opened up a ton00:39:25.380 –> 00:39:27.020of audits in this category.00:39:27.020 –> 00:39:32.940So again, if you receive the ERC credit, remember first, that’s taxable income.00:39:32.940 –> 00:39:37.420So theoretically the years that they refunded it, you need to go back to those years and00:39:37.420 –> 00:39:42.380file those returns and you need to make sure you picked up all the money on your tax return,00:39:42.380 –> 00:39:44.820because that is not like PPP money.00:39:44.820 –> 00:39:47.120This was completely taxable.00:39:47.120 –> 00:39:51.860Second part of that conversation is if you are still interested in getting ERC, this00:39:51.860 –> 00:39:53.740is your employee retention credit.00:39:53.740 –> 00:39:59.180There’s probably every week, five or six people calling your phones if you’re a business owner,00:39:59.180 –> 00:40:01.260saying that they can process it.00:40:01.260 –> 00:40:05.660But it’s very important to make sure you do have someone that really understands the system00:40:05.660 –> 00:40:10.980because last thing you really want to do is get yourself in trouble because of that.00:40:10.980 –> 00:40:15.860And 1099s, 1099-MIS again are due the last day of January.00:40:15.860 –> 00:40:20.620So next Wednesday or thereabouts, we’re going to have to make sure all of those have been00:40:20.620 –> 00:40:21.620put out.00:40:21.620 –> 00:40:27.040They can be sent electronically or you mail them to the individuals.00:40:27.040 –> 00:40:29.000But again, it is your responsibility.00:40:29.000 –> 00:40:34.860Keep in mind, as far as 1099 individuals, if you don’t receive a 1099, that doesn’t00:40:34.860 –> 00:40:38.260mean you don’t report the income.00:40:38.260 –> 00:40:43.380If you were paid by anybody, it doesn’t make a difference who, you pick up all of the income,00:40:43.380 –> 00:40:48.460even if it came in through cash, no matter what, it went towards your lifestyle, which00:40:48.460 –> 00:40:52.540means that you want to make sure you can justify how did you pay for your car payments, your00:40:52.540 –> 00:40:57.940car repairs, your mortgage, your property tax, your food bill, your clothing bill, all00:40:57.940 –> 00:40:59.500of that went towards that.00:40:59.500 –> 00:41:03.540And if you’re showing that you didn’t make all that money, then likeliness is it’s going00:41:03.540 –> 00:41:08.140to eventually, eventually, I’m not going to say I’m, I don’t know if you’ll ever be audited00:41:08.140 –> 00:41:13.420at all, but I think it’s important to make sure tax law says you need to file all of00:41:13.420 –> 00:41:15.620it when it comes time.00:41:15.620 –> 00:41:18.860If you never get 1099, it’s not there.00:41:18.860 –> 00:41:21.180They’re just recapping how much they sent to you.00:41:21.180 –> 00:41:25.200Your job is to track all of the income that comes to you no matter what.00:41:25.200 –> 00:41:30.360So very important to check that you can also, once you start e-filing again, e-file opens00:41:30.360 –> 00:41:32.260on Monday, the 29th.00:41:32.260 –> 00:41:38.740That means once the returns are being accepted, you can then go to irs.gov, click on refund,00:41:38.740 –> 00:41:41.740track your refunds from there.00:41:41.740 –> 00:41:48.580Also a major policy change will end unannounced visits to taxpayers.00:41:48.580 –> 00:41:50.140This is something that was going on.00:41:50.140 –> 00:41:55.060The IRS announced a major policy change that will end unannounced visits to taxpayers by00:41:55.060 –> 00:41:59.620agent revenue officers to reduce public confusion and increase safety.00:41:59.620 –> 00:42:04.020That’s great news because I tell people all the time, the IRS isn’t going to just show00:42:04.020 –> 00:42:05.020up.00:42:05.020 –> 00:42:06.020They’re not going to call.00:42:06.020 –> 00:42:07.020They’re going to send you a bunch of letters.00:42:07.020 –> 00:42:08.380You’re going to have time.00:42:08.380 –> 00:42:12.000This is a huge change though, because for a long time, revenue officers would come knock00:42:12.000 –> 00:42:16.220on doors just to try to get information because people are avoiding them.00:42:16.220 –> 00:42:18.320But that has come down the line.00:42:18.320 –> 00:42:21.780So that’s something that’s kind of new, a really unique circumstance.00:42:21.780 –> 00:42:24.340But I think part of that is for safety.00:42:24.340 –> 00:42:29.540I think a lot of people, for one, think that every revenue officer that comes in or comes00:42:29.540 –> 00:42:34.060around carries a gun and that they’re going to be threatening.00:42:34.060 –> 00:42:35.060Not the case.00:42:35.060 –> 00:42:40.480Many, many good friends that are working for the IRS, they’re a collection agency, guys.00:42:40.480 –> 00:42:44.340But I do think it’s probably for their safety that we don’t have them knocking on doors00:42:44.340 –> 00:42:47.020and just showing up unannounced.00:42:47.020 –> 00:42:50.620Doesn’t mean they’re not going to drive by your house and see how you live.00:42:50.620 –> 00:42:52.420I have had a lot of audits.00:42:52.420 –> 00:42:56.620And one of the first things a revenue officer will say to me is that, “Hey, we drove by00:42:56.620 –> 00:42:57.620the house.00:42:57.620 –> 00:42:58.620We saw where they live.00:42:58.620 –> 00:42:59.620We saw the cars.00:42:59.620 –> 00:43:03.580We saw the toys, the boat, all these different things.00:43:03.580 –> 00:43:08.580And if you have those kinds of circumstances, again, just remember that these are the kinds00:43:08.580 –> 00:43:13.540of things that you don’t want to come back and bite you later.00:43:13.540 –> 00:43:17.180Better to show it on your return, show the information, and then that way you can sleep00:43:17.180 –> 00:43:18.180well at night.”00:43:18.180 –> 00:43:19.180All right, guys.00:43:19.180 –> 00:43:22.380So that will be pretty much all we have for the show today.00:43:22.380 –> 00:43:25.020We’re going to be wrapping up here in just a few minutes.00:43:25.020 –> 00:43:31.380So if you want to ask a question during the week, I will do my best to respond to emails.00:43:31.380 –> 00:43:35.780I can’t say it’s going to happen as fast as it was prior to now because we’re kind of00:43:35.780 –> 00:43:38.860working seven-day weeks now, working on taxes.00:43:38.860 –> 00:43:41.460But you can email Friday@DRFriday.com.00:43:41.460 –> 00:43:48.180Again, Friday, F-R-I-D-A-Y @DRFriday.com.00:43:48.180 –> 00:43:53.460Also if you want to set up a time to talk, if you’ve got tax issues or maybe you haven’t00:43:53.460 –> 00:43:59.180filed taxes in a long time and you’re like, “Oh my gosh, I’ve got to get myself back together.00:43:59.180 –> 00:44:03.580I’m tired of waiting to see if the next ball is going to drop,” or maybe they’re sending00:44:03.580 –> 00:44:08.260letters to your employer, which can be very embarrassing, you can also call my office00:44:08.260 –> 00:44:11.820Monday morning, 615-367-0819.00:44:11.820 –> 00:44:13.300615-367-0819.00:44:13.300 –> 00:44:19.940615-367-0819.00:44:19.940 –> 00:44:24.820If you are an existing client of mine and you haven’t yet set up your tax appointment,00:44:24.820 –> 00:44:31.420please call our office again at 615-367-0819 or text that number so we can get you on the00:44:31.420 –> 00:44:32.420calendars.00:44:32.420 –> 00:44:37.700We are pretty much filled up for new clients, but returning clients always, always will00:44:37.700 –> 00:44:38.820have time for you guys.00:44:38.820 –> 00:44:43.540So I need to get you on the calendar so we can make sure we’ve got your taxes ready for00:44:43.540 –> 00:44:45.620you in time to prepare those.00:44:45.620 –> 00:44:50.620If you, again, if you haven’t filed taxes, maybe you have a certain or unique situation00:44:50.620 –> 00:44:54.940or you’ve received some love letters and you’re really not sure how to respond.00:44:54.940 –> 00:44:57.700I mean, we’ve had some unique love letters in the last couple of weeks.00:44:57.700 –> 00:45:02.860I’ll be honest, things that are coming back from 17, 18, 19, normally they’re only going00:45:02.860 –> 00:45:07.900back a couple of years, but I’ve had a couple that have just come back, 941 taxes, different00:45:07.900 –> 00:45:12.460things like that where it looks like maybe the IRS is just preparing forms because they00:45:12.460 –> 00:45:15.220didn’t receive them in the proper time.00:45:15.220 –> 00:45:19.380But just because you’ve got a letter that says you owe money doesn’t always mean you00:45:19.380 –> 00:45:21.860truly owe that money.00:45:21.860 –> 00:45:27.940But if you don’t respond and get to the bottom of it, you may owe it because after a while00:45:27.940 –> 00:45:31.740the IRS is going to take their numbers and not pay attention to what you’re saying because00:45:31.740 –> 00:45:33.300they’ve already sent out the information.00:45:33.300 –> 00:45:38.660You had time to review and change this information and it wasn’t done.00:45:38.660 –> 00:45:42.060So again, not everything’s going to stay as it is.00:45:42.060 –> 00:45:45.260If you just ignore the IRS, it’s not always going to be a good thing.00:45:45.260 –> 00:45:55.140All right, so one more time, phone number to the office, 615-367-0819, 615-367-0819,00:45:55.140 –> 00:45:57.820Friday at drfriday.com.00:45:57.820 –> 00:46:00.860Probably one of the easiest ways to get ahold of me.00:46:00.860 –> 00:46:06.820Email Friday at drfriday.com or check us out on the web, drfriday.com.00:46:06.820 –> 00:46:08.780You can find out who I am, what I do.00:46:08.780 –> 00:46:15.100I am an enrolled agent licensed by the Internal Revenue Service to do taxes and representation,00:46:15.100 –> 00:46:16.380which basically all I do.00:46:16.380 –> 00:46:20.900So it means I’m kind of like the shield between you and the IRS, but we’re also here to help00:46:20.900 –> 00:46:26.020you get into compliance and understand what is your taxes that needs to be filed, where00:46:26.020 –> 00:46:27.500are you at and what you need to do.00:46:27.500 –> 00:46:29.060I hope you guys enjoyed this Saturday.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday delves into the complexities of the mortgage interest deduction, a topic that can stir quite a bit of confusion among homeowners. She clarifies that while many believe they can deduct the entire amount of interest on mortgages up to $750,000, the reality is nuanced, especially for those who have refinanced their homes in recent years. Dr. Friday highlights the changes in deduction limits from over a million dollars to the current cap at $750,000, noting the significant impact of rising house values in Tennessee. This episode is essential for anyone navigating the intricacies of itemizing deductions and understanding how refinancing affects their tax situation.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Mortgage interest deduction. Boy, can this cause some conflict because if you’re able to itemize, many people think they can just write off their entire amount of interest even if the mortgage is over $750,000. And for many, they may not have, they’ve done a refinance, right? Because many people reduce their interest, they refinance their home in the last couple years. And if you did that, you may have had an old mortgage that would have qualified over a million dollars. The new ones only qualify up to $750,000, which many people listening may say that’s not a problem. But in Tennessee, house values went up a lot in the last couple years. If your mortgage is over $750,000, you can only take interest up to $750,000.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this insightful one-minute moment, Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, highlights the importance of understanding IRA contribution deductions and the impact of income brackets on your tax benefits. She emphasizes the significance of consulting a financial planner to decide between contributing to a traditional IRA or a Roth IRA, considering the long-term tax advantages. Whether it’s saving taxes now or in the future, Dr. Friday underscores the potential to leverage the saver’s credit for those in the 12% tax bracket, advising listeners to make informed decisions for their financial health. Tune into the Dr. Friday Call-In Show every Saturday afternoon for more expert financial guidance.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

IRA contribution deductions. You may be able to deduct contributions to a traditional IRA, though there are some things that you have to think about. One of it is your income brackets. Also, sometimes I’ll meet people, and keep in mind guys, I’m not a financial planner, but from the tax standpoint, if you’re in the 12% tax bracket, you can still get saver’s credit if you make a little less, or you can get the growth for the rest of your life in a Roth. So make sure you talk to a financial planner before making the decision. Is it a traditional IRA or a Roth IRA? Save taxes today or save taxes later? Big question.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday addresses the critical aspect of deducting gambling losses on your tax return. She highlights that gambling losses can only be deducted up to the amount of gambling winnings, emphasizing the importance of keeping thorough records of all gambling activities. Dr. Friday shares a cautionary tale of an individual who won a million dollars but failed to save his lottery tickets, resulting in an inability to deduct his losses and facing significant tax liabilities. Additionally, she reminds listeners that gifts to family and friends from winnings are not tax-deductible, underscoring the importance of tracking and documenting gambling expenses meticulously to avoid unexpected tax payments.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Let’s talk about gambling losses. Gambling losses and expenses are a deduction only to the extent of gambling winning. So if you’re not making money, guys, that loss is not something you’re going to be putting on your tax return. And if you did win the lottery, you better have saved all of your lottery tickets the entire time of your life, because that’s the only time you’ll be able to run it off up to whatever you may have won. So I had a guy that won a million dollars last year. It was great. It was wonderful. He did not save one lottery ticket. Decided to gift a lot of it to family and friends, which is not a tax deduction. So paying taxes is what he’ll be doing, and so will you if you don’t track your expenses.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this insightful episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, demystifies the complexities surrounding state and local taxes (SALT). She explains common misconceptions about property taxes and the opportunity to deduct sales taxes on significant purchases like mobile homes, motor homes, boats, or jet skis. Dr. Friday highlights the cap on SALT deductions – $10,000 for joint filers and $5,000 for those married filing separately, emphasizing the importance of careful planning to maximize deductions without losing tax dollars. Tune in to the Dr. Friday Call-In Show live every Saturday for more tax insights.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Let’s talk about state and local taxes, SALT taxes. So many times people will say, I double pay my property taxes. And of course, or I went out and I purchased a mobile home or a motor home or, or some sort of boat or jet ski. And so they want to write off the extra sales tax. And that is legitimate, but keep in mind sales tax, property taxes, personality tax, which in Tennessee, we really can’t deduct because there’s no state income tax involved in it. Then you only can get $10,000. Married, finally separately $5,000. So as hard as you work to make sure that number is as high as possible, you may be losing tax dollars when dealing with SALT tax.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this Dr. Friday Tax Tips – One Minute Moment, Dr. Friday addresses the complexities of maximizing medical deductions on tax returns. She outlines the initial hurdle of surpassing 7.5% of adjusted gross income before itemizing deductions, a step made more challenging with today’s higher standard deductions. The focus shifts to an often-overlooked opportunity for seniors—deducting nursing home or care facility expenses as medical deductions. Dr. Friday emphasizes how significant portions of these costs can qualify as medical expenses, potentially reducing tax liabilities for seniors. This insightful tip highlights the importance of exploring all avenues to minimize taxes, especially for seniors in care facilities.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Guys, this is a hard one. It’s not hard to do, but you have to first exceed 7.5 of your adjusted gross income. Then once you’ve done that, you still have to itemize. And nowadays with the higher itemization, it’s really hard to really use or maximize medical. But I will say there is one thing I have done or found out that many people don’t think about is really with seniors. When they’re ending up in nursing homes or care facilities, that is mostly a chunk of that is considered medical as a way of maybe taking it off on their taxes to help you reduce their tax liabilities.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, an enrolled agent and president of Dr. Friday’s Tax and Financial Firm, shares her extensive experience in tax representation and resolution. For over 15 years, Dr. Friday has been a familiar voice on the radio, providing invaluable advice and support to those facing challenges with the IRS. Whether it’s responding to IRS notices, negotiating tax debts, or simply seeking guidance on how to get back on track with tax obligations, Dr. Friday offers her expertise to help taxpayers find relief and start anew. She highlights the importance of professional help in navigating the complexities of tax issues and invites listeners to join her live Call-In Show every Saturday afternoon for direct advice and support.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one minute moment.

You guys have probably been hearing me on the radio for the last 15 years and been doing a wonderful time listening to me and it’s appreciated. But as an enrolled agent, really my job is helping you do taxes and representation, which means if you’re getting the love letters in the mail or you’re not too sure which way you can go, all you know is that you can’t afford to pay the IRS or you get into this cycle and you’re just not sure, how do I start over so I can get the IRS back on track? Guess what? That’s what I do. I can help you get straight with the IRS. Call 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this Dr. Friday Tax Tips – One Minute Moment, Dr. Friday discusses strategies for taxpayers who itemize deductions, particularly focusing on charitable contributions. She explains that for those who itemize, consolidating several years’ worth of charitable donations into one year can be beneficial. This approach helps in exceeding the standard deduction threshold, thereby allowing the taxpayer to deduct their charitable contributions effectively. Dr. Friday also touches on other potential itemizable deductions such as sales tax and property tax, emphasizing the importance of understanding these options. For personalized advice, she invites listeners to contact her directly. The episode wraps up with an invitation to her live Call-In Show every Saturday.

Transcript

G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

For many of you itemizing isn’t something you’re going to do but if you do itemize maybe there’s a way of maximizing like giving a couple years worth of charity at one time therefore you’re able to hit that itemization otherwise you won’t be able to deduct your charitable deductions you can give up to 60% of your income and take it all in one year assuming again that that still kicks you into the itemizing but along with that you may have some other deductions sales tax property tax and we’ll cover more of those but if you’re not sure how this would work give me a call I can explain it 615-367-0819 or drfriday.com.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In the January 20th episode of the Dr. Friday Tax Show, Dr. Friday, an experienced financial counselor and tax consultant, delves into crucial topics for the 2024 tax season. This episode highlights important updates including:

• Beneficial Ownership Information Compliance: Urgent for business owners to comply by January 1, 2025, with significant penalties for non-compliance.
• IRS E-file Opening Delayed: Now starting January 29th, impacting early filers, especially those with earned income and child tax credits.
• Social Security and Tax Liabilities: Discusses how income changes affect Medicare costs and child support calculations.
• Small Business Tax Filings: Critical deadlines for 1120-S and 1065 forms emphasized.
• Handling Disability Benefits and Trust Incomes: Insight into tax implications for those receiving disability benefits and beneficiaries of trusts.
• Interactive Listener Queries: Addresses a variety of questions, from personal tax situations to complex issues.

Essential for business owners, retirees, and individual taxpayers, this episode offers a wealth of information to smoothly navigate through the tax season.

Transcript00:00:00.000 –> 00:00:07.000No, no, no, she’s not a medical doctor, but she can sure cure your taxproblems or your financial woes.00:00:07.000 –> 00:00:11.000She’s the how-to girl. It’s the Dr. Friday Show.00:00:11.000 –> 00:00:22.000If you have a question for Dr. Friday, call her now. 737-WWTN. That’s737-9986.00:00:22.000 –> 00:00:28.000So here’s your host, financial counselor and tax consultant, Dr. Friday.00:00:29.000 –> 00:00:36.000G’day, I’m Dr. Friday and the doctor is in the house on this very coldSaturday.00:00:36.000 –> 00:00:41.000Many of you may be at the house, not actually out running around, but whoknows?00:00:41.000 –> 00:00:44.000When I went out earlier, it looked like it was a bit busy out there.00:00:44.000 –> 00:00:48.000So, I will say that many people probably have enjoyed the snow a little bit.00:00:48.000 –> 00:00:52.000But, hopefully that will go away so we can get back into some seriousbusiness.00:00:52.000 –> 00:00:56.000A little hard for people to get to their tax appointments when there’s snowcoming down.00:00:56.000 –> 00:01:03.000So, if you want to join the show today, if you’ve got questions concerningtaxes or things that you may have heard or you’re working on,00:01:03.000 –> 00:01:09.000either your 2023 filings or preparing for 2024, something that may be comingup,00:01:09.000 –> 00:01:19.000all you have to do is pick up the phone. 615-737-9986.00:01:19.000 –> 00:01:27.000We’re getting a lot of phone calls on the BOI or the Small BusinessCompliance Guide that’s put out by the Finance Criminal Enforcement Network.00:01:27.000 –> 00:01:32.000This is a true thing, beneficial ownership information, BOI.00:01:32.000 –> 00:01:38.000Many of you are getting emails or being told by other individuals that thisneeds to be filed.00:01:38.000 –> 00:01:43.000It does need to be filed and the rules are kind of interesting.00:01:43.000 –> 00:01:52.000So, if you already have a business and it started prior to 2024, you haveuntil January 1st, 2025.00:01:52.000 –> 00:02:01.000If you’ve opened it in this first period, you only have less than 90 days toactually put this BOI in.00:02:01.000 –> 00:02:10.000So, if you’ve just opened up a new LLC or a new corporation, then you needto make sure if you are required to file the beneficial ownershipinformation,00:02:10.000 –> 00:02:14.000that that is done. Basically, they’re going to have us doing it within 30days.00:02:14.000 –> 00:02:23.000And the penalties, guys, are ridiculous. According to the last thing I read,the fine is $500 a day if it is not done.00:02:23.000 –> 00:02:32.000That is ridiculously high. Again, this has to do, it’s not a tax, it’s theFinance Crime Enforcement Network, the U.S. Department of Treasury.00:02:32.000 –> 00:02:38.000This is kind of like Big Brother watching. They want to know who thepartners of these companies are.00:02:38.000 –> 00:02:43.000They are requesting legal names, addresses, Social Security numbers, datesof birth,00:02:43.000 –> 00:02:47.000and you have to have a picture of your driver’s license or passport.00:02:47.000 –> 00:02:51.000Each person that is more than a 20% owner of a company.00:02:51.000 –> 00:02:58.000So, this is really something we’re going to need to stay on top of becausethat can get very expensive very quickly.00:02:58.000 –> 00:03:02.000Also, you’re going to want to, obviously, it’s tax time.00:03:02.000 –> 00:03:13.000So, now is the time I’m showing that most of the IRS is not going to accepte-filing until January 29th now, is what we’re being told.00:03:13.000 –> 00:03:18.000And if you have earned income credit or child tax credit on the earnedincome,00:03:18.000 –> 00:03:23.000that could be as late as the first or second week of February before thosefunds,00:03:23.000 –> 00:03:29.000even if you e-file on January 29th, they may hold that up for a week or two.00:03:29.000 –> 00:03:35.000They’re trying to make sure they’re checking to make sure these are yourchildren, that you are entitled to those fees.00:03:35.000 –> 00:03:38.000They find a lot of fraud going in that situation.00:03:38.000 –> 00:03:45.000So, they’re going to basically be doing their best to do identity theft andall that before they send out the refund.00:03:45.000 –> 00:03:48.000So, don’t rush and be very careful.00:03:48.000 –> 00:03:54.000I know there are organizations, tax companies out there that will give youyour money up front.00:03:54.000 –> 00:03:56.000I will say I’m not an advocate for that.00:03:56.000 –> 00:04:01.000Personally, most people have lived the whole year without that money, a fewmore weeks,00:04:01.000 –> 00:04:06.000and not having to pay large fees for your own money just doesn’t make a lotof sense.00:04:06.000 –> 00:04:07.000But I get it.00:04:07.000 –> 00:04:10.000Just be careful of what you sign when it comes to that,00:04:10.000 –> 00:04:14.000because if the IRS does not give you the amount of refund that they’veadvanced you,00:04:14.000 –> 00:04:19.000or you end up with a situation, keep in mind that is a loan.00:04:19.000 –> 00:04:21.000That is not something that they’re giving to you.00:04:21.000 –> 00:04:24.000And if the IRS doesn’t give you that money, guess what?00:04:24.000 –> 00:04:29.000You’re still responsible for giving that money back, and the interest ratesare pretty high.00:04:29.000 –> 00:04:37.000So, again, just if you’re running to get your taxes done because you needthat money to keep things going,00:04:37.000 –> 00:04:39.000that’s obviously a situation.00:04:39.000 –> 00:04:45.000But just be careful when people are giving you advanced credits on your taxreturns,00:04:45.000 –> 00:04:48.000because not everybody is going to get every dollar.00:04:48.000 –> 00:04:55.000Sometimes they have found that a large number of people that get the childcredit is one that gets the earned income credit,00:04:55.000 –> 00:04:58.000that they’re finding more and more tax fraud in that.00:04:58.000 –> 00:05:00.000So just be careful.00:05:00.000 –> 00:05:01.000Let’s see.00:05:01.000 –> 00:05:02.000What else?00:05:02.000 –> 00:05:03.000So we’ve covered that.00:05:03.000 –> 00:05:04.000Obviously, it’s tax time.00:05:04.000 –> 00:05:09.000We’re working on the 2023 taxes, obviously, as we speak.00:05:09.000 –> 00:05:17.000Many of them do not yet have the ability to do the clearance of — you know,to e-file them,00:05:17.000 –> 00:05:20.000but they are and should be getting ready soon.00:05:20.000 –> 00:05:25.000That way, then you can have your K-1s and then finish up your personal taxreturns.00:05:25.000 –> 00:05:33.000Remember, if you are a small business owner and you do 1120-S or 1065s,those are due March 15th.00:05:33.000 –> 00:05:38.000So you need to make sure those are filed before you file your personals orat the exact same time,00:05:38.000 –> 00:05:41.000because you can’t finish your personal tax return.00:05:41.000 –> 00:05:48.000If you have a sub-S corporation or if you’re a member of a 1065, you mustget that first.00:05:48.000 –> 00:05:50.000Also, trust.00:05:50.000 –> 00:05:55.000If you had a family member that passed away and there was a trust in somecases,00:05:55.000 –> 00:06:00.000there are K-1s that come from those trusts, and therefore, you filing yourpersonal tax return,00:06:00.000 –> 00:06:05.000you may want to check with the executor or whoever handling the taxes.00:06:05.000 –> 00:06:10.000We’ve had many cases where people come back and didn’t realize that theywere going to have some taxable income00:06:10.000 –> 00:06:12.000that came in from a trust.00:06:12.000 –> 00:06:16.000Not everything that comes from when someone passes away is tax-free.00:06:16.000 –> 00:06:22.000Sometimes there are taxable situations, and that can pass directly to thebeneficiaries00:06:22.000 –> 00:06:25.000and therefore become a tax situation on that.00:06:25.000 –> 00:06:28.000So, very important that you have all of your tax documents.00:06:28.000 –> 00:06:32.000Don’t just rush to that finish line to make it work.00:06:32.000 –> 00:06:35.000If you need help or have some questions on your taxes,00:06:35.000 –> 00:06:45.000you can join the show today at 615-737-9986, 615-737-9986,00:06:45.000 –> 00:06:48.000taking your calls here in the studio.00:06:48.000 –> 00:06:52.000We’re getting a number of people that are working on taxes.00:06:52.000 –> 00:06:57.000I had an interesting phone call that came in earlier this week with a personthat had done their own taxes,00:06:57.000 –> 00:07:01.000and they called and said, “Hey, I’d really like you to take a look.00:07:01.000 –> 00:07:04.000I’ve done my own taxes, but it doesn’t seem quite right.”00:07:04.000 –> 00:07:08.000And it really came down to she had married this year,00:07:08.000 –> 00:07:11.000and instead of being head of household and claiming her child,00:07:11.000 –> 00:07:14.000she was married filing separately.00:07:14.000 –> 00:07:18.000And in that case, married filing separately, you don’t qualify for all thesame things00:07:18.000 –> 00:07:20.000that you would if you were head of household.00:07:20.000 –> 00:07:25.000So instead of getting a large refund, which is what she was kind of used togetting,00:07:25.000 –> 00:07:30.000now that she got married and married filing separately, you know, kicked outa lot of her credit.00:07:30.000 –> 00:07:36.000So again, sometimes if you have life changes, sometimes you end up divorced,you end up married,00:07:36.000 –> 00:07:39.000you have a child, all of those things can happen.00:07:39.000 –> 00:07:43.000But sometimes, depending on how you file your taxes, sometimes marriedcouples,00:07:43.000 –> 00:07:49.000due to other reasons, be it maybe, I don’t know, educational credits,00:07:49.000 –> 00:07:54.000as far as let’s say you have student loans, and sometimes if you file yourown taxes,00:07:54.000 –> 00:07:57.000they don’t take into account your husband or your wife’s income,00:07:57.000 –> 00:08:01.000so you want to stay married filing separately on those,00:08:01.000 –> 00:08:05.000so you keep your student loans at a payment you can afford necessarily,00:08:05.000 –> 00:08:10.000that then there’s a child, and then you normally can’t get all the creditsthat would come with that.00:08:10.000 –> 00:08:14.000So there’s a price to pay when married filing separately, as far as I’mconcerned,00:08:14.000 –> 00:08:18.000there’s penalties, and you want to make sure that you’re making the bestchoice.00:08:18.000 –> 00:08:22.000Sometimes you can’t always get every dollar back because of the benefits youmay be receiving00:08:22.000 –> 00:08:24.000in some other fashion.00:08:24.000 –> 00:08:27.000So it’s important to make sure you know how you’re filing taxes,00:08:27.000 –> 00:08:29.000and what you may or may not be giving up.00:08:29.000 –> 00:08:33.000So again, that’s kind of an important question that you have to deal with,00:08:33.000 –> 00:08:36.000or make happen for yourself.00:08:36.000 –> 00:08:38.000If you’ve got a question, you can certainly join the show.00:08:38.000 –> 00:08:47.000Again, 615-737-9986, 615-737-9986,00:08:47.000 –> 00:08:51.000taking your phone calls, talking about my favorite subject, it is tax time,guys.00:08:51.000 –> 00:08:56.0002023 is here. Many of you will be getting, if you haven’t already gotten,00:08:56.000 –> 00:08:58.000you will be getting your W-2s.00:08:58.000 –> 00:09:02.000Keep in mind, everyone has until the last day of January, if that’s on theweekend,00:09:02.000 –> 00:09:06.000the first day of February, to file them as employers, right?00:09:06.000 –> 00:09:11.000So if your employer hasn’t given you a W-2 yet, do not freak out.00:09:11.000 –> 00:09:16.000They have, theoretically, until January 31st, which does fall in the middleof the week.00:09:16.000 –> 00:09:23.000So they have until January 31st to get them out, and then as long as theyhit the mail by January 31st,00:09:23.000 –> 00:09:28.000they’ve met compliance, so it could be first week of February before youreceive it.00:09:28.000 –> 00:09:33.000And again, if there’s e-file or e-mails, a lot of them are sending links out00:09:33.000 –> 00:09:38.000where you can obtain your W-2 through an e-mail link.00:09:38.000 –> 00:09:42.000Then again, that’s something you want to do, and that’s not a big deal.00:09:42.000 –> 00:09:46.000But, you know, making sure that you have access, and if you don’t haveaccess,00:09:46.000 –> 00:09:52.000then that would be an interesting conversation, because then you may have toask them to mail it,00:09:52.000 –> 00:09:55.000or you may have to find someone that can upload it for you,00:09:55.000 –> 00:09:59.000because a lot of employers have gotten away from doing any kind of mail atall.00:09:59.000 –> 00:10:04.000All right, let’s see if we can hit Prey line one in Nashville.00:10:04.000 –> 00:10:06.000Hey, Prey.00:10:06.000 –> 00:10:08.000>> Hello, Dr. Harvey. How are you?00:10:08.000 –> 00:10:11.000>> I am doing great.00:10:11.000 –> 00:10:13.000First off, I want to say thank you again.00:10:13.000 –> 00:10:24.000I talked to you many years ago about a tax situation, and you were able toset me straight on what I needed to do.00:10:24.000 –> 00:10:28.000>> Well, thank you. Appreciate the phone call. I’m glad I was able to help.00:10:28.000 –> 00:10:39.000>> Okay. In August of 2023 — excuse me, August of 2020, I became disabled.00:10:39.000 –> 00:10:44.000And I had a short-term/long-term policy with my employer.00:10:44.000 –> 00:10:48.000I paid for the short-term. They paid for the long-term.00:10:48.000 –> 00:10:52.000And they made me file for Social Security Disability.00:10:52.000 –> 00:10:53.000>> Right.00:10:53.000 –> 00:11:02.000>> In 2022, I paid $4,300 income tax on those benefits.00:11:02.000 –> 00:11:04.000>> Right.00:11:04.000 –> 00:11:14.000>> And January of ’23, I was approved for my Social Security and startedreceiving my benefits.00:11:14.000 –> 00:11:20.000I have gotten some — I think it’s a 1099.00:11:20.000 –> 00:11:30.000And I’m just curious about what I need to do, and have I already paid taxeson 2022 or what?00:11:30.000 –> 00:11:37.000>> So when they gave you your disability, did they back pay you on SocialSecurity?00:11:37.000 –> 00:11:44.000>> Yeah, I got a lump sum, and everything went to the insurance company andthe lawyers.00:11:44.000 –> 00:11:45.000>> Right.00:11:45.000 –> 00:11:51.000Unfortunately, you’re not going to get a lot of benefit from any of that.00:11:51.000 –> 00:11:55.000But you can go back and theoretically amend 2022.00:11:55.000 –> 00:11:59.000I don’t know if that would be beneficial or not without looking at it.00:11:59.000 –> 00:12:03.000But you might want to — you know, you may have to do that to see.00:12:03.000 –> 00:12:10.000But in 2023, you can either pay all of it — is that the only income youhave, or do you have other income?00:12:10.000 –> 00:12:15.000>> I did about — 2022, I did about $9,000 with Lyft.00:12:15.000 –> 00:12:20.000And this year, I did approximately $7,000 with Lyft.00:12:20.000 –> 00:12:21.000>> Okay.00:12:21.000 –> 00:12:28.000So when you take off your cost of running Lyft, you probably will have zerotax on your Social Security disability or whatever.00:12:28.000 –> 00:12:31.000Because it’s not taxable unless there’s enough earnings.00:12:31.000 –> 00:12:33.000>> Well, the $7,000 is after all my deductions.00:12:33.000 –> 00:12:34.000>> Oh, okay.00:12:34.000 –> 00:12:36.000So you still won’t probably pay tax on it.00:12:36.000 –> 00:12:41.000Because if you take half of that, you’re not going to probably hit theprovisional tax code.00:12:41.000 –> 00:12:44.000You may, because it’s probably a high number in 2023.00:12:44.000 –> 00:12:45.000You may have to.00:12:45.000 –> 00:12:47.000So there’s two sides.00:12:47.000 –> 00:12:52.000You can go back and redo the years in which the Social Security wasreported.00:12:52.000 –> 00:13:01.000So if they backed it to ’21 or ’22, you could go back and amend those years,keeping your provisional income lower in 2023.00:13:01.000 –> 00:13:13.000I don’t know if it’s worth it without looking to see what your provisionalincome is, meaning half of your Social Security plus your earnings to see ifyou’re single or married, what that amount would come to.00:13:13.000 –> 00:13:16.000You could end up paying a few dollars in taxes.00:13:16.000 –> 00:13:20.000But it may just not be worth opening up 2022 to compensate 2023.00:13:20.000 –> 00:13:22.000Without looking, I can’t tell you.00:13:22.000 –> 00:13:26.000But that would be not as easy as a fix as maybe your last time.00:13:26.000 –> 00:13:35.000But the answer to this is you may have to amend ’22 to get ’23 straight, oryou may just file everything under ’23 and see if it actually creates ataxable situation.00:13:35.000 –> 00:13:38.000Because Social Security itself is not taxable.00:13:38.000 –> 00:13:43.000It is based on our earnings that we get outside of Social Security.00:13:43.000 –> 00:13:50.000>> Okay, so I’m going to need professional help with this then, obviously.00:13:50.000 –> 00:13:52.000>> Probably be easier for just this year.00:13:52.000 –> 00:13:54.000After this year, it will be fairly simple.00:13:54.000 –> 00:14:05.000You know, I mean, as long as you keep your driving down to a minimal, youprobably won’t have to worry about filing taxes with exception of any taxthat’s due on the lift side.00:14:05.000 –> 00:14:07.000>> Okay.00:14:07.000 –> 00:14:13.000>> And who — can you recommend — can you handle this, or can you recommendsomeone?00:14:13.000 –> 00:14:20.000>> You can get my office call on Monday, and we’ll be more than glad toeither recommend someone close to you or we’ll see if we can help.00:14:20.000 –> 00:14:21.000>> Okay.00:14:21.000 –> 00:14:23.000I really — I greatly appreciate the help.00:14:23.000 –> 00:14:24.000>> Thanks, Prey.00:14:24.000 –> 00:14:25.000All right.00:14:25.000 –> 00:14:27.000We’re going to take a quick break.00:14:27.000 –> 00:14:30.000And then when we get back, we’re going to hit Ian in Nashville.00:14:30.000 –> 00:14:32.000We’ll be right back with “The Dr. Friday Show.”00:14:32.000 –> 00:14:38.000[ Music ]00:14:38.000 –> 00:14:39.000All righty.00:14:39.000 –> 00:14:42.000We are back here live in studio.00:14:42.000 –> 00:14:48.000And we are going to go right to the phone lines because Ian in Nashville iskind enough to wait through that long break.00:14:48.000 –> 00:14:49.000Hey, Ian.00:14:49.000 –> 00:14:51.000>> Hi, Beth.00:14:51.000 –> 00:14:54.000>> What can I do for you, sweetie?00:14:54.000 –> 00:15:04.000>> So I received a financial settlement which was in regards to settlingoutstanding medical expenses.00:15:04.000 –> 00:15:05.000>> Okay.00:15:05.000 –> 00:15:14.000>> And I was told that it should be tax-free because it was relating tooutstanding medical expenses.00:15:14.000 –> 00:15:18.000>> Whoever told you that was correct.00:15:18.000 –> 00:15:20.000Yes.00:15:20.000 –> 00:15:21.000>> Well, good.00:15:21.000 –> 00:15:22.000Thank you.00:15:22.000 –> 00:15:25.000>> Thanks.00:15:25.000 –> 00:15:30.000>> What does — so I’m going to get something like a 1099 from my lawyer.00:15:30.000 –> 00:15:40.000What does it need to be specifically to make sure it doesn’t trip me uptax-wise when it then goes through my tax processor, please?00:15:40.000 –> 00:15:45.000>> Honestly, you won’t most likely get a 1099 from your lawyer.00:15:45.000 –> 00:16:00.000They will send you a distribution worksheet normally that explains —because normally they don’t 1099 because only 1099s generate into an incomesource, be it rental, medical, whatever.00:16:00.000 –> 00:16:05.000And in your case, they’re basically reimbursing you or paying you formedical situation.00:16:05.000 –> 00:16:08.000So there should not be a 1099 from him.00:16:08.000 –> 00:16:11.000There should be just a distribution.00:16:11.000 –> 00:16:19.000>> Okay, because the defendants, I guess, paid my lawyer who then took hispart and then paid me.00:16:19.000 –> 00:16:22.000So I’m just trying to make sure that I get all the paperwork lined up.00:16:22.000 –> 00:16:23.000Thank you.00:16:23.000 –> 00:16:24.000>> No problem.00:16:24.000 –> 00:16:25.000Yes.00:16:25.000 –> 00:16:26.000He would have collected the money.00:16:26.000 –> 00:16:28.000The money would have went to the attorney.00:16:28.000 –> 00:16:30.000The attorney would do a distribution.00:16:30.000 –> 00:16:37.000After everything else that was required to be paid with the money was paid,you should just get a check from the attorney breaking down the total.00:16:37.000 –> 00:16:42.000I got 200,000 and here’s your 50,000 because we paid everybody kind ofsituation.00:16:42.000 –> 00:16:44.000But that’s all there should be.00:16:44.000 –> 00:16:46.000There should not be a 1099.00:16:46.000 –> 00:16:53.000>> So if I ask him to make sure I get the distribution worksheet, that’sexactly what my tax preparer will need?00:16:53.000 –> 00:16:58.000>> That’s all they should need because the tax preparer will not be usingany of that on their tax return.00:16:58.000 –> 00:17:02.000This is outside the tax window because it is not considered earnings.00:17:02.000 –> 00:17:05.000So it will not report on your physical tax return.00:17:05.000 –> 00:17:06.000>> Great.00:17:06.000 –> 00:17:07.000Thanks a lot.00:17:07.000 –> 00:17:08.000That’s really helpful.00:17:08.000 –> 00:17:09.000>> No problem.00:17:09.000 –> 00:17:10.000All right.00:17:10.000 –> 00:17:11.000Thanks, Mike.00:17:11.000 –> 00:17:12.000All right.00:17:12.000 –> 00:17:13.000Let’s see if we can hit Charlie in Woodbury.00:17:13.000 –> 00:17:14.000Hey, Charlie.00:17:14.000 –> 00:17:15.000>> How are you doing?00:17:15.000 –> 00:17:16.000>> I’m doing awesome.00:17:16.000 –> 00:17:17.000How about you?00:17:17.000 –> 00:17:18.000>> Oh, great, man.00:17:18.000 –> 00:17:28.000Listen, what if you’re used to filing paper, sending in paperwork theold-fashioned way, you know, your 1040 and your other forms?00:17:28.000 –> 00:17:31.000I read somewhere that they’re not going to do that anymore.00:17:31.000 –> 00:17:33.000Everything has got to be electronic.00:17:33.000 –> 00:17:34.000>> That is correct.00:17:34.000 –> 00:17:39.000They are not accepting paper unless there is extenuating circumstances.00:17:39.000 –> 00:17:49.000There is still some people that can do some of it through because ofdisability and unable to use a computer or, you know, certain things likethat.00:17:49.000 –> 00:17:55.000But just because it’s easier, and I know I have some clients that just don’tdo anything on computers.00:17:55.000 –> 00:17:56.000You know what I mean?00:17:56.000 –> 00:17:57.000They really don’t.00:17:57.000 –> 00:17:58.000>> I’m kind of like that.00:17:58.000 –> 00:17:59.000I’m kind of like that.00:17:59.000 –> 00:18:08.000>> Yeah, and if that’s the case, you may be able to apply for a waiver, butwhat they’re basically forcing people to do is to go,00:18:08.000 –> 00:18:14.000and even if you complete your own taxes, for you to go in and have somebodysubmit them for you.00:18:14.000 –> 00:18:16.000>> That would probably be the best way to do it.00:18:16.000 –> 00:18:20.000Like, if you’re a farm bureau, they have tax assistance.00:18:20.000 –> 00:18:26.000I thought I might drop in there and do my paperwork ahead and let them sendit in for me.00:18:26.000 –> 00:18:27.000>> Absolutely.00:18:27.000 –> 00:18:30.000>> And there are clients that do — I mean, physically they do their wholetax return.00:18:30.000 –> 00:18:35.000We just re-input it, double check their math, and, you know, and maybe ask acouple extra questions.00:18:35.000 –> 00:18:38.000But all in all, they’ve done the returns because they’re so used to doingit.00:18:38.000 –> 00:18:41.000They still print out the paper every time.00:18:41.000 –> 00:18:44.000So, you know, there’s nothing wrong.00:18:44.000 –> 00:18:48.000I’m sure your tax person wouldn’t have an issue with — or, you know, farmbureaus are a great place.00:18:48.000 –> 00:18:50.000They help a lot of people do taxes.00:18:50.000 –> 00:18:53.000So it’s not a bad idea at all.00:18:53.000 –> 00:18:56.000And then that way you can get confirmation it’s been received.00:18:56.000 –> 00:19:01.000>> Even if you owe money, pay it electronically or you can still mail inchecks.00:19:01.000 –> 00:19:06.000Again, they’re pushing for everything to be done electronic in the next fewyears.00:19:06.000 –> 00:19:10.000>> Well, how would you send your — I’ll be owing some money, I’m sure.00:19:10.000 –> 00:19:15.000How would you send in it electronically if you’re doing it that way?00:19:15.000 –> 00:19:18.000>> The way a lot of us do it, we just put in our routing number and accountnumber,00:19:18.000 –> 00:19:23.000kind of like the way you pay your mortgage or your — anythingelectronically you may pay.00:19:23.000 –> 00:19:25.000You may not pay anything electronically.00:19:25.000 –> 00:19:30.000That’s — I mean, again, I do have clients that just will not let anythinglike that happen.00:19:30.000 –> 00:19:32.000And then, you know, you can still mail it in.00:19:32.000 –> 00:19:36.000But otherwise you can use a credit card or your bank account.00:19:36.000 –> 00:19:39.000>> Okay. So you probably could use a debit card, couldn’t you?00:19:39.000 –> 00:19:41.000>> You could use a debit card, yes.00:19:41.000 –> 00:19:42.000>> Okay. Thank you.00:19:42.000 –> 00:19:43.000Thank you, Dr. Farhadi.00:19:43.000 –> 00:19:44.000I appreciate you.00:19:44.000 –> 00:19:45.000>> Thanks for listening, Charlie.00:19:45.000 –> 00:19:46.000I appreciate it.00:19:46.000 –> 00:19:47.000All right.00:19:47.000 –> 00:19:49.000Let’s hit George in Fayetteville.00:19:49.000 –> 00:19:52.000Hey, Georgie, what’s happening?00:19:52.000 –> 00:19:55.000>> Hello. Pretty good.00:19:55.000 –> 00:20:02.000I’m church — left the Methodist church.00:20:02.000 –> 00:20:10.000And I was wondering, should I do a W-2 for the preacher or a 1099?00:20:10.000 –> 00:20:15.000>> Well, you’re going to want to do — are you paying housing allowance aswell?00:20:15.000 –> 00:20:16.000>> No. No.00:20:16.000 –> 00:20:18.000>> Okay.00:20:18.000 –> 00:20:23.000>> I would just — I mean, I would say at this point I would probably justdo a 109900:20:23.000 –> 00:20:28.000because you guys haven’t filed any of the other reports that would berequired with the W-2,00:20:28.000 –> 00:20:31.000be that 941s or 944s.00:20:31.000 –> 00:20:36.000You didn’t withhold anything from him as far as Social Security or Medicare.00:20:36.000 –> 00:20:40.000So I would just 1099 him.00:20:40.000 –> 00:20:42.000>> Should I use — okay.00:20:42.000 –> 00:20:50.000Should I use the old federal number or the new one?00:20:50.000 –> 00:20:53.000>> I would use whatever you have as the most current one.00:20:53.000 –> 00:20:58.000So if you have a new one versus an old one, I’m not too sure how long you’vebeen around.00:20:58.000 –> 00:21:03.000But if you have anything from the IRS currently, I would use that federal IDnumber,00:21:03.000 –> 00:21:07.000the name of the church, as well as the church address.00:21:07.000 –> 00:21:08.000>> Okay.00:21:08.000 –> 00:21:09.000Okay.00:21:09.000 –> 00:21:10.000Thank you.00:21:10.000 –> 00:21:12.000Thanks, George.00:21:12.000 –> 00:21:14.000Appreciate it.00:21:14.000 –> 00:21:21.000So, again, if you have questions, you can certainly join the show,615-737-9986.00:21:21.000 –> 00:21:26.000615-737-9986.00:21:26.000 –> 00:21:30.000You can also e-mail us, Friday@DRFriday.com if you’re a little shy,00:21:30.000 –> 00:21:35.000and that would be another way for you to get through the lines,Friday@DRFriday.com.00:21:35.000 –> 00:21:41.000You can also go to our website, DRFriday.com and click in, send us a messageright through the website.00:21:41.000 –> 00:21:46.000I will tell you, if you are an existing client of mine, which many of youguys that are listening,00:21:46.000 –> 00:21:51.000since we’ve been doing this for, what, 13, 14 years now, if you haven’talready booked your appointment,00:21:51.000 –> 00:21:56.000please call our office on Monday or Tuesday and go ahead and get yourself onthe calendar.00:21:56.000 –> 00:22:04.000The calendar is full for any new clients, but we are still open always forour existing clients.00:22:04.000 –> 00:22:07.000Always thankful for having you return every year.00:22:07.000 –> 00:22:12.000So if you don’t see anything on the calendar, just give our office a calland we will get you booked in.00:22:12.000 –> 00:22:17.000So, again, you know what? It’s tax season, so don’t rush.00:22:17.000 –> 00:22:21.000If I can tell anyone anything, I know it is the 20th, and many of you aresitting there going,00:22:21.000 –> 00:22:28.000“I need to get my taxes done,” but don’t rush because sometimes if you haveany kind of investment accounts,00:22:28.000 –> 00:22:33.000those aren’t going to be out. At least my company told me not until February15th.00:22:33.000 –> 00:22:39.000W-2s may not all be out, and if you work more than one job, 1099s aren’tgoing to be out.00:22:39.000 –> 00:22:42.000None of those until almost the first week of February.00:22:42.000 –> 00:22:47.000So don’t rush to get things filed. You’re not going to get your refund thatmuch faster,00:22:47.000 –> 00:22:52.000and if there’s a mistake, then they’re going to do a matching, and thenyou’re going to find out that you have more issue00:22:52.000 –> 00:22:56.000than what you want because that’s going to hold it up even longer.00:22:56.000 –> 00:23:00.000So if you’re not sure, you know, you have everything, or maybe you did somework and you’re like,00:23:00.000 –> 00:23:06.000“Well, I don’t know if anyone’s going to 1099.” Oh, and may I point out,that is not the answer.00:23:06.000 –> 00:23:12.000If you’ve done something and you received money, tax law says you’resupposed to report that as income.00:23:12.000 –> 00:23:17.000It doesn’t mean if someone doesn’t 1099 you don’t report it. That’s not theway it works.00:23:17.000 –> 00:23:25.000You want to report it only if you’ve earned it. If it was deposited in yourbank, if you used it for your lifestyle,00:23:25.000 –> 00:23:35.000IRS is saying that is taxable income. That’s one of the reasons they’rereally pushing the 1099s onto the 1099ks00:23:35.000 –> 00:23:41.000from all the merchant places because the same thing. Many people are sellingthings through Facebook and Marketplace00:23:41.000 –> 00:23:46.000and all that, and not just doing one or two, but they’re selling many, manythings.00:23:46.000 –> 00:23:54.000So they’re creating a lifestyle with it, and therefore the IRS is saying,“Wait, people are underreporting their information.”00:23:54.000 –> 00:24:02.000So that way you have the situation. So if you want to join the show, youcan. 615-737-9986.00:24:02.000 –> 00:24:10.000615-737-9986. We’re going to take a quick break. When we get back, we’ll getto more of your phone calls and emails.00:24:10.000 –> 00:24:16.000And again, if you’re not too sure who I am, just go to drfriday.com, andwe’ll tell you a lot more about who Dr. Friday is.00:24:16.000 –> 00:24:19.000We’ll be right back with The Dr. Friday Show.00:24:19.000 –> 00:24:25.000[Music]00:24:25.000 –> 00:24:33.000All righty, we are back here live in studio. And if you want to join ushere, you can always ask questions concerning taxes,00:24:33.000 –> 00:24:38.000or maybe you’re in the process of, maybe there’s an inheritance, or you’redealing with something along those lines.00:24:38.000 –> 00:24:48.000You can give us a call. 615-737-9986. 615-737-9986. Taking your calls.00:24:48.000 –> 00:24:52.000Talking about my favorite subject. First, we’re going to be getting readyfor taxes.00:24:52.000 –> 00:24:57.000So that also means all my entrepreneurs, or small business, or people thathave multiple rentals.00:24:57.000 –> 00:24:59.000I say multiple, you can have one rental.00:24:59.000 –> 00:25:07.000Keep in mind, 1099s do need to be issued to anyone that we have paid forservices over $600.00:25:07.000 –> 00:25:16.000So if you’ve got a lawn man, a handyman, a repair company that is not acorporation, and most companies out here are actually LLCs.00:25:16.000 –> 00:25:23.000So if you’ve got a heating and air conditioning company that’s come out anddone some repairs, it’s over $600.00:25:23.000 –> 00:25:30.000You need to be 1099ing them for your rental properties. You need to be doingthat for, especially in businesses.00:25:30.000 –> 00:25:37.000So if you have a service, you run a business of any sort, and you have somesort of outside service,00:25:37.000 –> 00:25:44.000maybe you pay professional fees, and they’re not a corporation, then youneed to be 1099ing them.00:25:44.000 –> 00:25:48.000And those 1099s need to be out by January 31st.00:25:48.000 –> 00:25:54.000There are fines that you will pay, or a possibility of paying, if you do notdo 1099s.00:25:54.000 –> 00:26:02.000And again, even if you do not receive a 1099, does not mean that you shouldnot be reporting it as income.00:26:02.000 –> 00:26:07.000I have some industries, some different places that they don’t get 1099s.00:26:07.000 –> 00:26:13.000It doesn’t mean that it wasn’t income and that you didn’t earn it justbecause somebody else did not 1099 you.00:26:13.000 –> 00:26:19.000I had a situation not too long ago where we actually had somebody that wasbeing audited,00:26:19.000 –> 00:26:26.000and the IRS came back and they had a large number of subcontractors, this isin the construction business,00:26:26.000 –> 00:26:30.000and they required us to actually issue 1099s.00:26:30.000 –> 00:26:33.000At that point, obviously, some people didn’t have any issue.00:26:33.000 –> 00:26:37.000They picked it up as income because they were running a business and it wasincome.00:26:37.000 –> 00:26:43.000But then there was a large number of people, and kind of funnily, I think anumber of them ended up being audited00:26:43.000 –> 00:26:46.000because of the one person being audited.00:26:46.000 –> 00:26:52.000So very important that if you end up in a situation, make sure whatever isrunning through your bank,00:26:52.000 –> 00:26:58.000whatever is creating your lifestyle, and I always say that because somepeople are kind of anti-bank.00:26:58.000 –> 00:27:04.000So you could be living one, then you say, “Well, I’ve only put $20,000through my bank.”00:27:04.000 –> 00:27:06.000But your rent is more than $20,000 a year.00:27:06.000 –> 00:27:09.000So obviously, you’re making more than that.00:27:09.000 –> 00:27:15.000So simple math, it doesn’t take a genius if they’re auditing you to figureout how much money do you have to pay in rent.00:27:15.000 –> 00:27:21.000If you have auto notes, if you’re wearing clothes, anything, they can eventake–00:27:21.000 –> 00:27:27.000they can put together a pretty quick idea of what it takes as a minimumincome to take care of you.00:27:27.000 –> 00:27:33.000And if that is not showing up on your tax return or you’re not growing acredit card every year by the difference,00:27:33.000 –> 00:27:37.000then you know what? Sooner or later, that could come and catch you.00:27:37.000 –> 00:27:39.000So just important to think about.00:27:39.000 –> 00:27:43.000I have people often come in and they say, “I didn’t make any money thisyear.”00:27:43.000 –> 00:27:47.000Because entrepreneurs, let’s be honest, we hate tax time.00:27:47.000 –> 00:27:52.000Because even if you’ve made all your quarterly’s, it always feels likethey’re draining more and more money out.00:27:52.000 –> 00:27:54.000But we have a partner in business.00:27:54.000 –> 00:27:58.000And if you look at it that way, you may not like that partner.00:27:58.000 –> 00:28:01.000I mean, there’s a lot of people that have partners that they don’t likeanyways.00:28:01.000 –> 00:28:05.000But the IRS or the U.S. Treasury is a partner in our business.00:28:05.000 –> 00:28:06.000It’s that simple.00:28:06.000 –> 00:28:11.000Every dollar I make, every dollar I profit, they have a percentage of.00:28:11.000 –> 00:28:16.00025, 30 percent, depending on your situation and how much profit you’remaking.00:28:16.000 –> 00:28:18.000So you have choices.00:28:18.000 –> 00:28:23.000There are some ways you can kind of reduce their percentage by putting moneyinto retirement accounts,00:28:23.000 –> 00:28:28.000maybe issuing W-2s to yourself, different things that may control some ofthat.00:28:28.000 –> 00:28:33.000But all in all, if you look at it that you’re not a 100 percent owner ofthis business,00:28:33.000 –> 00:28:40.000you’re going to find out you’re going to be in a better situation becauseyou have set aside that share to your partner.00:28:40.000 –> 00:28:45.000And a bank or you’ve paid it out quarterly or even monthly to them.00:28:45.000 –> 00:28:49.000So that way, at the end of the year, you don’t dread tax season.00:28:49.000 –> 00:28:53.000And I know some people say, I need every dollar I make to just survive.00:28:53.000 –> 00:28:55.000I am barely making it right now.00:28:55.000 –> 00:28:59.000I can’t possibly pay 25 percent.00:28:59.000 –> 00:29:04.000Well, then in the big picture, guys, that you’re not going to make it.00:29:04.000 –> 00:29:05.000I mean, you may have a bad year.00:29:05.000 –> 00:29:13.000We’ve all had bad years and we’ve had to borrow or we’ve had to get familyto loan us money or whatever it might have taken to make it through thatyear.00:29:13.000 –> 00:29:20.000But in the big picture, you can’t do that very long because sooner or lateryou’re going to end up upside down.00:29:20.000 –> 00:29:28.000And so you have to be critical with your business, especially entrepreneurs,because we have to eventually say, here’s the line in the sand.00:29:28.000 –> 00:29:39.000If I keep it going and I can’t make this much money at this point and I’mstill going, are you just trying to keep something alive that really isn’tfunding itself?00:29:39.000 –> 00:29:43.000It’s a very hard and sometimes it’s management. Sometimes it’s lifestyle.00:29:43.000 –> 00:29:46.000Sometimes people are living way above what they’re actually earning.00:29:46.000 –> 00:29:50.000I mean, come on, that doesn’t have to be an entrepreneur. That’s an everydaylife story.00:29:50.000 –> 00:29:54.000And those are the kinds of things you have to have a hard look at.00:29:54.000 –> 00:30:00.000But if you actually do and you can succeed and you can actually have yourown style of life.00:30:00.000 –> 00:30:05.000I mean, being an entrepreneur is one of the best things in the world becauseyou can do certain things.00:30:05.000 –> 00:30:09.000You can control certain aspects that maybe you can’t if you were employedwith somebody else.00:30:09.000 –> 00:30:12.000But it doesn’t mean you’re going to avoid taxation.00:30:12.000 –> 00:30:16.000I’m just saying. And a lot of times people think, oh, I can write off.00:30:16.000 –> 00:30:23.000And yes, if you’re a sole proprietorship or a small business, you canprobably write off a portion of your house that you’re actually working in.00:30:23.000 –> 00:30:28.000It’s an office. I mean, my my home office is an extension of our own home.00:30:28.000 –> 00:30:33.000And therefore it is a big chunk of space that is being used for thebusiness.00:30:33.000 –> 00:30:39.000And there’s no question you walk in. You can’t question that it is abusiness and that there is an office.00:30:39.000 –> 00:30:49.000But if it’s a guest bedroom and you’ve got a laptop sitting on a bed becausethere’s no desk in there, even that is not an office space.00:30:49.000 –> 00:30:54.000And I have many people that run businesses off of laptops. They don’t haveto have an office space.00:30:54.000 –> 00:31:00.000They don’t even set up an office space. They like to set up in the frontroom and their sofa and they do their work.00:31:00.000 –> 00:31:04.000They’re very good at it. And that’s all they need to do. That’s great.00:31:04.000 –> 00:31:08.000And that works perfectly. But don’t think you’re going to qualify for a homeoffice.00:31:08.000 –> 00:31:11.000That’s the kind of things you need to understand.00:31:11.000 –> 00:31:20.000Would it be beneficial for you to set up a home office space that allows youto have the square footage to take off a part of your home expense?00:31:20.000 –> 00:31:28.000Because you’re working in that home and a part of the utilities and all thatis legitimate if you have true office space.00:31:28.000 –> 00:31:36.000Understanding tax law puts more money in your pocket. Also makes youunderstand why or where the money is going.00:31:36.000 –> 00:31:42.000Now, as far as the IRS and their spending, well, let’s be honest, the IRSdoesn’t spend the money. It’s Congress and the Senate.00:31:42.000 –> 00:31:49.000So all they are is really the collection agency. If you look at them as whatthey are, they collect the money and they put it into the treasury.00:31:49.000 –> 00:31:56.000And that’s about the extent of their power. But that being said, it is goingto get more interesting in the next couple of years.00:31:56.000 –> 00:32:01.000We already have the beneficial ownership information. I talked about thatduring the first part of the show.00:32:01.000 –> 00:32:07.000I want to keep saying that I’m going to keep saying that for the next partof the year because it’s a huge change.00:32:07.000 –> 00:32:16.000If you’ve got a brand new business that you’ve just opened up, you better beGoogling beneficial ownership information, BOI, because you have about 30days.00:32:16.000 –> 00:32:22.000And the fines are ridiculous. I’m not sure why they want this information. Ihave an idea.00:32:22.000 –> 00:32:34.000Again, what you need to fill out for anybody that has 25 percent or morelegal name, address, Social Security number, date of birth and a picture,license or passport.00:32:34.000 –> 00:32:41.000They are trying to find something just either clarifying that the partnersin these businesses truly are the partners in these businesses.00:32:41.000 –> 00:32:47.000It does have to do with the money laundering. Most of us, you know, we’renot worried about it. It’s not a big deal.00:32:47.000 –> 00:32:52.000It’s just another thing. But it’s the fine that I worry about because thatis a huge fine.00:32:52.000 –> 00:32:57.000And many people are sitting back going, I don’t really want to fill outthis. I don’t really want to do that.00:32:57.000 –> 00:33:00.000It’s not really an option. There’s surveys out there that they can find you.00:33:00.000 –> 00:33:04.000But normally the fine is five or six hundred dollars if you choose not tocomplete it.00:33:04.000 –> 00:33:08.000This is per a day. Five hundred dollars a day.00:33:08.000 –> 00:33:14.000If you don’t do this right, unless that gets overrode or considered highwayrobbery.00:33:14.000 –> 00:33:23.000That’s what says in the pamphlet that we have in our office that was doneversion one point one December of twenty twenty three.00:33:23.000 –> 00:33:26.000They may be updating that and that may be some more clarification as we go.00:33:26.000 –> 00:33:31.000I also want to clarify. Someone asked me about the business license. We havebeen filing them now.00:33:31.000 –> 00:33:36.000So just so you know, if you have less than three thousand or less than onehundred thousand,00:33:36.000 –> 00:33:42.000the only fine you are only fee you’re going to pay is the twenty two dollarscity and then twenty two dollars county.00:33:42.000 –> 00:33:47.000If you’re in the county in the city, if you have less than one hundredthousand in sales, you will only be paying those fees,00:33:47.000 –> 00:33:52.000which is the annual renewal fee. Just as a point, I wasn’t sure how that wasgoing to work.00:33:52.000 –> 00:33:58.000Hadn’t done it before. Now we filed several of them. So, again, all you haveto go on to your Tintin file it.00:33:58.000 –> 00:34:02.000If you make less than one hundred thousand dollars, you’re going to paytwenty two to the city.00:34:02.000 –> 00:34:08.000And if you’re city and county, then twenty two county or if you’re countyand city, whichever way.00:34:08.000 –> 00:34:13.000So that will be all you’ll have to pay. And it walks through. There’s noother questions that are being asked or anything else.00:34:13.000 –> 00:34:18.000You just click in a box saying you made less or more than one hundredthousand dollars.00:34:18.000 –> 00:34:26.000So keep that in mind. And there’s no reason not to go online as soon as youknow what your gross sales, gross business receipts,00:34:26.000 –> 00:34:32.000business tax returns. Those are due by April. First, go on the Tintin app.00:34:32.000 –> 00:34:36.000You probably have a couple of different things. You may have sales tax,which is due by Monday.00:34:36.000 –> 00:34:41.000You may have your business tax and you have your franchise excise. That’s atleast the three that could be in there.00:34:41.000 –> 00:34:46.000Some of you may not have franchise excise if you’re not an entity, but allof them are due.00:34:46.000 –> 00:34:53.000So go ahead and start filing these sales tax. Obviously, you can file thebusiness gross receipts once you have the year in sales.00:34:53.000 –> 00:34:59.000You know what you’re putting in there. And if it’s already if you alreadyknow, I didn’t have nearly one hundred thousand dollars,00:34:59.000 –> 00:35:03.000then you can go ahead and file that, pay the money. And that way you’re ingood standing.00:35:03.000 –> 00:35:09.000You want to stay in good standing. It’s always a pain because if you do yourannual report, they can request that.00:35:09.000 –> 00:35:14.000And if you don’t get it, they can freeze or make inactive your your name.00:35:14.000 –> 00:35:18.000And that could be a problem for insurance or loans or anything else thatyou’re doing.00:35:18.000 –> 00:35:22.000So you want to keep that active. All right. So we’re going to take one morebreak.00:35:22.000 –> 00:35:26.000And if you want, I know it’s cold out there and it’s probably just sittingaround thinking,00:35:26.000 –> 00:35:31.000I don’t really have a whole bunch to think about today on taxes. It’s alittle early for some of us.00:35:31.000 –> 00:35:34.000But if you have a tax question, maybe who you should be 1099.00:35:34.000 –> 00:35:41.000What the due dates or something is, you can call the show 615-737-9986.00:35:41.000 –> 00:35:51.000615-737-9986 is the number here in the studio. When we get back, we’re goingto talk more about what we can expect for this tax season.00:35:51.000 –> 00:35:57.000Also take more of your calls and check out the email bag just to see, youknow, if anyone sent over anything new.00:35:57.000 –> 00:36:00.000Always some fun and interesting questions that come out.00:36:00.000 –> 00:36:04.000But again, you’re listening to The Dr. Friday Show and we’re going to beright back.00:36:04.000 –> 00:36:13.000[Music]00:36:13.000 –> 00:36:20.000All right, we are back. Back here in studio in this nice little warm, cozylittle studio.00:36:20.000 –> 00:36:25.000It is so nice not to have to be out in that snow. Had to go out earlier.00:36:25.000 –> 00:36:29.000As you guys all know, I have some beautiful dogs and you know what?00:36:29.000 –> 00:36:31.000They love the snow. Crazy, but they do.00:36:31.000 –> 00:36:34.000So we’re out playing with them and enjoying it.00:36:34.000 –> 00:36:41.000So anyways, which we’ll probably do a little bit more of this afternoon, butuntil then we have about 10 minutes left of this show.00:36:41.000 –> 00:36:48.000So if you want to join the show, you can at 615-737-9986.00:36:48.000 –> 00:36:59.000615-737-9986 is the number you want to call here in studio, which will befor, like I said, the next eight, nine minutes.00:36:59.000 –> 00:37:04.000And then we have it from there. If you want to go ask some questions, youcan always go to email.00:37:04.000 –> 00:37:08.000But let’s hit Bob in Franklin really quick and then we’ll let you go fromthere.00:37:08.000 –> 00:37:10.000Hey, Bob, what’s happening?00:37:10.000 –> 00:37:12.000I’m doing great. How are you doing, Doc?00:37:12.000 –> 00:37:15.000I am doing awesome, my love.00:37:15.000 –> 00:37:19.000Good. So look, I’m a small business owner. We have a restaurant here inFranklin.00:37:19.000 –> 00:37:22.000And the question I have is I’m new to Tennessee.00:37:22.000 –> 00:37:28.000And the question I have is regarding my children, my dependents who are alsoemployees of mine.00:37:28.000 –> 00:37:38.000Is there, I heard somewhere there’s like, is it 14 grand or something that Ican, I can give to my children or something along those lines without havingthem having to pay taxes?00:37:38.000 –> 00:37:48.000So it’s statutory employees. If they’re under the age of 17 and they’reworking for a family held sole proprietorship or partnership.00:37:48.000 –> 00:37:53.000So, or LLC in essence, they cannot be a corporation.00:37:53.000 –> 00:37:58.000Then you can actually making sure that they actually are working.00:37:58.000 –> 00:38:04.000I believe tax law basically says 6,500, but theoretically another 6,000could be if they’ve earned the hours.00:38:04.000 –> 00:38:06.000This has to be a legitimate job, right?00:38:06.000 –> 00:38:13.000If they’ve earned it, you could put another 6,000 into, I would suggest aRoth IRA, but I’m not a financial planner.00:38:13.000 –> 00:38:21.000So theoretically, $12,500 could be paid to them without them paying any taxas a statutory employee.00:38:21.000 –> 00:38:24.000Okay. That’s great. And then if you have time, one more quick question.00:38:24.000 –> 00:38:25.000Sure.00:38:25.000 –> 00:38:40.000It’s regarding our vehicles, our, our, our, now we’re, we’re a restaurant,like I said, so, and we do not use our vehicles for delivery or restaurantservices, but are we able to deduct, let’s say fuel or mileage for ourcommute?00:38:40.000 –> 00:38:46.000No, because just like you said, it’d be no different than if you were goingto work at somebody else’s restaurant, right? As an employee.00:38:46.000 –> 00:39:01.000So your commuting, no, but if you had to run out to the grocery storebecause you ran out of, I don’t know, tomatoes or something, and you had torun and buy some, the fuel back and forth to do that would be required,would be allowed, or coming to see your tax person or any going to the bank.00:39:01.000 –> 00:39:11.000Any of those miles would be actual business miles, but going from home towork and work to home for all of us is still commuting and therefore not atax deduction.00:39:11.000 –> 00:39:15.000Okay, great. Well, listen, I appreciate your advice and your input. Thankyou.00:39:15.000 –> 00:39:21.000Thanks. Appreciate you listening. All right, let’s hit Matt in Nashville.Hey, Matt, what’s happening, my friend?00:39:21.000 –> 00:39:43.000Yeah, I just started my own LLC and I’m contracting with a companycurrently, and I’m under 1099, but I also do side work with a few differentapps. So would I have to open a 1099 on each of those apps and the companyI’m working for, or can I just combine it?00:39:43.000 –> 00:40:02.000No, it’s the opposite. They’re paying you, Matt, so they’re going to 1099your LLC, theoretically you, but through the name of the LLC. If, let’s sayI worked for you, Matt, as a subcontractor to do something, then you would1099 me for those services I did for you.00:40:02.000 –> 00:40:03.000Does that make sense?00:40:03.000 –> 00:40:07.000So for me to file my taxes, what would I need to open?00:40:07.000 –> 00:40:31.000You need to, well, you need to just track all the money everyone’s paid you.Theoretically, they should all 1099 you, but if they don’t, whatever waspaid to you, that would be what you need as far as gross. And then you’llwrite off all of your expenses, be that miles, I don’t know, whatever ittakes to do the job you’re doing. And then you’ll get to your net, which isthe taxable amount.00:40:31.000 –> 00:40:37.000Okay. And I would open up a 1099 on myself. Is that what you’re saying?00:40:37.000 –> 00:40:58.000Nope. You don’t need to worry about the 1099s. You’re going to do a ScheduleC since you’re a single member LLC on your 1040. So you’re going to file aregular tax return like you normally would. And then under that, you’regoing to do a Schedule C, which is for the self-employed, which singlemember LLCs fall under. So that’s where you’ll report all of the income andexpenses on that form.00:40:58.000 –> 00:41:01.000And that’s due at January 31st?00:41:01.000 –> 00:41:24.000No, that you don’t, again, that’s 1099. That’s due April 15th. So don’t wantto confuse you. You’re 1040 and all that. You’re, you’re cool. You don’thave to worry about anything. Only if you paid anyone to do services foryou. That’s the only person we’re trying to track down right now, Matt,would be as if you had someone that did work, then, then you would 1099them. Otherwise you’re good for a while.00:41:24.000 –> 00:41:26.000Okay.00:41:26.000 –> 00:41:28.000All right. Thank you.00:41:28.000 –> 00:41:34.000No worries. That was a great question. Thanks. All right. Let’s hit Stevereal quick. Steven. Hey, he’s in Tennessee.00:41:34.000 –> 00:41:46.000Yeah. Thank you. Just a quick question. Since Trump took all deductions awayfrom the company truck driver, I’m an employee. Are we getting anydeductions back this year?00:41:46.000 –> 00:42:07.000Nope. None of that is going to happen until January of 2026 where that willpotentially, right. We don’t know if it will, but it potentially expires atthat point. So at that point, the 2106 or the employee deduction, I doubtit’s going to come back, Steve, based on all the audits they did. Mostpeople were misusing that form.00:42:07.000 –> 00:42:34.000So I’m pretty sure that that’s probably never going to come back under thesame pretense it was. And I did a number of legitimate truck drivers thatdid overnight long hauls and they were, you know, they were able to take perdiems. And we lost that under the, under the Trump administration. So that Idon’t see that coming back no matter what, but no, you did not get any of itback. Good question though.00:42:34.000 –> 00:42:36.000Okay. Thank you.00:42:36.000 –> 00:42:54.000Sorry, bud. Yep. All right. So again, you are listening to Dr. Friday andthose were great questions and I do appreciate the phone calls. It makesthis show so much more exciting than me just sitting here talking abouttaxes, which for me is very exciting. But for most of you that’s sitting athome, probably not quite so exciting.00:42:54.000 –> 00:43:13.000So if you have questions again, the we’re pretty much at the end here, butyou can always join us every Saturday from two to three. If you have taxquestions outside of that time period, you can usually set up an appointmentor you can try emailing. I will be honest, it’s going to get very crazy inour office for the next few months.00:43:13.000 –> 00:43:32.000But if you can email, I will do my best to get back with you on anyquestions that you might have, or at least be able to send you hopefully inthe right direction as far as making sure that you file everything on time.We’re going to make sure that we’re still concentrating on all the tax lawsand things that are going to apply to most of us.00:43:32.000 –> 00:43:52.000Hopefully I don’t confuse any of you out there of when things are done orwhat they’re doing, but I’d much rather you ask than think that youunderstand me and I’ve completely misled you. So, you know, again, for anyof you that have people that work for you and you’ve wrote checks to them,just reiterating those are who we’re going to 1099.00:43:52.000 –> 00:44:12.000So, and if you have rental property, our lawn people, our handyman, if youhad someone repair a roof, any of those services that went to a company thatis not a corporation is required to have a 1099.00:44:12.000 –> 00:44:34.000So, not only a lot of people just think of 1099s as business to business,but it is because a rental property is considered a business based on theIRS. So again, just keeping that out there, making sure that we aren’t goingto get hit later with a penalty or fine, because we didn’t really know thatwe were required to do that kind of situation.00:44:34.000 –> 00:44:54.000So again, so if you have anyone that has worked for you that made more than$600, that person should be 1099 and or W-2, but W-2s are pretty much setup, right? We know we’re taking money out every week, bi-weekly, once amonth, whatever you’re paying. And that money goes then on a W-2 and itautomatically kind of goes to the system.00:44:54.000 –> 00:45:15.000The 1099 side, not so much. And I will suggest also, it’s a fresh brand newyear. And sometimes people are like, I don’t have their address. I don’thave the social security or EIN number for this vendor because I can’t findthem now. They’re not answering my phone calls. Get that up front before youwrite the very first check to anyone, make sure you have that information.00:45:15.000 –> 00:45:38.000So that way, if you do keep using them and they exceed past $600, you haveit. If you don’t, then you don’t need it, but you still had it just in case.All right. So if you need to reach my office on Monday morning, you can at615-367-0819, 615-367-0819.00:45:38.000 –> 00:45:57.000You can also email Friday@drfriday.com. Again, Friday, F-R-I-D-A-Y@drfriday, like the day of the week. Or you can check me out on the web,which is drfriday.com. Again, D-R-F-R-I-D-A-Y. It’s pretty easy.00:45:57.000 –> 00:46:18.000So if you have questions or you need help in doing anything that deals withtaxes, maybe you haven’t filed taxes in a number of years, or you need helpbecause you know what, you relocated five times. You haven’t, can’t find allyour paperwork. There are ways that we can help you get that information sothat you can file your taxes on time. That’s the important part of all ofthis is staying in compliance.00:46:18.000 –> 00:46:39.000Again, you can reach me at 615-367-0819. I hope you guys are going to staynice and warm. Don’t do anything crazy. I mean, some people that drive onthese roads, I’ll tell you, I drive a big truck and it can be crazy outthere, but I want you guys to enjoy this Saturday. Hope you enjoy it. Talkto you later.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the head of Dr. Friday’s Tax and Financial Firm, delves into the intricacies of the Earned Income Tax Credit (EITC) for the year 2023. She explains that the EITC is a refundable tax credit designed primarily for lower-income individuals, with or without children. The credit amount for 2023 ranges between $600 and $7,430, varying based on the number of children, marital status, and income level. Dr. Friday emphasizes the income-based eligibility of the EITC, highlighting that individuals with up to three children can claim this credit. For those seeking assistance with their taxes, Dr. Friday encourages contacting her firm or tuning into her live Call-In Show on Saturdays.

Transcript

G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Earned Income Tax Credit. What is it? It’s a refundable tax credit tax breaks for lower-income individuals with or without children. In 2023, the credit ranges from $600 up to $7,430 depending on how many kids you have, your marital status, or if you have no kids. So, again, this is one of those that’s truly based solely on income, and if it’s low enough and you don’t have children, you may qualify. If you do, you have up to three children that you can claim for the earned income credits. If you need help, all you have to do is check me on the web, drfriday.com.

Need help with taxes? Call me at 615-367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, President of Dr. Friday’s Tax and Financial Firm, elucidates the intricacies of the student loan interest deduction. This tax benefit allows borrowers to deduct up to $2,500 from their taxable income for paid student loan interest. However, it’s subject to income limits. For single individuals, the deduction begins to phase out at $75,000 and completely phases out at $90,000. For married couples, these limits are between $155,000 and $185,000. Dr. Friday highlights the importance of these thresholds, emphasizing that exceeding them disqualifies taxpayers from claiming the deduction. The episode is a must-listen for anyone navigating the complexities of student loans and taxes.

Transcript

G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

The student loan interest deduction allows borrowers to write off up to $2,500 of their taxable income if they paid interest on their student loan. Now, this is one of those that is means-tested, guys, so that means that if you earn between $75,000 and $90,000, by $90,000, you’re not going to get the deduction for single individuals. It starts means testing at $155,000, up to $185,000 for a married couple. These are very important numbers because, obviously, if you’re claiming this and you make too much money, the interest isn’t going to be a tax deduction.

Need help with taxes? Call me at 615-367-0819. You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, discusses the crucial aspects of student loan interest deductions. The focus is on the income thresholds that affect eligibility for this deduction. For single filers, the deduction begins to phase out at $75,000 and is completely phased out at $90,000. For married couples, these limits are set at $155,000 and $185,000, respectively. Dr. Friday emphasizes the importance of being aware of these income limits, as exceeding them means losing eligibility for the deduction. For personalized tax assistance, Dr. Friday encourages listeners to contact her directly. Also, she reminds listeners to tune into the Dr. Friday Call and Show every Saturday afternoon for more tax insights.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Student loan interest deductions lets borrowers write off up to $2,500 for their taxable income if paid interest on their student loan. Now this is one of those that is means tested guys, so that means that if you earn between $75,000 and $90,000, by $90,000 you’re not going to get the deduction for single individuals. It starts means testing at $155,000 up to $185,000 for a married couple. Very important numbers because obviously if you’re claiming this, you make them too much money, the interest isn’t going to be a tax deduction. Need help with taxes? Call me. 615-367-0819.

You can catch the Dr. Friday Call and Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Welcome to the Dr. Friday Radio Show! In this episode, Dr. Friday provides valuable insights into the intricacies of tax preparation and compliance. Key topics include the delay in IRS e-file opening, the crucial Small Entity Compliance Guide, and the urgent need for business owners to understand the Beneficial Ownership Information requirements. Dr. Friday emphasizes the importance of accurate tax documentation and the potential implications on Medicare and Social Security. The episode also covers payroll tax issues, child support considerations in relation to Social Security, and questions about capital gains on real estate sales. Insightful call-ins add to the dynamic discussion, making this a must-listen for anyone seeking practical tax advice.

Key Highlights:

1. IRS E-file Delay: The opening of IRS e-file is postponed to January 29th, impacting the filing process for basic tax returns.
2. Beneficial Ownership Information Compliance: A critical alert for business owners about the substantial penalties for non-compliance by January 1, 2025.
3. Medicare and Social Security Impacts: Discussions on how income changes, including Social Security benefits, can affect Medicare costs and child support calculations.
4. Real Estate Sales and Taxes: Guidance on the tax implications and exclusions related to selling property, particularly for seniors in different living situations.
5. Interactive Listener Queries: Dr. Friday addresses a variety of caller questions, from payroll tax concerns to retirement account rollovers.

Whether you’re a business owner, retiree, or individual taxpayer, this episode is packed with essential information to help you navigate the complexities of tax season.

Transcript00:00:00.000 –> 00:00:06.880No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your00:00:06.880 –> 00:00:07.880financial woes.00:00:07.880 –> 00:00:10.100She’s the how-to girl.00:00:10.100 –> 00:00:11.600It’s the Dr. Friday Show.00:00:11.600 –> 00:00:18.720If you have a question for Dr. Friday, call her now.00:00:18.720 –> 00:00:19.720737-WWTN.00:00:19.720 –> 00:00:20.720That’s 737-9986.00:00:20.720 –> 00:00:27.720So here’s your host, financial counselor and tax consultant, Dr. Friday.00:00:27.720 –> 00:00:35.600Hey, this is Dr. Friday and the doctor is in the house.00:00:35.600 –> 00:00:42.800We are here live in studio on this very cold Saturday, getting ready to start our tax season.00:00:42.800 –> 00:00:45.680Well, actually, it’s already started, already completing returns.00:00:45.680 –> 00:00:53.000I will let you know that the IRS is now saying January 29th for many of my very basic W-200:00:53.000 –> 00:00:58.560only tax returns, that e-file will not open until January 29th.00:00:58.560 –> 00:01:02.640So in some cases, if you were thinking to rush to that line and get your money back00:01:02.640 –> 00:01:07.920from the IRS, you may have to wait a little longer than you expected.00:01:07.920 –> 00:01:12.040But if you’re working on your taxes this weekend or you’ve got some questions, a little call00:01:12.040 –> 00:01:17.600out to all my prior or existing clients that we, you know, every year obviously handle00:01:17.600 –> 00:01:19.200your taxes.00:01:19.200 –> 00:01:23.960If you don’t see a time, our calendar, the calendar is open at drfriday.com.00:01:23.960 –> 00:01:26.560If you don’t see an available time, just call the office.00:01:26.560 –> 00:01:31.040We do have available time, so we just can’t open up on the calendar because, well, if00:01:31.040 –> 00:01:35.400we do, then we’ll have no more time because it goes as quickly as we have.00:01:35.400 –> 00:01:38.680So that being said, just keep us in the loop.00:01:38.680 –> 00:01:48.920And then if you want to join the show, 615-737-9986, 615-737-9986.00:01:48.920 –> 00:01:52.040I’m always in your calls talking about my favorite subjects.00:01:52.040 –> 00:01:55.040Anytime you have something, you can just let me know.00:01:55.040 –> 00:02:01.080Again, 615-737-9986 is what we’re talking about here in the studio.00:02:01.080 –> 00:02:02.080So we’ll take it from there.00:02:02.080 –> 00:02:06.800I’m trying to get my mic still to work through the system, but this is working fine.00:02:06.800 –> 00:02:07.800All right.00:02:07.800 –> 00:02:11.400And then we also today, we’re going to talk a couple different times just depending on00:02:11.400 –> 00:02:13.960how fast the phone goes in and everything else.00:02:13.960 –> 00:02:17.960We’re going to have the small entity compliance guide.00:02:17.960 –> 00:02:22.640There is a situation that’s coming around where a lot of people are getting emails,00:02:22.640 –> 00:02:26.800phone calls from either other business owners or individuals.00:02:26.800 –> 00:02:30.840And part of that is going to be basically where they’re talking about the beneficial00:02:30.840 –> 00:02:33.600ownership information.00:02:33.600 –> 00:02:35.760And there is a serious penalty.00:02:35.760 –> 00:02:39.760We have until January 1st of 2025.00:02:39.760 –> 00:02:40.760Put that out there.00:02:40.760 –> 00:02:46.000The deadline for filing this is January 1st, 2025.00:02:46.000 –> 00:02:51.920If you do not file in this compliance, the penalty is $500 a day.00:02:51.920 –> 00:02:55.200So this is something we do want to keep talking about.00:02:55.200 –> 00:02:59.280If you’re not too sure, you can always just Google beneficial ownership information.00:02:59.280 –> 00:03:03.600There’s a website set up by the Financial Crime Enforcement Network.00:03:03.600 –> 00:03:07.240This is coming out through the U.S. Department of Treasury.00:03:07.240 –> 00:03:12.160It’s basically asking for the names of the owners, the address of the owners, the dates00:03:12.160 –> 00:03:17.480of birth for the owners, the Social Security numbers for the owners of all businesses.00:03:17.480 –> 00:03:24.320There are a few that can get waivers or have something that is — something out there where00:03:24.320 –> 00:03:28.600basically there are certain businesses, certain things that don’t have to comply, like if00:03:28.600 –> 00:03:33.960you sell insurance, I guess because you already have certain amounts of compliance that’s00:03:33.960 –> 00:03:38.480required, you’re not required to have to do anything on that.00:03:38.480 –> 00:03:43.560It’s just a matter of figuring out which way you want to go and how you want to make it00:03:43.560 –> 00:03:45.320work, et cetera, et cetera.00:03:45.320 –> 00:03:57.840So if you have a question on taxes, you can reach us at 615-737-9986, 615-737-9986, taking00:03:57.840 –> 00:04:00.880your calls live here in studio.00:04:00.880 –> 00:04:04.320Really not a whole bunch as far as taxes getting started.00:04:04.320 –> 00:04:09.720There has been a lot of love letters, it seems like, coming out in this last week or two,00:04:09.720 –> 00:04:17.200but having to do with prior years, ’18, ’19, ’20, ’21, ’22, and a lot of it has to do with00:04:17.200 –> 00:04:21.720payroll taxes, like they’re just realizing now that some of these things were done and00:04:21.720 –> 00:04:24.240they’re coming back and having us do things.00:04:24.240 –> 00:04:28.920So it is one of those situations where you’re like, okay, do I actually really owe this00:04:28.920 –> 00:04:29.920money?00:04:29.920 –> 00:04:31.020Do I need to do something?00:04:31.020 –> 00:04:36.540How can I make sure I’m not just paying a penalty because it’s showing up on here?00:04:36.540 –> 00:04:40.540So we want to make sure all of that is in compliance.00:04:40.540 –> 00:04:44.180So if you get one of those love letters and you’re not too sure what to do, first thing00:04:44.180 –> 00:04:47.700I would do is go back and look at your own records.00:04:47.700 –> 00:04:51.140Did you make all your payroll taxes on time?00:04:51.140 –> 00:04:52.140Was there a problem?00:04:52.140 –> 00:04:53.980Was there a delay?00:04:53.980 –> 00:04:57.980And then that way you can double check to see if, you know, the situation is.00:04:57.980 –> 00:05:03.180I mean, just like we all know payroll taxes were due on the 15th, the 15th falls on a00:05:03.180 –> 00:05:04.180holiday.00:05:04.180 –> 00:05:10.220Theoretically, they wanted all the payroll taxes done on the 12th.00:05:10.220 –> 00:05:12.060You know, that’s what their prefer was.00:05:12.060 –> 00:05:16.140So they would want to be on that and make sure that that was the situation.00:05:16.140 –> 00:05:21.700So if that’s their case, then we have to make sure that that is filed on the right situation.00:05:21.700 –> 00:05:24.620Otherwise, not going to be really a good situation.00:05:24.620 –> 00:05:25.620All right.00:05:25.620 –> 00:05:26.620Oh, sorry.00:05:26.620 –> 00:05:28.100We have a question from Brentwood is on the line.00:05:28.100 –> 00:05:29.100Let’s get Joe.00:05:29.100 –> 00:05:31.100Hey, Joe, what can I do for you?00:05:31.100 –> 00:05:35.300>> Joe Connor Hey, Friday, former client.00:05:35.300 –> 00:05:37.460Question for you.00:05:37.460 –> 00:05:46.380I am now eligible for Social Security benefits, but I have younger children under 16 on which00:05:46.380 –> 00:05:49.220I’m paying child support.00:05:49.220 –> 00:05:56.780So if I start drawing on Social Security, does my child support have to be recalculated00:05:56.780 –> 00:05:59.260because that’s now counted as income?00:05:59.260 –> 00:06:03.500>> Dr. Mary Jo Cagle That’s a great question.00:06:03.500 –> 00:06:07.020That seems like probably more of a legal question.00:06:07.020 –> 00:06:11.180And if you have children, if you’re on Social Security, and I don’t know all the rules,00:06:11.180 –> 00:06:17.380but theoretically, your children under minor children can actually qualify for Social Security00:06:17.380 –> 00:06:19.380benefits.00:06:19.380 –> 00:06:21.140Again, not a total expert.00:06:21.140 –> 00:06:25.940I have clients with young children that are on Social Security and their children qualify00:06:25.940 –> 00:06:27.380as well.00:06:27.380 –> 00:06:32.180But that may only qualify for certain types or income brackets, et cetera.00:06:32.180 –> 00:06:38.260But that is a good question on how and since it’s not earnings, is it actually even a part00:06:38.260 –> 00:06:45.260of the calculation for the child support since child support is not a tax deduction for you?00:06:45.260 –> 00:06:48.180I’m not sure if they would actually consider it.00:06:48.180 –> 00:06:52.860>> Joe Connor Yeah, it’s been sort of a murky thing that00:06:52.860 –> 00:06:55.100I’ve not gotten a great answer on.00:06:55.100 –> 00:06:57.340So I thought I would ask somebody that I trusted.00:06:57.340 –> 00:07:01.340>> Dr. Mary Jo Cagle Well, I appreciate the question, Joe.00:07:01.340 –> 00:07:04.740I just don’t feel like I’m going to be able – I mean, it really comes down to – because00:07:04.740 –> 00:07:10.060child support, the way they calculate it, it doesn’t make sense for most of us to be00:07:10.060 –> 00:07:16.180quite honest because many times they’re calculating things either prior to taxes being paid in00:07:16.180 –> 00:07:17.700the right way and different things.00:07:17.700 –> 00:07:23.380So I don’t find that there’s the same mathematics used when they calculate that than they do00:07:23.380 –> 00:07:25.940with like us for taxes, right?00:07:25.940 –> 00:07:29.820And since it’s not a tax deduction, it becomes even worse.00:07:29.820 –> 00:07:34.340So in answer to that basic question, I guess I’m going to have to say I don’t know the00:07:34.340 –> 00:07:35.340exact answer.00:07:35.340 –> 00:07:41.020And I don’t even know how your Social Security would have even come into play as far as would00:07:41.020 –> 00:07:43.900they care if you’re having to pay tax on it or not.00:07:43.900 –> 00:07:44.900You know what I mean?00:07:44.900 –> 00:07:49.180Would it make any difference that 85% of it could be taxed potentially?00:07:49.180 –> 00:07:53.340>> Joe Connor Yeah, and my question is really because Social00:07:53.340 –> 00:08:02.900Security is taking out pre-tax and child support payments are made based on gross earnings,00:08:02.900 –> 00:08:08.780am I not already paying maximum child support because it’s based on my gross earnings?00:08:08.780 –> 00:08:10.340>> Dr. Debra Hixxon Exactly.00:08:10.340 –> 00:08:14.100Like I just said, that doesn’t make any sense to most of us.00:08:14.100 –> 00:08:18.100If you’re sitting down and doing the math, why would you have to pay child support based00:08:18.100 –> 00:08:19.100on gross earnings?00:08:19.100 –> 00:08:21.580You don’t put gross earnings in your pocket.00:08:21.580 –> 00:08:25.620And then when you take out Social Security, in many cases, even though you already pay00:08:25.620 –> 00:08:31.500tax, you’re very likely going to have to pay tax again on up to 85% of what you get in00:08:31.500 –> 00:08:37.460Social Security unless you can live off Social Security by itself, which most of us can’t.00:08:37.460 –> 00:08:42.420So it just honestly doesn’t make sense to me the way they calculate.00:08:42.420 –> 00:08:45.900So I’m going to say that they probably aren’t going to recalculate it.00:08:45.900 –> 00:08:48.860They’re probably going to make you pay more because it just seems like they never see00:08:48.860 –> 00:08:52.380unless something changes and you’ve reduced your income.00:08:52.380 –> 00:08:54.340That’s about the only thing that would change.00:08:54.340 –> 00:08:55.340That’s my guess.00:08:55.340 –> 00:08:57.660>> Joe Connor Well, I appreciate your time.00:08:57.660 –> 00:08:59.340>> Dr. Debra Hixson No problem, Joe.00:08:59.340 –> 00:09:00.340Thanks.00:09:00.340 –> 00:09:01.900>> Joe Connor I’m going to go to Joyce real quick before the break.00:09:01.900 –> 00:09:04.220Hey Joyce, what can I do for you, sweetie?00:09:04.220 –> 00:09:09.020>> Joyce Rose We are thinking about rolling over a 401(k)00:09:09.020 –> 00:09:10.020to a Roth.00:09:10.020 –> 00:09:17.340But now my question is, a couple or three weeks ago, you were talking about somebody00:09:17.340 –> 00:09:20.100having income and it would affect their Social Security and Medicare.00:09:20.100 –> 00:09:23.720We’re 73 years old and we’re on both.00:09:23.720 –> 00:09:29.420So if we roll that over, I know we have to pay taxes on it, but does it count as income00:09:29.420 –> 00:09:32.900and does it affect our Social Security and Medicare?00:09:32.900 –> 00:09:42.100>> Joyce Rose My understanding is, and what I have seen00:09:42.100 –> 00:09:47.780actually, it will affect if you guys go over, I think it’s like 92, don’t have the exact00:09:47.780 –> 00:09:52.300dollar, 92 for single, so it’s like 180 for a married couple.00:09:52.300 –> 00:09:58.180If you exceed that 180 for all of your income, including the conversion, you could end up00:09:58.180 –> 00:10:03.660increasing, your Medicare could go up for another year because they base it on the year00:10:03.660 –> 00:10:05.460that, you know, whenever that happens.00:10:05.460 –> 00:10:12.180So you could end up paying higher in Medicare fees or the regular withdrawal than you do00:10:12.180 –> 00:10:13.180now.00:10:13.180 –> 00:10:16.700So I don’t know your income and I don’t know if you’re usually over or under that dollar00:10:16.700 –> 00:10:22.660amount, but it is a key number to keep in mind when we’re doing things because we always00:10:22.660 –> 00:10:27.300think about the taxes, but we don’t think about how Medicare does mean testing based00:10:27.300 –> 00:10:28.300on our tax returns.00:10:28.300 –> 00:10:33.580And the next thing you know, I’ve got people that were having a 160 or $130 normally coming00:10:33.580 –> 00:10:38.140out and now they’re having a 180 or $200 a month.00:10:38.140 –> 00:10:41.940And that, you know, fixed income, just because you have the money in your case, you didn’t00:10:41.940 –> 00:10:44.180touch any of that money, you’re just paying the taxes.00:10:44.180 –> 00:10:48.820So your fixed income is still the same and now you’ve lost money for your lifestyle.00:10:48.820 –> 00:10:52.740Not to say it’s going to make it hardship, but who wants to pay more money to Medicare?00:10:52.740 –> 00:11:00.380So 180, now that’s, is that net after you take off all your expenses?00:11:00.380 –> 00:11:05.140Yeah, that would be your adjusted gross income.00:11:05.140 –> 00:11:06.140Okay.00:11:07.140 –> 00:11:08.140That’s 180,000.00:11:08.140 –> 00:11:09.140Okay.00:11:10.140 –> 00:11:11.140Thank you very much.00:11:11.140 –> 00:11:12.140No problem.00:11:12.140 –> 00:11:13.140Thanks, Joy.00:11:13.140 –> 00:11:14.140Appreciate you.00:11:14.140 –> 00:11:15.140All righty.00:11:15.140 –> 00:11:16.140So that was a great question.00:11:16.140 –> 00:11:26.180And a lot of times, I mean, I’ll be honest, doing this for 25, 28 years now, and one of00:11:26.180 –> 00:11:30.900the things that we figured out probably five or six years ago, which makes us a little00:11:30.900 –> 00:11:34.900slow, is that we’re always concentrating on the IRS or the state if they’re state income00:11:34.900 –> 00:11:37.980and some of my clients, that’s what I’ve always looked at.00:11:37.980 –> 00:11:42.860And then we started getting people, you know, coming in and afterwards saying, hey, wait00:11:42.860 –> 00:11:47.860a sec, you know, now my Medicare changed because I sold a piece of real estate and my capital00:11:47.860 –> 00:11:50.860gains went up, you know, whatever, and now we have this.00:11:50.860 –> 00:11:55.580And then, you know, there is some sort of waiver that you can get once or something,00:11:55.580 –> 00:11:58.460but I’ll be honest, guys, I’ve never successfully done it.00:11:58.460 –> 00:12:05.140I’ve had clients successfully contact Medicare and get it done, but I’ve not yet had any00:12:05.140 –> 00:12:07.020real success in filing that document.00:12:07.020 –> 00:12:12.420So it’s really important if you can control it, like in Joyce’s situation, maybe they00:12:12.420 –> 00:12:16.980do a little bit in 24 and a little bit in 25 and keep them under that number if that’s00:12:16.980 –> 00:12:19.620a possibility, that would be something.00:12:19.620 –> 00:12:23.460Because a lot of times your financial planner will be sitting there saying, wait, as long00:12:23.460 –> 00:12:28.620as it’s under 250, you’re maximizing the 22 percent, let’s maximize as much as we can,00:12:28.620 –> 00:12:33.260but when you go from that 180 to 250, you’ve just affected your Medicare rates.00:12:33.260 –> 00:12:36.900So again, talk to your financial people, make sure you got it covered.00:12:36.900 –> 00:12:38.500All right, we’re going to take a quick break.00:12:38.500 –> 00:12:40.580When we get back, we’ll take more of your phone calls.00:12:40.580 –> 00:12:41.580615-737-9986.00:12:41.580 –> 00:12:47.580We’ll be right back with the Dr. Friday Show.00:12:47.580 –> 00:12:57.140All right, we are back live here in studio.00:12:57.140 –> 00:13:07.500And if you have anything you want to join the show, 615-737-9986, 615-737-9986, taking00:13:07.500 –> 00:13:08.500your calls.00:13:08.500 –> 00:13:13.220We’ll go right to Robert from Nashville and see what he has.00:13:13.220 –> 00:13:15.380Hello, Dr. Friday.00:13:15.380 –> 00:13:18.780My mother-in-law, I’m 90 years old now.00:13:18.780 –> 00:13:21.980She has been in a nursing home the last couple of years.00:13:21.980 –> 00:13:24.180We sold her home.00:13:24.180 –> 00:13:26.260She lost her husband about 40 years ago.00:13:26.260 –> 00:13:28.540She never remarried.00:13:28.540 –> 00:13:30.660What is the exclusion on the capital gains?00:13:30.660 –> 00:13:33.420Does she get 250 or does she get 500?00:13:33.420 –> 00:13:35.420She only gets 250.00:13:35.420 –> 00:13:39.620You only have a window of two years after the passing of a spouse.00:13:39.620 –> 00:13:42.860But she did get a — well, 40 years ago.00:13:42.860 –> 00:13:44.260I have no idea.00:13:44.260 –> 00:13:49.060Theoretically, if they owned the home jointly that they had owned — I don’t know if she’d00:13:49.060 –> 00:13:54.180sell the same house or not that you sold — but at the time of his passing, there would have00:13:54.180 –> 00:13:58.460been a 50% step-up in basis.00:13:58.460 –> 00:14:03.180But 40 years ago, I can’t imagine what the property would have had today, you know?00:14:03.180 –> 00:14:04.180Oh, yeah.00:14:04.180 –> 00:14:07.860It would be locked into most of the growth she’s probably seen.00:14:07.860 –> 00:14:12.100I mean, I don’t know where it’s at or anything, but I’m going to guess in the last 10 years,00:14:12.100 –> 00:14:16.140the house would probably increase quite a bit more than it had in the 30 years.00:14:16.140 –> 00:14:17.140Oh, yeah.00:14:17.140 –> 00:14:18.140Absolutely.00:14:18.140 –> 00:14:19.140With all the growth we’ve had here.00:14:19.140 –> 00:14:20.140So, yeah.00:14:20.140 –> 00:14:23.740So she’s looking at a $250,000 exclusion.00:14:23.740 –> 00:14:28.740But keep in mind, if she’s living in a nursing home, unless it’s a Medicare situation, any00:14:28.740 –> 00:14:34.740money that she’s paying out is medical, and therefore can’t be used for itemizing.00:14:34.740 –> 00:14:35.740Okay.00:14:35.740 –> 00:14:36.740Very good.00:14:36.740 –> 00:14:37.740Thank you.00:14:37.740 –> 00:14:38.740All right.00:14:38.740 –> 00:14:39.740I appreciate the phone call.00:14:39.740 –> 00:14:40.740Thanks, Robert.00:14:40.740 –> 00:14:41.740All righty.00:14:41.740 –> 00:14:51.500So, again, if you have questions, you can join us here, 615-737-9986, 615-737-9986,00:14:51.500 –> 00:14:52.500taking your calls.00:14:52.500 –> 00:14:56.700If you’ve got questions, again, I do want to keep — Daryl will probably get tired of00:14:56.700 –> 00:15:00.260it, but this is a huge penalty to all small business owners.00:15:00.260 –> 00:15:07.020That means if you are a partnership, a corporation, it doesn’t apply to single member.00:15:07.020 –> 00:15:12.860It does only, in most cases, if you’re a single member corporation, it would, or single sole00:15:12.860 –> 00:15:13.860holder.00:15:13.860 –> 00:15:15.420But you need to look.00:15:15.420 –> 00:15:16.420You need to go online.00:15:16.420 –> 00:15:20.740You may have already gotten something from compliance, but you need to be looking at00:15:20.740 –> 00:15:26.340the beneficial ownership informational from the Financial Crime Enforcement Network.00:15:26.340 –> 00:15:28.740This is a legitimate situation.00:15:28.740 –> 00:15:29.740You have time.00:15:29.740 –> 00:15:33.700It’s not something you have to draw up the phone and get done today, but it is something00:15:33.700 –> 00:15:38.060that you need to make sure that yourself or your accountant or whoever is handling these00:15:38.060 –> 00:15:39.060kind of situations.00:15:39.060 –> 00:15:40.780It’s not part of a tax situation.00:15:40.780 –> 00:15:45.260It’s not something that we normally would do, but it is something that you do need to00:15:45.260 –> 00:15:51.300have someone help you do or get done yourself, so that way you’re able to not have this penalty,00:15:51.300 –> 00:15:58.780because this penalty is, as far as I’m concerned, massive when it’s $500 a day when you’re late.00:15:58.780 –> 00:16:01.020And that could add up really, really quickly.00:16:01.020 –> 00:16:05.380So these questions, and keep in mind, right now, one of the best things you need to be00:16:05.380 –> 00:16:11.180doing, you can start working on your taxes, but like I said, IRS has already sent notifications00:16:11.180 –> 00:16:14.140out to us that they will not be opening e-file.00:16:14.140 –> 00:16:16.000It was going to be the 22nd.00:16:16.000 –> 00:16:19.540We got notification today that it was going to be the 29th.00:16:19.540 –> 00:16:23.300It may not be for every single type of tax return, just some of the returns we’re working00:16:23.300 –> 00:16:24.300on.00:16:24.300 –> 00:16:29.820And then also you have the situation where you need to make sure you have all your documentation.00:16:29.820 –> 00:16:32.140Make sure you have your portfolio.00:16:32.140 –> 00:16:37.780So if you have stock, dividends, interest, a lot of that’s not coming out.00:16:37.780 –> 00:16:42.020Mortgage statements, I know a lot of times nowadays we don’t use those as often, but00:16:42.020 –> 00:16:44.100getting that information together.00:16:44.100 –> 00:16:49.460If you have any kind of distribution, 1099s, none of that has to be out to the last day00:16:49.460 –> 00:16:50.460of January.00:16:50.460 –> 00:16:55.780And in some cases, again, my mortgage company said they weren’t going to have them out until00:16:55.780 –> 00:16:56.780February 15th.00:16:56.780 –> 00:17:00.740So again, one of those situations where you just want to make sure you have all the information00:17:00.740 –> 00:17:02.340so you’re not amending things later.00:17:02.340 –> 00:17:03.340All right, let’s take Gary.00:17:03.340 –> 00:17:04.340I think it’s in Dixon.00:17:04.340 –> 00:17:05.340Let’s see what he has a question on.00:17:05.340 –> 00:17:06.340Hey, Gar.00:17:06.340 –> 00:17:07.340Hey.00:17:07.340 –> 00:17:08.340Yeah, we’re just on straight Social Security.00:17:08.340 –> 00:17:09.340We don’t have any other income.00:17:09.340 –> 00:17:19.180I think H&R Block told us last year we wouldn’t have to file no more.00:17:19.180 –> 00:17:20.900Is that correct?00:17:20.900 –> 00:17:21.900Correct.00:17:21.900 –> 00:17:26.340If you only have Social Security and you don’t have any other source of income, Social Security00:17:26.340 –> 00:17:29.300in itself is a zero tax.00:17:29.300 –> 00:17:32.420It’s only when you make money that Social Security can become taxable.00:17:32.420 –> 00:17:37.340So yeah, you have one of the few times, few advantages, Gary, at this point in life to00:17:37.340 –> 00:17:43.100just be able to ignore all the hoopla when it comes to taxes.00:17:43.100 –> 00:17:48.500Well, I think, yeah, I was sort of leery of that.00:17:48.500 –> 00:17:52.100So I wanted to ask somebody, you know, about it.00:17:52.100 –> 00:17:59.060And they said, no, if you don’t work any more or have any income coming in, up to a certain00:17:59.060 –> 00:18:01.900amount, I think is what they told me, but I can’t remember.00:18:01.900 –> 00:18:06.140Yeah, it’s up to the standard deduction, but half of that would be possibly, it’s called00:18:06.140 –> 00:18:10.700the provisional tax code, so you take half of your Social Security plus whatever you00:18:10.700 –> 00:18:11.700might have earned.00:18:11.700 –> 00:18:16.620And if it does exceed your, pretty much your standard deduction, which as a married couple00:18:16.620 –> 00:18:21.740is almost $30,000 if you’re over the age of 65, you would have some wiggle room.00:18:21.740 –> 00:18:27.420So if you made a W-2 for $10,000, you’d still not, as long as there was no withholding,00:18:27.420 –> 00:18:29.460you know, you’d still not have to file taxes.00:18:29.460 –> 00:18:30.460Right.00:18:30.460 –> 00:18:34.860Well, I’m 74, so we’re sort of home.00:18:34.860 –> 00:18:37.220You know, we’ll just stay at home and stay out of trouble.00:18:37.220 –> 00:18:38.220There you go.00:18:38.220 –> 00:18:39.220It’s about time.00:18:39.220 –> 00:18:40.220You get to enjoy a little bit.00:18:40.220 –> 00:18:41.220Well, enjoy it.00:18:41.220 –> 00:18:42.220Hey, man.00:18:42.220 –> 00:18:43.220Stay inside, though.00:18:43.220 –> 00:18:44.220It’s too cold.00:18:44.220 –> 00:18:45.220All right.00:18:45.220 –> 00:18:46.220You have a good day.00:18:46.220 –> 00:18:47.220Thank you, sir.00:18:47.220 –> 00:18:48.220All right.00:18:48.220 –> 00:18:51.740And that was a good question, because I have a number of people every year, and I think00:18:51.740 –> 00:18:55.180it’s good to check, because sometimes things change.00:18:55.180 –> 00:19:00.780Maybe you sell some stocks or even selling your home, even if it’s a zero tax situation,00:19:00.780 –> 00:19:06.380a lot of times we like to report it so that the IRS knows it was your primary home.00:19:06.380 –> 00:19:10.860But most of the time, it’s just a matter of, you know, just making sure everything is reported00:19:10.860 –> 00:19:16.140so you don’t have to look over your shoulder later and you say, “Oh, man, one of my clients,00:19:16.140 –> 00:19:23.500he’s an older gentleman, and he just got a love letter from 2022, and we found that maybe00:19:23.500 –> 00:19:27.740it looks like it may have been one of his portfolios, information did not come through00:19:27.740 –> 00:19:28.740to him.”00:19:28.740 –> 00:19:33.020So that’s why I’m using that example, and if you’re not the first, you certainly won’t00:19:33.020 –> 00:19:34.020be the last.00:19:34.020 –> 00:19:40.580But make sure, do your best to make sure that you have all of your information, because00:19:40.580 –> 00:19:44.220the IRS is going to come back, and there is nothing worse than getting a letter from the00:19:44.220 –> 00:19:48.500Internal Revenue Service saying you forgot or they’ve changed your tax return, because00:19:48.500 –> 00:19:49.700it’s never for the good.00:19:49.700 –> 00:19:54.060They never usually send those letters out that I can find that usually says, “Oh, we’ve00:19:54.060 –> 00:19:56.380changed your tax return, and you now have a refund.”00:19:56.380 –> 00:20:02.900Not really something that’s happening too often, you know, but what we do want to make00:20:02.900 –> 00:20:09.620sure is that you are able to get your information and then be able to look.00:20:09.620 –> 00:20:16.020And when you do get those letters, this gentleman, he was smart enough to review his taxes and00:20:16.020 –> 00:20:20.980see that the way I labeled something and the way the IRS labeled it, it was the same thing.00:20:20.980 –> 00:20:26.340So they were saying that one of the things was not on the tax return, but it was.00:20:26.340 –> 00:20:29.660And it was on the same section, it’s just different labeling.00:20:29.660 –> 00:20:35.940So just because the IRS says they’ve changed your tax return, don’t take that as that you00:20:35.940 –> 00:20:37.900have to pay that money, okay?00:20:37.900 –> 00:20:39.100That’s not always the case.00:20:39.100 –> 00:20:42.740And there, in the letter, it basically says, “If you have any information to help us change00:20:42.740 –> 00:20:46.420this, blah, blah, blah, if you ignore us, we’re going to change it anyway.”00:20:46.420 –> 00:20:50.980And then you’d have to go back and try to amend, and just so you know, amended tax returns00:20:50.980 –> 00:20:54.780are not necessarily having to be accepted.00:20:54.780 –> 00:20:58.060So it’s one of those deals where you need to make sure you have everything.00:20:58.060 –> 00:21:03.300Also, I wanted to put a reminder out that anyone that may not have applied yet for the00:21:03.300 –> 00:21:08.020employee retention tax credit, that will expire come April.00:21:08.020 –> 00:21:12.780So if you haven’t applied for it, and not everybody gets it, I can tell you every day,00:21:12.780 –> 00:21:17.380during the week especially, I at least get one phone call a day telling me how I can00:21:17.380 –> 00:21:21.980qualify for $26,000 per an employee.00:21:21.980 –> 00:21:28.060I personally think they should be put under arrest or something, because it’s a fraud.00:21:28.060 –> 00:21:32.780I mean, very few people actually truly qualify for $26,000 per an employee, because they00:21:32.780 –> 00:21:39.540actually back out PPPs and different things, if you were truly affected.00:21:39.540 –> 00:21:45.980Many of us stayed open, so my people were working, therefore they didn’t apply to them.00:21:45.980 –> 00:21:50.540It only applies to people that maybe had, I don’t know, I’m thinking like a bar or something00:21:50.540 –> 00:21:54.220that was totally shut down in Nashville for periods of time, and then they’d open and00:21:54.220 –> 00:21:56.020then they re-shut them down.00:21:56.020 –> 00:22:00.220Those companies were totally affected, and maybe in those situations, some of them would00:22:00.220 –> 00:22:04.780have qualified, but if they got the PPP, which most of them would have gotten first, they00:22:04.780 –> 00:22:06.220still won’t qualify for all of it.00:22:06.220 –> 00:22:07.220So it’s very misleading.00:22:07.220 –> 00:22:11.900So just be very careful when you get those calls, because I have several clients that00:22:11.900 –> 00:22:16.060call me once they get those phone calls, and like I said, I’m getting those phone calls,00:22:16.060 –> 00:22:17.060and they’re very misleading.00:22:17.060 –> 00:22:20.700A lot of times they’re recordings, and they’re just someone saying something, so it’s not00:22:20.700 –> 00:22:27.020like you can say, “Hey, you really can’t — I don’t qualify, so stop calling me.”00:22:27.020 –> 00:22:29.500They’re phishing, and they’re trying to get this information.00:22:29.500 –> 00:22:32.940So it’s really important that you know and understand how that works.00:22:32.940 –> 00:22:39.700But if you have a business that was in business in ’21 and ’22, and you were affected by COVID,00:22:39.700 –> 00:22:46.260and you didn’t maybe get all the PPP, or especially the second PPP, because many of them didn’t00:22:46.260 –> 00:22:51.060qualify because they didn’t have the hardship, then you might want to make sure that you’re00:22:51.060 –> 00:22:52.060not leaving.00:22:52.060 –> 00:22:59.340But also I want to say ERTC, Employee Retention Tax Credit, is taxable income.00:22:59.340 –> 00:23:04.180That is not like PPP that was free money or turned out to be free money.00:23:04.180 –> 00:23:06.180This is a taxable situation.00:23:06.180 –> 00:23:12.660So if you get $20,000 back, that’s $20,000 of income that in theory, if it was for ’21,00:23:12.660 –> 00:23:16.340you need to go back, amend ’21, and then pay the taxes.00:23:16.340 –> 00:23:19.460And the IRS is reviewing and auditing those.00:23:19.460 –> 00:23:25.900I have already seen several cases and conversations that I’ve heard on some of these phone calls.00:23:25.900 –> 00:23:27.900So just, you know, be prepared.00:23:27.900 –> 00:23:29.460Make sure you have your documentation.00:23:29.460 –> 00:23:33.820Just because you got the money from the IRS does not mean that they can’t come back and00:23:33.820 –> 00:23:38.100audit that and reconfirm that you did or did not qualify for it.00:23:38.100 –> 00:23:42.140So again, making sure that all that information was correct and you’re doing it.00:23:42.140 –> 00:23:45.300All right, we’re going to get ready here to take our second break.00:23:45.300 –> 00:23:49.460If you want, you’ve got a question concerning your 2024s, or maybe something has happened00:23:49.460 –> 00:23:55.420in 2023 filings, or I should say 2022, or preparing your 2023, then you can give us00:23:55.420 –> 00:23:58.420a call here at 615-737-9986.00:23:58.420 –> 00:23:59.420615-737-9986.00:23:59.420 –> 00:24:02.420We’ll be right back with the Dr. Friday Show.00:24:02.420 –> 00:24:06.420All righty, we are back here live in studio.00:24:06.420 –> 00:24:12.420You can join the show if you want at 615-737-9986.00:24:12.420 –> 00:24:13.420615-737-9986.00:24:13.420 –> 00:24:19.420And we’re going to hit Joe in Manchester.00:24:19.420 –> 00:24:26.420Hey Joe, what’s happening?00:24:26.420 –> 00:24:30.100Hey, Dr. Friday.00:24:30.100 –> 00:24:38.180The house beside me recently sold during the summer, and the guy that bought it is a home00:24:38.180 –> 00:24:39.180remodeler.00:24:39.180 –> 00:24:46.660And he asked if I would keep his grass mowed for him, which I did, and he paid me $500.00:24:46.660 –> 00:24:51.100And I’m not self-employed or a business owner, I’m just a neighbor.00:24:51.100 –> 00:24:53.100So how do I need to claim that on my taxes?00:24:53.100 –> 00:24:58.860Well, it would either be considered other income, because it wasn’t an attempt to make00:24:58.860 –> 00:25:00.100earnings.00:25:00.100 –> 00:25:04.420You could put it on your Schedule 1 under other income if you want to be.00:25:04.420 –> 00:25:10.380I doubt he’s going to 1099 you, and in theory it was more like a gift that he paid you for00:25:10.380 –> 00:25:11.940doing a nice thing.00:25:11.940 –> 00:25:17.620But to be legitimate, you file it on your Schedule 1 under other income.00:25:17.620 –> 00:25:18.620Okay.00:25:18.620 –> 00:25:21.900All right, that sounds good.00:25:21.900 –> 00:25:23.580Okay, good question.00:25:23.580 –> 00:25:25.140Okay, thank you, Dr. Friday.00:25:25.140 –> 00:25:28.140Most people would probably just ignore it, Joe.00:25:28.140 –> 00:25:29.700Say what now?00:25:29.700 –> 00:25:30.700Okay.00:25:30.700 –> 00:25:34.220I said most people probably would not be reporting it, to be quite honest.00:25:34.220 –> 00:25:36.620Well, he wrote me a check and everything.00:25:36.620 –> 00:25:39.140He’s a home developer, so I didn’t know.00:25:39.140 –> 00:25:40.140No.00:25:40.140 –> 00:25:45.900I mean, what you’re doing is correct, but theoretically, as long as it’s $500 or more,00:25:45.900 –> 00:25:48.620in theory, we’re supposed to report it on our tax return.00:25:48.620 –> 00:25:52.580If he had paid you $450, you wouldn’t have had to report it.00:25:52.580 –> 00:25:55.900So that might be something if he does for this year, you might just want to cut it off.00:25:55.900 –> 00:25:59.060Say, “I’m going to do it for $450, so I don’t have to worry about taxes.”00:25:59.060 –> 00:26:01.520Okay, sounds good.00:26:01.520 –> 00:26:02.520Thank you.00:26:02.520 –> 00:26:03.520Thanks, buddy.00:26:03.520 –> 00:26:04.520Bye-bye.00:26:04.520 –> 00:26:05.520All right.00:26:05.520 –> 00:26:09.460But yes, he probably won’t, because it’s under $600.00:26:09.460 –> 00:26:11.420He doesn’t have to legally 1099 you.00:26:11.420 –> 00:26:16.820But what Joe brought up is actually a great point, which means that even though somebody00:26:16.820 –> 00:26:24.820doesn’t 1099 you, in theory, the IRS says any income earned should be reported on your00:26:24.820 –> 00:26:27.020tax return.00:26:27.020 –> 00:26:31.140And if you have a, you know, I mean, Joe then, I would have said he could have wrote it off00:26:31.140 –> 00:26:35.500as a small business, but the IRS would have classified it as a hobby.00:26:35.500 –> 00:26:37.140He wasn’t out to make a lawn service.00:26:37.140 –> 00:26:38.620He was doing it as a favor.00:26:38.620 –> 00:26:41.300It was someplace that he would just come over and do.00:26:41.300 –> 00:26:45.180So he wasn’t really in the lawn business.00:26:45.180 –> 00:26:50.580So in his case, he doesn’t, he cannot write off his expenses against that money because00:26:50.580 –> 00:26:54.420he wasn’t in business and he wasn’t trying to be in business.00:26:54.420 –> 00:26:58.980Now, if you are in the lawn service business, then obviously you could have wrote off your00:26:58.980 –> 00:27:02.900petrol and different things, your miles and the gas and things it takes to go into your00:27:02.900 –> 00:27:06.460lawnmower, but that’s not one of those situations.00:27:06.460 –> 00:27:10.860But anytime, and this is going to be coming back in 20, I know we keep saying this every00:27:10.860 –> 00:27:19.700year guys, but in 2023, theoretically, some companies like Square and PayPal and Venmo00:27:19.700 –> 00:27:27.180were getting geared up to start issuing anyone that made more than $600 on in using their00:27:27.180 –> 00:27:28.180sites, right?00:27:28.180 –> 00:27:31.980I mean, that was, and then it got extended and then it’s now $5,000.00:27:31.980 –> 00:27:39.180So right now the law is $5,000 or more than 20 transactions.00:27:39.180 –> 00:27:40.620And that’s what you’re going to be dealing with.00:27:40.620 –> 00:27:47.880So if you’re doing a, I don’t know, like a garage sale kind of thing on, people are coming00:27:47.880 –> 00:27:53.740in and paying you through one of them, PayPal or Venmo or any of those, or you’re using00:27:53.740 –> 00:27:59.700those apps thinking that that isn’t going to really show up as income because it’s a00:27:59.700 –> 00:28:05.180cash app and so far there hadn’t been a lot unless you were using merchant statements.00:28:05.180 –> 00:28:07.660So I’m preparing you guys.00:28:07.660 –> 00:28:13.220If you decide that you’re going to continue doing your webpage where you’re selling different00:28:13.220 –> 00:28:17.900things and you’re maybe even taking furniture and fixing it up and then resubmitting or00:28:17.900 –> 00:28:23.260reselling that or going around to garage sales and putting stuff out there and selling it,00:28:23.260 –> 00:28:25.120that is a legitimate business.00:28:25.120 –> 00:28:29.580Even though you might think it’s just a little side thing that you’re doing, the IRS is going00:28:29.580 –> 00:28:31.540to say that is a business.00:28:31.540 –> 00:28:37.140You are taking one thing and you’re creating it or you’re even just shopping around and00:28:37.140 –> 00:28:40.960then you’re putting that same thing out for the market to buy.00:28:40.960 –> 00:28:44.000You are now creating a product and a sale.00:28:44.000 –> 00:28:49.140So you need to start thinking about, because most of the time what we ran into in a couple00:28:49.140 –> 00:28:52.300cases, no one tracked their little garage sale pickup.00:28:52.300 –> 00:28:56.460So people drive around and they find these really cool things that are at garage sales00:28:56.460 –> 00:29:01.340and they negotiate prices and then they turn around and put them back out in the marketplace.00:29:01.340 –> 00:29:03.180But they’re not carrying a receipt book.00:29:03.180 –> 00:29:04.260They paid cash for it.00:29:04.260 –> 00:29:06.060They don’t even know where they purchased it.00:29:06.060 –> 00:29:07.380So there is no basis.00:29:07.380 –> 00:29:13.900So when they sell it, since they did not track where, how, when, how much money that was00:29:13.900 –> 00:29:18.780spent on it, then when they sell it and if the IRS audits those individuals, we have00:29:18.780 –> 00:29:19.780no trail.00:29:19.780 –> 00:29:21.900There’s nothing come back at us and says, “Oh, wait.00:29:21.900 –> 00:29:26.900We can actually deduct this because this is who we paid $45 for this item that we sold00:29:26.900 –> 00:29:27.900for 80.00:29:27.900 –> 00:29:31.340So we have a basis and then we can only have to pay tax on the difference.”00:29:31.340 –> 00:29:32.340No.00:29:32.340 –> 00:29:36.980So if you’re one of those individuals that has just accumulated that you have a lot of00:29:36.980 –> 00:29:42.620stuff and you’re selling it, theoretically if it’s your own personal thing and you put00:29:42.620 –> 00:29:48.500them out there, but now if you sell more than $5,000 a year, the IRS is saying that’s a00:29:48.500 –> 00:29:49.860lot of money in one year.00:29:49.860 –> 00:29:52.420That’s a lot to be generating.00:29:52.420 –> 00:29:57.580Therefore you’re going to have to question is it truly a business that you’re in or not.00:29:57.580 –> 00:30:03.340You know, maybe you sold one thing for $5,000 because you had a piano or something, but00:30:03.340 –> 00:30:07.700if you’re using any kind of cash app, it’s going to start coming.00:30:07.700 –> 00:30:13.780So you need to start really thinking about where, how you’re doing things because if00:30:13.780 –> 00:30:16.420you’re doing some of this on the side thinking, “Hey, you know what?00:30:16.420 –> 00:30:17.420It’s been a great way.00:30:17.420 –> 00:30:18.420I find these things.00:30:18.420 –> 00:30:25.780I have a sister-in-law that used to go and go to some of the outlets, buy clothes,” and00:30:25.780 –> 00:30:30.860then she would list them on the internet and she had a little store there and then she00:30:30.860 –> 00:30:36.060would sell the stuff and make it, which was great.00:30:36.060 –> 00:30:39.900But obviously if you’re not reporting at all, that becomes a problem.00:30:39.900 –> 00:30:45.340So you need to make sure that if you’re doing something like that, you are now really tracking00:30:45.340 –> 00:30:50.540your expenses because if you’re not, it could come back at you later where you don’t have00:30:50.540 –> 00:30:55.980any expenses because you can’t justify any of them because you didn’t have a paper trail00:30:55.980 –> 00:30:56.980to use.00:30:56.980 –> 00:31:02.100And the IRS has the right to completely write off all of your expenses because you can’t00:31:02.100 –> 00:31:03.540justify those expenses.00:31:03.540 –> 00:31:04.740So, all right.00:31:04.740 –> 00:31:06.100So we’ve got that.00:31:06.100 –> 00:31:08.700Don’t forget we are in the middle of, well, we aren’t in the middle.00:31:08.700 –> 00:31:13.940We just started I should say since e-file hasn’t even opened up until January 29th.00:31:13.940 –> 00:31:16.740Does it mean you cannot complete your taxes?00:31:16.740 –> 00:31:19.620Does it mean they can’t be ready and ready to go out?00:31:19.620 –> 00:31:24.140We’ve already completed probably 20, 30 returns and we’re working this weekend.00:31:24.140 –> 00:31:28.140Tax returns are going out and getting everything at least as far as we can go.00:31:28.140 –> 00:31:33.300There’s going to be a couple that we may start and we’re waiting for a few documents, K-1s,00:31:33.300 –> 00:31:37.460different things that’s going to come from other sources that we’re not able.00:31:37.460 –> 00:31:39.020Don’t forget to track your stuff.00:31:39.020 –> 00:31:40.020That’s all I’m going to say.00:31:40.020 –> 00:31:44.660I know I say that a lot, but I can’t tell you how many times someone comes in because00:31:44.660 –> 00:31:49.180they get a letter that the IRS has changed their returns because of something they didn’t00:31:49.180 –> 00:31:50.180think about.00:31:50.180 –> 00:31:56.100In some cases, it’s as simple as they had a 1099-R, which is a distribution.00:31:56.100 –> 00:32:00.940And since the federal taxes came out of that distribution, some people think, “Oh, I don’t00:32:00.940 –> 00:32:01.940have to put on my tax returns.00:32:01.940 –> 00:32:02.940They already took the money out.00:32:02.940 –> 00:32:03.940They already took the taxes out.”00:32:03.940 –> 00:32:07.100That doesn’t quite work that way.00:32:07.100 –> 00:32:08.740All they did was take an estimate.00:32:08.740 –> 00:32:13.180They took a dollar amount that you told them, 10, 20, 30 percent, whatever it might have00:32:13.180 –> 00:32:14.180been.00:32:14.180 –> 00:32:17.780But based on your income, total overall is how that is taxed.00:32:17.780 –> 00:32:22.620So in many cases, not enough money came out, and therefore, they end up having to pay more00:32:22.620 –> 00:32:27.940money now with penalties because they didn’t report it, and then they get underreporting00:32:27.940 –> 00:32:30.020of income and everything else.00:32:30.020 –> 00:32:33.340Very important to track your information and make sure you know where it’s coming from.00:32:33.340 –> 00:32:34.340That’s all I’m going to say.00:32:34.340 –> 00:32:35.340Documentation.00:32:35.340 –> 00:32:38.700Right now is the time to just go through, “Steve, did you work more than you said you00:32:38.700 –> 00:32:39.700would?00:32:39.700 –> 00:32:40.700Did you have more than one job?00:32:40.700 –> 00:32:44.580Did you have any major medical situations that may or may not trigger anything?00:32:44.580 –> 00:32:47.660Did you have a large charitable contribution?”00:32:47.660 –> 00:32:50.140And that doesn’t always have to be cash.00:32:50.140 –> 00:32:53.260But what we have also learned over all these years is what, guys?00:32:53.260 –> 00:32:59.460If you have something over $250 or $500, depending if it’s cash or product, you need to have00:32:59.460 –> 00:33:00.460documentation.00:33:00.460 –> 00:33:02.740It’s always about the documentation.00:33:02.740 –> 00:33:07.740And in most cases, if you have a family member that’s passed away and then you’ve donated00:33:07.740 –> 00:33:12.380all of their things, and theoretically that could be a tax deduction to you, you better00:33:12.380 –> 00:33:13.380have an appraisal.00:33:13.380 –> 00:33:17.700We have a situation where we’ve been working with someone for a long time trying to get00:33:17.700 –> 00:33:23.700them to come back and reopen and audit because they basically disallowed all of it because00:33:23.700 –> 00:33:29.300he did not have, but he was under the understanding at the time that one item didn’t require it00:33:29.300 –> 00:33:34.700unless one item was over the $500 or $5,000, depending on what you’re looking at.00:33:34.700 –> 00:33:39.780Mark, and in his case, no, the IRS came back and they have ruled on this in court cases00:33:39.780 –> 00:33:44.740that says if you have an estate, and let’s say the combination of everything in that00:33:44.740 –> 00:33:50.020house is $5,000 or $6,000 and you’re going to give it all to a charity and you want to00:33:50.020 –> 00:33:55.780deduct that from your taxes as a charitable deduction, you better have an appraisal that00:33:55.780 –> 00:33:58.020shows that all of that was worth that.00:33:58.020 –> 00:34:00.860And that’s the way it’s going to come down.00:34:00.860 –> 00:34:05.700Otherwise, you’re not going to qualify for anything more than the $250 cash and $50000:34:05.700 –> 00:34:06.700non-cash contributions.00:34:06.700 –> 00:34:09.140That’s pretty much out there.00:34:09.140 –> 00:34:13.340So just putting that on the table, you want to make sure that you’re documenting these00:34:13.340 –> 00:34:14.340things.00:34:14.340 –> 00:34:21.100Don’t forget, if you have some stock that is valued at a certain dollar amount and you00:34:21.100 –> 00:34:25.060don’t want to have to pay capital gains, you can gift that to them at the value and you00:34:25.060 –> 00:34:26.060get to take the value.00:34:26.060 –> 00:34:30.940Let’s just say you have some IBM stock and it’s worth 50 grand, but your basis is only00:34:30.940 –> 00:34:31.94010.00:34:31.940 –> 00:34:39.500You can donate that to a charity for $50,000, deduct the $50,000 and never pay tax on that00:34:39.500 –> 00:34:40.500capital gain.00:34:40.500 –> 00:34:42.580That’s the way these kind of things work.00:34:42.580 –> 00:34:46.700And if you have a situation where you want to do something like that, I’ve had people00:34:46.700 –> 00:34:53.540in the past donate art or donate stocks or homes, then it’s something you want to really00:34:53.540 –> 00:34:55.180consider or look into, right?00:34:55.180 –> 00:34:58.740You don’t want to just — sometimes it always sounds good on paper.00:34:58.740 –> 00:34:59.980Oh, I don’t want to lose that.00:34:59.980 –> 00:35:02.740I’ll go ahead and do this and then I’ll give my 30%.00:35:02.740 –> 00:35:04.580Well, maybe there’s another way of doing it.00:35:04.580 –> 00:35:08.660Maybe there’s a way of giving something that you can then write off and do more with.00:35:08.660 –> 00:35:11.340Well, that’s the kind of situation you can work with.00:35:11.340 –> 00:35:15.100All right, we’re going to get ready to take our last break for the day.00:35:15.100 –> 00:35:18.180That means if you are waiting and you’re sitting there going, oh, my gosh, I have something00:35:18.180 –> 00:35:21.420I want to say and I don’t know, there’s really no silly questions.00:35:21.420 –> 00:35:23.300There’s no dumb questions, really.00:35:23.300 –> 00:35:27.620I mean, if you’re working on it, a lot of times it’s just what you’re asking.00:35:27.620 –> 00:35:31.140A lot of other people sometimes are always curious about the same answer and it just00:35:31.140 –> 00:35:33.140takes one person to call in.00:35:33.140 –> 00:35:37.140So you can call the show at 615-737-9986.00:35:37.140 –> 00:35:44.500615-737-9986 is the number here in the studio.00:35:44.500 –> 00:35:46.740And we’re going to come back and take some of your calls.00:35:46.740 –> 00:35:50.660You’re listening to the Dr. Friday Show and we’ll be right back.00:35:50.660 –> 00:35:53.940(Music)00:35:53.940 –> 00:35:58.180All righty, we are back here live in studio.00:35:58.180 –> 00:36:00.180And it looks like we have a couple people on the line.00:36:00.180 –> 00:36:05.780Let’s hit Bobby from Tennessee here and we’ll start there and see if we can get Bobby an answer.00:36:05.780 –> 00:36:07.380Hey, Bobby.00:36:07.380 –> 00:36:13.700Hey, I just recently got disability and I’ve got a little part-time job on the side and00:36:13.700 –> 00:36:15.380they said I could work like part-time.00:36:15.380 –> 00:36:20.660But the guy’s going to put that directly in the mutual fund, but it’s not much.00:36:20.660 –> 00:36:22.660It’s like after taxes.00:36:22.660 –> 00:36:26.420It’s $500 a month, but after taxes it’s only like $462.00:36:26.420 –> 00:36:30.740Do I have to still file taxes for that part, that little bit?00:36:30.740 –> 00:36:33.860Is this a W-2 or a 1099?00:36:33.860 –> 00:36:34.900You said after taxes.00:36:34.900 –> 00:36:35.540No.00:36:35.540 –> 00:36:37.460I’m assuming it’s a W-2.00:36:37.460 –> 00:36:43.300Yeah, he’s just going to put that little check in once a month straight into a mutual fund.00:36:43.300 –> 00:36:48.500But I didn’t know if I still had to file taxes on that amount for $24.00:36:48.500 –> 00:36:50.100Right.00:36:50.100 –> 00:36:54.900Well, the answer would be, Bobby, if it comes on a W-2, then the answer would be no, you’re00:36:54.900 –> 00:36:57.540under the minimum and nothing would be taxable.00:36:57.540 –> 00:37:03.780If it comes on another form like a 1099, then the answer would be yes, because it’s basically00:37:03.780 –> 00:37:08.020considered self-employment and you’ll still have to pay the taxes on it, even if he’s00:37:08.020 –> 00:37:09.060withheld the taxes.00:37:09.060 –> 00:37:10.020I’m not sure.00:37:10.020 –> 00:37:14.260But it sounds like it’s a W-2, and if it is, then you should not have to pay any, I mean,00:37:14.260 –> 00:37:15.220you wouldn’t need to file.00:37:15.220 –> 00:37:18.100Well, he subtracted Medicare and-00:37:18.100 –> 00:37:19.860Social Security.00:37:19.860 –> 00:37:24.500All that out of it, yeah, and then he’s going to put the rest on in my mutual thing.00:37:24.500 –> 00:37:26.180But I was just wondering.00:37:26.180 –> 00:37:27.940Yeah, yeah.00:37:27.940 –> 00:37:34.020So just, you’ll know in another few weeks, but my answer would be, if you see a W-2 from00:37:34.020 –> 00:37:37.380this gentleman, then you know you don’t have to do anything, because he’s not withholding00:37:37.380 –> 00:37:39.460any federal withholding, so there’d be no need to.00:37:39.460 –> 00:37:45.700But if he gives you a form called a 1099, then you do need to still do it.00:37:45.700 –> 00:37:48.820It doesn’t sound like he’s going to, but I’m just preparing you just in case, okay?00:37:48.820 –> 00:37:51.060Well, all righty.00:37:51.060 –> 00:37:52.500I appreciate it.00:37:52.500 –> 00:37:53.940Thanks, Bobby.00:37:53.940 –> 00:37:54.900I appreciate it.00:37:54.900 –> 00:37:57.540All right, let’s head over to Darrell in Hendersonville.00:37:57.540 –> 00:37:58.420Let’s see if I can help him.00:37:58.420 –> 00:37:58.980Hey, Darrell.00:37:58.980 –> 00:38:00.900Good afternoon, Dr. Friday.00:38:02.100 –> 00:38:09.780I’ve got about $5,000 that I’m going to take as a long-term capital loss on a crypto coin00:38:09.780 –> 00:38:17.380that tanked on me, and I wanted to find out what type of documentation would I need to00:38:17.380 –> 00:38:19.460substantiate that capital loss?00:38:19.460 –> 00:38:24.100Basically, you need the same as you would in any other stock.00:38:24.100 –> 00:38:29.780So you needed to have the date that you purchased the stock and then the date that you sold00:38:29.780 –> 00:38:35.300it and the type, the dollar, the cryptocurrency that it was.00:38:35.300 –> 00:38:40.500You need to make sure that it is documented because that’s one of those areas that the00:38:40.500 –> 00:38:42.340IRS is definitely coming back to.00:38:42.340 –> 00:38:48.100A lot of people are claiming large losses, but unfortunately, in many cases, they purchased00:38:48.100 –> 00:38:52.020one type of currency and then they sold that for another, and then they sold that, and00:38:52.020 –> 00:38:56.020then now they finally converted or lost it all, and then they’re trying to claim it.00:38:56.020 –> 00:39:02.180But each time you switch currency, it should have been a sale on the Schedule D for me.00:39:02.180 –> 00:39:07.940So just tracking that information, no different than if you had brought normal stock, but00:39:07.940 –> 00:39:10.180you do want to make sure it’s totally documented.00:39:10.180 –> 00:39:12.580Otherwise, they may turn around and disallow your loss.00:39:12.580 –> 00:39:18.340So just a regular statement from the wallet company?00:39:18.340 –> 00:39:20.740So if you use one of the wallets, that’s the best way.00:39:20.740 –> 00:39:23.860Different wallets.00:39:23.860 –> 00:39:24.740I use a wallet.00:39:24.740 –> 00:39:29.060And as long as you’ve used the wallet to put the money in to buy the crypto and then either00:39:29.060 –> 00:39:34.020convert it back or if you lost it because it became zero worthless, then that would00:39:34.020 –> 00:39:34.820be when it is.00:39:34.820 –> 00:39:39.380As long as it’s been qualified as worthless or you sold it at a very big loss.00:39:39.380 –> 00:39:42.180Yeah, I haven’t sold it yet, but I’m going to.00:39:42.180 –> 00:39:42.980Okay.00:39:42.980 –> 00:39:43.380Yeah.00:39:43.380 –> 00:39:43.940All right.00:39:43.940 –> 00:39:45.300The best bet is to sell it.00:39:45.300 –> 00:39:48.660That way, at least you can prove your loss because otherwise, even though some of these00:39:49.540 –> 00:39:54.580currencies are no longer really available, the IRS will say that they haven’t actually00:39:54.580 –> 00:39:55.300closed out.00:39:55.300 –> 00:39:56.580Yeah, I can.00:39:56.580 –> 00:39:57.700In my opinion, it’s worthless.00:39:57.700 –> 00:39:58.100But yeah.00:39:58.100 –> 00:39:59.940The transaction has to occur first.00:39:59.940 –> 00:40:01.380Exactly.00:40:01.380 –> 00:40:01.940Exactly.00:40:01.940 –> 00:40:02.340100%.00:40:02.340 –> 00:40:03.540Good job, Joe.00:40:03.540 –> 00:40:04.040Okay.00:40:04.040 –> 00:40:04.900Thank you.00:40:04.900 –> 00:40:05.620All right.00:40:05.620 –> 00:40:06.500Appreciate it.00:40:06.500 –> 00:40:06.740All right.00:40:06.740 –> 00:40:08.100Really quick, let’s hit John.00:40:08.100 –> 00:40:09.060John in Tullahoma.00:40:09.060 –> 00:40:09.560Hey, John.00:40:09.560 –> 00:40:12.260Hey, Dr. Roddy.00:40:12.260 –> 00:40:15.220I’ve got a question regarding gift tax.00:40:15.780 –> 00:40:23.380So if I wanted to gift some real estate property to my children, so son and daughter,00:40:23.380 –> 00:40:30.500and would there be a gift tax required on that from either my side or their side?00:40:30.500 –> 00:40:34.500So you want to gift them some real estate?00:40:34.500 –> 00:40:35.140Is that what you said?00:40:35.140 –> 00:40:36.760Yes.00:40:36.760 –> 00:40:38.100Okay.00:40:38.100 –> 00:40:44.180So the way it would work is whatever your basis is in that, let’s just say you pay $200,00000:40:44.180 –> 00:40:45.700for this piece of real estate.00:40:45.700 –> 00:40:50.900You could theoretically gift them that $200,000 on a gift tax return.00:40:50.900 –> 00:40:55.540You would owe nothing because you didn’t have any gains.00:40:55.540 –> 00:40:58.420And they would pay nothing because you’ve already paid tax on it when you purchased00:40:58.420 –> 00:40:59.700that originally, right?00:40:59.700 –> 00:41:01.460I mean, the money was tax-free.00:41:01.460 –> 00:41:03.540So there would be nothing on those.00:41:03.540 –> 00:41:08.740And then if they sell it, they then would have to pay the capital gains tax on that.00:41:08.740 –> 00:41:13.460Now, just as a point of interest, I would probably not do that.00:41:13.460 –> 00:41:17.860I would probably let them, you know, theoretically, if you die, they get a step-up in basis and00:41:17.860 –> 00:41:19.540nobody pays the capital gains tax.00:41:19.540 –> 00:41:22.740But if it’s a home that they’re living in or something like that, and you just want00:41:22.740 –> 00:41:27.540to put in their name, then you need to give it to them at the cost basis, not at the current00:41:27.540 –> 00:41:28.260market price.00:41:28.260 –> 00:41:30.660Gotcha.00:41:30.660 –> 00:41:31.460Okay.00:41:31.460 –> 00:41:37.620So how would that apply for money if you were to gift them money?00:41:37.620 –> 00:41:39.140Is there any–00:41:39.140 –> 00:41:39.700Same thing.00:41:39.700 –> 00:41:40.660I mean, exactly the same thing.00:41:40.660 –> 00:41:45.940If you gift them money, the biggest thing is anything over the $17,000 that you and00:41:45.940 –> 00:41:50.020then the theoretic if you’re married, your spouse can give to them, anything above that00:41:50.020 –> 00:41:51.700needs to be on the gift tax return.00:41:51.700 –> 00:41:56.660It doesn’t mean there’s any taxes, but we have a lifetime of $11 million that we can00:41:56.660 –> 00:41:57.060gift.00:41:57.060 –> 00:41:59.140And so they’re taking the difference.00:41:59.140 –> 00:42:03.380So if you give someone $100,000, the difference between the $17,000 and the $100,000 is going00:42:03.380 –> 00:42:05.140to come out of your lifetime gifting.00:42:05.140 –> 00:42:07.380Okay.00:42:07.380 –> 00:42:08.020Gotcha.00:42:08.020 –> 00:42:09.540So you do have to file those?00:42:10.420 –> 00:42:13.380Yes, you need to file that so that way they can track it.00:42:13.380 –> 00:42:14.100Yep.00:42:14.100 –> 00:42:14.980Gotcha.00:42:14.980 –> 00:42:15.460Okay.00:42:15.460 –> 00:42:15.940Good deal.00:42:15.940 –> 00:42:16.260Thank you.00:42:16.260 –> 00:42:17.860No problem.00:42:17.860 –> 00:42:18.820Great call.00:42:18.820 –> 00:42:19.460All righty.00:42:19.460 –> 00:42:21.220So that was a good call.00:42:21.220 –> 00:42:25.060And there’s many– and a lot of times people are like, well, how does anyone know?00:42:25.060 –> 00:42:26.900But it does come down to sometimes.00:42:26.900 –> 00:42:30.980I had one where they sold the house to their son and they did an actual closing, which00:42:30.980 –> 00:42:35.220was proper, but then they gifted like $40,000 to their son.00:42:35.220 –> 00:42:41.220But that became $40,000 in their pocket because they only paid– they sold it for like $200,00000:42:41.220 –> 00:42:43.540and they only paid like $160,000.00:42:43.540 –> 00:42:48.900So the difference or the gain, they gifted on the paperwork, but the paperwork was trackable.00:42:48.900 –> 00:42:52.340So therefore, that $40,000 now became taxable income to them.00:42:52.340 –> 00:42:56.260The person giving the gift always pays the tax.00:42:56.260 –> 00:42:58.740The person receiving the gift does not.00:42:58.740 –> 00:43:03.780So you just have to make sure however you want to give it to them, it’s going to work00:43:03.780 –> 00:43:07.060one way or the other, and it could be that their tax bracket’s lower than yours.00:43:07.060 –> 00:43:11.140So it’s better to gift the real estate and let them sell the real estate at a lower tax00:43:11.140 –> 00:43:13.860bracket than if you were the higher tax bracket.00:43:13.860 –> 00:43:17.940There are many things you can do that way, but there are paper trails and there’s a lot00:43:17.940 –> 00:43:19.140of things that are turned in.00:43:19.140 –> 00:43:23.060So you’re not really hiding anything, in my personal opinion.00:43:23.060 –> 00:43:24.900So it’s better to have a paper trail.00:43:24.900 –> 00:43:26.340And I mean, let’s be honest.00:43:26.340 –> 00:43:33.700The gift limits have changed over my lifetime from as little as $500,000 over our lifetime00:43:33.700 –> 00:43:37.940to now $11 million, and it could very likely reduce down again.00:43:37.940 –> 00:43:42.020So the question would always be is what happens if you’ve already given several million dollars00:43:42.020 –> 00:43:43.700and it goes down to a million?00:43:43.700 –> 00:43:45.300I don’t know if I know the exact answer.00:43:45.300 –> 00:43:47.300I’m assuming it gets grandfathered in.00:43:47.300 –> 00:43:48.260But you know what?00:43:48.260 –> 00:43:49.460IRS is always funny.00:43:49.460 –> 00:43:51.220They may find a way to tax you again.00:43:51.220 –> 00:43:56.020So we’ll have to figure that out when and if that ever happens in the rest of our lifetime.00:43:56.020 –> 00:44:01.300But right now, we have a big window for gifting, and at least doing the things that you want00:44:01.300 –> 00:44:03.140to do would be one way of doing it.00:44:03.140 –> 00:44:07.780And not doing it without a paper trail, in my opinion, is not worth it.00:44:07.780 –> 00:44:13.140It’s much better to have the tax returns filed for gifting, and then that way if the children00:44:13.140 –> 00:44:17.060actually inherit or something changes, that was filed on the year it happened.00:44:17.060 –> 00:44:20.740If you don’t file it, then that’s bound to cause some problems later in life.00:44:20.740 –> 00:44:21.940All right.00:44:21.940 –> 00:44:26.660So if you’re working on your taxes, again, people that are already my clients and you00:44:26.660 –> 00:44:32.100get on my website, drfriday.com, and you click on calendar and you do not see a date open,00:44:32.100 –> 00:44:33.620call me.00:44:33.620 –> 00:44:37.780You know the number, 615-367-0819.00:44:37.780 –> 00:44:41.860Again, 615-367-0819.00:44:41.860 –> 00:44:43.940Call me Monday morning, and we will get you.00:44:43.940 –> 00:44:49.060We have dating times open for our clients that are not on that calendar, and so there00:44:49.060 –> 00:44:50.740is some opening for you.00:44:50.740 –> 00:44:57.220If you want to send me or email me, you can always email Friday at drfriday.com.00:44:57.220 –> 00:45:01.220Again, Friday, F-R-I-D-A-Y at drfriday.com.00:45:01.220 –> 00:45:05.860And again, the website is drfriday.com.00:45:05.860 –> 00:45:11.060If you’re looking to make an appointment, there’s also the tax organizers out there,00:45:11.060 –> 00:45:11.940many different things.00:45:11.940 –> 00:45:15.220Tell us a little bit about me if you don’t know who I am.00:45:15.220 –> 00:45:16.980Then go on out there.00:45:17.700 –> 00:45:22.420And then you could also send a message through that website directly to us if you’re still00:45:22.420 –> 00:45:25.620looking for a date for existing clients.00:45:25.620 –> 00:45:28.740So that way we make sure all of you are taken care of.00:45:28.740 –> 00:45:30.900We get your tax appointment in.00:45:30.900 –> 00:45:34.740Make sure you’re tracking all of your information so that you don’t have to worry about that00:45:34.740 –> 00:45:35.240either.00:45:35.240 –> 00:45:40.340And then that way you’re in good shape and you don’t have to worry about missing or having00:45:40.340 –> 00:45:43.540a problem with your tax situation.00:45:43.540 –> 00:45:50.980So if you have big changes, guys, this is the time to also look at your W-4s.00:45:50.980 –> 00:45:58.180If you were married, divorced, had a child, you know, child turned over the age of 17,00:45:58.180 –> 00:46:03.700you might want to revisit your withholdings on your paycheck because it’s January.00:46:03.700 –> 00:46:04.820Now we have a whole year.00:46:04.820 –> 00:46:08.260A lot of times people wait until they get their taxes done, which can be April all the00:46:08.260 –> 00:46:09.380way down to October.00:46:09.380 –> 00:46:12.180And then we’re making changes and that makes a big difference.00:46:12.180 –> 00:46:15.240Alright, it’s Saturday, hope you guys had a great time.

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In this ‘Dr. Friday Tax Tips – One Minute Moment’ episode, Dr. Friday illuminates the benefits of the Lifetime Learning Credit, a valuable tax break for education expenses. She explains that taxpayers can claim 20% of their first $10,000 spent on tuition and fees, potentially saving up to $2,000. Dr. Friday emphasizes that while living expenses and transportation are not eligible, costs like books, supplies, and even computers used for coursework can be included. For personalized tax assistance, she invites listeners to visit her website, www.drfriday.com, or call her office. Additionally, Dr. Friday hosts a live show every Saturday from 2 to 3 p.m. on 99.7 WTN, offering more expert tax advice.

Transcript

G’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

The lifetime learning credit lets you claim 20% of the first 10,000 you pay towards tuition and fees for a maximum of $2,000. Like the American Opportunity Tax Credit, the lifetime credit doesn’t count living expenses or transportation. Those are eliminated expenses. You can claim books, supplies needed for the course, also tuition, tutoring, computers, those all can be added back in. If you need help with your taxes you can go to my website which is www.drfriday.com, set up an appointment or call me 615-367-0819.

You can catch the Dr. Friday Call and Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this insightful episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, President of Dr. Friday’s Tax and Financial Firm, delves into the important aspects of the Child and Dependent Care Credit. She emphasizes that this credit is applicable for expenses incurred in daycare or childcare services for children under 13. A crucial point highlighted is that the credit is only available if childcare is needed due to work commitments of the parent or guardian. Dr. Friday clarifies that personal activities, such as getting nails done, do not qualify for this credit. She also explains the financial limits of the credit, with up to 35% of expenses covered or a maximum of $3,000 for one child and $6,000 for two or more dependents. Dr. Friday concludes by urging listeners to review their taxes to ensure they are taking advantage of this valuable credit.

Transcript

G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Child and dependent care credit. A child and dependent care credit means that you’re covering a percentage of daycare or some sort of child care for children under the age of 13. A parent or spouse whichever it might be unable to watch them because either they’re working or they have some other type of work. It has to be work guys. It can’t just be I want to go out and get my nails done and so I’m putting my child in daycare. It has to qualify as a work and then you will qualify up to 35% or $3,000 in expenses for two or more dependents $6,000 maximum. So if you haven’t done this you need to check your taxes.

You can catch the Dr. Friday call in show live every Saturday afternoon from 2-3 PM, right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, President of Dr. Friday’s Tax and Financial Firm, sheds light on the Child Tax Credit (CTC) for the 2023 tax year. She emphasizes the importance of correctly filing taxes to capitalize on the $2,000 per child credit, of which $1,600 is refundable. Dr. Friday advises against hastily filing taxes just to receive the CTC and underscores the significance of accuracy in tax filing to avoid delays in refunds. For any tax-related queries, she provides her contact number and also invites listeners to her weekly call-in show on 99.7 WTN every Saturday from 2-3 PM.

Transcript

G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Child Tax Credit, also known as CTC, is a break for families with children below the age of 17 that also meet certain income limitations. In 2023, which we’ll be filing now, but for the tax year of 2023, that’s $2,000 per child, 1,600 of it can be refunded. So making sure that you file everything properly, this could delay your refund, but it’s so important to make sure taxes are filed. Don’t just rush to file your taxes just because you think you’re going to get this refund. Make sure they’re right, double-check them, then file them. If you have questions, 615-367-0819.

You can catch the Dr. Friday call in show live every Saturday afternoon from 2-3 PM, right here on 99.7 WTN.

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In this quick but informative episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the President of Dr. Friday’s Tax and Financial Firm, emphasizes the significant financial benefits of filing tax extensions early. Discussing the potential 25% penalty for late filings, which accrues at a rate of 5% per month, Dr. Friday advises listeners to consider filing an extension form 48-68, even if they anticipate meeting the April 15th deadline. This strategy provides a safety net, protecting taxpayers from unexpected delays and penalties. Additionally, Dr. Friday reminds listeners of her weekly call-in show on 99.7 WTN, every Saturday from 2-3 PM, for more financial insights.

Transcript

G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

And I know you’re gonna be saying, “Friday, why are you already talking about extensions?” Because if you file an extension you can save a penalty of 25% – 5% per a month for however late you are. And it’s just such a huge savings that if you think for any reason you may not be able to make that April 15th deadline, you know what? Even if you do make the April 15th deadline there is no penalty for filing an extension today and then something happens and you’re not able to file, you still have that protection. So even if you are gonna make April 15th, I suggest filing a 48-68 just for protection.

You can catch the Dr. Friday call in show live every Saturday afternoon from 2-3 PM, right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, President of Dr. Friday’s Tax and Financial Firm, addresses the eagerness of taxpayers who have received their W-2s and are ready to file their taxes. She highlights a crucial point: the e-file system for tax year 2023 doesn’t open until January 22, 2024. This means that early filers should not expect their refunds within the usual 5-10 day window. Dr. Friday provides valuable insights into the expected refund release dates, emphasizing that refunds could be issued as early as February 9th, but those with Earned Income Credit may have to wait until February 23rd. She encourages listeners to remember these dates to manage their expectations appropriately. Additionally, Dr. Friday reminds listeners to tune in to her live call-in show every Saturday from 2-3 PM on 99.7 WTN for more tax insights.

Transcript

G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

And many of you already have your W-2 in hand and you’re like I’m filing my taxes but keep in mind e-file does not open until January 22 2024 so you may have a few more days to wait. Now a lot of times we can basically save the e-files and then they’ll automatically produce as that date but just prepare yourself that you’re not going to see in five or ten days your refund if you file it today. They’re gonna start releasing refunds probably by February 9th. You may get it a little earlier but if you have earned income credit it could be as late as February 23rd. These are important numbers guys keep track of them so you know what’s going on.

You can catch the Dr. Friday call in show live every Saturday afternoon from 2-3 PM, right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, President of Dr. Friday’s Tax and Financial Firm, delves into the various factors that influence the timing of tax refunds. She emphasizes the importance of electronic filing over mailing, noting the latter’s inefficiency and lack of tracking capabilities. The episode highlights key elements such as the date of filing, claims for earned income credit and college credits, existing debts with federal or state governments, and outstanding student loans, all of which can significantly impact the timing and receipt of tax refunds. Dr. Friday advises taxpayers to utilize the ‘Where’s My Refund?’ feature on irs.gov for tracking their refunds. The show wraps up with an invitation to listen to the Dr. Friday call-in show every Saturday from 2-3 PM on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Several factors can determine when a taxpayer might receive his or hers refund. Like, when did you file? Are you claiming earned income credit, college credits? Whether you file electronically or by mail, which I will tell you right now, mailing in a tax return is the slowest way, impossible almost, to track tax filing. E-file is the way to go. Whether a taxpayer already has a debt with the federal government, or a state, or student loans, all of that can be a huge factor in when or if you will actually receive your refund. But you can always go to irs.gov and click on “Where’s My Refund?” if you’re looking for more information. It’s a great way to keep track.

You can catch the Dr. Friday call in show live every Saturday afternoon from 2-3 PM, right here on 99.7 WTN.

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In this episode of the ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday emphasizes the importance of early preparation for the upcoming tax deadline on April 15, 2024. She advises listeners to either book an appointment with her team or begin gathering necessary documentation if they plan to handle their taxes independently. Key documents include W-2s, 1099s, mortgage interest statements, and 1095A forms. Dr. Friday underscores the importance of thorough preparation, encouraging listeners to start early and avoid doing taxes halfway. For any queries, she reminds listeners of her availability for assistance and also mentions her live call-in show on Saturdays, from 2-3 PM on 99.7 WTN.

Transcript

G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Keep in mind, tax deadlines this year is going to finally be on the normal April 15th, 2024. So if you’re planning on doing your taxes, first thing you need to do is probably go to our calendar if you want us to help you, and go ahead and get a date set for that. It’s filling up really quickly. If you’re going to do your own, start now. Start outlining what do you need, W-2s, 1099s, mortgage interest? Did you have a marketplace 1095A? Do you have interest, dividends? All of those things need to be collected before you start your taxes. Don’t do them halfway. Call me if you have questions.

You can catch the Dr. Friday call in show live every Saturday afternoon from 2-3 PM, right here on 99.7 WTN.

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Welcome to the Dr. Friday Radio Show, January 6th, 2024 edition! In this insightful episode, Dr. Friday, a seasoned tax consultant and financial counselor, navigates through the complexities of the tax season. The show delves into various tax-related topics, including the implications of real estate transactions, capital gains tax, and retirement account distributions. Additionally, Dr. Friday provides personalized advice to callers on issues ranging from tax deductions and inheritance taxes to Social Security and Medicare impacts. This episode is a treasure trove of valuable information for anyone looking to make informed decisions during the tax season.

Key Highlights:

• Real Estate Insights: Dr. Friday discusses the tax implications of buying and selling real estate, offering expert advice on how these transactions affect tax filings.
• Capital Gains Clarifications: Callers receive detailed explanations about capital gains tax, especially concerning the sale of long-held stocks and assets.
• Retirement Accounts and Taxation: The episode covers the tax treatment of distributions from traditional IRAs, including the tax liabilities arising from such withdrawals.
• Social Security and Medicare Considerations: Dr. Friday addresses questions about the taxation of Social Security benefits and the potential Medicare implications of increased income.
• Interactive Q&A: The show features interactive segments where listeners call in with specific tax queries, which Dr. Friday addresses with her expertise.
• Small Business Tax Tips: Valuable information is shared about business tax filing deadlines, the importance of updating business licenses, and other regulatory compliances.

Whether you’re a taxpayer seeking guidance on personal finance, a retiree grappling with tax implications, or a small business owner, this episode offers a wealth of knowledge to navigate the tax season confidently.

Transcript00:00:00.000 –> 00:00:06.780No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes.00:00:06.780 –> 00:00:10.320She’s the how-to girl. It’s the Dr. Friday Show.00:00:10.320 –> 00:00:21.800If you have a question for Dr. Friday, call her now. 737-WWTN. That’s 737-9986.00:00:21.800 –> 00:00:26.960So here’s your host, financial counselor and tax consultant, Dr. Friday.00:00:29.320 –> 00:00:33.360G’day, I’m Dr. Friday and the doctor is in the house.00:00:33.360 –> 00:00:37.880It is that time of the year where it’s going to start getting a bit more crazy.00:00:37.880 –> 00:00:44.320Tax season is upon us and we have just finished up, it feels like, the last tax year.00:00:44.320 –> 00:00:46.320So we will be talking mostly about00:00:46.320 –> 00:00:52.0802023. Doesn’t mean that if you haven’t filed prior tax years or if you’re having tax issues in other ways00:00:52.080 –> 00:00:55.540that there might be something that we need to still address as well.00:00:55.680 –> 00:01:00.440But the important part of all this is we are ready to get going with00:01:00.440 –> 00:01:05.3602023 tax season, which is going to be a crazy one.00:01:05.360 –> 00:01:11.040Not a lot of changes from last year to this year to be quite honest if we’re looking at certain things.00:01:11.040 –> 00:01:16.240You know, tax brackets always change a little bit and itemizing.00:01:16.240 –> 00:01:20.480But I still have a large number of people that seem to be buying and selling real estate.00:01:20.480 –> 00:01:22.880And so that does have an effect on us.00:01:23.480 –> 00:01:27.640And different times and if you have some of that.00:01:27.640 –> 00:01:29.640So that will be something we’ll take.00:01:29.640 –> 00:01:32.560In fact, we’ve got a phone call from Pete in Clarksville,00:01:32.560 –> 00:01:35.480which I think hits pretty much on what I was just going to talk about.00:01:35.480 –> 00:01:36.480Hey Pete, what’s happening?00:01:36.480 –> 00:01:40.040Yes, nice to talk to you. Second time caller.00:01:40.040 –> 00:01:42.040You too. Thanks.00:01:42.040 –> 00:01:45.160Earlier this year,00:01:45.160 –> 00:01:47.480a few days ago,00:01:47.480 –> 00:01:52.640I liquidated some stock that I’ve held for00:01:53.440 –> 00:01:55.440oh, I don’t know, a good 20 years.00:01:55.440 –> 00:01:58.360And that’s going to be00:01:58.360 –> 00:02:02.120going to be held to capital gains tax.00:02:02.120 –> 00:02:10.400And I do not understand quite the sequence00:02:10.400 –> 00:02:16.640in which I would file the 1040 SE.00:02:16.640 –> 00:02:20.720And maybe you can help me out.00:02:20.720 –> 00:02:23.720And specifically,00:02:23.720 –> 00:02:29.160do I do I fill out that form after I do my taxes?00:02:29.160 –> 00:02:33.480And secondly, does the 1040 E00:02:33.480 –> 00:02:36.920get its data from like00:02:36.920 –> 00:02:40.960taxable income and earned income00:02:40.960 –> 00:02:46.040from the my tax, my 2023 tax form?00:02:46.880 –> 00:02:52.640Right. So 1040 ES just stands for estimated statement, estimated tax tax.00:02:52.640 –> 00:02:57.240So you would use it for the extent that on January 15th,00:02:57.240 –> 00:03:00.160anything that happened in 2023,00:03:00.160 –> 00:03:03.960tax law says we’re supposed to make four equal payments00:03:03.960 –> 00:03:06.200to not get hit with penalties.00:03:06.200 –> 00:03:08.360In your case, it’s a one time situation.00:03:08.360 –> 00:03:10.920So really what they’re going to hit you with is failure00:03:10.920 –> 00:03:15.640to not pay 110 percent in if you wait till April 15th.00:03:15.880 –> 00:03:17.880As far as the situation.00:03:17.880 –> 00:03:22.720So we’re really looking at 2022 when we’re talking about 1040 ES00:03:22.720 –> 00:03:25.640unless it’s just someone I want to make an estimate,00:03:25.640 –> 00:03:28.080because we know they’re going to owe quite a bit more money00:03:28.080 –> 00:03:31.640and they’re not going to file maybe until October, you know, I mean, or whatever.00:03:31.640 –> 00:03:36.680So if you have your normal job and you had your normal withholdings00:03:36.680 –> 00:03:38.920and normally you get a small refund,00:03:38.920 –> 00:03:42.720you probably don’t need to worry about an estimated payment.00:03:43.000 –> 00:03:46.680But if every year you usually do have to make a little bit of a payment,00:03:46.680 –> 00:03:51.880we’re not looking to estimate necessarily your 2023.00:03:51.880 –> 00:03:56.120What we’re looking to do is say, OK, you owe 10,000 simple math.00:03:56.120 –> 00:04:00.000You owe ten thousand dollars total tax in 2022.00:04:00.000 –> 00:04:04.560And so since we want to pay 110 percent more by the end of January,00:04:04.560 –> 00:04:08.200by January 15th to keep you with any penalty situation,00:04:08.200 –> 00:04:11.240you may need to make an extra thousand dollar payment.00:04:11.240 –> 00:04:14.000So that way you paid 110 percent.00:04:14.000 –> 00:04:15.040Is that helping?00:04:15.040 –> 00:04:18.960We’re not looking to really estimate if this stock sale has generated,00:04:18.960 –> 00:04:20.440I don’t know, a ten thousand.00:04:20.440 –> 00:04:24.360I like that number apparently today, a ten thousand dollar additional tax00:04:24.360 –> 00:04:25.640deficit for you.00:04:25.640 –> 00:04:30.160If you file on or before April 15th, you’re really not looking at a big penalty00:04:30.160 –> 00:04:33.400unless you haven’t actually paid in enough for the year,00:04:33.400 –> 00:04:36.000because every year you usually end up writing a check00:04:36.000 –> 00:04:38.600that kind of following through, Pete.00:04:38.600 –> 00:04:43.320I understood what you said, but specifically for my case, I am retired.00:04:43.320 –> 00:04:46.280OK, don’t have any earned income.00:04:46.280 –> 00:04:48.640OK, nothing. Everything’s going to be capital gains.00:04:48.640 –> 00:04:53.200Can you tell me if this capital gains is going to exceed more than 50,00000:04:53.200 –> 00:04:56.840dollars of gains, not necessarily how much you sold, but of gains?00:04:56.840 –> 00:04:59.640Yes. OK. All right.00:04:59.640 –> 00:05:03.920So we are going to require to file taxes because there’s a zero percent00:05:03.920 –> 00:05:06.680capital gains if it was under that. OK, so you’re retired.00:05:06.680 –> 00:05:09.040So you have Social Security, I’m assuming, right?00:05:09.040 –> 00:05:10.840I got Social Security, got a pension.00:05:10.840 –> 00:05:15.680I got got a minimum distribution on 401k.00:05:15.680 –> 00:05:19.960I filed jointly.00:05:19.960 –> 00:05:21.280That’s pretty much it.00:05:21.280 –> 00:05:23.280So do you usually get a refund every year?00:05:23.280 –> 00:05:25.200I mean, it sounds like you have to file every year.00:05:25.200 –> 00:05:28.400So do you usually get or do you break even or what’s your scenario00:05:28.400 –> 00:05:30.560normally before this stock?00:05:30.560 –> 00:05:34.200I got I got bit00:05:34.680 –> 00:05:39.640a few years ago in in having to pay a penalty00:05:39.640 –> 00:05:44.320for not taking out enough tax on my 401k distribution.00:05:44.320 –> 00:05:49.200By talking to you, I got that cleared up with the IRS.00:05:49.200 –> 00:05:50.760They forgave me.00:05:50.760 –> 00:05:54.040But the Achilles heel was there again.00:05:54.040 –> 00:05:55.960I didn’t take out enough taxes.00:05:55.960 –> 00:06:00.960But subsequent years following that, I made sure I did take out enough taxes.00:06:01.240 –> 00:06:03.160And that’s scheduled.00:06:03.160 –> 00:06:06.000And that has resulted that I00:06:06.000 –> 00:06:12.240I have gotten a refund for the last five years or so.00:06:12.240 –> 00:06:13.680OK. All right.00:06:13.680 –> 00:06:19.080So in theory, assuming you file your taxes before April 15th,00:06:19.080 –> 00:06:22.320then you’re not going to probably need to worry00:06:22.320 –> 00:06:26.600about making a 1040 ES or an estimated payment.00:06:26.600 –> 00:06:29.120If for some reason you think, hey, you know what?00:06:29.120 –> 00:06:31.840Some of my clients, they just extend because it’s easier.00:06:31.840 –> 00:06:33.960They don’t like to rush through the tax season.00:06:33.960 –> 00:06:36.600So then I would say you need to make an estimate.00:06:36.600 –> 00:06:39.440But in your scenario, you need to.00:06:39.440 –> 00:06:43.120And can I ask ballpark is the capital gains?00:06:43.120 –> 00:06:46.080Hundred thousand, one hundred fifty thousand.00:06:46.080 –> 00:06:48.320I mean, ballpark of what your gains are.00:06:48.320 –> 00:06:51.760Just the capital gains is like sixty eight thousand.00:06:51.760 –> 00:06:58.320OK, so assuming that the rest of your income is less than one hundred and eighty,00:06:58.720 –> 00:07:00.920then you’re going to have a 15 percent tax.00:07:00.920 –> 00:07:03.560You probably know this, but just putting that out for everyone listening.00:07:03.560 –> 00:07:04.360So that’s correct.00:07:04.360 –> 00:07:07.120You’re correct. Your taxation will be 15 percent.00:07:07.120 –> 00:07:08.800So you have two options.00:07:08.800 –> 00:07:11.880You will not be mandated and you should not be penalized, Pete,00:07:11.880 –> 00:07:15.640if you don’t make an estimated payment as long as you file by April 15th.00:07:15.640 –> 00:07:18.880Of this year of this year.00:07:18.880 –> 00:07:23.000Yes. If for some reason it gets extended because you don’t have all your documents00:07:23.000 –> 00:07:27.680or whatever, I would send in an estimate or I would send in an extension00:07:27.800 –> 00:07:30.880with that additional 15 percent of that sixty eight thousand.00:07:30.880 –> 00:07:35.400OK, so I don’t have to burden myself with all this extra paperwork00:07:35.400 –> 00:07:37.640on a ten forty.00:07:37.640 –> 00:07:40.640Yes. If I file.00:07:40.640 –> 00:07:47.480By the 15th of April, which I probably filed by the end of this month.00:07:47.480 –> 00:07:52.760Yeah. And then and and as long as my00:07:52.760 –> 00:07:57.560as long as my earned income00:07:58.360 –> 00:08:00.800and not taxed or the taxable income.00:08:00.800 –> 00:08:05.240Well, we’re really talking taxable income because obviously only 85 percent00:08:05.240 –> 00:08:08.680of your social security is under one hundred and fifty thousand for joint.00:08:08.680 –> 00:08:12.800Right. It’s actually to be under two hundred and fifty thousand.00:08:12.800 –> 00:08:17.960Oh, I’m if I was two hundred and fifty thousand00:08:17.960 –> 00:08:22.040on, I wouldn’t be talking to you.00:08:22.040 –> 00:08:24.880Well, anyways, I appreciate the call is a great question.00:08:24.880 –> 00:08:26.360Hopefully that helps.00:08:26.360 –> 00:08:28.400OK, thank you so much. I appreciate it.00:08:28.400 –> 00:08:30.000Uh huh. Thanks. All right.00:08:30.000 –> 00:08:32.920Let’s hit Renee in Clarksville.00:08:32.920 –> 00:08:35.040Hello, sweetheart. What can I do for you?00:08:35.040 –> 00:08:38.880Hi. OK, I00:08:38.880 –> 00:08:44.520accidentally deferred my taxes in November.00:08:44.520 –> 00:08:51.080So from the last paycheck in November,00:08:51.080 –> 00:08:52.720I get paid twice a week.00:08:52.720 –> 00:08:54.040I’m sorry, twice a month.00:08:54.040 –> 00:08:58.240So so for the past three paychecks, I did not have taxes taken out.00:08:58.240 –> 00:09:02.400Now, I’m OK with that because00:09:02.400 –> 00:09:05.440I’m single00:09:05.440 –> 00:09:13.480and I I have a lot of I give I give a lot to my church.00:09:13.480 –> 00:09:19.280So this year I gave about twelve thousand dollars to my church.00:09:19.280 –> 00:09:22.880So regardless, I should be fine this year.00:09:23.160 –> 00:09:25.560I was just wondering, should I do that again next year?00:09:25.560 –> 00:09:29.160Should I do it like I’m well, actually this year.00:09:29.160 –> 00:09:32.640Should I do it this year, like the whole entire year,00:09:32.640 –> 00:09:36.200even though I know that I’m going to make enough that covers the standard00:09:36.200 –> 00:09:41.880deduction, I’m estimating that I’ll make about thirty six thousand this year.00:09:41.880 –> 00:09:45.320Now, I get 36 and you’re you’re single.00:09:45.320 –> 00:09:48.040So much is yes, I am.00:09:48.040 –> 00:09:51.800I’m a disabled veteran, 90 percent disabled veteran.00:09:51.960 –> 00:09:55.000So I get a lot of non taxable income.00:09:55.000 –> 00:09:57.640Right. So you get twenty three thousand.00:09:57.640 –> 00:10:00.880And if you’re itemizing above, just keep in mind, I mean,00:10:00.880 –> 00:10:05.520obviously just in the simple math, if you’ve got thirty six thousand gross00:10:05.520 –> 00:10:09.680and you can itemize, which means you if you’re only giving twelve in charity00:10:09.680 –> 00:10:13.320and don’t mean only at your income, that’s a lot more than that’s like00:10:13.320 –> 00:10:17.600twenty five percent of your income, but of the taxable income.00:10:17.600 –> 00:10:18.960Let me clarify.00:10:19.200 –> 00:10:23.680Then then you have your do you have a mortgage, property tax, sales tax?00:10:23.680 –> 00:10:27.280All those apply. I mean, I have a mortgage.00:10:27.280 –> 00:10:30.120OK. Yes, I do have a mortgage.00:10:30.120 –> 00:10:33.600OK. And well, hopefully I’m.00:10:33.600 –> 00:10:39.360Yeah, so you I mean, you would still even if you have like twenty thousand dollars00:10:39.360 –> 00:10:42.680that comes out of that, you’d still have about sixteen thousand dollars00:10:42.680 –> 00:10:47.720that would be taxable income at the 12 percent tax bracket.00:10:47.720 –> 00:10:51.760So, you know, you’d still need to be paying my suggestions, deferring,00:10:51.760 –> 00:10:53.160which I’m not even sure you can defer.00:10:53.160 –> 00:10:55.720I mean, you’re doing it, but I didn’t know you could do that.00:10:55.720 –> 00:10:57.080Some employers may offer that.00:10:57.080 –> 00:10:58.680I didn’t know I would probably either.00:10:58.680 –> 00:11:00.760And I did taxes for years.00:11:00.760 –> 00:11:02.120Oh, that’s crazy.00:11:02.120 –> 00:11:04.040I didn’t know that was something that’s on the notes.00:11:04.040 –> 00:11:05.760Asked me about that one.00:11:05.760 –> 00:11:10.160But I would suggest actually, if you’re going to do it is like you did this year,00:11:10.160 –> 00:11:12.360go ahead and turn it back on for January.00:11:12.360 –> 00:11:15.080Do your taxes for this year. Right.00:11:15.880 –> 00:11:19.000And, you know, and then if you find out that you still ended up00:11:19.000 –> 00:11:22.560with a healthy refund, you could start deferring it again,00:11:22.560 –> 00:11:25.520maybe in October or September, you want to do the math.00:11:25.520 –> 00:11:28.200I would just be concerned with the whole year of deferral.00:11:28.200 –> 00:11:31.440Then you may get hit with a penalty for not making proper payments00:11:31.440 –> 00:11:33.600if you have to pay something.00:11:33.600 –> 00:11:35.080Yeah, yeah, no, I wasn’t.00:11:35.080 –> 00:11:36.360I do apologize.00:11:36.360 –> 00:11:39.240I should have said that I would not defer for the whole year.00:11:39.240 –> 00:11:44.960Probably at most six months, maybe even four or three months.00:11:45.560 –> 00:11:46.440Right. Yeah.00:11:46.440 –> 00:11:50.320So I would turn it back on and then do my taxes and then see,00:11:50.320 –> 00:11:53.520you know, if you’re still in the refund, I’m all for the refund.00:11:53.520 –> 00:11:55.440And like I said, I never heard anyone.00:11:55.440 –> 00:11:56.920You can’t always reduce it.00:11:56.920 –> 00:11:58.800A single and zero is single and zero.00:11:58.800 –> 00:12:03.160But you could also claim single and one just because of your itemizing.00:12:03.160 –> 00:12:06.640It’s as if you have another dependent because you give so much to charity.00:12:06.640 –> 00:12:09.520You know, you could change your withholding.00:12:09.520 –> 00:12:11.760But either way, I was doing.00:12:11.760 –> 00:12:14.240I had no idea that I deferred it.00:12:14.240 –> 00:12:16.960And I called them up. I’m like, why am I not paying?00:12:16.960 –> 00:12:20.840Why am I only paying Social Security and Medicare?00:12:20.840 –> 00:12:23.120And I’m not paying any federal tax.00:12:23.120 –> 00:12:25.720And they’re like, well, I am like, oh, well, you deferred it.00:12:25.720 –> 00:12:27.720And I’m like, well, how the heck did I do that?00:12:27.720 –> 00:12:29.760I was trying to do single and one.00:12:29.760 –> 00:12:31.960I mean, how did I defer this?00:12:31.960 –> 00:12:33.320This is crazy.00:12:33.320 –> 00:12:33.680I don’t know.00:12:33.680 –> 00:12:36.000Sounds like they somehow put you as exempt.00:12:36.000 –> 00:12:40.400But again, normally that that’s not as easy, you know, but somehow it happened.00:12:40.400 –> 00:12:43.720But yes. So I think you’ve got the right idea, though.00:12:43.720 –> 00:12:47.160I mean, I think the concept, again, not very many people fall into that.00:12:47.160 –> 00:12:49.720But with the fact that you have,00:12:49.720 –> 00:12:54.000you know, disposable income, it’s non-taxable that comes to you for your service.00:12:54.000 –> 00:12:56.360And thank you for your service.00:12:56.360 –> 00:12:59.600But, you know, it does work in your situation.00:12:59.600 –> 00:13:04.680OK, so just keep on keep on keeping on.00:13:04.680 –> 00:13:06.000Got it. Thank you. You got it.00:13:06.000 –> 00:13:07.600I appreciate your help.00:13:07.600 –> 00:13:08.840No problem. Thanks.00:13:08.840 –> 00:13:10.800Let’s hit Jimmy and Woodmont real quick.00:13:12.720 –> 00:13:15.160Hello, my boy, Jimmy, what can I do for you?00:13:15.160 –> 00:13:19.400Yes, I started drawing Social Security in September00:13:19.400 –> 00:13:22.160and I’ve draw September to December.00:13:22.160 –> 00:13:24.640Is that income taxable?00:13:24.640 –> 00:13:26.440I have to pay taxes on that.00:13:26.440 –> 00:13:30.040You could, depending on your other earned income or if you’re married,00:13:30.040 –> 00:13:34.040your spouse’s earned income and you claim and you’re filing married filing jointly.00:13:34.040 –> 00:13:37.800Up to 85 percent of Social Security can be taxed.00:13:37.800 –> 00:13:40.520Yeah, I’m single.00:13:40.520 –> 00:13:44.120And I worked from January to September.00:13:44.120 –> 00:13:47.400Right. So did you make?00:13:47.400 –> 00:13:50.680May I be nosy enough to say, did you make more than like 15,00:13:50.680 –> 00:13:52.48020,000 during those months?00:13:52.480 –> 00:13:56.280Did I make over 15,000?00:13:56.280 –> 00:13:58.000Yeah. Yeah. January.00:13:58.000 –> 00:14:00.000OK, so most likely.00:14:00.000 –> 00:14:04.440Go ahead, Jimmy. Sorry.00:14:04.440 –> 00:14:06.760Yeah, I just started drawing in September.00:14:06.760 –> 00:14:11.120See, I worked till I started drawing in October.00:14:11.120 –> 00:14:13.120I worked to September.00:14:13.120 –> 00:14:16.720So answer your question in the year in 2023,00:14:16.720 –> 00:14:20.520since you have W2 earnings or earnings and then your Social Security,00:14:20.520 –> 00:14:22.880it will portion of it will be taxed.00:14:22.880 –> 00:14:28.720OK, so. But the money I made from September to December,00:14:28.720 –> 00:14:31.280they will tax it from Social Security.00:14:31.280 –> 00:14:33.680Up to 85 percent of it.00:14:33.680 –> 00:14:36.680Not the amount, not how much tax you’ll pay.00:14:36.680 –> 00:14:38.400Depends on how much your total earnings.00:14:38.400 –> 00:14:41.000But they can they don’t tax 100 percent of it.00:14:41.000 –> 00:14:43.400They tax 85 or less.00:14:43.400 –> 00:14:45.480So just one of those weird things.00:14:45.480 –> 00:14:49.120But yes, you plan to make sure when you file your taxes, you either00:14:49.120 –> 00:14:51.320if you do it yourself or you give it to someone, make sure that00:14:51.320 –> 00:14:54.000that information is there. OK?00:14:54.000 –> 00:14:55.560OK. Yeah.00:14:55.560 –> 00:14:57.920Social Security’s done sent me 1099.00:14:57.920 –> 00:15:00.120So, yeah, they will. Yeah, they’ll send it out.00:15:00.120 –> 00:15:02.440My friend of mine just received hers the other day.00:15:02.440 –> 00:15:04.600So you should be getting it soon. OK.00:15:04.600 –> 00:15:07.480OK. Thank you. Thank you, Jimmy.00:15:07.480 –> 00:15:09.640All right. We’re going to take a quick break when we’re done here.00:15:09.640 –> 00:15:10.800We’ll get back with the Dr.00:15:10.800 –> 00:15:12.440Friday show in just a minute.00:15:12.440 –> 00:15:21.360All righty, we are back here live in studio.00:15:21.360 –> 00:15:26.000And if you want to join the show, you can at six one five three six seven00:15:26.000 –> 00:15:31.760zero eight one nine six one five three six seven zero eight00:15:31.760 –> 00:15:36.680one nine, we have Alan in Dixon.00:15:36.680 –> 00:15:38.440Put my glasses on.00:15:38.440 –> 00:15:40.960Hey, Alan, what you have happening?00:15:40.960 –> 00:15:43.560Yeah, the reason I’m calling.00:15:43.560 –> 00:15:45.520I’ve got a question in my.00:15:45.520 –> 00:15:52.480Bowsers both on Social Security now, I’m sixty five and she’s sixty three.00:15:52.480 –> 00:15:58.320And we’ve she worked for years and I did, too.00:15:58.320 –> 00:16:00.480We’re not even doing that this year at all.00:16:01.480 –> 00:16:05.720Do we have to send in some kind of form by tax form showing that or00:16:05.720 –> 00:16:08.960do they just think we just.00:16:08.960 –> 00:16:13.160We don’t want to have some not sent in and they’re going to wonder00:16:13.160 –> 00:16:16.640what happened to us, that we’ve been so regular every year.00:16:16.640 –> 00:16:20.440Well, yes, I know what happened.00:16:20.440 –> 00:16:24.400Many clients that ask that same question, because in most cases00:16:24.400 –> 00:16:28.480it is sort of crazy that they00:16:29.680 –> 00:16:33.000that people have for 40 years you file taxes.00:16:33.000 –> 00:16:34.360I, you know, I’ve always filed.00:16:34.360 –> 00:16:35.240Answer your question.00:16:35.240 –> 00:16:38.360No, there is nothing in there that you have to worry about.00:16:38.360 –> 00:16:40.800So I got a one year.00:16:40.800 –> 00:16:44.720Well, the reason why another reason I asked this is because every year when I00:16:44.720 –> 00:16:50.680I was on disability before my wife quit work, but I still had to fill out that one00:16:50.680 –> 00:16:52.720half of my income.00:16:52.720 –> 00:16:56.000I mean, my social security had to go on that form.00:16:56.000 –> 00:16:59.120Right. Because you were fine.00:16:59.120 –> 00:17:00.920Did I pay on it?00:17:00.920 –> 00:17:04.760Yes, you paid tax if you were filing on your wife’s tax return.00:17:04.760 –> 00:17:08.280You may have, depending on her income, may have had to pay some tax.00:17:08.280 –> 00:17:12.160But the fact that neither of you have earned income, only social security,00:17:12.160 –> 00:17:15.840maybe a small pension, don’t know, then most likely you don’t qualify00:17:15.840 –> 00:17:18.240for having to file taxes if it’s only social security.00:17:18.240 –> 00:17:20.720You definitely do not qualify for filing taxes.00:17:20.720 –> 00:17:26.120And then my wife is saying that she’s doing her insurance.00:17:26.440 –> 00:17:29.720I guess they would her medical insurance.00:17:29.720 –> 00:17:31.840They require that proven that she’s.00:17:31.840 –> 00:17:37.520Making this or not working or whatever, and they write some kind of forms, so.00:17:37.520 –> 00:17:40.440Are they going to need some kind of.00:17:40.440 –> 00:17:44.560So the way you’re talking, they need a tax form for her to do that.00:17:44.560 –> 00:17:48.480Now, she in the marketplace.00:17:48.480 –> 00:17:52.120For health insurance, so you’re talking about Alan, probably.00:17:52.120 –> 00:17:53.800I’m guessing.00:17:53.800 –> 00:17:54.760I think so, right?00:17:54.760 –> 00:18:00.120You can tell them that you are social security only not required to file taxes.00:18:00.120 –> 00:18:02.560And that should suffice.00:18:02.560 –> 00:18:05.920I have, again, other clients that have that same exact situation.00:18:05.920 –> 00:18:08.440So you should be in good shape.00:18:08.440 –> 00:18:11.440OK, well, I appreciate your time and enjoy your show.00:18:11.440 –> 00:18:13.840OK, thank you. Appreciate it.00:18:13.840 –> 00:18:18.040All right. I’m not sure what number I put out there, but my eyes and ears.00:18:18.040 –> 00:18:20.080I want to join the radio.00:18:20.080 –> 00:18:25.680Get my tongue working. Six one five seven three seven nine nine eight six.00:18:25.680 –> 00:18:26.880Join us live right now.00:18:26.880 –> 00:18:32.440Six one five seven three seven nine nine eight six is the number here.00:18:32.440 –> 00:18:35.840If you want to join the show and get your questions,00:18:35.840 –> 00:18:37.360it’s a great way to get some of your questions.00:18:37.360 –> 00:18:39.960And I love it when you guys call in, because I think a lot of people00:18:39.960 –> 00:18:42.280listening sometimes have that same kind of question,00:18:42.280 –> 00:18:44.920but not everybody really wants to do that.00:18:44.920 –> 00:18:47.680OK, so I do want to bring up a couple of things.00:18:47.720 –> 00:18:49.840Obviously, the end of the year has happened.00:18:49.840 –> 00:18:52.720So happy New Year’s.00:18:52.720 –> 00:18:54.840Now we’re looking at twenty twenty four.00:18:54.840 –> 00:18:58.320But one of the first things we’re going to be filing, of course, is business tax00:18:58.320 –> 00:19:02.280is due normally by the first of April or thereabouts.00:19:02.280 –> 00:19:05.360And they have changed the limit.00:19:05.360 –> 00:19:10.200So the limit is less than one hundred thousand dollars of taxes00:19:10.200 –> 00:19:12.360obtained by a minimum activity.00:19:12.360 –> 00:19:13.640You don’t have to pay.00:19:13.640 –> 00:19:18.280So one hundred thousand dollars is for the business license.00:19:18.280 –> 00:19:21.280And this is if you’re a contractor or an individual that works00:19:21.280 –> 00:19:23.720in multiple cities or or counties.00:19:23.720 –> 00:19:28.040So if you do less than one hundred thousand in a city or county,00:19:28.040 –> 00:19:32.400then that business license is not required to be filed.00:19:32.400 –> 00:19:36.920One thing I have to find out, don’t know if anyone else out there knows the answer.00:19:36.920 –> 00:19:40.400Do we still file it as a minimum and basically put the information?00:19:40.400 –> 00:19:43.760And it’s a zero tax, but we still have the minimum of fifteen dollars00:19:43.760 –> 00:19:47.680county or city to have to pay that no matter what.00:19:47.680 –> 00:19:52.040That’s what I need to find, because this normally most used to be like fifty00:19:52.040 –> 00:19:56.320thousand and I didn’t have very many clients that made less than fifty thousand00:19:56.320 –> 00:19:59.520dollars. So didn’t have a lot to deal with on that one.00:19:59.520 –> 00:20:04.120But one hundred thousand dollars will will be good for many of my clients00:20:04.120 –> 00:20:08.120to help make sure we have that information in the system.00:20:08.320 –> 00:20:12.240And, you know, we don’t want to pay any more tax than we have to again.00:20:12.240 –> 00:20:16.600So in some of these cases, you may just have a minimum tax business fee of fifteen00:20:16.600 –> 00:20:22.080dollars instead of paying the point zero zero one eight six tax on your old business00:20:22.080 –> 00:20:25.040license. All right, let’s hit Russ in Cookville.00:20:25.040 –> 00:20:26.680We got Russ in Cookville.00:20:26.680 –> 00:20:28.640Hey, Russ, what’s happening?00:20:28.640 –> 00:20:31.160Hey, Dr. Friday, thank you for taking the call here.00:20:31.160 –> 00:20:34.760I had a question here about traditional IRA.00:20:35.120 –> 00:20:36.760I opened it. Oh, my.00:20:36.760 –> 00:20:39.880It must mean maybe 30 years ago, you know, quite a ways back.00:20:39.880 –> 00:20:43.240Anyway, I cashed it out this year.00:20:43.240 –> 00:20:44.720It’s only around fourteen thousand.00:20:44.720 –> 00:20:47.520But will I receive something from the bank?00:20:47.520 –> 00:20:51.240Well, it’s been with about probably three or four different banks.00:20:51.240 –> 00:20:56.160Now, do they keep track of track of that or what will I receive in the mail from00:20:56.160 –> 00:21:00.240that? You should receive a form called the ten ninety nine R.00:21:01.320 –> 00:21:04.200And it would be from the last one that did.00:21:04.200 –> 00:21:06.560You said you received a distribution, right, Russ?00:21:06.560 –> 00:21:09.240Right, right. Yeah, I just want to write one.00:21:09.240 –> 00:21:14.600So that should be a most of those are in by the 15th, most of the time the 15th.00:21:14.600 –> 00:21:17.400But they do have till the last day of January to get that to you.00:21:17.400 –> 00:21:20.840But you will receive a form called the ten ninety nine R.00:21:20.840 –> 00:21:23.560That will tell you how much is taxable, how much you withdrew.00:21:23.560 –> 00:21:27.520If there was any withholdings, all that good stuff will be listed on that form.00:21:28.080 –> 00:21:33.080OK, yeah, I would have 12 percent, but will I be taxed on like like I said, it was00:21:33.080 –> 00:21:35.760probably 30 years. It’s been like 30 years.00:21:35.760 –> 00:21:37.680I probably only put a couple of thousand in there.00:21:37.680 –> 00:21:39.640Will I pay tax on that?00:21:39.640 –> 00:21:42.840What I put in there also are just the interest I’ve earned or.00:21:42.840 –> 00:21:49.120Well, assuming that it is a deferred like a 401k situation and back that many years00:21:49.120 –> 00:21:53.240probably was, then you’ll pay tax on everything because you never paid tax on it00:21:53.240 –> 00:21:58.040before. But if it was a Roth situation where you put money in and it just00:21:58.040 –> 00:22:01.760grow into this dollar amount and it was paid with aftertax, then the whole thing is00:22:01.760 –> 00:22:05.960tax deferred. So do you know if it’s a traditional or a Roth?00:22:05.960 –> 00:22:09.280Do you have any idea? It was it was traditional.00:22:09.280 –> 00:22:12.080Like I said, it was OK. Many, many probably 30 years.00:22:12.080 –> 00:22:15.640So I just went ahead and put just put a couple of thousand in there.00:22:15.640 –> 00:22:17.440And I think I just left it at that.00:22:17.440 –> 00:22:18.600So. Right.00:22:18.600 –> 00:22:22.200And so all of it will be taxed at ordinary income tax just to let you know.00:22:22.200 –> 00:22:24.800OK, OK. Yeah, I would have 12 cents.00:22:24.800 –> 00:22:26.480OK, well, I appreciate very much.00:22:26.960 –> 00:22:28.040No problem. Thank you.00:22:28.040 –> 00:22:30.360Bye bye. Bye bye.00:22:30.360 –> 00:22:36.400So again, if if you and he did the right thing, I will just say Russ handled his00:22:36.400 –> 00:22:40.680because a lot of times people take money out thinking, well, may or may not be taxable.00:22:40.680 –> 00:22:44.720Well, it’s always safer because most of us have deferred something along the way,00:22:44.720 –> 00:22:47.520mostly safer to to deal with that.00:22:47.520 –> 00:22:53.040So make sure you take out at least 12, 15, 20 percent, depending on your tax bracket.00:22:53.320 –> 00:22:57.360All right. Let’s go to Pat and see if we can get her in before the break.00:22:57.360 –> 00:22:58.840Hey, Pat or him.00:22:58.840 –> 00:23:07.280Hi. I am getting ready to take out a pension plan and I can do it all in one lump sum,00:23:07.280 –> 00:23:08.880which I thought about.00:23:08.880 –> 00:23:13.800But how what’s the percentage of federal?00:23:13.800 –> 00:23:17.600I will have to pay on this and state for Kentucky.00:23:17.600 –> 00:23:22.960Well, one, I’m not a financial planner throwing that out only because I’m going to say00:23:22.960 –> 00:23:27.160I don’t think you should take the whole thing out at one time because we’re in a00:23:27.160 –> 00:23:28.400progressive tax code.00:23:28.400 –> 00:23:29.640So give me what.00:23:29.640 –> 00:23:33.680Just give me a number. How much are we thinking that the total package is just.00:23:33.680 –> 00:23:36.360Let’s say, for example, fifty thousand.00:23:36.360 –> 00:23:38.080I’m 67 years old.00:23:38.080 –> 00:23:40.000OK, are you married or single?00:23:40.000 –> 00:23:41.720I am single.00:23:41.720 –> 00:23:44.600OK, so you’re 60.00:23:44.600 –> 00:23:46.360So are you on Social Security as well?00:23:46.360 –> 00:23:48.120Yes. All right.00:23:48.120 –> 00:23:52.680All right. So we have two things we have to look at.00:23:52.680 –> 00:23:55.920We’ve got one, the means testing that can happen to Medicare.00:23:55.920 –> 00:24:00.680If you take all 50000, it could theoretically kick you over 90000 total income.00:24:00.680 –> 00:24:05.240If it does. And I don’t have the exact dollar amount, Pat, but then they may charge you00:24:05.240 –> 00:24:07.280another year more money.00:24:07.280 –> 00:24:10.280If it doesn’t, then you’re fine.00:24:10.280 –> 00:24:11.920It won’t affect that amount.00:24:11.920 –> 00:24:17.120You’ll be under that. It won’t be over 90000.00:24:17.120 –> 00:24:19.800So. OK, so then we don’t have to worry about that.00:24:19.800 –> 00:24:25.080Second, basically, as long as I mean, the first 50000 dollars is at 12 percent.00:24:25.080 –> 00:24:31.360The next for simple math, the next 55000 goes up to 20 percent, 22 to be precise.00:24:31.360 –> 00:24:33.560So and it’s progressive.00:24:33.560 –> 00:24:37.080So it doesn’t just go from zero to twelve, zero to twenty two, whatever.00:24:37.080 –> 00:24:43.720So you’d be looking at probably effectively probably I would just say 15 percent tax on00:24:43.720 –> 00:24:46.640the 50000 dollars on the federal state.00:24:46.640 –> 00:24:48.800I believe Kentucky’s around six percent.00:24:48.800 –> 00:24:50.040I don’t do a ton of Kentucky.00:24:50.040 –> 00:24:51.040I don’t have memorized.00:24:51.040 –> 00:24:56.200But so you’re looking at probably 20 percent tax between state and fed.00:24:56.200 –> 00:24:58.920I spread it out.00:24:58.920 –> 00:25:03.680Yeah. And keep in mind, you’re met and your Social Security will be taxed up to 8500:25:03.680 –> 00:25:09.280percent of it. So if you get 20000 dollars or whatever, 85 percent of 20000, whatever00:25:09.280 –> 00:25:13.080that is, I don’t have my calculator today will become added income.00:25:13.080 –> 00:25:15.560So, you know, so Social Security.00:25:15.560 –> 00:25:19.600So if we could split it in two years, you might be able to get where your Social00:25:19.600 –> 00:25:22.680Security is almost zero tax and you could spread it out.00:25:22.680 –> 00:25:26.680So I don’t know if you have that option where you can defer half and take out half.00:25:26.680 –> 00:25:31.200And then that way you’re maybe so that way you say I’m 12.00:25:31.200 –> 00:25:32.840Now, right now, I got paid.00:25:32.840 –> 00:25:38.600I get a Social Security and that’s like 1350 a month.00:25:38.600 –> 00:25:41.560Right. So that’s the total.00:25:44.360 –> 00:25:50.520So I’m not sure I thought I wondered if I could invest reinvested in a IRA or00:25:50.520 –> 00:25:54.000something and then just draw interest off from it.00:25:54.000 –> 00:25:55.480You definitely can do that.00:25:55.480 –> 00:25:59.400You can defer it into a retirement of some sort.00:25:59.400 –> 00:26:03.360Normally it’s an IRA and then take it deferred into the IRA.00:26:03.360 –> 00:26:06.680And then that way you could take out a monthly draw of some sort and keep you at the00:26:06.680 –> 00:26:07.840lowest tax bracket.00:26:07.840 –> 00:26:11.880That would be my suggestion, but that’s something to think about.00:26:12.480 –> 00:26:19.080OK, OK, because if I do it like that now, but probably I mean, I could draw a00:26:19.080 –> 00:26:23.360monthly on it, you know, like 267 or something like that.00:26:23.360 –> 00:26:25.200So well, I would not have to pay.00:26:25.200 –> 00:26:27.040Sometimes your limitation you wouldn’t have.00:26:27.040 –> 00:26:30.520But if you can do it in smaller increments and put it into an IRA where maybe you00:26:30.520 –> 00:26:34.600have better investment options than you do in the pension, it might give you a win00:26:34.600 –> 00:26:35.600win situation.00:26:35.600 –> 00:26:39.440OK, now what did you mean about the Social Security?00:26:41.600 –> 00:26:47.240When you earn twenty five thousand dollars, half of your Social Security plus00:26:47.240 –> 00:26:50.720whatever you earn, if it exceeds twenty five thousand dollars, you’re going to start00:26:50.720 –> 00:26:53.040paying tax on your Social Security itself.00:26:53.040 –> 00:27:02.160Oh, OK, like if I took out fifty thousand and with my Social Security a year, if it’s00:27:02.160 –> 00:27:07.320over twenty, anything over that twenty five thousand, I have to pay half of the00:27:07.320 –> 00:27:08.760Social Security that I’m getting.00:27:08.760 –> 00:27:12.360Exactly. Which you don’t I mean, you can control that if you do it the other way.00:27:12.360 –> 00:27:13.920OK. OK.00:27:13.920 –> 00:27:15.240Thank you so much.00:27:15.240 –> 00:27:17.320Thank you. All right. We’re going to take a quick break.00:27:17.320 –> 00:27:19.360When we get back, we’ll take more of your phone calls.00:27:19.360 –> 00:27:22.480Six one five seven three seven nine nine eight six.00:27:22.480 –> 00:27:23.480We’ll be right back.00:27:23.480 –> 00:27:35.120All right, we are back live in studio, and I love the fact that everyone else is00:27:35.120 –> 00:27:36.760excited about taxes as I am.00:27:36.760 –> 00:27:39.640Because my phone line keeps going and this is so awesome.00:27:39.640 –> 00:27:42.760All right. Let’s go to Rick in Nashville.00:27:42.760 –> 00:27:44.160Hey, Rick, what’s happening, love?00:27:44.160 –> 00:27:49.120I’ve got a question about a piece of property that I sold last year.00:27:49.120 –> 00:27:53.160I purchased it in nineteen ninety nine and I sold it last year.00:27:53.160 –> 00:27:56.600Obviously, I’ve got some capital gains I’m going to have to take.00:27:56.600 –> 00:28:02.280However, I filled out Schedule E every year that I had it because it was it was a00:28:02.280 –> 00:28:06.720rental property. I had some tax loss that have occurred over the years.00:28:07.160 –> 00:28:09.280I never brought it forward on my taxes.00:28:09.280 –> 00:28:14.120Can I go back and if I go back and create a spreadsheet of each year, what the tax00:28:14.120 –> 00:28:15.320loss was for that year?00:28:15.320 –> 00:28:18.320Can I recoup it now that I sold the property?00:28:18.320 –> 00:28:25.120Well, in theory, yes, but it should be rolling over in your taxes, but since you’re00:28:25.120 –> 00:28:29.920doing them, maybe you didn’t report it because it’s supposed to be rolling forward00:28:29.920 –> 00:28:33.440every year, right? As a NOL that tracks through the system.00:28:34.440 –> 00:28:37.880It’s supposed to, but I didn’t do it that way.00:28:37.880 –> 00:28:40.840So what did you do with the loss every year?00:28:40.840 –> 00:28:44.440Well, I didn’t have a loss every year, just had a loss.00:28:44.440 –> 00:28:48.960But I think in 2006, it had a pretty substantial loss.00:28:48.960 –> 00:28:52.800But in 2006, you didn’t take it on your tax return?00:28:52.800 –> 00:28:58.000I took it. It’s on my tax return, but I didn’t roll it like you can only roll, I00:28:58.000 –> 00:29:01.400think, like thirty five hundred or something like that over every year.00:29:01.600 –> 00:29:02.600I didn’t do that.00:29:02.600 –> 00:29:07.200Well, yeah, I mean, theoretically, you have twenty five thousand dollars depending on00:29:07.200 –> 00:29:11.360your income. If you make less than one hundred twenty five, you can make a maximum00:29:11.360 –> 00:29:12.760loss of twenty five thousand.00:29:12.760 –> 00:29:17.400So I would say the first thing is if you want to go back and track and see, because00:29:17.400 –> 00:29:21.640the problem will be is proving that you didn’t already take that loss in the year or00:29:21.640 –> 00:29:23.400the following year that you had it.00:29:23.400 –> 00:29:25.880Because normally if we don’t get it, it rolls to the next year.00:29:25.880 –> 00:29:30.080If there’s any profits, it zeroes out those profits and it gets eaten up, so on and so00:29:30.080 –> 00:29:33.160on until the losses or gains exceed.00:29:33.160 –> 00:29:36.480Like myself, I have losses on my real estate.00:29:36.480 –> 00:29:40.400I can’t take those losses because my income, but it will roll forward.00:29:40.400 –> 00:29:43.840So every year if I make a profit on one of them, it will offset the loss.00:29:43.840 –> 00:29:47.880So I don’t I mean, I don’t it’s not a black and white answer, unfortunately, on that00:29:47.880 –> 00:29:53.280one, because those losses should have been offset against the gains in the years that00:29:53.280 –> 00:29:58.600followed. And if you didn’t do that, you know, theoretically, they’re going to go00:29:59.520 –> 00:30:02.520Those are all claims on my Schedule E for that property.00:30:02.520 –> 00:30:04.480I believe it’s Schedule E for that property.00:30:04.480 –> 00:30:05.680Yeah, no, you’re 100 percent.00:30:05.680 –> 00:30:08.880Schedule E sounds I would go back and see since you purchased it.00:30:08.880 –> 00:30:12.800I mean, if you can go back to ninety nine, that’s impressive in the first place, Rick.00:30:12.800 –> 00:30:17.760But if you have those, I guess the first answer would be is go ahead, do the Excel,00:30:17.760 –> 00:30:22.720take the positives and the losses and see how they were tracked on the taxes and then00:30:22.720 –> 00:30:25.040see if you have any NOL available.00:30:25.040 –> 00:30:28.800And theoretically, if you have one, you could argue the point that it’s available.00:30:28.840 –> 00:30:31.680Yes. OK, thank you.00:30:31.680 –> 00:30:34.280Thanks, buddy. All right.00:30:34.280 –> 00:30:36.000That was an interesting question.00:30:36.000 –> 00:30:37.040I’m not too sure.00:30:37.040 –> 00:30:41.800You know, I don’t think I mean, I don’t think a lot of my clients could go all the00:30:41.800 –> 00:30:47.840way back to to twenty nine or nineteen ninety nine and find their tax returns to come00:30:47.840 –> 00:30:52.800up with that. So I’m already impressed, Rick, that you have the ability to find your00:30:52.800 –> 00:30:57.240tax returns. I know this listening that say I have every copy of every tax return I’ve00:30:57.240 –> 00:31:00.040ever filed. And I know my father passed away.00:31:00.040 –> 00:31:04.240I found that was one that was filed in the in the 60s.00:31:04.240 –> 00:31:10.680And I thought it was cool because it was it was so small, the tax return and so00:31:10.680 –> 00:31:12.280different than what we filed today.00:31:12.280 –> 00:31:16.800But OK, so if you’ve got questions, join us live here in the studio.00:31:16.800 –> 00:31:22.800Six one five seven three seven nine nine eight six six one five seven three seven00:31:22.800 –> 00:31:25.000nine nine eight six.00:31:25.760 –> 00:31:32.920There’s also for for new members of LLCs, make sure you go to Tentap.00:31:32.920 –> 00:31:38.120They have a new where we have to fill in all the members of your existing business,00:31:38.120 –> 00:31:40.160LLC or corporation.00:31:40.160 –> 00:31:44.800Sometimes when people file the annual report, they don’t always list all the members00:31:44.800 –> 00:31:46.480and it is a mandate.00:31:46.480 –> 00:31:52.000So you might want to go back and just check and make sure when filing annual reports or00:31:52.240 –> 00:31:59.040your information on on Tentap that all the members of your LLCs are listed so you00:31:59.040 –> 00:32:01.360don’t get hit with a penalty or a fine.00:32:01.360 –> 00:32:04.480Again, business licenses are coming up due soon.00:32:04.480 –> 00:32:08.200So that one you want to file on or before April 15th.00:32:08.200 –> 00:32:12.560And if your business made less than one hundred thousand dollars, you may not have to00:32:12.560 –> 00:32:16.840file anything but just the return from that setup.00:32:16.840 –> 00:32:20.760And then just making sure that you have all of your information.00:32:20.960 –> 00:32:25.480And keep in mind, nowadays, the IRS does still I mean, they are not the IRS.00:32:25.480 –> 00:32:31.040Tennessee Department of Revenue is really good about putting in email notifications00:32:31.040 –> 00:32:33.000if people want to have those.00:32:33.000 –> 00:32:37.440So it does help a lot with what’s going on in the state side.00:32:37.440 –> 00:32:40.200Federal IRS will never email you guys.00:32:40.200 –> 00:32:43.600So if you get an email from the IRS, you know it’s a fraud.00:32:43.600 –> 00:32:44.920They’re not emailing you.00:32:44.920 –> 00:32:49.680They may use e-fax to be able to do something, but they’re never going to fail.00:32:49.920 –> 00:32:52.480They’re never going to email you or anything like that.00:32:52.480 –> 00:32:57.080So just make sure when you’re getting ready, if you’re making a little list of things that00:32:57.080 –> 00:33:01.000have to be done in the first quarter or I consider it the first quarter, basically it’s00:33:01.000 –> 00:33:02.600before April the 15th.00:33:02.600 –> 00:33:08.080Keep in mind, you’ve got your annual note for this is for businesses, your annual report00:33:08.080 –> 00:33:14.400usually on April 1st, your business license, April 15th, your franchise excise, April00:33:14.400 –> 00:33:19.24015th, your first quarterly for the state or franchise excise, April 15th.00:33:19.240 –> 00:33:25.640Obviously on the federal side, you also have your personal or corporate returns.00:33:25.640 –> 00:33:31.120Now, remember 1065s and 1120s are due March 15th.00:33:31.120 –> 00:33:38.080So if you are a small first time business filer and you have started a dual, a00:33:38.080 –> 00:33:47.120partnership LLC or an S corporation, those deadlines are March 15th, not April.00:33:47.120 –> 00:33:48.360March 15th.00:33:48.360 –> 00:33:52.440So these are deadlines where I’ll keep hitting out there because it’s very important00:33:52.440 –> 00:33:54.440that you actually have that information.00:33:54.440 –> 00:33:58.000You know what you got going, you know where you’re going with it, and it’s just00:33:58.000 –> 00:33:59.960important to be able to get.00:33:59.960 –> 00:34:01.920No one likes to pay penalties.00:34:01.920 –> 00:34:03.120I dislike penalties.00:34:03.120 –> 00:34:07.080I hate making mistakes and and I don’t like having to pay a price for it when I do make00:34:07.080 –> 00:34:12.040the mistake. And so if I can help you guys figure out what you do or do not need to00:34:12.040 –> 00:34:15.520file or if there’s a way of getting around it, that’s what I like to do most.00:34:15.760 –> 00:34:19.800But if you have, you know, if you’re a small business owner, especially when you’re00:34:19.800 –> 00:34:23.880small, I mean, most of us are so often wearing more than one hat.00:34:23.880 –> 00:34:26.560So, you know, we’re sitting here doing our accounting.00:34:26.560 –> 00:34:31.320We’re also doing the sales or we’re doing the work where, you know, and so sometimes00:34:31.320 –> 00:34:33.240dates and things can slip by.00:34:33.240 –> 00:34:38.800So it’s really important that you actually just know what you need and put them on the00:34:38.800 –> 00:34:41.840calendar so you’re not late and get them done.00:34:41.840 –> 00:34:44.920I mean, you can file your business license today if you know your sales.00:34:45.560 –> 00:34:47.800For January through December, get it done.00:34:47.800 –> 00:34:52.040It’s out of here. If you have an annual report, same thing.00:34:52.040 –> 00:34:54.520Easy to do. Get it filed.00:34:54.520 –> 00:34:56.800Move it on. Don’t have to worry about it.00:34:56.800 –> 00:35:03.120And then you’re able to just make sure you have the right forms and the times.00:35:03.120 –> 00:35:07.040But on your annual reports this time, make sure you list all members.00:35:07.040 –> 00:35:10.000Otherwise you could end up with a situation.00:35:10.000 –> 00:35:14.360You know what? If I take Bill right now, I’ll end up hitting the break.00:35:14.360 –> 00:35:18.000So why don’t we take a quick break just a few seconds early if we can.00:35:18.000 –> 00:35:22.600That way, then when I get back, I can hit Bill and we don’t have to worry about cutting00:35:22.600 –> 00:35:26.480them off really quick. We’re going to take a quick break and we’ll be right back with00:35:26.480 –> 00:35:27.920the Dr. Friday Show.00:35:27.920 –> 00:35:40.040We are back here live in studio and we’re going to go right to the phone lines and hit00:35:40.040 –> 00:35:43.280Bill and McMinnville so I can hopefully get his questions.00:35:43.280 –> 00:35:43.880A good one.00:35:44.880 –> 00:35:52.120Hey, Dr. Friday, my sister’s husband passed away this last year and he had a farm.00:35:52.120 –> 00:35:58.720He had some a couple of hay barns and some cattle and cattle working equipment.00:35:58.720 –> 00:36:06.280She’s been told that she needed to set up a basis on the day that he passed of the00:36:06.280 –> 00:36:11.000value of that property because she could set up and depreciate that.00:36:11.000 –> 00:36:13.520Is that right on a house?00:36:13.760 –> 00:36:15.560So theoretically, yes.00:36:15.560 –> 00:36:18.800I mean, in answer to your question, so she inherited the farm?00:36:18.800 –> 00:36:21.760Right. She’s selling the equipment.00:36:21.760 –> 00:36:28.440Well, she’s still we’re helping her take care of her cattle and stuff, so it’s still a00:36:28.440 –> 00:36:30.360functioning farm. She has income.00:36:30.360 –> 00:36:37.960OK, so what she does, she needs to have an evaluation no later than 60 days after the00:36:37.960 –> 00:36:39.160person passed away.00:36:39.160 –> 00:36:44.120I mean, at least the values, because then she can use that as her basis of what she00:36:44.120 –> 00:36:45.120inherited at.00:36:45.120 –> 00:36:48.040And it does need to be from an outside party.00:36:48.040 –> 00:36:53.240I mean, something like this, in my opinion, it needs to be either an appraisal or auction00:36:53.240 –> 00:36:58.160company, someone that can come in, put the date, you know, the listing of the valuation,00:36:58.160 –> 00:37:01.720the fair market value, you know, all of that needs to be listed.00:37:01.720 –> 00:37:06.760And there’s a lot of little things that she has, you know, I mean, and big things.00:37:06.760 –> 00:37:08.600Hay barn, even cows.00:37:08.600 –> 00:37:12.320I mean, you know, depending on the market, you know, those those prices can go up and00:37:12.320 –> 00:37:13.840down quite a bit.00:37:13.840 –> 00:37:20.840So if she’s going to keep it or even if she decides later to sell it, she needs that00:37:20.840 –> 00:37:25.080basis. Otherwise, she inherited at zero if she doesn’t do this.00:37:25.080 –> 00:37:31.320So she needs to take that time, either get somebody from the area that knows how to,00:37:31.320 –> 00:37:36.240you know, maybe Google is my best answer to see if you can get an appraisal for farming00:37:36.240 –> 00:37:40.320equipment or existing farms, you know, because you’re not looking at a house appraisal,00:37:40.320 –> 00:37:42.480really. You’re looking more at a farming appraisal.00:37:42.480 –> 00:37:46.720And, you know, there is the thought of maybe calling in.00:37:46.720 –> 00:37:48.360They may give it to you. And I don’t know.00:37:48.360 –> 00:37:51.920But there’s a lot of when I go to auctions and things, many of them have a lot of00:37:51.920 –> 00:37:53.920farming equipment and different things like that.00:37:53.920 –> 00:37:55.800So they may be able to help with that as well.00:37:55.800 –> 00:37:59.600Well, our father also passed away last year.00:37:59.600 –> 00:38:02.960Now, we both inherited some.00:38:02.960 –> 00:38:07.600She had a rental house and a farm on it from our father.00:38:07.600 –> 00:38:15.600And then I’ve got equipment and cattle and a couple of hay barns on property that he00:38:15.600 –> 00:38:21.680left for me. Is that I need to set that up for a deduction?00:38:21.680 –> 00:38:25.920You need all of that. And they need to go back to the within 60 days of the date of the00:38:25.920 –> 00:38:31.520person passing away and then using that as their date to pull it up in their databases to00:38:31.520 –> 00:38:36.520get appraisal for how many heifers, how many cows, if it’s dairy cows, babies, whatever,00:38:36.520 –> 00:38:42.600along with barns and equipment, you know, and the land, because all of that has a basis.00:38:42.600 –> 00:38:46.560And without it, you know, you what do you have?00:38:46.560 –> 00:38:50.360And then eventually you’re either selling it or even if your children inherit, there00:38:50.360 –> 00:38:51.880still needs to be an original basis.00:38:52.640 –> 00:38:54.440OK, I just want to share.00:38:54.440 –> 00:38:59.240I know I’ve bought property with barns and buildings and stuff.00:38:59.240 –> 00:39:05.400And I know if you buy it, you can set it up to depreciate it because you have an expense00:39:05.400 –> 00:39:08.040on it. But I didn’t know about inheritance.00:39:08.040 –> 00:39:12.040Yep. Same thing. You actually have a value because you get a step up in basis.00:39:12.040 –> 00:39:16.720So whatever that property, everything included was worth, part of that will be00:39:16.720 –> 00:39:18.240depreciated as a working farm.00:39:18.240 –> 00:39:21.760OK, OK, I appreciate it.00:39:22.160 –> 00:39:23.440No problem, buddy. Thanks.00:39:23.440 –> 00:39:26.040All right. Let’s hit Bruce really quick at White House.00:39:26.040 –> 00:39:27.840Hey, Bruce, thanks for holding.00:39:27.840 –> 00:39:33.840Hello, I got a granddaughter, 31 years old, last year.00:39:33.840 –> 00:39:39.720Oops, looks like we lost him really quick.00:39:39.720 –> 00:39:43.840I don’t know what happened, but Bruce, if you can call back in the next minute or two,00:39:43.840 –> 00:39:45.600I will try to get you back on.00:39:45.600 –> 00:39:50.160But it sounds like he has granddaughters and he wants to know at 31 if he can claim00:39:50.160 –> 00:39:54.400them. And if you’re listening, Bruce, I’m going to answer that particular question just00:39:54.400 –> 00:39:55.400to see if it helps.00:39:55.400 –> 00:39:59.560OK, so first, are they really a dependent?00:39:59.560 –> 00:40:02.160Are they making less than five or six thousand dollars a year?00:40:02.160 –> 00:40:07.360If not, if they’re actually 31 and not working, not too sure.00:40:07.360 –> 00:40:10.200Maybe there’s great grandchildren they’re taking care of.00:40:10.200 –> 00:40:15.000But if they’re living in your house, you’re providing more than 50 percent of their care00:40:15.000 –> 00:40:18.680and they’re not working to make any money on their own, then you can claim them.00:40:18.680 –> 00:40:23.120But if they are making five, six, seven thousand dollars, then they are theoretically their00:40:23.120 –> 00:40:26.240own person. I don’t know how they would live off that dollar amount.00:40:26.240 –> 00:40:29.760That’s not the point. The IRS says it’s time for them to be on their own.00:40:29.760 –> 00:40:31.520And therefore you would not.00:40:31.520 –> 00:40:35.440You would get a credit of five hundred dollars.00:40:35.440 –> 00:40:40.640So the the adult credit or the dependent credit is five hundred dollars.00:40:40.640 –> 00:40:44.680That’s what you would be receiving on on those children or those people.00:40:44.680 –> 00:40:48.520And you have to I think you have to have earned income because if it’s if you’re living00:40:48.520 –> 00:40:53.240solely off Social Security, I’m pretty sure it won’t kick in because it’s not a00:40:53.240 –> 00:40:55.280refundable or fully refundable credit.00:40:55.280 –> 00:40:58.200So I would do taxes both directions.00:40:58.200 –> 00:41:02.920But if your granddaughter is living with you and she’s 31 years old, maybe she’s going00:41:02.920 –> 00:41:07.240through a divorce or something, then they have to live with you six months in one day.00:41:07.240 –> 00:41:10.040So they would have had to move in last June.00:41:10.040 –> 00:41:14.480And then you need to give them more than 50 percent of their care, meaning that they00:41:14.480 –> 00:41:17.600didn’t bring any money into the household to help take care of themselves.00:41:18.560 –> 00:41:19.960If that’s the case, you can’t claim them.00:41:19.960 –> 00:41:24.520But 31 would seem like they’re a little bit older, but they may not have been able to00:41:24.520 –> 00:41:28.280work. And if that’s the case, then and they did live with you for more than six months00:41:28.280 –> 00:41:31.960in a day, then they would qualify as a dependent of yours most likely.00:41:31.960 –> 00:41:34.560So hopefully I didn’t see you back.00:41:34.560 –> 00:41:37.040And I’m sorry, Bruce. Sometimes that happens.00:41:37.040 –> 00:41:39.800But hopefully that answers your question.00:41:39.800 –> 00:41:45.680If not, you can always contact my office on Monday morning at 615-367-081.00:41:46.080 –> 00:41:51.800That’s the direct number 615-367-0819.00:41:51.800 –> 00:41:55.800And I can answer your question directly to you off the radio.00:41:55.800 –> 00:41:58.560Not everybody likes to be on the radio.00:41:58.560 –> 00:42:03.360And, you know, sometimes those questions can be difficult for what you have.00:42:03.360 –> 00:42:07.560So another caveat back to Rick, who has all the farming.00:42:07.560 –> 00:42:14.560I did look up in the IRS does require a fair market value based on the IRS ruling.00:42:15.560 –> 00:42:20.240Or regs, I guess you’d say under 26, which basically says it has to have the market value,00:42:20.240 –> 00:42:24.280any changing of hands or anything that’s happened, selling, etc., etc.00:42:24.280 –> 00:42:30.560So you I think if you inherited all this, you may have the attorney that handled the00:42:30.560 –> 00:42:36.840estate. If there was an attorney, they may have already done some appraisals or listings00:42:36.840 –> 00:42:39.440to do it just to make sure the estate was under.00:42:39.440 –> 00:42:44.400But right now, with the estates being over what, 11, 12 million, most people don’t have00:42:44.400 –> 00:42:49.480to worry about those appraisals as they were, or if they bring them back down to the00:42:49.480 –> 00:42:50.960one million dollar mark.00:42:50.960 –> 00:42:54.720That will definitely create a whole different conversation in our lives.00:42:54.720 –> 00:42:57.880All right. So let’s cover what we need to know.00:42:57.880 –> 00:43:02.080If you’re a business owner, you need to start thinking about getting a few things filed00:43:02.080 –> 00:43:04.440out of the way because you know how crazy it’s going to get.00:43:04.440 –> 00:43:07.280So doing business licenses, annual reports.00:43:07.280 –> 00:43:09.000Don’t forget those annual reports.00:43:09.000 –> 00:43:12.160It’s so easy to do, but it’s an easy thing to do.00:43:12.160 –> 00:43:15.560Just go to Tennessee Secretary of State right on the front page.00:43:15.560 –> 00:43:17.280This is file annual report.00:43:17.280 –> 00:43:21.240Click it. Put in your number or look up your name of your business.00:43:21.240 –> 00:43:22.360File the annual report.00:43:22.360 –> 00:43:26.920Make sure you put in all members of it so that it’s all up to date and properly00:43:26.920 –> 00:43:30.800recognized. And then you can go from there and do what you need to do.00:43:30.800 –> 00:43:35.640Then the next thing, obviously, is start getting your paperwork together.00:43:35.640 –> 00:43:38.880I already know Social Security has sent out.00:43:38.920 –> 00:43:43.800Maybe not all of you have received it, but I know for a fact that Social Security has sent out00:43:43.800 –> 00:43:48.280their statements. So some if you haven’t received it should be coming out very soon.00:43:48.280 –> 00:43:54.400W-2s. And if you worked at multiple locations, take a few seconds, put an envelope, a00:43:54.400 –> 00:43:58.960manila envelope together, write down the places you work to make sure you have all of the00:43:58.960 –> 00:44:02.720W-2s before you go out and try to file your taxes.00:44:02.720 –> 00:44:05.720Because what we’re going to do, we’re going to get a letter back that says, hey, we’ve00:44:05.720 –> 00:44:09.880changed your tax return because you didn’t report something.00:44:09.880 –> 00:44:14.240And that usually happens when someone has either worked a job that they forgot was the00:44:14.240 –> 00:44:18.800first part of the year, whatever, and they don’t remember it or that they actually sold00:44:18.800 –> 00:44:20.560stocks. That’s a huge one.00:44:20.560 –> 00:44:26.280A lot of times people think, well, I paid on taxes already, took money out of a 401k or an00:44:26.280 –> 00:44:30.360IRA. And since they withheld taxes, a lot of times people think they don’t have to report00:44:30.360 –> 00:44:32.600those taxes. Not the case.00:44:32.960 –> 00:44:36.720Everything eventually almost, I mean, from my world, I mean, I’m sure there’s not00:44:36.720 –> 00:44:41.480everything, but anything that’s a taxable source, even if they withheld taxes, needs to00:44:41.480 –> 00:44:47.400be. 1099Cs where they’ve actually done collections and maybe you negotiate with a00:44:47.400 –> 00:44:48.440collection company.00:44:48.440 –> 00:44:52.320Have one on my table right now where they didn’t realize it was going to become income.00:44:52.320 –> 00:44:56.040They saw the form. They just didn’t realize that that was a tax form that they need to00:44:56.040 –> 00:44:58.240file. It is it is taxable.00:44:58.240 –> 00:45:02.000So sometimes when you make these deals and it sounds like so great, you know what?00:45:02.320 –> 00:45:08.240I owed fifteen thousand dollars to the Visa company and negotiated down to a thousand00:45:08.240 –> 00:45:11.360dollars. So I save fourteen thousand dollars.00:45:11.360 –> 00:45:12.760And then guess what? Wham!00:45:12.760 –> 00:45:16.800At the end of the year, you’ve got a 1099 for fourteen thousand dollars.00:45:16.800 –> 00:45:21.560Now that puts you in an income situation instead of only a credit card company, which00:45:21.560 –> 00:45:26.600really has a lot harder time collecting as far as I’m concerned than the IRS.00:45:26.600 –> 00:45:27.880It is much easier.00:45:27.880 –> 00:45:33.080So be smart. Don’t just make a deal with somebody just to to think that you’re saving00:45:33.080 –> 00:45:36.320money. Make sure you think about how much this is going to cost me in tax dollars.00:45:36.320 –> 00:45:37.880And do I have that to pay?00:45:37.880 –> 00:45:40.920Because do you really want the IRS as a loan officer?00:45:40.920 –> 00:45:42.800I can guarantee you the answer is no.00:45:42.800 –> 00:45:44.920All right, guys, we’re winding up the show.00:45:44.920 –> 00:45:57.600So if you want to reach my office, 615-367-0819, 615-367-0819, direct00:45:57.600 –> 00:45:58.800number to my office.00:45:58.800 –> 00:46:03.320You can always email Friday at DR Friday dot com.00:46:03.320 –> 00:46:05.200That’s F-R-I-D-A-Y.00:46:05.200 –> 00:46:07.840That is my first name for all of you that wonder about Dr.00:46:07.840 –> 00:46:11.920Friday. So it’s DR Friday at DR Friday dot com.00:46:11.920 –> 00:46:13.920Or you can just check us on the web.00:46:13.920 –> 00:46:17.640DR Friday dot com is the website that you can go in.00:46:17.640 –> 00:46:21.480And then, of course, if you’re an existing client, hopefully you’ve went in.00:46:21.480 –> 00:46:23.080But if not, you’re just remembering.00:46:23.080 –> 00:46:25.280Set your tax appointment up now.00:46:25.280 –> 00:46:27.040Go ahead. The calendar’s in there.00:46:27.320 –> 00:46:29.080Go ahead and set up your tax appointment.00:46:29.080 –> 00:46:32.680So that way we can make sure that you’re on the books for me to do.00:46:32.680 –> 00:46:35.800Other than that, guys, I really hope you guys are in.00:46:35.800 –> 00:46:36.680It’s cold outside.00:46:36.680 –> 00:46:37.800So stay inside.00:46:37.800 –> 00:46:39.800Enjoy. Get your paperwork together.00:46:39.800 –> 00:46:41.320Organize everything.00:46:41.320 –> 00:46:45.520And then that way, when the busy season, the forms start coming in, it doesn’t00:46:45.520 –> 00:46:46.360get so crazy.00:46:46.360 –> 00:46:49.480As we always say in Australia, cop you later.00:46:49.480 –> 00:46:51.900(rock music)

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, discusses the significant tax implications of major life events occurring in 2024, such as childbirth, marriage, or divorce. She emphasizes the importance of updating your W-4 form to ensure the right amount of tax is withheld, thereby avoiding giving a large loan to the IRS or facing a hefty tax bill. Dr. Friday advises listeners to contact her for personalized guidance on managing these changes effectively. She also reminds listeners to tune in to her live call-in show every Saturday for more expert tax advice.

Transcript

G’day. I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Major changes for you in your life happening in 2024. Child coming, marriage, divorce, any of these could have huge changes. What you need to think about, do I need to update my W-4 form so I have more or less coming out? No one wants to give a loan to the IRS so you get this huge refund. That’s never a good idea, guys. But we also don’t wanna have to write a check to the IRS for a large amount. If you’re not sure if you’re doing all this right, first thing you need to do, pick up the phone and call me, 367-0819, or go to the web at drfriday.com. We’re here to help you.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this Dr. Friday Tax Tips – One Minute Moment episode, Dr. Friday addresses the widely discussed changes to the 2023 Form 1099-K, focusing on its impact on small business owners and individual sellers. Amidst the flurry of inquiries, Dr. Friday clarifies the evolution of the 1099-K threshold, which was initially slated for adjustment in 2022 but is now rescheduled to shift in 2024 to a $5,000 threshold. This significant change is crucial for those with side businesses, particularly those selling on platforms like Amazon or disposing of personal items. Dr. Friday emphasizes the importance of early preparation and awareness of potential tax exclusions to navigate these changes effectively. For more in-depth insights, Dr. Friday invites listeners to explore her website and tune into the weekly live call-in show every Saturday on 99.7 WTN.

Transcript

G’day. I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

The 2023 Form 1099-K, we are getting tons of phone calls on this because we all know back in 2020, initially they were going to bring it out in 2022, then in 2023, the threshold was 600, and then now it’s gonna be, guess what? $5,000, that’s right. Starting in 2024, they’re phasing in a $5,000 1099-K. So that means if you are of a little side business and maybe you’re selling things on Amazon or you’re selling your personal items, you need to start prepping now. There are tax exclusions that you can qualify. Check us out on the web.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, an experienced tax professional, delves into the continuation of the zero personal tax exemption for 2024. This policy, originating from the Tax Cut and Jobs Act passed in 2020, has been in effect since 2018. Dr. Friday explains why the maintenance of this exemption rate is beneficial, despite initial reservations about zero exemptions in taxation. She emphasizes the potential changes in 2025 and encourages listeners with tax-related queries to utilize her expertise as an enrolled agent licensed by the IRS. The episode concludes with an invitation to join her weekly call-in show for more tax advice.

Transcript

G’day. I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

The personal tax exemption for 2024 remains at zero. Which doesn’t always sound good when we’re talking taxes, but this is a good thing. Eliminating the personal exemption tax was provided in the Tax Cut and Jobs Act that was passed back in 2020. So if you have a question and it’s been zero since 2018 all the way through 2024, 2025 may be a different story. But if you’re not sure what’s affecting your taxes, what’s not, I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. So you need to call me if you have any questions. 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this informative episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, President of Dr. Friday’s Tax and Financial Firm, sheds light on the complexities of the Alternative Minimum Tax (AMT) and its exemptions. She highlights the significant updates for 2024, including the increased exemption amount to $85,700 for individuals, which phases out at $600,000. For married couples, the exemption begins at $133,300. Dr. Friday emphasizes the importance of understanding these changes to avoid the pitfalls of this often overlooked aspect of tax planning. Given the tricky nature of AMT, she encourages listeners to reach out to her office for personalized advice. The episode also reminds listeners of the opportunity to engage with Dr. Friday live on her call-in show every Saturday afternoon.

Transcript

G’day. I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Alternative minimum tax exemptions. We all know about the hidden tax code within the tax code. In fact, there’s multiple ones, but AMT tax can be a sneaky one. In this one, they’ve increased the tax up to $85,700. So you won’t most likely start paying AMT tax until you hit $85,700. And that’s the beginning and it phases out at $600,000. For married couples, it starts at $133,300 in the year of 2024. This can be a sneaky one, and if you’re not sure if you’re going to have to pay AMT, you need to call my office at 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday highlights the significant increase in the standard deduction for the 2024 tax year. Married couples will see an increase of approximately $1,500, raising the deduction to $29,200, while individuals will have a deduction of $14,600. Dr. Friday emphasizes the importance of understanding these changes to make informed decisions about tax strategies, such as conversions and maximizing deductions. She also addresses the common shift from itemizing to standard deductions and offers her expertise for those needing guidance in navigating these tax changes. The episode concludes with an invitation to join the live Dr. Friday call-in show on 99.7 WTN every Saturday afternoon.

Transcript

G’day. I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

New for 2024, they will be increasing the standard deduction for married couples. For about $1500, it will go up to $29,200, up from the 2023. As well as individuals will be $14,600. These numbers are very important. If you don’t know your standard deduction, which most people nowadays are not itemizing, how can you figure out, should I do a conversion? How much am I going to be paying taxes? What tax bracket am I in? What can I be maximizing in deductions that I might normally not be able to itemize? If you need help with this, just give me a call at 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this special New Year’s edition of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the president of Dr. Friday’s Tax and Financial Firm, warmly welcomes 2024 and dives into the essentials of preparing for the 2023 tax season. With an eye on proactive planning for the year ahead, Dr. Friday highlights the importance of early preparation, especially for business owners. A crucial tip shared is for those with business licenses who made less than $100,000 in 2023, as they might be exempt from filing. Dr. Friday extends an invitation for personalized advice through direct contact, either by phone or email. Additionally, listeners are reminded of the opportunity to participate in Dr. Friday’s live call-in show every Saturday on 99.7 WTN, offering a platform for real-time tax consultations and advice.

Transcript

G’day. I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

It’s New Year’s, Happy New Year’s 2024. Guess what? It’s also the start of 2023 tax preparation. So we have a couple things that’s going to be happening in ’23. We’ll be covering a couple things in ’24. One of the biggest things in ’24 is the fact that we need to start planning for ’24. But if you have a business license in 2023, make sure if you make less than $100,000, you don’t have to file. We can get more of that if you call me at 615-367-0819 or Friday at drfriday.com.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In the final ‘Dr. Friday Tax Tips – One Minute Moment’ of 2023, Dr. Friday underscores the importance of year-end financial actions. She emphasizes that the last day of the year is crucial for making adjustments to 401k contributions through employers, as these need to be completed within the current year. Additionally, she advises listeners to review and update their W-4 forms to ensure appropriate withholdings or credits for the upcoming year. This proactive approach can help individuals start the new year on a strong financial footing. For personalized assistance, Dr. Friday offers her contact details. She also reminds listeners about her live call-in show every Saturday on 99.7 WTN.

Transcript

G’day. I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

It’s actually the last one we’re gonna have for 2023. New Year’s is on top of us so I do want to put a little bit of a thought out there anyone that might have the ability to make some sort of adjustment to a paycheck today would be the last day because anything that has for 401k’s that come through employers needs to be done in the year it happens. So maybe you’re lucky enough to be able to make some sort of adjustment. Also if you really want to start the New Year’s out double check your W-4 form make the adjustments so you have a full year of the new withholdings or new credit to your check. If you need help you can call me 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this insightful episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday discusses a significant change in Tennessee’s business tax regulations that favors small businesses. Highlighting Notice 2308 from May 2023, she explains the Tennessee Work Tax Act’s impact on increasing the business tax filing threshold. Previously, small businesses with earnings of $3,000 to $10,000 were exempt from taxes, but now this exemption has been extended to businesses earning up to $100,000. Dr. Friday emphasizes the importance of consulting the Tennessee Department of Revenue and using the TINTAP system to ensure compliance and avoid unnecessary taxation. This episode is crucial for small business owners in Tennessee seeking to understand and benefit from these tax changes.

Transcript

G’day. I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Notice back in 2023 of May, Notice 2308, Tennessee Work Tax Act increased business tax filing threshold. With all that being said, this is actually good news. If you are a small business in Tennessee, we’ve always had to pay a business tax. Basically $3,000 or less, up to maybe $10,000 it was zero, right? But now, up to $100,000. That’s right. Doesn’t mean you might not need your business license, it may just mean that you have a zero tax. You need to check with Tennessee Department of Revenue, go onto your TINTAP, check it out. Make sure that you’re not paying taxes, you shouldn’t.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this enlightening episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, delves into the historical progression of Tax Day in the United States. The journey begins in 1913, marking the first year of tax filings with the original deadline set on March 1st. Subsequently, in 1918, the deadline shifted to March 15th, accommodating various changes. It wasn’t until 1955 that April 15th was established as the official Tax Day, a date we’ve adhered to for several decades. Dr. Friday emphasizes the significance of this historical evolution, reminding listeners of the importance and inevitability of filing taxes. The episode closes with an invitation to join the live Dr. Friday call-in show every Saturday afternoon on 99.7 WTN.

Transcript

G’day. I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Here’s an interesting fact. A lot of times people don’t realize, in 1913 was the first year we filed taxes and the tax day was March 1st. Then came a few other things and in 1918 they said, “Wait, the first is a little hard, let’s make it March 15th.” All the way until April of 1955, they changed it to April 15th in the year of 1955. So we’ve been only doing that for a period of years and so it’s important to understand tax day is tax day and we’ve been doing it for a long time. So for all of you that think, “Well, you know what, I don’t really need to file taxes.” Sooner or later you might find tax day a lot harder than you think.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this insightful ‘Dr. Friday Tax Tips – One Minute Moment’ episode, Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, discusses the intricacies of IRS regulations regarding the sale of personal items. She highlights that selling personal items at a gain can trigger a 1099K form. The episode emphasizes the importance of two crucial forms: Form 8949 for the sale and disposition of capital assets and Schedule D. Dr. Friday stresses the necessity of retaining original purchase receipts, as failing to provide these during an audit could lead to assuming a zero-cost basis for the sold items. The episode is a must-listen for anyone navigating the complexities of personal item sales and their tax implications.

Transcript

G’day. I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

The IRS says selling personal items at a gain can cause a 1099k for personal items sold. There is a form, actually two forms. You can form an 8949 for sale and other disposition of capital assets or the Schedule D when selling those. The hard part of all this is if you’re selling personal items you need to be saving the receipt of the original cost. If you don’t have it you don’t have a deduction. If you can’t prove how much money you paid for something that you’re selling 10-15 years later the cost factor is zero unless you can prove otherwise. That’s what the IRS is saying when they review audits.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this heartwarming ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the president of Dr. Friday’s Tax and Financial Firm, steps away from her usual tax advice to spread some Christmas cheer. Encouraging listeners to take time for themselves and cherish the holiday season, she emphasizes the importance of family and gratitude. Dr. Friday acknowledges the efforts of those who make America a safe and wonderful place, reminding us to be thankful for what we have during this festive period. This episode serves as a gentle nudge to set aside tax concerns temporarily and enjoy the company of loved ones, celebrating the spirit of Christmas.

Transcript

G’day. I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment… and it’s dedicated to Christmas. That’s right, Merry Christmas. Make sure you’re having some time for yourself, spending it and enjoying the holidays. Let’s not talk taxes today. Let’s think about family. Think about all those people that have helped make America safe and wonderful. And just be thankful for the things we have. That’s the important thing when it comes to Christmas. Taxes will be there all of our life. Christmas, we need to spend it with our family. Enjoy the holidays. Be thankful for all the things that you have. That’s what I would say. And I want to wish a Merry Christmas to my family and clients and friends. Merry Christmas.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this enlightening episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, president of Dr. Friday’s Tax and Financial Firm, delves into the often-overlooked aspect of tax deductions for small business startups. She emphasizes that expenses incurred in the early stages of planning and setting up a business, such as purchasing educational materials and books, are eligible for tax deductions. These preparatory expenses, even if they occurred years before the actual business launch, are considered part of the startup process. Dr. Friday cautions, however, that this doesn’t apply to hobbies or unsuccessful business ventures. This crucial advice is aimed at ensuring entrepreneurs don’t miss out on valuable tax deductions during the formative phase of their business.

Transcript

G’day. I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Did you know that credit for a small business startup doesn’t mean you had to spend all the money in the year you’re talking about. So if you started a business but maybe you started thinking about the business two years ago and maybe you went ahead and set up some different education, you brought books, you did things, that’s all considered startup. So when you’re actually starting a business you want to be thinking about now if it’s a hobby or it’s a business that never happened and never go off the ground, that’s not a tax deduction guys. Just because you made the mistake for the wrong that’s one thing but if you’ve been working a year or two to open a business that can be a tax deduction. Don’t leave any tax deductions on the table.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this insightful episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday addresses a common and complex issue in tax filing: the legitimacy of claiming dependents. She highlights a scenario where individuals may mistakenly claim their partner’s children as dependents, emphasizing the importance of understanding the criteria for legitimate dependent claims. Dr. Friday cautions against the assumption that supporting a partner’s children automatically qualifies them as dependents for tax purposes. She underscores the risks involved, including the potential loss of eligibility for earned income credit by the IRS in cases of incorrect claims. This episode serves as a crucial reminder for taxpayers to thoroughly assess their dependent claims to avoid costly mistakes.

Transcript

G’day. I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

I was reviewing some taxes and one thing I have noticed is sometimes people put on children that may not be legitimate deductions. So your girlfriend lives with you and even though you’re supporting the children are they truly your dependents? That’s a really tough question and it really depends on how long they’ve stayed with you. Have you the only breadwinner in the family? What is the story that just because she didn’t make any money and they put you on as head of household because she now lives with you? Be very careful. If you make a mistake on earned income credit the IRS can stop you from ever collecting earned income credit in the future.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of the Dr. Friday Tax Tips – One Minute Moment, Dr. Friday addresses a common post-tax-filing question: tracking your tax refund. She explains that the best way to locate your refund is through the official IRS website (irs.gov) or by using the IRS2Go app. These platforms allow taxpayers to check the status of their refunds, including delays or issues with processing. Dr. Friday emphasizes that these are the only reliable sources to obtain accurate information about refunds. She also touches upon the possibility of refunds being delayed due to incorrect information in the filing. This episode is essential for anyone waiting on their tax refund and looking for the most effective way to track its status.

Transcript

G’day. I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Many of you have already filed your taxes. Some of you are calling asking me where’s your refund and there’s two ways of doing it. You can go to irs.gov click on where’s my refund or you can even download the app IRS to go and you can also track your refunds and your returns your amended returns all through that website. It is the only place you’re going to be able to find out if there’s been a delay. If you see that it’s not been processed it’s probably not received unless it’s been pulled back because it doesn’t have all the correct information but that’s where you’re going to want to check where your refund is. Again irs.gov or download the app IRS to go to get the info.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Summary: In this insightful episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, a seasoned tax expert, shares vital advice on dealing with the IRS, emphasizing the importance of persistence. She explains that a single rejection from the IRS doesn’t spell the end of a case. Instead, she urges taxpayers to be tenacious, suggesting that even taking the matter to tax court can be beneficial. Dr. Friday highlights that dealing with the IRS often involves negotiating with computers, but persistence can lead to discussions with attorneys knowledgeable in tax law who are more likely to adjust decisions. For those struggling to navigate IRS communications on their own, Dr. Friday offers her expertise, available through her website. The episode also invites listeners to tune into the Dr. Friday call-in show every Saturday for more tax insights.

TranscriptG’day. I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

If I could give you any advice about dealing with the IRS it’s that basically one time isn’t always enough meaning if you send one letter and the IRS sends back a rejection it doesn’t always mean the case is closed. You need to be a little bit more tenacious and even take it as far as tax court as far as dealing with the petitions because many times you’ll actually deal with an attorney that represents the IRS that knows the tax law. They’re more apt to listen to adjust versus sometimes you’re really dealing with a computer on some of these things. So don’t just give up if you’re dealing with the IRS on your own and you need help you can also contact me at drfriday.com.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday emphasizes the importance of meticulous record-keeping for self-employed individuals and small business owners, especially those managing an S corporation, LLC, or sole proprietorship. She highlights that adhering to tax laws isn’t just about earning and spending money freely; it requires diligent tracking of expenses and earnings. Dr. Friday warns that failure to maintain accurate records could lead to the disallowance of expenses by the government, posing significant risks to the business. She advises that effective bookkeeping will be crucial for the year 2024 and offers assistance through her website, drfriday.com. The episode also mentions her live call-in show on 99.7 WTN every Saturday afternoon.

TranscriptG’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

As a self-employed or small business owner of an S corporation LLC sole proprietorship we all have one thing we have to do keep good records. That’s in the tax law. You can’t just start a business and say you know what I’m just gonna spend the money how I want make the money how I want and the government can’t do anything. Yes they can. They can basically disallow all your expenses if you’re not tracking those expenses correctly which basically means getting receipts. Tracking the receipts making sure they go with the money that you’re earning so that way you don’t get in trouble. So good bookkeeping is going to be the secret for 2024. Need help? Go to drfriday.com.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this insightful episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, the President of Dr. Friday’s Tax and Financial firm, emphasizes the importance of understanding the intricate relationship between taxes and Medicare IRMA, especially for those over 67 on full social security. Dr. Friday, a dedicated tax expert, offers valuable resources and personal assistance through her website, drfriday.com, for those needing guidance on these often overlooked aspects of financial planning. Whether it’s scheduling an appointment, accessing helpful worksheets, or understanding how specific financial decisions can affect Medicare IRMA, Dr. Friday is committed to assisting her audience in navigating the complexities of taxes.

TranscriptG’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

We’re here to help you understand taxes. That’s what I do. I’m Dr. Friday and I like to help people do taxes. It’s what I do 24/7 it feels like. Maybe not quite that much but it’s here to help you. If you need help go to my website drfriday.com. You can click on appointment from the calendar. You can see other worksheets and things that are available on the website. If you need to understand how Irma is affected by your taxes you can give me a call. These are the kinds of things that people forget to talk about. If you’re going to sell something and you’re over the age of 67 and you’re on full social security you may have to watch out for your Medicare Irma because you get in to pay more money once that happens.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, President of Dr. Friday’s Tax and Financial Firm, emphasizes the critical importance of maintaining accurate mileage logs for tax returns. She highlights that mileage deductions are frequently scrutinized by the IRS during audits. Dr. Friday advises using reliable apps like Mileage IQ or similar software to track every drive, stop, and start, ensuring that each trip is categorized as personal or business. This practice is crucial for creating a robust and IRS-compliant mileage log, which is essential for anyone claiming mileage deductions on their tax returns.

TranscriptG’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I’ve talked in the past and I’ll keep talking because you guys all know I love to talk. But in saying that one of the things you need to make sure if you’re taking miles off of your tax return you need to be using an app or a mileage log. It is one of the largest things that the IRS will audit. If they open up a tax return and they see miles no matter what you do they’re going to ask for your log. If you’re using something like mileage IQ or other mileage software that’s going to be your best bet. But make sure you’re maintaining it because at least my mileage IQ every time I drive, every time I stop, every time I start and I have my cell phone it does it. So make sure you label it personal business so you have an excellent log.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, President of Dr. Friday’s Tax and Financial firm, delves into the significance of below-the-line deductions in tax planning. She explains how deductions such as standard or itemized deductions, charitable contributions, medical expenses, and mortgage interest are subtracted from your adjusted gross income to arrive at your taxable income. Emphasizing the importance of maximizing these deductions, Dr. Friday highlights that for most taxpayers, leveraging these deductions is a primary strategy for reducing tax liabilities. She stresses that seeking professional advice is crucial in ensuring these deductions are optimized effectively. The episode ends with a reminder to tune into Dr. Friday’s live call-in show every Saturday on 99.7 WTN for more tax insights.

TranscriptG’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Below the line deductions on the other hand are qualified deductions that are subjected from your adjusted gross income to help determine your taxable income so for an example that would be your standard deductions or your itemized like charitable deductions medical expense mortgage interest these can all help reduce your income very important guys we want to reduce as much as possible making sure that you’re maximizing those deductions is the only way you’re going to save tax dollars most of us don’t have a lot of other ways to reduce our taxes so if you need help call me 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday highlights the significance of above the line deductions in tax planning. These deductions include contributions to retirement accounts, health savings accounts, and student loan interest. By utilizing these, taxpayers can reduce their taxable income before their tax liability is calculated, leading to potential tax savings and enhanced future savings. Dr. Friday emphasizes the importance of considering these deductions in one’s financial strategy, while also reminding listeners that they shouldn’t be the sole focus. For personalized advice, Dr. Friday encourages contacting her office or visiting her website.

TranscriptG’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Above the line deductions. What is it? A contribution to a retirement account. That’s an above the line. Health savings accounts. You know I love my health savings accounts. Student loan interest is above the line. That means that we’re basically taking those deductions before we even look at how much money you’re going to owe in taxes. So from a tax standpoint we’d like to get as much as we can in the above the line deduction so that you pay less in taxes and maybe you’re saving more for the future. It’s important but not always the only thing you should be thinking about. So you should call me at 615-367-0819 or check me out at drfriday.com.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Welcome to the Dr. Friday Radio Show Christmas Special 2023! Hosted by financial counselor and tax consultant, Dr. Friday, this episode promises a blend of financial insight, lively discussions, and festive giveaways. Joined by special guest Dr. Electric (Joe Macri), the show celebrates the season of giving with its annual Christmas giveaway, a tradition for nearly 15 years. Tune in for a unique mix of business updates, expert advice, and exciting prizes!

Key Highlights:

• Special Guest Appearance: Dr. Electric (Joe Macri) joins the show, providing insights into his business and joining the festive giveaway.
• Annual Christmas Giveaway: Celebrating a 15-year tradition, the show features a range of giveaways, including Netflix cards, restaurant gift cards, and more.
• Business Updates: Discussions about the latest happenings and seasonal trends in Dr. Friday’s tax consultancy and Dr. Electric’s business.
• Interactive Segments: Listeners call in for a chance to win various prizes and ask questions related to finance, taxes, and electrical issues.
• Practical Financial Advice: Dr. Friday addresses listener questions, offering guidance on topics like tax deductions for businesses, dealing with inheritances, and navigating changes in tax laws.
• Unique Prizes: The giveaways include items like half a deer for a holiday feast, signifying the show’s blend of practicality and festive cheer.
• Listener Engagement: Engaging with the audience through calls, the show fosters a sense of community and offers direct assistance to individuals.

Join Dr. Friday and Dr. Electric for an episode filled with warmth, wisdom, and the spirit of Christmas. Whether you’re seeking financial advice or just in for the festive atmosphere, this special show has something for everyone!

TranscriptPart 100:00:00.000 –> 00:00:06.400No, no, no, she’s not a medical doctor, but she can sure cure your taxproblems or your00:00:06.400 –> 00:00:07.400financial woes.00:00:07.400 –> 00:00:09.640She’s the how-to girl.00:00:09.640 –> 00:00:11.360It’s the Dr. Friday Show.00:00:11.360 –> 00:00:19.880If you have a question for Dr. Friday, call her now, 737-WWTN.00:00:19.880 –> 00:00:23.600That’s 737-9986.00:00:23.600 –> 00:00:27.400So here’s your host, financial counselor and tax consultant, Dr. Friday.00:00:27.400 –> 00:00:34.280G’day, I’m Dr. Friday and the doctor is in the house.00:00:34.280 –> 00:00:40.160And today we have a show of shows that we’re going to be putting on everyyear.00:00:40.160 –> 00:00:45.560I’m fortunate enough, many of you know that Dr. Electric is not on the show asoften or00:00:45.560 –> 00:00:50.680he doesn’t have his normal Saturday shows, but I have dragged him onto theradio.00:00:50.680 –> 00:00:54.360So we’re going to have a really good time having Joe here and myself.00:00:54.360 –> 00:00:57.000This is our annual Christmas giveaway.00:00:57.000 –> 00:00:59.800We have done for nearly 15 years together.00:00:59.800 –> 00:01:04.160So I’m so glad that he’s going to join us on the show.00:01:04.160 –> 00:01:08.000We’ll talk a little bit about what his business is doing, what my business isdoing, but most00:01:08.000 –> 00:01:13.720importantly what we’re going to do is talk about what we’re giving away.00:01:13.720 –> 00:01:14.720That’s right.00:01:14.720 –> 00:01:16.600This is always, usually we had two hours.00:01:16.600 –> 00:01:18.840We got to get it all into one hour.00:01:18.840 –> 00:01:21.240So we’re going to have a lot of fun doing that.00:01:21.240 –> 00:01:22.240Is Joe on the line?00:01:22.240 –> 00:01:23.240I am.00:01:23.240 –> 00:01:24.240Oh, there’s my boy.00:01:24.240 –> 00:01:25.240How are you doing, buddy?00:01:25.240 –> 00:01:27.040Doing fine.00:01:27.040 –> 00:01:32.280How are you doing?00:01:32.280 –> 00:01:33.280Staying busy.00:01:33.280 –> 00:01:36.320You know, it is getting close to my season again.00:01:36.320 –> 00:01:41.380So I can’t say it seems like I get done with taxes by October and they startagain in January.00:01:41.380 –> 00:01:45.000So it keeps life exciting and fun here.00:01:45.000 –> 00:01:48.000But how’s the business still doing well?00:01:48.000 –> 00:01:51.640Yeah, still busy.00:01:51.640 –> 00:01:55.800You know, I kind of stopped doing a radio show for retirement because I wantedmy Saturdays00:01:55.800 –> 00:01:59.600back just like right now I’m doing a radio show from Florida with you.00:01:59.600 –> 00:02:00.600Exactly.00:02:00.600 –> 00:02:05.480I know that’s the one thing people don’t realize is that it’s really a six daya week situation00:02:05.480 –> 00:02:10.800and it does take off our weekends whenever you want to go away or something.00:02:10.800 –> 00:02:12.080You always have to plan something.00:02:12.080 –> 00:02:16.320So it’s not as convenient as others, but we’ve enjoyed doing it.00:02:16.320 –> 00:02:20.160Today we’re going to do our usual Christmas show.00:02:20.160 –> 00:02:23.480No matter where in the world you are at the moment in Florida, obviously.00:02:23.480 –> 00:02:26.960So why don’t we just go ahead and start with our giveaway.00:02:26.960 –> 00:02:32.480The phone number here in the studio is 615-737-9986.00:02:32.480 –> 00:02:33.480615-737-9986.00:02:33.480 –> 00:02:42.400We’re all start with a $50 Netflix card, a $50 Netflix card for the first.00:02:42.400 –> 00:02:46.580You’re going to, Leviticus, you are going to pick the number.00:02:46.580 –> 00:02:49.000So we’re going to let the phone lines light up.00:02:49.000 –> 00:02:56.480Again, if you would like to have a free Netflix card, you just pick up thephone 615-737-9986.00:02:56.480 –> 00:03:01.320It will take a, whichever color he chooses because anytime I say the numberand then00:03:01.320 –> 00:03:04.840the phone lines blast, the next thing you know, you don’t have anything.00:03:04.840 –> 00:03:09.020So we’re a, let the phone lines light up a little bit and let him choose onthat one.00:03:09.020 –> 00:03:14.200So we have a, in Florida, are you doing a, are you building a new house outthere or00:03:14.200 –> 00:03:16.200something or are you guys just enjoying it?00:03:16.200 –> 00:03:17.200No, no, no, no.00:03:17.200 –> 00:03:22.440I have another house being built actually the Monday I’m meeting a, this one’sgoing00:03:22.440 –> 00:03:24.080to have a golf simulator inside of it.00:03:24.080 –> 00:03:28.000So the company that’s coming to install it, it’s going to meet me here Mondayand I have00:03:28.000 –> 00:03:30.800a shooting range in it, so I’m going to handle it with them.00:03:30.800 –> 00:03:32.160But I’m still doing a bit.00:03:32.160 –> 00:03:36.680I mean, I took probably 10 calls yesterday just from Florida, you know, doingmy stuff.00:03:36.680 –> 00:03:40.600I got Cody running my company while I’m down here, but everything’s still thesame.00:03:40.600 –> 00:03:41.600Right.00:03:41.600 –> 00:03:42.600Well, these work for you for what?00:03:42.600 –> 00:03:43.60010, 15 years, Cody?00:03:43.600 –> 00:03:44.600Yeah, yeah.00:03:44.600 –> 00:03:45.600I know.00:03:45.600 –> 00:03:50.560Well, I mean, yeah, but I mean, he’s, he’s been in the business a long time,but I knew00:03:50.560 –> 00:03:54.880he was about time for him to kind of step up and do something on that.00:03:54.880 –> 00:03:56.520So all right.00:03:56.520 –> 00:04:00.280So it looks like, are we saying Buffalo Bill is the winner?00:04:00.280 –> 00:04:02.800Buffalo Bill, are you online?00:04:02.800 –> 00:04:03.800I am.00:04:03.800 –> 00:04:04.800Hey, Buffalo Bill.00:04:04.800 –> 00:04:05.800I love the name.00:04:05.800 –> 00:04:11.880I mean, heck, my parents call me Friday, so I guess there’s nothing differentthan Buffalo00:04:11.880 –> 00:04:13.140Bill on that one.00:04:13.140 –> 00:04:16.160So you are the winner of a Netflix card, my friend.00:04:16.160 –> 00:04:19.480I hope you have a very Merry Christmas.00:04:19.480 –> 00:04:20.560Thank you.00:04:20.560 –> 00:04:22.880I was the last of 11 kids.00:04:22.880 –> 00:04:25.680So my dad, he nicknamed me, well, my name was Bill.00:04:25.680 –> 00:04:26.680So he called me Billy Quit.00:04:26.680 –> 00:04:29.680He had 11 kids called it Quit.00:04:29.680 –> 00:04:30.680Yeah.00:04:30.680 –> 00:04:34.520Well, as you guys all know, I’m the youngest of eight and my father prettymuch said, thank00:04:34.520 –> 00:04:36.180God it’s Friday and it was over.00:04:36.180 –> 00:04:38.260So no more babies after me.00:04:38.260 –> 00:04:42.320So that was anyone from a big family can relate to that.00:04:42.320 –> 00:04:43.320Fantastic.00:04:43.320 –> 00:04:45.440All right, buddy.00:04:45.440 –> 00:04:46.440Thanks.00:04:46.440 –> 00:04:50.120Stay on the line or make sure that our gentleman gets your information andthen we’ll get it00:04:50.120 –> 00:04:51.120back to you.00:04:51.120 –> 00:04:52.120Okay.00:04:53.120 –> 00:04:54.880Thank you, sir.00:04:54.880 –> 00:04:55.880All right.00:04:55.880 –> 00:04:57.400So we got our first one.00:04:57.400 –> 00:04:58.800I like that Buffalo Bill.00:04:58.800 –> 00:05:01.800I wonder if he likes Westerns or anything.00:05:01.800 –> 00:05:04.200All right.00:05:04.200 –> 00:05:08.900So Joe, you’ve been hunting obviously, because one of the reasons I wanted youon the show00:05:08.900 –> 00:05:14.760is because I don’t know if I can do a Christmas show without giving away somedeer meat.00:05:14.760 –> 00:05:16.320They may boycott me if I don’t.00:05:16.320 –> 00:05:20.800This is something I never thought I would ever be giving away on the radio.00:05:20.800 –> 00:05:24.920And so far it’s always been one of our number one giveaways and we’re notgiving it away00:05:24.920 –> 00:05:25.920yet.00:05:25.920 –> 00:05:28.320I’ll make people wait a little bit for that.00:05:28.320 –> 00:05:29.840Oh, okay.00:05:29.840 –> 00:05:36.360We’ll give away a whole deer, like half of somebody processed, the other halfto somebody00:05:36.360 –> 00:05:37.360else.00:05:37.360 –> 00:05:38.360We’ll give two.00:05:38.360 –> 00:05:39.360Yes, that’s the idea.00:05:39.360 –> 00:05:40.360Give two different ones.00:05:40.360 –> 00:05:41.360Yeah.00:05:41.360 –> 00:05:46.960And I also do have the three hand and stone massages we can give away with it.00:05:46.960 –> 00:05:49.080Like also if you run out of yourself.00:05:49.080 –> 00:05:50.080Oh, okay.00:05:50.080 –> 00:05:51.080So I got you.00:05:51.080 –> 00:05:52.080All right.00:05:52.080 –> 00:05:53.080Hand and stone.00:05:53.080 –> 00:05:55.080And they can ask questions in electrical.00:05:55.080 –> 00:05:58.760I know it’s a tech show, but you know, it’s pretty boring, but if they haveany electrical00:05:58.760 –> 00:06:00.920questions, they can still call me.00:06:00.920 –> 00:06:01.920I knew you.00:06:01.920 –> 00:06:03.480I was just waiting for you to warm up.00:06:03.480 –> 00:06:04.480I knew I was waiting for this.00:06:04.480 –> 00:06:07.480I knew I had to have a little fun.00:06:07.480 –> 00:06:10.800It’s like, I’m like, okay, well maybe he’s just getting a little older andhe’s just00:06:10.800 –> 00:06:12.200getting more mellow or something.00:06:12.200 –> 00:06:13.200I was so waiting.00:06:13.200 –> 00:06:16.840I mean, I’m sure the people on the other, the listening, we’re waiting for itas well00:06:16.840 –> 00:06:21.280because I knew you couldn’t go away without telling me how wonderful theelectric business00:06:21.280 –> 00:06:25.160is and how boring the tax business is.00:06:25.160 –> 00:06:28.480You know, gosh knows, but he is a hundred percent correct.00:06:28.480 –> 00:06:33.320If you’ve got any questions for either Dr. Electric talking about householdelectrical00:06:33.320 –> 00:06:38.040or he covers a lot of different things or since it’s a tech show, you know, ifyou have00:06:38.040 –> 00:06:40.760a question, you can certainly call the show.00:06:40.760 –> 00:06:50.920Just let us know again, anything to talk about 615-737-9986, 615-737-9986.00:06:50.920 –> 00:06:54.480And while we’re waiting for that next caller, since I have to give away somany things that00:06:54.480 –> 00:06:57.240have already got listed here, we’re ready for the second giveaway.00:06:57.240 –> 00:07:02.320It’s going to be a $50 a Darden restaurant, which is the Olive Garden, theLonghorn, a00:07:02.320 –> 00:07:08.200bunch of other restaurants they own $50 gift card to the Darden restaurantchains.00:07:08.200 –> 00:07:12.120And so if you like that, you can certainly pick up the phone, get the phonerolling,00:07:12.120 –> 00:07:14.720and then luckily you will hopefully be one of the callers.00:07:14.720 –> 00:07:23.600Again, the number is 615-737-9986, 615-737-9986.00:07:23.600 –> 00:07:28.000Has anything changed in your business as far as, I mean, a lot like mine, Joe,I mean,00:07:28.000 –> 00:07:32.240there are changes from time to time where they upgrade different requirementsand stuff,00:07:32.240 –> 00:07:33.240right?00:07:33.240 –> 00:07:35.280Has anything come down the line on that or no?00:07:35.280 –> 00:07:36.280Or is it always changing?00:07:36.280 –> 00:07:37.280It changes every three years.00:07:37.280 –> 00:07:42.760The code comes out every three years, but sometimes it takes six before theyenforce00:07:42.760 –> 00:07:43.760it.00:07:43.760 –> 00:07:47.400So it’s basically costing more money to our house because they make you domore special00:07:47.400 –> 00:07:48.400breakers.00:07:48.400 –> 00:07:52.200But basically everything on the wire and all the stuff we do is always thesame.00:07:52.200 –> 00:07:55.760I mean, the smoke detectors and permits go up every year.00:07:55.760 –> 00:08:01.320Seems like just stuff like that, but nothing, actually some of the cost iscoming down now00:08:01.320 –> 00:08:04.360because the wire was so high before and PVC was so high now.00:08:04.360 –> 00:08:08.440Now it’s starting to, it’s not as low as it used to be, but it is gettinglower than it00:08:08.440 –> 00:08:09.440was.00:08:09.440 –> 00:08:14.840Well, we all know with inflation, everything has went up and then there wasjust, I think,00:08:14.840 –> 00:08:20.280so much demand and they didn’t have as much with that one that, you know, I’mjust saying00:08:20.280 –> 00:08:23.320that they were able to do something with it.00:08:23.320 –> 00:08:26.800So interesting to see how that would work out.00:08:26.800 –> 00:08:30.720You know, I’m just curious because even in our business, I mean everything’sgoing up00:08:30.720 –> 00:08:36.480again, you know, I mean just the cost of paper, pins, computers, you name itall seems to00:08:36.480 –> 00:08:37.480go keep going up.00:08:37.480 –> 00:08:40.840All right, Donald Daniel, let’s see if we can get you on the phone.00:08:40.840 –> 00:08:45.480Donald Daniel, the winner of our Darden restaurant gift card.00:08:45.480 –> 00:08:47.320Hey Donald, how’s life?00:08:47.320 –> 00:08:48.960Oh, it’s great.00:08:48.960 –> 00:08:50.600Thank you.00:08:50.600 –> 00:08:55.440Appreciate your program and I appreciate the chance to win something.00:08:55.440 –> 00:08:56.440No problem.00:08:56.440 –> 00:09:00.760You just have to tell Dr. Electric how much I’m a better, my show’s betterthan his show,00:09:00.760 –> 00:09:02.160even though he doesn’t have it any longer.00:09:02.160 –> 00:09:04.760It was always, you’ve always been more my listener, right?00:09:04.760 –> 00:09:09.560More than his or did you listen to both shows or did you ever listen to eitherof us?00:09:09.560 –> 00:09:10.560That’s your.00:09:10.560 –> 00:09:11.560There you go.00:09:11.560 –> 00:09:12.560All right, well, I’ll take that.00:09:12.560 –> 00:09:13.560That’s Donald’s problem.00:09:13.560 –> 00:09:14.560He just listens to you.00:09:14.560 –> 00:09:15.560So he want to, he want to, what do you want to Netflix?00:09:15.560 –> 00:09:21.080Cardinal, he could have got half a deer.00:09:21.080 –> 00:09:25.280Well, we’ll let Donald go.00:09:25.280 –> 00:09:26.280Merry Christmas, Donald.00:09:26.280 –> 00:09:27.520And thank you for being a listener.00:09:27.520 –> 00:09:29.000We really appreciate it.00:09:29.000 –> 00:09:31.280Merry Christmas to you.00:09:31.280 –> 00:09:32.280Yeah.00:09:32.280 –> 00:09:33.280All right.00:09:33.280 –> 00:09:36.400Well, uh, I was trying to get him to obviously stand up.00:09:36.400 –> 00:09:40.480Uh, by the time I got done, Joe, it was almost like I was praying for my nameto come up.00:09:40.480 –> 00:09:42.800That didn’t come out quite as well as I wanted it to.00:09:42.800 –> 00:09:45.960Uh, I’ll have to work harder on that one to be more subtle.00:09:45.960 –> 00:09:47.760That’s never been my strong suit to be.00:09:47.760 –> 00:09:52.000You need a, you need like a caller number four, that way they know, okay,there’s a00:09:52.000 –> 00:09:54.960race to call the, then they could say what they want.00:09:54.960 –> 00:10:01.400I’d make them saying the wind’s helping like you used to do.00:10:01.400 –> 00:10:07.360But so, um, all right, well, in my business, to be honest with you, nothing’schanged in00:10:07.360 –> 00:10:08.360taxes very much.00:10:08.360 –> 00:10:11.360Just to let you know, I know you worry about that when you’re with yourbusiness.00:10:11.360 –> 00:10:19.480I know you’re constantly sweating over tax changes, but, uh, that’s just onone of the00:10:19.480 –> 00:10:20.480houses.00:10:20.480 –> 00:10:23.080They told me the property tax next year is $20,000.00:10:23.080 –> 00:10:24.080I know.00:10:24.080 –> 00:10:29.320No, seriously, even in, even in Murray County, which is obviously out, youknow, more than00:10:29.320 –> 00:10:33.880Williamson, which has obviously been a, but our property tax in the last twoor three00:10:33.880 –> 00:10:37.400years has went up almost doubled from when I moved here 10 years ago.00:10:37.400 –> 00:10:42.840So, I mean, it’s kind of ridiculous, but, um, that’s just because we have somany people,00:10:42.840 –> 00:10:47.720um, you know, moving in Murray County just went berserk to be quite honest.00:10:47.720 –> 00:10:48.720I don’t know.00:10:48.720 –> 00:10:52.680You guys still live up, uh, past the, uh, Gallatin up there, right?00:10:52.680 –> 00:10:53.680Is it busy?00:10:53.680 –> 00:10:55.360I mean, have you guys had a lot of growth up in that way?00:10:55.360 –> 00:10:56.520I don’t live up that way.00:10:56.520 –> 00:10:57.520So yeah, yeah.00:10:57.520 –> 00:10:58.520Yeah.00:10:58.520 –> 00:11:01.960Cotton town’s growing, but it’s the big, one of the biggest counties, butit’s, it’s growing00:11:01.960 –> 00:11:04.520and a lot new schools and a lot more traffic.00:11:04.520 –> 00:11:05.520Yeah.00:11:05.520 –> 00:11:07.240That’s what I dislike a lot more traffic.00:11:07.240 –> 00:11:08.240All right.00:11:08.240 –> 00:11:12.520If anyone wants to call in for a question, you can certainly call, um, Joe’son the line.00:11:12.520 –> 00:11:17.000So any kind of electrical or any of those kinds of questions you can call ortax questions.00:11:17.000 –> 00:11:18.000Come on guys.00:11:18.000 –> 00:11:19.000It is almost Christmas.00:11:19.000 –> 00:11:22.520So we’re also doing the Christmas show, but if you have a question, you canjoin us.00:11:22.520 –> 00:11:29.8806 1 5 7 3 7 9 9 8 6 6 1 5 7 3 7 9 9 8 6 is the number.00:11:29.880 –> 00:11:35.180If you want to call us and ask a question, we’re, uh, um, probably we takeanother break00:11:35.180 –> 00:11:39.000and then we’ll come back and probably going a little too slow for all mythings, but we00:11:39.000 –> 00:11:40.000can always get back.00:11:40.000 –> 00:11:45.080And when we get back, we’re going to actually give one of Joe’s, do you saysomething, Joe?00:11:45.080 –> 00:11:46.080Whatever you want.00:11:46.080 –> 00:11:48.080You want to give away half a deer?00:11:48.080 –> 00:11:49.080Um, yeah.00:11:49.080 –> 00:11:51.520When we get back, we have to take a break real quick here.00:11:51.520 –> 00:11:55.360And then when we get back from the break, we’re going to have a deer, uh,that’s going00:11:55.360 –> 00:12:00.000to be half of a deer that’s going to be, uh, given to the next caller.00:12:00.000 –> 00:12:01.540But we have to take our first break.00:12:01.540 –> 00:12:04.000We get rid of that break as soon as we come back.00:12:04.000 –> 00:12:06.880So keep listening, Joe and I will stay on the line here.00:12:06.880 –> 00:12:07.880We get back.00:12:07.880 –> 00:12:09.060This is the doctor Friday show.00:12:09.060 –> 00:12:12.240If you want to join the show, you might want to write this number down becausehe keeps00:12:12.240 –> 00:12:19.440clearing off the numbers, but the number in the studio, 6 1 5 7 3 7 9 9 8 6 isthe number00:12:19.440 –> 00:12:20.440here.00:12:20.440 –> 00:12:25.040You keep listening and we’ll be right back with the doctor Friday show.Part 200:12:25.040 –> 00:12:28.880Alrighty.00:12:28.880 –> 00:12:32.920We are back here live in studio, the doctor Friday and dr.00:12:32.920 –> 00:12:36.000Electric Christmas show here to go.00:12:36.000 –> 00:12:37.720And we’ve got a lot going on.00:12:37.720 –> 00:12:40.400We’ve got a couple of phone calls, but here’s what we’re going to do.00:12:40.400 –> 00:12:44.520I’m going to take a phone call or two, but while we’re doing that, we’re alsogoing to00:12:44.520 –> 00:12:49.120be waiting for callers to call in on a half of a deer.00:12:49.120 –> 00:12:50.560Now Joe is there.00:12:50.560 –> 00:12:53.000I mean, they have to meet you someplace, right?00:12:53.000 –> 00:12:58.720As far as Murfreesboro and that area, like all the way through Nashville.00:12:58.720 –> 00:13:02.440If you live past Murfreesboro, sometimes you’ll meet us halfway somewhere.00:13:02.440 –> 00:13:04.960This will be all processed frozen.00:13:04.960 –> 00:13:09.560So we’ll bring it in a, you know, like a cooler style or a bag to make sureyou got room.00:13:09.560 –> 00:13:12.160Cause these deer this year I shot were pretty big.00:13:12.160 –> 00:13:14.560I would say they’re averaging like 140 pounds.00:13:14.560 –> 00:13:17.760So you might get, you know, deboned and all grind.00:13:17.760 –> 00:13:19.880You probably gonna get 40 to 50 pounds of meat.00:13:19.880 –> 00:13:20.880Wow.00:13:20.880 –> 00:13:21.880That’s a lot of meat.00:13:21.880 –> 00:13:22.880All right.00:13:22.880 –> 00:13:25.920So while we do that, we’re going to hit, make sure you got room because hedoesn’t want00:13:25.920 –> 00:13:27.440to have a little teeny little car.00:13:27.440 –> 00:13:29.520We’re going to Ron, Ron in Mount Juliet.00:13:29.520 –> 00:13:30.520Go for it.00:13:30.520 –> 00:13:31.520Hey Ron.00:13:31.520 –> 00:13:32.520Hi, how are you?00:13:32.520 –> 00:13:35.320It’s a pleasure to speak with you.00:13:35.320 –> 00:13:40.040Not only am I very poor, but I am also very stupid.00:13:40.040 –> 00:13:44.360So therefore I’m not exactly where I need to be with taxes.00:13:44.360 –> 00:13:45.840And I had a couple of questions.00:13:45.840 –> 00:13:50.120I could take my answer off the air, but I was just curious if you could name acouple00:13:50.120 –> 00:13:51.800of smart things to do.00:13:51.800 –> 00:13:59.120I just recently started an LLC and you know, you hear about putting thingsinto your LLC00:13:59.120 –> 00:14:01.760and what to deduct and whatnot too.00:14:01.760 –> 00:14:03.480And I just really haven’t.00:14:03.480 –> 00:14:06.000Can I ask you, are you a business or a real estate?00:14:06.000 –> 00:14:07.000A business.00:14:07.000 –> 00:14:08.400It’s a business.00:14:08.400 –> 00:14:09.400Okay.00:14:09.400 –> 00:14:10.400Just making sure.00:14:10.400 –> 00:14:14.760Cause so if you’re a business, obviously everything that we have that goesinto making our business00:14:14.760 –> 00:14:16.840is going to be a tax deduction.00:14:16.840 –> 00:14:21.960Once you have a profit, theoretically you might want to set up a SEP, aself-employed00:14:21.960 –> 00:14:27.000retirement plan that you can maximize up to 40, 50 grand a year.00:14:27.000 –> 00:14:32.200If you, if you had the cash to do that would be a direction you might want togo.00:14:32.200 –> 00:14:36.280Obviously writing off particularly maybe a home office or writing off yourcar.00:14:36.280 –> 00:14:37.920Again, not knowing your business.00:14:37.920 –> 00:14:41.760These are the areas in which you probably need to set up an appointment or, ortalk00:14:41.760 –> 00:14:46.920to your tax person to really get a checkoff list based on the type of businessyou do.00:14:46.920 –> 00:14:53.960What can you, or can you not write off because of the business that you’re in?00:14:53.960 –> 00:14:55.520And I was so, did you hear that Joe?00:14:55.520 –> 00:14:57.800He just fell off the lines cause that was so good.00:14:57.800 –> 00:14:58.800Yeah.00:14:58.800 –> 00:15:04.320I was hoping he got to hear you talk about home office, his phone line forwork, his00:15:04.320 –> 00:15:06.520gas, keep his gas to get off.00:15:06.520 –> 00:15:07.520He keeps it.00:15:07.520 –> 00:15:10.520So you know me, I’m writing off a Christmas gift.00:15:10.520 –> 00:15:11.520Well, no problem.00:15:11.520 –> 00:15:12.520Thanks Ron.00:15:12.520 –> 00:15:18.520I thought he fell off the line and then he’s still there.00:15:18.520 –> 00:15:19.520Ron, are you still there?00:15:19.520 –> 00:15:20.520Yes, I am.00:15:20.520 –> 00:15:21.520Okay.00:15:21.520 –> 00:15:22.520Sorry.00:15:22.520 –> 00:15:23.520I thought I lost you.00:15:23.520 –> 00:15:27.360You were so quiet and you know, I’m not a very quiet person, so you’reprobably there,00:15:27.360 –> 00:15:29.760but was, did that help answer your question?00:15:29.760 –> 00:15:30.760Absolutely.00:15:31.760 –> 00:15:37.000Of course I run a very small business, so it’s really just a side gig at themoment.00:15:37.000 –> 00:15:40.480So I didn’t know exactly what legally I could do.00:15:40.480 –> 00:15:41.480Right.00:15:41.480 –> 00:15:44.720Even with the side, any legitimate business, as Joe was even pointing out, alot of those00:15:44.720 –> 00:15:47.040expenses can be wrote off.00:15:47.040 –> 00:15:49.840The biggest thing is not confusing your day job.00:15:49.840 –> 00:15:53.920If you’re a W2 person trying to write any expenses that may tie to thatthrough your00:15:53.920 –> 00:15:54.920business.00:15:54.920 –> 00:16:00.720But, but again, you know, all in all the basics are, you know, all of yourexpenses, your00:16:00.720 –> 00:16:03.160utilities, portion of utilities based on a home office.00:16:03.160 –> 00:16:08.160You have to have a legitimate home office, not your kitchen table.00:16:08.160 –> 00:16:10.240If the business requires one.00:16:10.240 –> 00:16:15.200But other than that, you know, as far as catching up on retirement or settingmoney aside, you00:16:15.200 –> 00:16:19.800kind of need to take the profits if possible from the side business and startusing that.00:16:19.800 –> 00:16:21.280But that’s easier said than done.00:16:21.280 –> 00:16:22.280Right.00:16:22.280 –> 00:16:23.280Well, thank you so much.00:16:23.280 –> 00:16:24.280No problem.00:16:24.280 –> 00:16:25.280I’ll move in that direction.00:16:25.280 –> 00:16:26.280Thanks, Ron.00:16:26.280 –> 00:16:27.280Appreciate it.00:16:27.280 –> 00:16:28.280All right.00:16:28.280 –> 00:16:32.720Let’s go to Will real quick and get the winner.00:16:32.720 –> 00:16:34.960Winner, winner, winner, winner, winner, winner, Christmas eater, whatever.00:16:34.960 –> 00:16:35.960Hey, Will, what’s happening?00:16:35.960 –> 00:16:36.960Hello.00:16:36.960 –> 00:16:37.960I actually was with a question.00:16:37.960 –> 00:16:38.960All right.00:16:38.960 –> 00:16:39.960I’m ready.00:16:39.960 –> 00:16:40.960What’s the question?00:16:40.960 –> 00:16:41.960My Airbnb, a camper.00:16:41.960 –> 00:16:42.960Okay.00:16:42.960 –> 00:16:53.960And Airbnb takes taxes out every time they make a transaction.00:16:53.960 –> 00:16:54.960Correct.00:16:54.960 –> 00:17:00.880Do I need to have additional taxes for my County or do those taxes cover theCounty?00:17:00.880 –> 00:17:01.880No.00:17:01.880 –> 00:17:06.400As far as I know, Airbnb only covers the state sales tax.00:17:06.400 –> 00:17:12.360They don’t cover the business tax and or which is the County County and citytax.00:17:12.360 –> 00:17:16.120So I think you still need to be if you want to have it come out, you wouldneed to be00:17:16.120 –> 00:17:22.060withdrawing that as part of additional fees through Airbnb, because I thinkthey’re only00:17:22.060 –> 00:17:28.520covering what’s required under the law, which is sales tax and in most cases,hotel tax00:17:28.520 –> 00:17:29.520as well.00:17:29.520 –> 00:17:30.520Okay.00:17:30.520 –> 00:17:31.520Well, great.00:17:31.520 –> 00:17:32.520No problem.00:17:32.520 –> 00:17:33.520All right.00:17:33.520 –> 00:17:37.960We hopefully got your number and Joe, we’ll give you a call later and makearrangements00:17:37.960 –> 00:17:39.480to get you some of that deer.00:17:39.480 –> 00:17:40.480Great.00:17:40.480 –> 00:17:41.480Merry Christmas.00:17:41.480 –> 00:17:42.480Thank you.00:17:42.480 –> 00:17:43.480Merry Christmas.00:17:43.480 –> 00:17:44.480Thank you.00:17:44.480 –> 00:17:45.480All right.00:17:45.480 –> 00:17:46.480Let’s go to Michael in Spring Hill.00:17:46.480 –> 00:17:48.480Hey, Mike, what’s happening?00:17:48.480 –> 00:17:57.040Hey, I have been retired for several years and this is the first time I’vemade any significant00:17:57.040 –> 00:18:00.840withdrawals on my IRA.00:18:00.840 –> 00:18:04.240And it’s a bit more than I’ve really wanted to withdraw.00:18:04.240 –> 00:18:13.640But I was wanting to find out if they still can offset that by borrowing somemoney and00:18:13.640 –> 00:18:17.640putting that back in the IRA.00:18:17.640 –> 00:18:20.360You have 30 or 60 days to do that.00:18:20.360 –> 00:18:22.000And you can only do it once.00:18:22.000 –> 00:18:24.200Nowadays, you can’t do it more times.00:18:24.200 –> 00:18:27.480And if you’re outside of that, the only other thing you and I don’t know ifyou’ve already00:18:27.480 –> 00:18:32.080received the money, you can’t do that either, but a qualified charitablededuction would00:18:32.080 –> 00:18:34.040have been a direction you could have maybe went.00:18:34.040 –> 00:18:36.800But other than that, Michael, there’s not a whole bunch.00:18:36.800 –> 00:18:40.800I mean, if it’s outside that 60 day window, then no, you can’t put it back in.00:18:40.800 –> 00:18:41.800Okay.00:18:41.800 –> 00:18:42.800Thank you for clarifying.00:18:42.800 –> 00:18:43.800No, no problem.00:18:43.800 –> 00:18:44.800Thanks, Michael.00:18:44.800 –> 00:18:45.800Appreciate it.00:18:45.800 –> 00:18:46.800All right.00:18:46.800 –> 00:18:47.800Really quick.00:18:47.800 –> 00:18:48.800Let’s hit Jeff.00:18:48.800 –> 00:18:49.800Hey, Jeff, what’s happening?00:18:49.800 –> 00:18:50.800Oh, hi, Dr. Varady, long time listener.00:18:50.800 –> 00:18:51.800I really enjoy your show.00:18:51.800 –> 00:18:52.800Quick question.00:18:52.800 –> 00:19:01.800My mother passed in July of 2022.00:19:01.800 –> 00:19:04.040She was 90 years old and poor health.00:19:04.040 –> 00:19:05.640I’m 67 years old.00:19:05.640 –> 00:19:11.080Anyway, she had a Roth IRA that had been around for about 20 years.00:19:11.080 –> 00:19:15.440I was designated as the beneficiary.00:19:15.440 –> 00:19:24.640So my CPA is telling me that the IRS has been trying to change the rules onRMDs for inherited00:19:24.640 –> 00:19:27.440Roth IRAs.00:19:27.440 –> 00:19:31.320I was under the impression that I had 10 years if I wanted to wait that longbefore I took00:19:31.320 –> 00:19:34.880any RMDs out.00:19:34.880 –> 00:19:41.080I’m being told now that I will have to take one this year by the end of themonth.00:19:41.080 –> 00:19:42.080Is that true?00:19:42.080 –> 00:19:44.640Well, what year did mom pass away?00:19:44.640 –> 00:19:45.6402022.00:19:45.640 –> 00:19:48.520It’s been a year and a half.00:19:48.520 –> 00:19:52.160So yes, they did change the rules a year ago.00:19:52.160 –> 00:19:53.800Roth IRAs do require RMDs.00:19:53.800 –> 00:19:58.320It’ll be tax free, but you can’t leave it in there growing tax free.00:19:58.320 –> 00:20:02.800And you are required within the next whatever money days we have left to thismonth to do00:20:02.800 –> 00:20:03.800that.00:20:03.800 –> 00:20:04.800So, yes.00:20:04.800 –> 00:20:05.800Okay.00:20:05.800 –> 00:20:06.800What about for last year?00:20:06.800 –> 00:20:08.080Do I want- No.00:20:08.080 –> 00:20:12.400Mama would have had the year in which you pass away, the RMD has to go to theperson that00:20:12.400 –> 00:20:13.400passed.00:20:13.400 –> 00:20:16.600So, she should have taken the RMD.00:20:16.600 –> 00:20:17.600Okay.00:20:17.600 –> 00:20:21.320So, I won’t be penalized for that then.00:20:21.320 –> 00:20:22.320That is correct.00:20:22.320 –> 00:20:23.320This is a Roth IRA.00:20:23.320 –> 00:20:24.320Does it make a difference?00:20:24.320 –> 00:20:25.600They changed the rules on it.00:20:25.600 –> 00:20:27.840So, even, I mean, there’s no money due, right?00:20:27.840 –> 00:20:32.400I mean, I’m just saying when we take the money out of a Roth, basically infive years or00:20:32.400 –> 00:20:37.400over the age of 59 and a half, both of those are applied for both you and yourmother were.00:20:37.400 –> 00:20:42.640So at this point, money you’re taking out is tax free, but you still have totake an00:20:42.640 –> 00:20:46.640RMD now out of a Roth IRA, inherited Roth IRA, I should say.00:20:46.640 –> 00:20:47.640Okay.00:20:47.640 –> 00:20:48.960Otherwise, there’s a big penalty for it.00:20:48.960 –> 00:20:49.960I understand.00:20:49.960 –> 00:20:50.960There is a penalty.00:20:50.960 –> 00:20:51.960Yes.00:20:51.960 –> 00:20:53.760So, you know, they’re looking for ways of getting their hands on yourretirement.00:20:53.760 –> 00:20:55.520So just, yeah, you got it.00:20:55.520 –> 00:20:56.520Okay.00:20:56.520 –> 00:21:00.000So, every year from now on, I have to take an RMD from that inherited RothIRA.00:21:00.000 –> 00:21:01.000I got you.00:21:01.000 –> 00:21:02.000That’s correct.00:21:02.000 –> 00:21:04.200And you do need to clean it all out by the end of the 10 years.00:21:04.200 –> 00:21:05.200Yes.00:21:05.200 –> 00:21:06.200Okay.00:21:06.200 –> 00:21:07.200Thank you very much, Dr. Farradi.00:21:07.200 –> 00:21:08.200Enjoy the show.00:21:08.200 –> 00:21:09.200No problem.00:21:09.200 –> 00:21:10.200All right.00:21:10.200 –> 00:21:11.200Thanks.00:21:11.200 –> 00:21:12.200All right, guys.00:21:12.200 –> 00:21:13.200We’ve got tons of them.00:21:13.200 –> 00:21:18.000We’ve got Blooming Brands, which is the Outback and Carrabba’s, $50 to theBlooming Brands,00:21:18.000 –> 00:21:20.600Outback and Carrabba’s.00:21:20.600 –> 00:21:22.520So let the phone lines light up.00:21:22.520 –> 00:21:26.520Meanwhile, we’re going to hit Renee on the phone line so we can get herquestion.00:21:26.520 –> 00:21:28.080Hey, Renee, what’s happening?00:21:28.080 –> 00:21:29.080Yeah.00:21:29.080 –> 00:21:30.080Hi there.00:21:30.080 –> 00:21:36.200Well, my dad passed away three years ago at the end of 2020 and everythingwent through00:21:36.200 –> 00:21:44.160probate and everything and there were two amended tax returns, both needed arefund.00:21:44.160 –> 00:21:54.480Well, the one from 2020, they refunded the money last summer, but 2019, theykeep…00:21:54.480 –> 00:21:59.560Every time the lawyer calls them, like about every two months, they keep…00:21:59.560 –> 00:22:06.080Even though we’ve gotten a discrimination that they owe money for 2019 to theestate,00:22:06.080 –> 00:22:12.440they keep telling him that it’s still under review and that it’ll be 30 days.00:22:12.440 –> 00:22:18.800Well, the last time he sat on the phone with them was October 5th.00:22:18.800 –> 00:22:21.240So there’s still no refund.00:22:21.240 –> 00:22:23.360So we can’t close out the estate.00:22:23.360 –> 00:22:26.960So is there any way to get the IRS to move on this?00:22:26.960 –> 00:22:31.160They had already made a determination, but they’re not doing anything.00:22:31.160 –> 00:22:34.520I would love to say the answer to that is yes.00:22:34.520 –> 00:22:38.040But as we probably have been listening long enough to know, there’s nothingreally you00:22:38.040 –> 00:22:39.040could do.00:22:39.040 –> 00:22:44.920And hopefully he has documentation of when this amended return was done,because 2019,00:22:44.920 –> 00:22:50.240if someone were to file one now, we would not get a refund because it’soutside of the00:22:50.240 –> 00:22:51.240three years.00:22:51.240 –> 00:22:54.800But hopefully that was filed within the three years and someone has a papertrail showing00:22:54.800 –> 00:22:55.800that.00:22:55.800 –> 00:22:56.800Oh yeah, this has been going on for two years now.00:22:56.800 –> 00:22:57.800Okay, good.00:22:57.800 –> 00:23:01.120Well, I mean, not good that it’s been doing, but good that it was filed withinthe proper00:23:01.120 –> 00:23:02.120time period.00:23:02.120 –> 00:23:05.800I’m telling them, you know, 30 days and then nothing happens.00:23:05.800 –> 00:23:12.440It’s a determination that they took for a refund, but now they’re saying that.00:23:12.440 –> 00:23:15.300The reason for the amendment is what’s causing the question.00:23:15.300 –> 00:23:17.640Is it really legitimate reason for amendment?00:23:17.640 –> 00:23:18.640And I don’t know.00:23:18.640 –> 00:23:22.880But they had already determined that it was, and already had sent thepaperwork saying00:23:22.880 –> 00:23:25.520that a refund was owed.00:23:25.520 –> 00:23:30.120But then it went into review or audit because of the…00:23:30.120 –> 00:23:34.160Well, I mean, you might want to talk to your attorney and tell them that youwant to have00:23:34.160 –> 00:23:40.140a 911 file with the tax advocate office, because then they could go at the taxadvocate office00:23:40.140 –> 00:23:41.880in Nashville is awesome.00:23:41.880 –> 00:23:46.520They will at least get in the middle and be able to go onto the IRS computers,which your00:23:46.520 –> 00:23:49.320attorney or myself, none of us can see, right?00:23:49.320 –> 00:23:51.400And they can go in there and see what’s holding it up.00:23:51.400 –> 00:23:55.440Is it the person that’s processing it has been on vacation or out for sickleave and00:23:55.440 –> 00:23:56.440it’s just sitting on a desk?00:23:56.440 –> 00:23:58.840Well, they’ve been out for vacation for a couple of years then.00:23:58.840 –> 00:24:03.720Yeah, well, you know, or maybe it’s been misplaced, you know, just keepsgetting pushed to someone00:24:03.720 –> 00:24:04.720else’s desk.00:24:04.720 –> 00:24:08.880I don’t have a good answer, but I would suggest talking to your attorney andjust saying,00:24:08.880 –> 00:24:13.680Hey, you know, someone suggested going to the tax advocate office, filing a911 so that00:24:13.680 –> 00:24:15.660they can get final resolution.00:24:15.660 –> 00:24:17.440It’s been long enough not to have that happen.00:24:17.440 –> 00:24:18.440This has been crazy.00:24:18.440 –> 00:24:19.440Yeah.00:24:19.440 –> 00:24:20.440We can’t close the estate.00:24:20.440 –> 00:24:25.960And I said, I said, well, can we just, you know, not even take the refund thehell with00:24:25.960 –> 00:24:26.960it?00:24:26.960 –> 00:24:27.960We need to close this thing out.00:24:27.960 –> 00:24:31.200But you know, you close it and then they’re going to turn around and want youto do the00:24:31.200 –> 00:24:32.200other.00:24:32.200 –> 00:24:34.680So then you won’t be able to cash the check or anything.00:24:34.680 –> 00:24:36.280So yeah, exactly.00:24:36.280 –> 00:24:38.640Well, hopefully that will help you a little bit.00:24:38.640 –> 00:24:39.640Okay.00:24:39.640 –> 00:24:42.640But there isn’t anything you can do.00:24:42.640 –> 00:24:48.640So do they ever go after people politically?00:24:48.640 –> 00:24:49.640Do you know that?00:24:49.640 –> 00:24:54.200Well, I mean, there are people that believe that.00:24:54.200 –> 00:24:59.400But I will like, I mean, there are some people, uh, Valentine was a big guythat always believed00:24:59.400 –> 00:25:02.520he was audited multiple times because of his political belief.00:25:02.520 –> 00:25:03.520But it happened to my father.00:25:03.520 –> 00:25:09.520And I’m just wondering if, if because it’s my dad and because my cousin who’sinvolved,00:25:09.520 –> 00:25:11.560who’s a Supreme Court justice.00:25:11.560 –> 00:25:12.560Yeah.00:25:12.560 –> 00:25:13.560I don’t know.00:25:13.560 –> 00:25:14.560Hopefully we haven’t gotten to that point.00:25:14.560 –> 00:25:15.560This is crazy.00:25:15.560 –> 00:25:16.560Yeah.00:25:16.560 –> 00:25:17.560All right, buddy.00:25:17.560 –> 00:25:18.560I wouldn’t have believed it before, but.00:25:18.560 –> 00:25:19.560Thanks.00:25:19.560 –> 00:25:20.560I gotta go.00:25:20.560 –> 00:25:21.560Okay.00:25:21.560 –> 00:25:22.560All right.00:25:22.560 –> 00:25:24.920Heather, you’re the winner of the blooming brand.00:25:24.920 –> 00:25:25.920Heather, are you online?00:25:25.920 –> 00:25:26.920I am on the line.00:25:26.920 –> 00:25:27.920How exciting.00:25:27.920 –> 00:25:28.920Thank you for holding and Merry Christmas.00:25:28.920 –> 00:25:29.920Oh, same to you.00:25:29.920 –> 00:25:30.920I’m excited.00:25:30.920 –> 00:25:31.920Thanks.00:25:31.920 –> 00:25:32.920No problem.00:25:32.920 –> 00:25:41.360Maybe you can get a nowadays, you know, hopefully at least one person couldeat out for $50.00:25:41.360 –> 00:25:45.760You know, it doesn’t go as far as it used to, but I’m very happy that youlisten and00:25:45.760 –> 00:25:47.760I’m happy that you guys really get a card.00:25:47.760 –> 00:25:48.760Awesome.00:25:48.760 –> 00:25:49.760Thanks.00:25:49.760 –> 00:25:50.760Well, Merry Christmas.00:25:50.760 –> 00:25:51.760Merry Christmas.00:25:51.760 –> 00:25:52.760All right, buddy.00:25:52.760 –> 00:25:54.080We’re going to take another break here.00:25:54.080 –> 00:25:55.220We come back.00:25:55.220 –> 00:25:58.680We’re going to give away a bunch of more cards because we’re moving way tooslow.00:25:58.680 –> 00:26:00.280Joe’s just not pushing me fast enough.00:26:00.280 –> 00:26:01.280I think it’s all Joe’s fault.00:26:01.280 –> 00:26:02.280There’s a guy on the phone.00:26:02.280 –> 00:26:03.280I can blame him.00:26:03.280 –> 00:26:04.280I was with that lady saying the heck with the refund.00:26:04.280 –> 00:26:05.280My thing, I’m like, “How much is the refund?00:26:05.280 –> 00:26:06.280I always want to know.”00:26:06.280 –> 00:26:07.280You’re nosy.00:26:07.280 –> 00:26:08.280That’s why.00:26:08.280 –> 00:26:09.280He’s like, “How much is the refund?00:26:09.280 –> 00:26:10.280How much do they owe you?”00:26:10.280 –> 00:26:11.280All right.00:26:11.280 –> 00:26:12.280We’re going to take a quick break.00:26:12.280 –> 00:26:21.720When we get back, guys, we got tons more gift cards and another half of a deerto give00:26:21.720 –> 00:26:22.720away.00:26:22.720 –> 00:26:24.640We’ll be right back with the Dr. Friday Show.Part 300:26:24.640 –> 00:26:26.040All righty.00:26:26.040 –> 00:26:29.040We are back here live in studio.00:26:29.040 –> 00:26:31.440This is the third section of the show.00:26:31.440 –> 00:26:33.120We’re running down on time.00:26:33.120 –> 00:26:37.400We have decided we are going to start kicking out some money cards here.00:26:37.400 –> 00:26:41.200We have a $50 Netflix card on the table.00:26:41.200 –> 00:26:43.360$50 to the next callers that come in.00:26:43.360 –> 00:26:44.360$50 Netflix card.00:26:44.360 –> 00:26:45.360Merry Christmas.00:26:45.360 –> 00:26:46.360Happy New Year’s.00:26:46.360 –> 00:26:53.400Get the phone lines ringing because we’re going to be going very quickly here.00:26:53.400 –> 00:26:55.520I have got so many different ones.00:26:55.520 –> 00:26:59.040Then Joe even brought on table Hand and Stone facials.00:26:59.040 –> 00:27:01.880I don’t know if any of you guys have ever went to Hand and Stone.00:27:01.880 –> 00:27:04.640I happen to love Hand and Stone.00:27:04.640 –> 00:27:07.960It’s a wonderful massage place.00:27:07.960 –> 00:27:08.960They give great facials.00:27:08.960 –> 00:27:13.000We’re going to be giving … We’re adding a couple of those on since Joe hasbrought00:27:13.000 –> 00:27:14.600them to the table.00:27:14.600 –> 00:27:17.720I think you said your daughter works there, right?00:27:17.720 –> 00:27:18.720At the Franklin store.00:27:18.720 –> 00:27:22.400She ran the Brentwood, but they moved her now to the Franklin store.00:27:22.400 –> 00:27:24.360I may have actually seen her.00:27:24.360 –> 00:27:25.960Not even putting two and two together.00:27:25.960 –> 00:27:27.400I go in there from time to time.00:27:27.400 –> 00:27:29.440Not that often, but from time to time.00:27:29.440 –> 00:27:31.520It’s a great location.00:27:31.520 –> 00:27:33.400We’re going to add some of those on here.00:27:33.400 –> 00:27:34.760In fact, you know what?00:27:34.760 –> 00:27:39.480I think we’ve got Milton as … I bet that’s my boy, Milton.00:27:39.480 –> 00:27:41.440We’re going to get Milton on the line.00:27:41.440 –> 00:27:47.040The next caller is going to get one Hand and Stone facial, which is worth $80.00:27:47.040 –> 00:27:49.720Or it’s a massage.00:27:49.720 –> 00:27:50.960Either or, they said.00:27:50.960 –> 00:27:52.360Or facial or massage.00:27:52.360 –> 00:27:53.360All right.00:27:53.360 –> 00:27:54.360You get choices.00:27:54.360 –> 00:27:56.720I thought we were locking into one thing.00:27:56.720 –> 00:28:02.360One Hand and Stone facial or massage, around $80 value.00:28:02.360 –> 00:28:03.360Next caller will get that.00:28:03.360 –> 00:28:06.560While I get my poor boy running, let’s get Milton on the line.00:28:06.560 –> 00:28:08.080Milton, are you there?00:28:08.080 –> 00:28:10.080I am here, Dr. Fryden.00:28:10.080 –> 00:28:11.080Merry Christmas.00:28:12.080 –> 00:28:15.080Tell your beautiful wife I said, “Merry Christmas.”00:28:15.080 –> 00:28:16.080I definitely will.00:28:16.080 –> 00:28:17.080I’ll let her know.00:28:17.080 –> 00:28:18.080Merry Christmas to Joe also.00:28:18.080 –> 00:28:19.080Oh, man.00:28:19.080 –> 00:28:20.080Do we have to include him in the whole Merry Christmas?00:28:20.080 –> 00:28:21.080Hey, I wanted to ask Joe, since he’s in Florida, who does he have working athis place?00:28:21.080 –> 00:28:22.080If I wanted to have some work done, do I just pick up the phone and call, oris he coming00:28:22.080 –> 00:28:23.080back to Tennessee?00:28:23.080 –> 00:28:24.080No, no.00:28:24.080 –> 00:28:25.080I’ll be back in Tennessee Thursday.00:28:25.080 –> 00:28:26.080Yeah.00:28:26.080 –> 00:28:27.080I’ll be back in Tennessee Thursday.00:28:32.080 –> 00:28:37.320pick up the phone and call, are you coming back to Tennessee? No, no, I’ll beback. Tennessee00:28:37.320 –> 00:28:41.540Thursday. Yeah. My guys are running just caught. I’m still doing work on myphone. My stepson00:28:41.540 –> 00:28:45.320runs the company, but all the phone calls come to me down here. Okay, verygood. Very00:28:45.320 –> 00:28:49.080good. Hey, Dr. Friday, I hope things are going well. I’m looking forward togetting my taxes00:28:49.080 –> 00:28:54.040started in about a couple of months. I know you’re excited too, cause I cantell it in00:28:54.040 –> 00:29:00.360your voice. You got it, buddy. You know how I love my taxes. So MerryChristmas until00:29:00.360 –> 00:29:06.560munchy brunchy as well. And I will talk to you later. Okay. Bye bye now. Bye.All right.00:29:06.560 –> 00:29:11.000So while we’re getting one of the hand in stones, which I am throwing at myboy on the00:29:11.000 –> 00:29:17.040radio there, next thing we’re going to do is another $50 to blooming brands.Again,00:29:17.040 –> 00:29:23.320that’s the Outback and Caraba blooming brands Outback and Caraba $50 on thetable. I feel00:29:23.320 –> 00:29:28.720like an auctioneer, Joe, $50, $50 going once, going twice. I’m not taking bidsapparently,00:29:28.720 –> 00:29:43.280but still $50. Right. Okay. And you can, and you can re-gift it. Oh, that’sright. I’m00:29:43.280 –> 00:29:47.000actually giving gifts that people could actually re-gift and take care offamily gifts. That’s00:29:47.000 –> 00:29:53.480a good point. I didn’t even think about that. Oh yeah. Any of these. I mean, Ididn’t think00:29:53.480 –> 00:29:57.840about, Hey, on your Christmas list, you know, like, you know, I got to get my,I have never00:29:57.840 –> 00:30:03.600been to a massage place. I’m so shocked. Anyone listening is probably totallyshocked that00:30:03.600 –> 00:30:08.760Joe has never been to a massage. Have you ever got a mani or pedi cure likeyour nails00:30:08.760 –> 00:30:17.800or your feet? Anything? Oh, I’m too standoffish. Yeah. Yeah. My dad neverliked him either.00:30:17.800 –> 00:30:22.880He, for a guy that was like a, like you very tough in some ways. He didn’tlike the idea.00:30:22.880 –> 00:30:28.640All right. Rodney King, Rodney King, the winner of the massage. Number one,hand in stone00:30:28.640 –> 00:30:35.280going to Rodney King. Hey Rodney, are you on the line? Yes, I am. Hey Dr.Friday. Hey00:30:35.280 –> 00:30:43.120Joe. How are you guys doing today? Doing fine. Awesome. I just want to say, Iwant to say00:30:43.120 –> 00:30:50.160both of y’all have the two best shows. I think on Nashville radio, you givehonest advice.00:30:50.160 –> 00:30:54.880You tell people sometimes what they don’t want to hear, but they need to hear.And I00:30:54.880 –> 00:30:59.000have been listening to both of y’all for as long as I can, as long, I thinkprobably as00:30:59.000 –> 00:31:05.000long as y’all been on the radio. So I really appreciate you guys being here.No problem.00:31:05.000 –> 00:31:10.920Rodney, I do have to ask, is the massage going to be used for you or someoneyou know? Um,00:31:10.920 –> 00:31:16.040it all depends if I can get my wife to use it. Absolutely. Otherwise I justwill have00:31:16.040 –> 00:31:22.040to, uh, you know, treat myself. I guess as they like to say. Absolutely. Allright. Thanks00:31:22.040 –> 00:31:27.160for calling buddy. I appreciate it. Merry Christmas. Thank you guys.Appreciate it.00:31:27.160 –> 00:31:33.000See, some men can handle that. Did you hear that Joe? Some men can actuallyhandle going00:31:33.000 –> 00:31:40.320and getting a massage or even a facial. I can’t relax. I just like, you know,I’d rather00:31:40.320 –> 00:31:44.600give it away, but just remember, I think they have to be used at the Franklinstore. That’s00:31:44.600 –> 00:31:47.960the only thing I’m not a hundred percent sure. I want to say that. Okay. Well,we’ll put00:31:47.960 –> 00:31:52.200that out there just in case. Just, uh, I mean all most of these listeners thatshouldn’t00:31:52.200 –> 00:31:57.880be, okay, we got $50 winner for Doug. And I believe that was for the OutbackCaraba.00:31:57.880 –> 00:32:04.440Doug winner of the $50 Bloomin brand Outback Caraba. Doug, are you on theline? I’m on00:32:04.440 –> 00:32:11.120the line. Yes, I am. Thank you. No worries. Thank you for calling andhopefully you will00:32:11.120 –> 00:32:18.120enjoy dinner or at least a portion of dinner on us. I will. And I enjoy bothof your shows,00:32:18.120 –> 00:32:27.960Dr. Electric and the Dr. Friday show in case you’re Joe is going to so go forthat one.00:32:27.960 –> 00:32:32.880Oh my goodness. Of course. Well, Merry Christmas, Doug. Thank you for being alistener. We truly00:32:32.880 –> 00:32:39.240appreciate you. Thank you. Merry Christmas. Merry Christmas. All right. Sowe’re going00:32:39.240 –> 00:32:43.800to get ready to, after this next break, we’re going to come right in and givethe second00:32:43.800 –> 00:32:49.000half of the deer after again, guys, we have to get another break going. Soafter that00:32:49.000 –> 00:32:55.360one, so while we’re waiting, let’s go ahead and do the last $50 Netflix, $50Netflix card.00:32:55.360 –> 00:32:59.160We got a few minutes before the break. So we’ll get one more of those in andwe still00:32:59.160 –> 00:33:03.920have a large number to do for the second half or the third half or whateveryou call the00:33:03.920 –> 00:33:09.080last half. And then we can get going. And Joe, are you guys going to be intown or in00:33:09.080 –> 00:33:15.600Florida for the holidays? Any plans? I don’t know. I’m playing is have thekids come over00:33:15.600 –> 00:33:20.240like I always do. So I’m only here just to help the golf, the simulator andthe gun range00:33:20.240 –> 00:33:24.640be put in and I’m booking back home. Well, I figured that, but I didn’t knowfor sure00:33:24.640 –> 00:33:28.240if if you guys were going to go down there just for the holiday, you know whatI mean?00:33:28.240 –> 00:33:32.520A lot of people go out of town for holidays. So they already rented.Somebody’s already00:33:32.520 –> 00:33:37.000rented a house all the way next week, all the way past New Year’s. Of course.Well,00:33:37.000 –> 00:33:42.280that’s that’s makes us happy. I mean, for the tech side of it makes us happy.Doesn’t00:33:42.280 –> 00:33:47.160necessarily make. All right. We’ve got the last winner for the last Netflixcard. Mark00:33:47.160 –> 00:33:53.800is the winter winner, not winter. Hey, Mark, how’s life? Life is doing muchbetter now.00:33:53.800 –> 00:34:00.880Thanks to you and getting a Netflix card. As Joe put it, even if it’s notyours, you00:34:00.880 –> 00:34:06.040can always re gifted. It’s a win win situation. I like his thought on that. Iwas thinking,00:34:06.040 –> 00:34:10.120you know, sometimes it’s nice to have that extra card. So there you go. Nowyou can either00:34:10.120 –> 00:34:16.000have a movie night at home or you can re gift it for one of your familymembers. Exactly.00:34:16.000 –> 00:34:21.040That’s what I plan on doing. One less gift I have to buy. Exactly. Well, thereI’m glad00:34:21.040 –> 00:34:24.600we were able to do the shopping for you. And thanks for being a listener. Weappreciate00:34:24.600 –> 00:34:31.520it. Oh, I’m a definite listener. Thank you. No problem. Merry Christmas,buddy. Merry00:34:31.520 –> 00:34:39.920Christmas. I like that guy at least has a little little personality. I thinkit was00:34:39.920 –> 00:34:47.640a listener Dr. Electric. So what’s the name of this one? I know. I’m an avidlistener00:34:47.640 –> 00:34:55.640to the Dr. Electric show and and there’s silence. I’m like, wait a second.Wait a second. This00:34:55.640 –> 00:35:00.680is the hour at least that’s supposed to be the Dr. Friday show. No silenceneeded. Oh00:35:00.680 –> 00:35:05.400my goodness. My world. My world. All right, guys, we’re gonna take our lastbreak. Again,00:35:05.400 –> 00:35:10.280when we come back from this break, the first thing we’re gonna give away isthe last half00:35:10.280 –> 00:35:15.480of a deer, which he’s saying somewhere between 30 40 50 pounds of deer meat.That’s a lot00:35:15.480 –> 00:35:20.360of meat guys. You better be having a big cookout or good something or other.So we’re gonna00:35:20.360 –> 00:35:25.480give that away when we get back and we have a bunch more cards. So write downthe number00:35:25.480 –> 00:35:31.800you’re calling 615-737-9986 is the number here in the studio. That’s thenumber you’re00:35:31.800 –> 00:35:35.920gonna call after the break. We’re gonna be giving away the deer meat. So don’tbe calling00:35:35.920 –> 00:35:39.560now because the break’s gonna be coming up and then you won’t get the deermeat. So give00:35:39.560 –> 00:35:43.800that after the day and then we still have a bunch more hand in stone, morerestaurants00:35:43.800 –> 00:35:49.120and a couple AMC’s theater things. So we’ll be right back. And if you’re alistener or00:35:49.120 –> 00:35:55.600not a listener, just give us a call 615-737-9986. After the break, we’ll beright back with the Dr. Friday show.Part 400:35:55.600 –> 00:36:03.160All righty, we are back. This is the last part of theChristmas show.00:36:03.160 –> 00:36:07.800This is gonna be it for the year. And I’ve got Joe on the phone here as well.So let’s00:36:07.800 –> 00:36:14.120go ahead. We’ve got a winner on the deer meat. Let’s go to Missy. Hey, Missy,are you online?00:36:14.120 –> 00:36:21.400I am. Hey guys. Hey there, sweetheart. So you have won a lot of deer meat. AndI’m so00:36:21.400 –> 00:36:29.240excited about it. Well, yes. You won the best prize that’s given away today.I’ve been trying00:36:29.240 –> 00:36:37.000for so long. I cannot argue that point. I am not a person that was raisedaround deer00:36:37.000 –> 00:36:43.640meat, but I will tell you every year that is like the number one, the phonesblow up.00:36:43.640 –> 00:36:48.120Everybody loves that particular giveaway. So I’m very happy Joe was willing tocome00:36:48.120 –> 00:36:53.920on and share his meat. So Missy, they have your information. Joe will give youa call00:36:53.920 –> 00:36:57.000and you guys can make arrangements. He said, just make sure there’s enoughroom in the00:36:57.000 –> 00:37:03.000car for all the deer meat. Oh, we’ve got it. Okay, girl. Thanks. MerryChristmas. Merry00:37:03.000 –> 00:37:11.160Christmas to you guys. Thanks. Go Joe. Go ahead. No, I was saying MerryChristmas to00:37:11.160 –> 00:37:17.480her too. She’s getting the side that didn’t get hit by the bumper. She’sgetting a clean00:37:17.480 –> 00:37:20.600side. All right. So we’re going to be going really quick here. We’ve got, I’mgoing to00:37:20.600 –> 00:37:25.520be adding something actually. So we’re going to do a Olive Garden Longhorn,which is the00:37:25.520 –> 00:37:33.360Darden restaurant and an AMC card. So dinner and a movie, which is over $75,$50 for dinner00:37:33.360 –> 00:37:39.560to 25 for the theater. So, um, next caller going to get dinner and a movieDarden restaurants,00:37:39.560 –> 00:37:44.880which is Olive Garden Longhorn, et cetera, and an AMC theater. We’re going toboom that00:37:44.880 –> 00:37:50.560one out. And then as soon as we get a winner on that one, I am going to bekicking out00:37:50.560 –> 00:37:58.560a second, uh, one of the hand and stones in Franklin, um, where we have a, uh,the manager00:37:58.560 –> 00:38:03.440or works at the office, their hand and stone facial or massage $80. We’regoing to be doing00:38:03.440 –> 00:38:10.800that one after he gets done with the dinner and the movies. So 25 for movies,$50 for00:38:10.800 –> 00:38:17.120dinner. Hopefully that will make a good night out for somebody and enjoy sometime. So she00:38:17.120 –> 00:38:20.660after save it for like January, you know, cause you’ve already got all thecraziness00:38:20.660 –> 00:38:26.240going and then you can actually chill, relax. That’s the theory. I don’t know.Works for00:38:26.240 –> 00:38:33.840you for me. Oh, right. We, it looks like we already have a winner on therestaurant and00:38:33.840 –> 00:38:41.840AMC Darden restaurants and AMC. Her name is Sherry. Sherry, you on the line. Iam. Wow.00:38:41.840 –> 00:38:49.760You are going to have a nice night out. Oh, great. I’m so excited. I haven’twon anything00:38:49.760 –> 00:38:56.960in a long, I mean, since I was a teenager, I think I’m not there anymore. I’mso glad00:38:56.960 –> 00:39:01.320that you listened to us and that you’re a part of our listening audience andthat you00:39:01.320 –> 00:39:05.040took the time to call in cause you never know who’s going to win on this show.Seriously.00:39:05.040 –> 00:39:11.600Yep. I listen to you all the time, so I appreciate you. Thank you very much.And a Merry Christmas.00:39:11.600 –> 00:39:15.840Thank you. Merry Christmas to you. All right. We’re going to go right onto thenext one.00:39:15.840 –> 00:39:23.880A hand in stone, a facial or massage, $80 value. Franklin location. Number twoof those00:39:23.880 –> 00:39:28.040giving it away. Again, we are keeping the phones line. We don’t have muchtime. We’ve00:39:28.040 –> 00:39:33.520only got maybe six, seven minutes and I still have a number of them to giveaway. Joe, we’re00:39:33.520 –> 00:39:38.960just gonna too bad. I can’t do like a big, big spin. But anyways, you had tobe in mind.00:39:38.960 –> 00:39:42.000You remember, you remember how you said the people come and get a hundreddollars cash00:39:42.000 –> 00:39:46.480when they showed up to the radio station. I love that. That was always, Ishould have00:39:46.480 –> 00:39:51.240did it to hear 200 bucks for the first person that comes over to the beachMarina and sees00:39:51.240 –> 00:39:58.120me. People would find that for one, nobody’s listening in Florida unlessthey’re listening00:39:58.120 –> 00:40:03.920through I heart. Okay. I mean, I’m just saying, somebody might know somebodymight have a00:40:03.920 –> 00:40:09.280phone call. Hey buddy, go get this and you know, you’re going to get the moneyof it00:40:09.280 –> 00:40:14.920or whatever. So that’s hilarious. That’d be the next one to go. All right. Sowe have00:40:14.920 –> 00:40:21.160another, let’s just do another dinner and movie cause I got to get rid ofthese. Another00:40:21.160 –> 00:40:27.320dinner and movie again, a Darden dinner and an AMC and we’re going to go rightto Matt00:40:27.320 –> 00:40:36.480who is the winner of the hand in stone. Matt, how’s life? Doing well. How areyou? I’m doing00:40:36.480 –> 00:40:40.840very well. So are you kind of guy that would like to have a massage or facialor is this00:40:40.840 –> 00:40:46.360going to be more of one of those? You give it to the women in your life. We’regoing00:40:46.360 –> 00:40:53.440to give it to the missus. Okay. That is often a good answer because well,we’ve already00:40:53.440 –> 00:40:57.720figured out Joe is not going to go for it. I don’t know very many. I mean acouple of00:40:57.720 –> 00:41:01.400my brothers I knew, I know get pedicures and manicure kind of thing, but Idon’t know about00:41:01.400 –> 00:41:06.960facials and massages. Uh, but uh, I think that’s something you have to growinto. But00:41:06.960 –> 00:41:11.800all of us women, I think that would be an awesome gift. Your wife will enjoy.Um, I,00:41:11.800 –> 00:41:15.960we believe it’s at the Franklin location, Matt, and we’ll get that informationto you00:41:15.960 –> 00:41:22.200and we hope you have a very Merry Christmas. Merry Christmas. We enjoy bothshows. Thank00:41:22.200 –> 00:41:27.600you. Thank you very much. All right guys, we’ve got again right now we’relooking for00:41:27.600 –> 00:41:32.280a caller for the Darden restaurants, which is the Olive Garden and Longhorn.And we threw00:41:32.280 –> 00:41:37.640in another night at the movies, which pretty much covers all the movies,covers all the00:41:37.640 –> 00:41:43.720restaurants. I think we’re getting down there. So, uh, we got another one ofthose and we’re00:41:43.720 –> 00:41:48.560just racking it down. Whew. It’s hard giving things away, Joe.00:41:48.560 –> 00:41:58.200No, not really. They just got to call faster. Well, we, we, we have a lot ofcalls. My boy’s00:41:58.200 –> 00:42:05.720working as fast as he can. All right, Travis. I remember, I remember both mencalled for00:42:05.720 –> 00:42:09.760the massage things. Two guys. I figured it’d be cool.00:42:09.760 –> 00:42:13.800They’re smart. Those are, those are smart men, Joe, because they’re gettinggifts for00:42:13.800 –> 00:42:18.120their wives. So they already got one more thing in their thing. That’s a smartmove.00:42:18.120 –> 00:42:23.520Travis, are you on the line? Yep. I’m here. Hey buddy. Merry Christmas.00:42:23.520 –> 00:42:28.520How’s it going? Merry Christmas. It’s going very well. So you get to go out todinner00:42:28.520 –> 00:42:34.240or go to the movies or you can re-gift those to someone that wants to godinner and movies.00:42:34.240 –> 00:42:38.120Outstanding. So we hope you have a very Merry Christmas,00:42:38.120 –> 00:42:41.360Joe. Thank you so much. Enjoy the show.00:42:41.360 –> 00:42:45.880Hey, thank you. All right. So we’re down to the last two things. So we’regoing to do00:42:45.880 –> 00:42:53.080one more, one more hand in stone and one more hand in stone, which is again,facial or massage00:42:53.080 –> 00:42:58.320and Franklin. I mean, if you haven’t, I mean, again, we’ve already seen twoguys have won.00:42:58.320 –> 00:43:02.040These are smart men. They’re like, Hey, I’m listening. If I can win this, it’sjust another00:43:02.040 –> 00:43:09.160thing I can hand off to the wife or girlfriend or whatever. But either way,hand in stone.00:43:09.160 –> 00:43:14.440And then we have one more and we have managed to make it within the timeclock. It has been00:43:14.440 –> 00:43:19.720a busy, busy day. We used to have two hours to do all this too. Now we onlyhave an hour.00:43:19.720 –> 00:43:23.840So that makes it a lot harder to give away as much as I like to give away.Because we00:43:23.840 –> 00:43:31.200do appreciate all of our listeners. And Joe’s going to give out hisinformation for all00:43:31.200 –> 00:43:35.880of you guys that want to be able to still get ahold of him, get someelectrical work00:43:35.880 –> 00:43:40.000done with the cold weather coming in. I’m assuming that’s going to keep himpretty busy00:43:40.000 –> 00:43:44.320when the fuses start blowing for Christmas lights, huh, Joe?00:43:44.320 –> 00:43:47.680There already are. We usually hit that stuff before Christmas.00:43:47.680 –> 00:43:50.480Oh, well, I didn’t think about that until right now.00:43:50.480 –> 00:43:52.480It started two weeks ago.00:43:52.480 –> 00:43:56.040There you go. I know when I plugged all mine in, the first thing I had a fuseand I had00:43:56.040 –> 00:44:01.080to move some wires. All right. We got Jeff as a winner. Third one, all menthat have00:44:01.080 –> 00:44:06.480won the hand in stone. That is something to remember. Hey, Jeff, how’s life?00:44:06.480 –> 00:44:07.480It is good now.00:44:07.480 –> 00:44:12.920There you go. So do we have a significant other that will be taking advantageof this00:44:12.920 –> 00:44:14.880hand in stone?00:44:14.880 –> 00:44:17.720I’m going to try and get her to take it.00:44:17.720 –> 00:44:20.720Well, you should.00:44:20.720 –> 00:44:22.720She will enjoy it.00:44:22.720 –> 00:44:26.720It doesn’t matter if she does it. My daughter’s been trying to get it. Shetells me a lot00:44:26.720 –> 00:44:29.960of guys go there to get the massages. She’s been begging me to do it because Ihurt my00:44:29.960 –> 00:44:36.000back. But I’m just not a massage kind of guy. I don’t like it. It’s for menand women, they00:44:36.000 –> 00:44:37.000say.00:44:37.000 –> 00:44:42.720It is. I will second that. It is definitely for men and women. So maybe justget her in00:44:42.720 –> 00:44:46.600the right mood and then send her out. You’ll be in good shape.00:44:46.600 –> 00:44:49.720Sure will. Thanks a lot. I appreciate you guys.00:44:49.720 –> 00:44:50.720No problem. Merry Christmas.00:44:50.720 –> 00:44:52.720Merry Christmas.00:44:52.720 –> 00:44:58.720All right. And we have the very last giveaway and we’ve got one minute. Solet’s hope you00:44:58.720 –> 00:45:02.920can get the Caraba, the Blooming Brand. I believe we have one card left andyou’ve got00:45:02.920 –> 00:45:08.480one minute to get that card done and finished. We may or may not be able toget the name00:45:08.480 –> 00:45:13.160on the on the line, but we’ve got the last one coming in. Meanwhile, Joe, whydon’t you00:45:13.160 –> 00:45:18.180give people the phone number for Dr. Electric if they need to call for someemergency or00:45:18.180 –> 00:45:20.600even just normal electrical?00:45:20.600 –> 00:45:28.280On Monday, call 615-504-0825. And that’s my cell phone. It rings to us and ifI don’t00:45:28.280 –> 00:45:32.440answer, somebody else will. We handle all the electrical and we’ll get theirname on.00:45:32.440 –> 00:45:37.520The little leather guy could just hold off for a couple of minutes until we’redone.00:45:37.520 –> 00:45:46.600We’ll do our best. And if you want to call our office Monday morning as well,it’s 615-367-0819,00:45:46.600 –> 00:45:55.840and we do have the name for the last winner. We’ll see his name is Mac. Mac,are you on00:45:55.840 –> 00:45:57.360the line real quick?00:45:57.360 –> 00:45:58.360Yes.00:45:58.360 –> 00:46:03.600All right, Mac, you are the winner of the last card and we have to get on andoff. So00:46:03.600 –> 00:46:05.840I’m just going to tell you, Merry, Merry Christmas.00:46:05.840 –> 00:46:11.440Merry Christmas. Thank you so much. Love your show. I’m Dr. Electric. We missyou too.00:46:11.440 –> 00:46:16.600All right. See someone that actually realized Joe, a few people didn’t realizeyou didn’t00:46:16.600 –> 00:46:18.560even have a radio show still.00:46:18.560 –> 00:46:23.480I know. That’s what don’t break down like a pack would do.00:46:23.480 –> 00:46:27.160Exactly. All right. Well, this is the end of the Dr. Friday show. If you wantto reach00:46:27.160 –> 00:46:35.600us 615-367-0819 or go to the web at drfriday.com. Hope you have a very MerryChristmas. Talk

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In this episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, a seasoned tax expert with nearly 25 years of experience, shares her role in protecting clients from IRS complications. As an Enrolled Agent, she emphasizes the importance of education in tax matters and her commitment to representing individuals before the IRS. Dr. Friday describes herself as a ‘Superwoman’ shield, standing between clients and the IRS, ensuring compliance and proper representation. She invites listeners to join her live call-in show every Saturday from 2 to 3 p.m. on 99.7 WTN for more insights and offers direct contact for those ready to face their tax challenges head-on.

TranscriptG’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

I’m Dr. Friday with Dr. Friday tax and financial firm. I’ve been doing taxes in this area for almost 25 years. I have a radio show right here on the station Saturdays from 2 to 3 and I am here to help you not only help you prepare your taxes but I also like helping educate people about taxes. As an enrolled agent I’m here to represent you in front of the IRS. Think of me as a little bit of a shield. I’m superwoman. I’m gonna shield you between IRS and yourself. They have to come through me to help you but we have to work together to get you into compliance. If you’re wanting to do that, you’re ready to get ready and get ready to face the IRS, call me 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday delves into the complexities of charitable deductions beyond cash contributions. She emphasizes that while donating cash can yield straight tax deductions up to 60% of income, donating items like stock, art, or furniture follows the same principle. However, a critical point arises when donations exceed $2,500, necessitating an official appraisal. Dr. Friday shares a cautionary tale of a gentleman who donated inherited items without an appraisal and faced IRS challenges. This episode highlights the importance of proper documentation in maximizing tax benefits from non-cash charitable donations.

TranscriptG’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Charitable deductions. We usually talk about charitable deductions and most the time we’re talking cash, right? If you give cash up to 60% of your income it’s a straight tax deduction. But how about if you give stock, precious art, furniture, all of that? That is also, but here’s the catch. If you’re giving more than $2,500, then you need to have an appraisal. Had a gentleman that inherited some things and he gave it to donation and the IRS came back and said, “Wait, you didn’t have an appraisal so we’re not giving.” He had pictures, he had documents, he did not have a direct appraisal. So making sure you have the right documentation can save you tax dollars.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this Dr. Friday Tax Tips – One Minute Moment episode, Dr. Friday addresses the evolving landscape of 1099k forms. She highlights the recent announcement of a new $5,000 threshold for 1099k, set to take effect in 2024. This change is particularly relevant for individuals with small-scale online sales, such as on Amazon, or those running hobby-based businesses. Dr. Friday emphasizes the significance of this update, noting that individuals with gross sales exceeding $5,000 should expect to receive a 1099k form. The episode also references instances from the current year where individuals received the form for amounts as low as six or seven hundred dollars. Dr. Friday’s insights are crucial for small sellers and hobbyists to stay informed and compliant with tax regulations.

TranscriptG’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

We keep getting calls on 1099k’s. We all know back in 2022 they announced that they were going to actually do a threshold of $600 and then they said oh wait we’re gonna extend it. Guess what 2024 they have announced a $5,000 threshold. So for all of you that might be selling little things on Amazon, for all of you that are have small little businesses you might think is a hobby and it’s more than $5,000 gross sales you are likely to be getting a 1099k. I actually have people that received it this year when they only had six or seven hundred dollars.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Welcome to another episode of the Dr. Friday Radio Show! In this episode, tax expert Dr. Friday delves deep into the complex world of taxes, offering clarity, guidance, and solutions for listeners. Here are some of the topics she addresses:

• Roth IRA conversions and the best time to undertake them, especially considering the holiday season.
• Maximizing your 401(k) contributions and the strategic timing for doing so.
• Advice on gifting significant amounts to children, including tax implications and necessary forms (like Form 709).
• Clarifications on tax credits and debunking myths regarding their repayment.
• Year-end tax planning for small business owners, including equipment purchases and the importance of placing new equipment into service before year-end for tax deductions.
• Tax implications of receiving a trust fund distribution.
• Guidance on home equity and mortgage issues in estate planning.
• Updates on Tennessee Department of Revenue’s new policies for small business owners regarding gross business receipts.
• Live calls from listeners with specific tax-related questions and scenarios.
• And more!

TranscriptPart 100:00:00.000 –> 00:00:07.000No, no, no. She’s not a medical doctor, but she can sure cure your tax problems or your financial woes.

00:00:07.000 –> 00:00:11.000She’s the how-to girl. It’s the Dr. Friday Show.

00:00:11.000 –> 00:00:22.000If you have a question for Dr. Friday, call her now. 737-WWTN. That’s 737-9986.

00:00:22.000 –> 00:00:28.000So here’s your host, financial counselor and tax consultant, Dr. Friday.

00:00:29.000 –> 00:00:34.000Good afternoon. I’m Dr. Friday and this is the Dr. Friday Show.

00:00:34.000 –> 00:00:46.000And we are talking about my favorite subject. It is December, so it means that we are thinking about what can we still do for the year of 2023.

00:00:46.000 –> 00:00:50.000We only have something like 20, 24, 25 days left of the season.

00:00:50.000 –> 00:00:57.000So we need to really start concentrating on if you’re considering the Roth conversion, you want to do it earlier versus later.

00:00:57.000 –> 00:01:02.000Later you get towards Christmas. A lot of people are out of town. It’s hard to make that conversion.

00:01:02.000 –> 00:01:11.000The other would be maximizing your 401(k). Sometimes people will put their final paycheck into their 401(k) to help reduce their overall income

00:01:11.000 –> 00:01:16.000because you really have a tough time knowing what your income is until this time of the year for year to day,

00:01:16.000 –> 00:01:20.000especially if you work with some limited bonuses and things like that.

00:01:20.000 –> 00:01:26.000Maybe you got an inheritance or something and you can’t really convert your inheritance into a retirement.

00:01:26.000 –> 00:01:32.000But you can maximize your work or your 401(k) or put money into an IRA of some sort.

00:01:32.000 –> 00:01:37.000And then that would help you reduce the overall tax that maybe you’re looking at.

00:01:37.000 –> 00:01:40.000So these are the kinds of things we really want to go with.

00:01:40.000 –> 00:01:44.000Oh, wow. Awesome. You guys are ready for the Dr. Friday Show today. I love it.

00:01:44.000 –> 00:01:49.000It’s not been quite tax season. We usually get that. Let’s go to Ron in Nashville and we’ll go right to it.

00:01:49.000 –> 00:01:50.000Hey, Ron.

00:01:51.000 –> 00:01:52.000Hey.

00:01:52.000 –> 00:01:53.000I’ve got a question.

00:01:53.000 –> 00:01:54.000Hey, there’s…

00:01:54.000 –> 00:02:04.000I’ve got several million. I want to gift my kids, four kids, maybe half a million dollars, 17,000 this year, half a million next year.

00:02:04.000 –> 00:02:08.000What are the ramifications? Is there a form I have to fill out?

00:02:08.000 –> 00:02:16.000And if I brought in my check for 17,000, for example, for 2023, do they have to cash it before December 31st?

00:02:16.000 –> 00:02:20.000Well, theoretically, as long as it’s written before that day.

00:02:20.000 –> 00:02:24.000So if you give it to them for Christmas and you can’t take…

00:02:24.000 –> 00:02:30.000Some banks still allow over like 10,000, take a picture of it and deposit and they have to physically go in for some reason,

00:02:30.000 –> 00:02:33.000then the answer would be no. They don’t have to.

00:02:33.000 –> 00:02:39.000As long as the check was written in the tax year, which in your situation would be before the end of the year,

00:02:39.000 –> 00:02:42.000you are perfect as far as that.

00:02:42.000 –> 00:02:48.000So if they don’t get cash to the first of the year, that is really their situation and that’s not a problem.

00:02:48.000 –> 00:02:53.000And if it’s 17,000, then we don’t have to worry about filing the gift tax return.

00:02:53.000 –> 00:03:00.000If it goes above that number, anything above, it’s a form 709 and you’re going to file the difference.

00:03:00.000 –> 00:03:05.000So if you give them half a million dollars, then back out the first 17 and the remaining will show up on that form.

00:03:05.000 –> 00:03:09.000All you really need is their legal name, social security number and address.

00:03:09.000 –> 00:03:14.000And then the date that it was given and how much. Sometimes people will do it in multiple things.

00:03:14.000 –> 00:03:19.000And that’s really the only thing. The only other side, as long as it stays at the half million,

00:03:19.000 –> 00:03:24.000I don’t believe you’ll have a situation. Right now, of course, we have a lifetime gifting of, I don’t know,

00:03:24.000 –> 00:03:29.000was it like $11,000, $11 million or something?

00:03:29.000 –> 00:03:33.000The problem will be if the limitation comes back down.

00:03:33.000 –> 00:03:37.000And I will say in 2024, you do have 18,000 just as a point of interest.

00:03:37.000 –> 00:03:45.000It went up to 18 in 2024. But, you know, your situation on that one, you can figure out.

00:03:45.000 –> 00:03:50.000I don’t know what’s going to happen if they bring it back down to a million dollars lifetime

00:03:50.000 –> 00:03:55.000and you’ve given away three million, which I have some clients that have.

00:03:55.000 –> 00:04:00.000I don’t think it’s grandfathered in. Theoretically, it could become what we’ll have to go back and file gift tax returns.

00:04:00.000 –> 00:04:05.000I’m not actually sure. But right now, the answer is file 709. Give the kids the money.

00:04:05.000 –> 00:04:09.000We’ll deal with the next one depending on what happens. It may change nothing in our lifetimes.

00:04:09.000 –> 00:04:13.000And we may be perfect. Does that make sense?

00:04:13.000 –> 00:04:24.000So with that, that would ask half a million. We wouldn’t pay. I wouldn’t pay taxes on like up to 40 percent on the half million.

00:04:24.000 –> 00:04:33.000Right. I mean, to gift. So to gift somebody money, the person giving the money has to already have paid tax

00:04:33.000 –> 00:04:36.000or will pay tax if they’re taking it out of some sort of investment.

00:04:36.000 –> 00:04:42.000I would suggest if it’s in an investment that is giftable, meaning stocks or something like that,

00:04:42.000 –> 00:04:49.000gift the kids the stock at the value of the stock and let them deal with it versus you pay the tax.

00:04:49.000 –> 00:04:54.000But that is your choice. I don’t know if this is cold cash or if it’s in an investment that you’re cashing out

00:04:54.000 –> 00:05:02.000and then wanting to give them cold cash. So what I have is this an investment run or is this cash?

00:05:02.000 –> 00:05:04.000It’s cash.

00:05:04.000 –> 00:05:07.000It is cash. OK, well, then we don’t have to worry if it’s in cash.

00:05:07.000 –> 00:05:15.000You’ve already paid tax on it is the theory. And then you’re just writing checks to the kids and they don’t have to pay any tax.

00:05:15.000 –> 00:05:19.000And there’s no tax at this time for that.

00:05:19.000 –> 00:05:30.000But the four hundred and eighty two thousand, let’s say next year, that would reduce the lifetime.

00:05:30.000 –> 00:05:36.000Lifetime. Is that correct? Yes, sir. That would reduce the lifetime. That’s 100 percent correct.

00:05:36.000 –> 00:05:42.000Yes, it would go against your lifetime of eleven million. Yes. OK. All right.

00:05:42.000 –> 00:05:46.000And are you married, Ron? No. Are you married or single?

00:05:46.000 –> 00:05:50.000OK. I wasn’t sure if you’re married, you could double it is everything I was thinking.

00:05:50.000 –> 00:05:55.000Yeah. Yeah. OK. You got it.

00:05:55.000 –> 00:06:02.000Thanks for listening. Appreciate it. All right. Let’s go to Bryant in Spring Hill.

00:06:02.000 –> 00:06:07.000Hey, Dr. Friday. Just got a quick question. Hanging out at work at the water cooler.

00:06:07.000 –> 00:06:13.000And we were talking about tax credits and there was a theory thrown out that you have to pay the tax credit back.

00:06:13.000 –> 00:06:17.000So don’t accept it. Could you shed a little light on that theory?

00:06:17.000 –> 00:06:22.000Which tax credit would that be? Do you know? Like a child tax credit?

00:06:22.000 –> 00:06:26.000Oh, no. So child tax credit, you don’t pay back.

00:06:26.000 –> 00:06:33.000The only tax credit that existed that I can think of right off the top of my head was the homebuyer’s credit back in.

00:06:33.000 –> 00:06:39.000Gosh, it’s been 10 years or more. So back in 2010, nine, eight, something like that.

00:06:39.000 –> 00:06:47.000They gave someone seventy five hundred dollars. And in that case, every year they had to pay five hundred dollars back until it’s paid off in full.

00:06:47.000 –> 00:06:51.000That’s the only time I’ve ever seen a credit that is actually paid back.

00:06:51.000 –> 00:06:54.000I mean, there’s the energy credits. That’s 30 percent off.

00:06:54.000 –> 00:07:02.000If you get solar, you don’t pay that 30 percent back. If you do something, you know, your kids, you have to keep them anyway.

00:07:02.000 –> 00:07:08.000So there’s no giving it back. So there’s really none that I can think of off the top of my head.

00:07:08.000 –> 00:07:16.000The only other kind of business deductions would be like if Section 179 or something like that, where if you sell it, you would have to do a recapture.

00:07:16.000 –> 00:07:21.000But no credits. Most credits are credits just like deductions.

00:07:21.000 –> 00:07:25.000I can’t think of, like I said, very many of them that would require you to pay back.

00:07:25.000 –> 00:07:31.000So I’d say you want to maximize any credit that you can qualify for.

00:07:31.000 –> 00:07:36.000I love it. I’m a client of yours and I knew you would have the answer and I thought this would be the best time to do it.

00:07:36.000 –> 00:07:38.000So thank you for all your service.

00:07:38.000 –> 00:07:42.000No problem, buddy. Thanks, Brian. I appreciate it.

00:07:42.000 –> 00:07:52.000All right. So we are live on the radio. 615-737-9986. 615-737-9986.

00:07:52.000 –> 00:07:57.000Taking your calls, talking about taxes. But we also want to think about year end.

00:07:57.000 –> 00:08:02.000We are at the end of a calendar year almost. We only have a few weeks left here.

00:08:02.000 –> 00:08:09.000And so now is the time to be thinking first, if you do qualify for equipment, if you’re a small business owner and you’re thinking,

00:08:09.000 –> 00:08:16.000well, you know what, we have a really healthy profit and maybe we need to go ahead and buy a piece of equipment,

00:08:16.000 –> 00:08:21.000buy a truck, buy a dozer, whatever your business might be.

00:08:21.000 –> 00:08:29.000Now may be the time to think about it. But keep in mind, tax law specifically says it has to be put in service.

00:08:29.000 –> 00:08:36.000So that being said, if it has to be put in service, you can’t go buy it on December 31st and take it off on your taxes

00:08:36.000 –> 00:08:40.000unless it was a truck you drove off the lot and it’s already ready to be working.

00:08:40.000 –> 00:08:45.000If it’s a piece of equipment and has to be brought into the factory or manufacturing or whatever you’re doing,

00:08:45.000 –> 00:08:50.000that piece of equipment needs to be installed and working before you can deduct it.

00:08:50.000 –> 00:08:54.000Very important because sometimes people are like, yeah, I purchased it already.

00:08:54.000 –> 00:09:00.000Oh, what? But they weren’t going to deliver it until the first of the next year or whatever.

00:09:00.000 –> 00:09:03.000And, you know, well, if you deliver it next year, then it’s a tax deduction for next year.

00:09:03.000 –> 00:09:10.000You may have used the money in 2023, but if you’re not getting it until 2024, it is not a legitimate tax deduction.

00:09:10.000 –> 00:09:16.000Important to understand. So I just want to make sure that you have and understand how that one’s going to work.

00:09:16.000 –> 00:09:20.000All right. We have another phone call, Rick from Cookville. Let’s see if we can get him on the line.

00:09:20.000 –> 00:09:27.000Hey, Rick, what’s happening? It’s a great day. I’m telling you, I’m glad I’m glad to talk to you.

00:09:27.000 –> 00:09:33.000Can I tell you what I’m doing? I have a house that I’m building, a house that I’m building for my daughter,

00:09:33.000 –> 00:09:43.000building it out of my own equity in my home, and I’m going to convert it to a long term loan for her.

00:09:43.000 –> 00:09:49.000She’s already pre-approved for the loan. All that. We’re doing the house really cheap because I’m doing all the labor

00:09:49.000 –> 00:09:54.000basically myself. So my daughter is going to get this great house.

00:09:54.000 –> 00:10:00.000The house is going to be valued at a lot more than she’s going to pay for it.

00:10:00.000 –> 00:10:04.000Will I be going to have a lot of equity in it when you’re done? Yes.

00:10:04.000 –> 00:10:10.000Yes. Will I be taxed for that equity as a gift to her?

00:10:10.000 –> 00:10:16.000No, because I mean, what you’re gifting her is your blood, sweat and tears.

00:10:16.000 –> 00:10:22.000Assuming you’re not crying, Rick. But anyways, in all honesty, no, because really what you’re gifting her is labor.

00:10:22.000 –> 00:10:27.000So, you know, is she going to use this as her primary home?

00:10:27.000 –> 00:10:34.000The fact is the value of the home, whatever the value is that you have in it is truly her original basis,

00:10:34.000 –> 00:10:40.000which is pretty much probably the loan that she’s taking. So if the house is maybe worth, let’s just say 300,

00:10:40.000 –> 00:10:45.000but you have 150 only in it, right? Because of all the labor and stuff you haven’t had.

00:10:45.000 –> 00:10:52.000So she’s going to have 150 in that house. And then when she sells it, whatever the difference,

00:10:52.000 –> 00:10:58.000and this may be 10 years from now, 20 years, hopefully more than five years, then she get a step up.

00:10:58.000 –> 00:11:07.000But she’s really only going to get it for the value that you put into it, not the value that the loan says it is.

00:11:07.000 –> 00:11:09.000Does that make sense? OK, that makes great sense.

00:11:09.000 –> 00:11:14.000She’s going to have a lot of equity in there. But the fact is, if we only have 150 grand in it,

00:11:14.000 –> 00:11:21.000then that’s all she has in it is the $150,000 that she’s basically paying back on that mortgage or loan.

00:11:21.000 –> 00:11:26.000You know, and make sure the biggest thing is make sure you go ahead.

00:11:26.000 –> 00:11:31.000Your labor’s free. And my personal taxes, then it will not. Right.

00:11:31.000 –> 00:11:36.000None of this is going to show up on you at all. None of this is going to show up because you’re using a home equity.

00:11:36.000 –> 00:11:41.000That’s going to. So that’s non-taxable money. And then when you convert it into the loan,

00:11:41.000 –> 00:11:45.000you’ll pay off your home equity again, a non-taxable situation.

00:11:45.000 –> 00:11:50.000And then she’ll have the 30 year loan or whatever that she’s going to take out and pay off the difference.

00:11:50.000 –> 00:11:57.000The biggest thing is, is that whatever you pay for, because some of this may come out of money you didn’t have in that home equity.

00:11:57.000 –> 00:12:01.000I don’t know. I’m just saying maybe just personal money that you’ve actually invested.

00:12:01.000 –> 00:12:06.000You want to make sure you can track the true amount that you put into this house if possible,

00:12:06.000 –> 00:12:11.000because that’s really going to be her value. OK. That makes sense.

00:12:11.000 –> 00:12:16.000I needed to know. Yes, ma’am. OK, boss. All right. Thanks. Appreciate the phone call.

00:12:16.000 –> 00:12:20.000Bye. All right. We’re going to take our first break. When we get back, we can get some more of your phone calls.

00:12:20.000 –> 00:12:31.000615-737-9986. 615-737-9986. We’ll be right back with the Dr. Friday show.

Part 200:12:32.000 –> 00:12:41.000We are back here live in studio.

00:12:41.000 –> 00:12:48.000Hear that transition. Sorry. If you want to join the show, you can at 615-737-9986.

00:12:48.000 –> 00:12:57.000615-737-9986. Again, we want to also be considering 2023 is not over yet.

00:12:57.000 –> 00:13:04.000We have 2024. We’re going to start really working hard on maybe doing some better deductions throughout the year,

00:13:04.000 –> 00:13:09.000maybe for some of us that are listening. But really, I want to concentrate on 2023.

00:13:09.000 –> 00:13:15.000We have a couple more weeks. That means making sure and if you can, you can always look.

00:13:15.000 –> 00:13:19.000Even one of the big things I think someone might look at is look at your W.

00:13:19.000 –> 00:13:26.000Look at your pay stub. And if you’ve made 50,000 and you haven’t paid in six, seven thousand,

00:13:26.000 –> 00:13:33.000if you’re single, eight or nine thousand possibly. And if you’re married, you know, at least five thousand.

00:13:33.000 –> 00:13:38.000Maybe you need to reconsider. Are you having enough money coming out of your check?

00:13:38.000 –> 00:13:41.000Have every last few years, have you actually had to write a check?

00:13:41.000 –> 00:13:47.000Now, again, most of my clients know I’m not an advocate for having two or three thousand dollar refunds.

00:13:47.000 –> 00:13:50.000That doesn’t really help my clients. They need the money in their own pocket.

00:13:50.000 –> 00:13:54.000But I also don’t want them having to write a check for two or three thousand dollars.

00:13:54.000 –> 00:13:59.000That can be hard when it’s sometimes depending on the business they’re in, seasonal or whatever,

00:13:59.000 –> 00:14:06.000that there could be a situation under that. So really, really important to think about is

00:14:06.000 –> 00:14:12.000if you’re not having enough money, you need to make that transition. It’s a W for you’re going to go back to your employer.

00:14:12.000 –> 00:14:15.000And maybe the easiest thing would be is leave whatever you have.

00:14:15.000 –> 00:14:20.000Just have an additional dollar amount come out. Maybe you were short five hundred dollars and you’re paid,

00:14:20.000 –> 00:14:26.000you know, 52 weeks a year or whatever. So you just want to have an extra ten dollars a paycheck come out.

00:14:26.000 –> 00:14:31.000So that way you don’t have to worry about that extra money when it comes due.

00:14:31.000 –> 00:14:35.000So now’s the time to think about that. All right. We’re going to head to the phone lines.

00:14:35.000 –> 00:14:41.000Carol in the borough. Hey, Carol, what is happening on this rainy Saturday?

00:14:41.000 –> 00:14:52.000Good afternoon. We received a trust fund from my father’s inheritance when he died in twenty twenty two.

00:14:52.000 –> 00:14:58.000It was dispersed. What kind of taxes will we be paying on that?

00:14:58.000 –> 00:15:03.000So your father had a trust and you received a distribution. Yes.

00:15:03.000 –> 00:15:10.000OK. And do you have any I mean, are you guys the trustees or is there someone else that’s a trustee?

00:15:10.000 –> 00:15:15.000My husband is. OK, wonderful, because they’ll have better access than sometimes.

00:15:15.000 –> 00:15:22.000So it would depend just because there was a distribution from the trust doesn’t necessarily mean it’s going to be taxable.

00:15:22.000 –> 00:15:29.000So the question would be, was there like a retirement 401k IRA cashed out that would become taxable?

00:15:29.000 –> 00:15:36.000And if that was distributed or did he hold back money and the trust is going to pay the tax and then the distribution or.

00:15:36.000 –> 00:15:40.000I know I’m not answering your question because on the trust, there’s two ways of doing it.

00:15:40.000 –> 00:15:52.000You can do what’s called a K1 from the trust and all the taxes rolls to the the beneficiaries or the trust can pay all the taxes and then just do distributions to the beneficiaries.

00:15:52.000 –> 00:15:56.000So kind of a couple of questions on that one would be first.

00:15:56.000 –> 00:15:59.000I don’t know what kind of assets were in the trust, so I can’t tell you.

00:15:59.000 –> 00:16:05.000Do you know if it was just cash in the bank or if it was like a house that got sold or.

00:16:05.000 –> 00:16:16.000It was a home that got sold. OK, the home they got so would have had a step up in basis, so that would have been zero taxable to you or to the beneficiaries.

00:16:16.000 –> 00:16:23.000But if there was any. Huh? Capital gains, do they have to be made on something like that?

00:16:23.000 –> 00:16:30.000Most likely, no. If it was sold within the right period and right now we’re not blowing up for a couple of years, I couldn’t say this.

00:16:30.000 –> 00:16:39.000But usually whenever the passing, the person passed away, the house then has to be cleaned up or whatever and then sold whatever it was valued at at the time of the passing.

00:16:39.000 –> 00:16:44.000If we sold it for that same amount or less, zero tax.

00:16:44.000 –> 00:16:52.000If we sold it for more, then there would be capital gains, but only after the value at the date of death.

00:16:52.000 –> 00:16:55.000All righty. The house is worth 500.

00:16:55.000 –> 00:17:02.000Did it. OK, awesome. I was winging it there a little bit, Carol. So I’m sorry. I was like, there’s too many possibilities in there.

00:17:02.000 –> 00:17:07.000But if you have any other questions, you guys can always follow up because that one’s not as easy over the radio.

00:17:07.000 –> 00:17:11.000But if there’s additional questions, you’ve got my office. If not, you’ll get my office number.

00:17:11.000 –> 00:17:16.000But I appreciate the phone call, Carol. Thank you. Thank you.

00:17:16.000 –> 00:17:22.000All right. Let’s hit Eddie in the borough. We are rocking in the borough today. Hey, Eddie.

00:17:22.000 –> 00:17:29.000Yeah. How are you doing?

00:17:29.000 –> 00:17:33.000I’m doing good, Eddie. How are you doing? I’m doing good. Long time listener.

00:17:33.000 –> 00:17:38.000Ungratefully, first time caller. My.

00:17:38.000 –> 00:17:47.000Go for it. My father just passed last week and he was a Vietnam vet and he was 100 percent disabled.

00:17:47.000 –> 00:17:52.000And he got a house through the V.A. that I’m actually living in.

00:17:52.000 –> 00:18:01.000And him just passing before he passed, we were I was able to take the house and do a.

00:18:01.000 –> 00:18:11.000He had a living will with me all over it. And then he had. And then we did a what do they call it when a trust transfer or something like that.

00:18:11.000 –> 00:18:27.000Yes. A quick claim deed. For the house. Now that he has passed the V.A. sent me paperwork and I’m going to have to continue paying on that house or is that house because that house has been passed down to me.

00:18:27.000 –> 00:18:33.000There’s still about two hundred forty left on the house. No, I’m going to have to continue to pay on that. Correct.

00:18:33.000 –> 00:18:39.000That is correct. Yes. The mortgage will still go with the house. So you’re going to continue to make the payments.

00:18:39.000 –> 00:18:44.000And the downside to that would be potentially we’d have to really see what the paperwork said.

00:18:44.000 –> 00:18:51.000But theoretically, because you did it before his passing, you may not have qualified for what we call the step up in basis.

00:18:51.000 –> 00:18:56.000You may have inherited at the value that he paid for it, not necessarily the value that was worth today.

00:18:56.000 –> 00:19:04.000But your main question is, is the mortgage still tied to it or do you still. Yes. You have to keep paying that mortgage.

00:19:04.000 –> 00:19:18.000OK. No matter how. OK. Now, is there a possibility of the of the of the V.A. defaulting on that or taking the house back to me or am I pretty much safe since I had that paperwork done?

00:19:18.000 –> 00:19:22.000Yeah, I don’t I mean, I doubt they want the real estate as long as you keep making payments.

00:19:22.000 –> 00:19:30.000And I’ve had clients that have their spouses have died and the mortgage was in the spouse’s name and they just keep paying it until they sold it later.

00:19:30.000 –> 00:19:38.000To be quite honest, I don’t believe and I’m not an attorney, but I don’t think anything is going to happen as long as the mortgage is paid.

00:19:38.000 –> 00:19:43.000All right. Great. You don’t think that would be more of a problem? Yeah. Cool.

00:19:43.000 –> 00:19:49.000Sorry for the loss of your dad, though. Thank you, ma’am. Appreciate you. Yeah. Talk to you later.

00:19:49.000 –> 00:19:54.000Thanks, Eddie. All right. We are on the Dr. Friday show. You can join.

00:19:54.000 –> 00:19:58.000I’m getting some great calls today, guys. A little bit more than sometimes, at least.

00:19:58.000 –> 00:20:04.000We normally in tax season, we blow up the phones, but it’s a little early, but I’m appreciating them.

00:20:04.000 –> 00:20:13.000You can reach us here in studio at 615-737-9986. 615-737-9986.

00:20:13.000 –> 00:20:16.000I do want to put out there for all business owners.

00:20:16.000 –> 00:20:23.000You guys have been receiving letters from Tennessee Department of Revenue about your gross business receipts.

00:20:23.000 –> 00:20:32.000OK, so here’s how this is going to work. If you have less than $100,000 and if you only have one location, this is simple.

00:20:32.000 –> 00:20:38.000Less than $100,000 in your sales, you will not be paying business tax.

00:20:38.000 –> 00:20:42.000You do need to notify them that you have less than that.

00:20:42.000 –> 00:20:48.000So I’m not exactly sure because some people, some years could be higher, some years could be lower.

00:20:48.000 –> 00:20:54.000And so you have to still keep a gross business license.

00:20:54.000 –> 00:21:01.000So you have to have a license. It’s just going to go. It used to be like less than $10,000 or less than $3,000.

00:21:01.000 –> 00:21:03.000But now it’s going to be less than $100,000.

00:21:03.000 –> 00:21:12.000So that’s great news for all the small business owners that are trying to make ends meet and then having to pay another $40, $50, $60 on a business license.

00:21:12.000 –> 00:21:19.000So you do have to contact Tennessee Department of Revenue and let them know what your gross receipts were, as my understanding.

00:21:19.000 –> 00:21:27.000Now, if you are a contractor and you in the same county have more than one location, but see some of my people,

00:21:27.000 –> 00:21:32.000they may make $30,000 or $40,000 in a county and/or a city.

00:21:32.000 –> 00:21:36.000As long as that county and city end up to be less than $100,000,

00:21:36.000 –> 00:21:42.000you don’t have to do the 50 million different business licenses that we’ve been doing in the past.

00:21:42.000 –> 00:21:44.000Now, some of you guys, it’s not going to make a difference.

00:21:44.000 –> 00:21:49.000You’re doing more than 100 in all the different cities and counties, or you have multiple locations in those cities and counties.

00:21:49.000 –> 00:21:54.000And if those multiple locations add up to more than 100,000, you’re paying it no matter what.

00:21:54.000 –> 00:22:02.000So it’s really designed for people making less than $100,000 in a city, county area.

00:22:02.000 –> 00:22:12.000So if you’re not sure, you can go to tentap.tn.gov and you can look at, if you haven’t already received this notice,

00:22:12.000 –> 00:22:16.000it’s kind of an important thing. We’re going to be filing those come January.

00:22:16.000 –> 00:22:20.000Gross business receipts are actually due, I believe, April 1st.

00:22:20.000 –> 00:22:27.000But normally we start filing them once we know what our December sales, then we have the year to date and we can start filing that information.

00:22:27.000 –> 00:22:30.000But it’s really important. Now would be a good time.

00:22:30.000 –> 00:22:36.000Now, some of you guys, if you’re close, if you’re already at 90,000 and you have the rest of this month, you may exceed.

00:22:36.000 –> 00:22:42.000There’s no special. If you were at $101,001, you have to file.

00:22:42.000 –> 00:22:48.000They’ve already came out and said there’s no middle of the road. It’s 100 or less or 100 and more.

00:22:48.000 –> 00:22:53.000So just putting that out there because I’ll have people come in and say, “I was so close.”

00:22:53.000 –> 00:22:56.000Well, close isn’t going to quite cut it in this case.

00:22:56.000 –> 00:23:05.000Again, if you have a small business and I have a number of them, this is going to be great news for because they’ve always had 30, 40, $50,000 a year.

00:23:05.000 –> 00:23:12.000It’s just a little business that people have. Those are no longer going to have to deal with the business license.

00:23:12.000 –> 00:23:17.000Now, again, I still think there’s a little bit of information missing because I’m not positive.

00:23:17.000 –> 00:23:21.000That means that we won’t have to have a business gross receipt because I think we do,

00:23:21.000 –> 00:23:26.000which means there’s a minimum of like $30 that we have to pay no matter what.

00:23:26.000 –> 00:23:29.000So we’ll find out more about that as we keep moving.

00:23:29.000 –> 00:23:34.000I think that’s probably going to be in January when we find out that they have made some adjustments to this.

00:23:34.000 –> 00:23:41.000But if you are one of those individuals that have just a little small business on the side or just maybe a one-man team,

00:23:41.000 –> 00:23:47.000then just keep in mind that you should, and this went in effect for 2023, not 2024.

00:23:47.000 –> 00:23:52.000It goes in effect for 2023, so it will be something that we can take in effect immediately.

00:23:52.000 –> 00:23:58.000So at the end of this year, maybe you won’t have to pay that several hundred dollars that you normally pay for a business license.

00:23:58.000 –> 00:24:01.000Maybe we can actually pay zero. That’s always great news, right?

00:24:01.000 –> 00:24:04.000All right, we’re going to take our second break here on the Dr. Friday Show.

00:24:04.000 –> 00:24:11.000You can join us live here in studio 615-737-9986.

00:24:11.000 –> 00:24:14.000We’ll be right back with the Dr. Friday Show.

Part 300:24:14.000 –> 00:24:19.000Live in studio, this is Dr. Friday with the Dr. Friday Show.

00:24:19.000 –> 00:24:22.000I’m an enrolled agent licensed by the Internal Revenue Service.

00:24:22.000 –> 00:24:25.000That means I do not work for the Internal Revenue Service, guys.

00:24:25.000 –> 00:24:29.000I’m licensed by the Internal Revenue Service to do taxes and representation.

00:24:29.000 –> 00:24:34.000So if you have IRS issues, you’re getting some love letters in the mail, you’re not too sure,

00:24:34.000 –> 00:24:38.000maybe you’ve got a special drawer you like to throw them in so that way you can ignore them.

00:24:38.000 –> 00:24:42.000And why do they always come by twos if you’re married? Why do I always get a whole bunch of them?

00:24:42.000 –> 00:24:44.000These are always the questions we have.

00:24:44.000 –> 00:24:48.000Just so you know, it should always, if it’s a joint tax return,

00:24:48.000 –> 00:24:52.000both people on the joint tax return should receive their own letters.

00:24:52.000 –> 00:24:54.000It doesn’t mean that you both owe that.

00:24:54.000 –> 00:24:57.000Well, theoretically, whoever can pay it pays it.

00:24:57.000 –> 00:25:00.000But the dollar amount is the total amount due on those letters.

00:25:00.000 –> 00:25:06.000So I had an email earlier, it says, “My husband and I both got letters and it shows that we owe 600 and some dollars.

00:25:06.000 –> 00:25:09.000Does that mean each of us owe 600 and some dollars?”

00:25:09.000 –> 00:25:13.000And the answer is no, together you owe 600 and some dollars.

00:25:13.000 –> 00:25:15.000So that’s just a point of interest.

00:25:15.000 –> 00:25:20.000Also want to put out there, next Saturday is the Christmas show.

00:25:20.000 –> 00:25:24.000You guys know for the last 15 years, and guess who will be on with me?

00:25:24.000 –> 00:25:27.000Dr. Electric. I know some of you guys are probably missing him.

00:25:27.000 –> 00:25:32.000I know I miss him on the radio, but he’s going to join and I’m sure he’s going to offer up some deer meat,

00:25:32.000 –> 00:25:35.000which has been a winner and I don’t understand it.

00:25:35.000 –> 00:25:40.000But hey, my listeners, his listeners have always loved giving away the deer.

00:25:40.000 –> 00:25:45.000So next week we are going to have a one hour show that we’ll be doing from 2 to 3.

00:25:45.000 –> 00:25:47.000And we’ll be giving away a ton of stuff.

00:25:47.000 –> 00:25:50.000So many of you guys, year after year, have managed to get in.

00:25:50.000 –> 00:25:53.000It’s going to be a little shorter because we used to be able to do two hours.

00:25:53.000 –> 00:25:58.000So this year we’ll have a one hour Christmas show next Saturday with Dr. Electric and myself.

00:25:58.000 –> 00:26:01.000And we’ll be doing a ton of giving away.

00:26:01.000 –> 00:26:06.000Since we have to cram everything into a one hour show, probably be a little faster than normal.

00:26:06.000 –> 00:26:09.000We may have something silly like you guys having a sing Christmas carol or something.

00:26:09.000 –> 00:26:15.000I don’t know. We always enjoy kind of having some fun with you guys because, you know, we have to say thank you somehow.

00:26:15.000 –> 00:26:22.000And we enjoy having our audience or, you know, I do since Joe decided not to do the radio any longer.

00:26:22.000 –> 00:26:28.000So I’m still here. So anyway, you can join us next Saturday, obviously, to get all those.

00:26:28.000 –> 00:26:31.000But this Saturday, you can still join us live in studio.

00:26:31.000 –> 00:26:34.000If you’ve got a question, maybe you’ve received some love letters.

00:26:34.000 –> 00:26:37.000Maybe you have to figure out, I want to get straight with the IRS.

00:26:37.000 –> 00:26:41.000I don’t even know where to begin. I’ve moved several times. I’ve gotten divorced.

00:26:41.000 –> 00:26:45.000I don’t know when we filed taxes. I don’t know if we ever filed taxes.

00:26:45.000 –> 00:26:48.000And I haven’t really gotten love letters. Sometimes I have people come in and they’ll say,

00:26:48.000 –> 00:26:53.000IRS hasn’t sent me anything, but I know I haven’t filed for the last five years.

00:26:53.000 –> 00:26:58.000So I think I need again, 2020 and 2021 were big years.

00:26:58.000 –> 00:27:03.000Guess what falls off by April of next year? 2020.

00:27:03.000 –> 00:27:08.000And if you haven’t gotten the stimulus money because you didn’t file taxes for the last five years.

00:27:08.000 –> 00:27:13.000And so you weren’t on the list. You may be leaving free money on the table.

00:27:13.000 –> 00:27:18.000And so often I find that a lot of times people don’t owe as much as they think.

00:27:18.000 –> 00:27:23.000Even people that leave money on the table. But you won’t be able to get a refund.

00:27:23.000 –> 00:27:28.000You can only go back three years for refunds. So ’21, ’22, ’23 will be what we have coming up.

00:27:28.000 –> 00:27:31.000Right now it’s ’20, ’21, and ’22.

00:27:31.000 –> 00:27:37.000And the two years that we did receive stimulus, if you were qualified for it, was ’20 and ’21.

00:27:37.000 –> 00:27:41.000So I just want to put that out there because it’s very important to be able to get out there

00:27:41.000 –> 00:27:44.000and don’t want to leave money out there.

00:27:44.000 –> 00:27:47.000Even if you owe money, why not use that money to pay back?

00:27:47.000 –> 00:27:51.000I mean, it’s still $1,400 or thereabouts, depending on your situation.

00:27:51.000 –> 00:27:55.000If you qualify. If you’re in the higher tax brackets, we don’t qualify for it.

00:27:55.000 –> 00:28:01.000But if you were in the lower married couples making less than, I think, $150 or single under $75,

00:28:01.000 –> 00:28:04.000you did qualify for some or all of the stimulus.

00:28:04.000 –> 00:28:08.000And if you have a number of children, that just adds up on top of it.

00:28:08.000 –> 00:28:11.000All right, so we’ve talked a little bit about IRAs.

00:28:11.000 –> 00:28:15.000You don’t have to worry so much about making–I mean, I’m not a financial planner,

00:28:15.000 –> 00:28:18.000so I’m sure financial planners would say make it as soon as you can.

00:28:18.000 –> 00:28:25.000But you don’t have to make your IRA, your Roth IRAs, or even your HSA payments quite yet.

00:28:25.000 –> 00:28:29.000They can go all the way up until tax day, which is April 15th this year, guys.

00:28:29.000 –> 00:28:34.000Finally, an actual April 15th, unless something happens, that will be our due date.

00:28:34.000 –> 00:28:37.000On that day we do have to pay all of those.

00:28:37.000 –> 00:28:45.000Right now the only ones that are really important is people that actually have 401(k)s or some version,

00:28:45.000 –> 00:28:51.000403(b)s, there are several different versions, that the money comes from your paycheck that has to go in.

00:28:51.000 –> 00:28:56.000You can’t just take money and send it out to your 401(k) if you’re working for somebody.

00:28:56.000 –> 00:29:01.000They have to take it from your paycheck and then take out because it’s deferred, right?

00:29:01.000 –> 00:29:03.000So you want to be able to pay it in that way.

00:29:03.000 –> 00:29:07.000And then there’s the Roth, which is not deferred, but still comes out of the paycheck.

00:29:07.000 –> 00:29:13.000So if that’s something you need to do, you might want to sit back and just look at your checks and see where you’re at

00:29:13.000 –> 00:29:15.000and just see if it’s the thing that you need.

00:29:15.000 –> 00:29:24.000Again, I’m not a financial planner, but all I do know is that you can’t, and many times you cannot have an IRA and a 401(k).

00:29:24.000 –> 00:29:26.000Again, I’m not a financial planner.

00:29:26.000 –> 00:29:29.000I keep putting that out there because these are questions you should be asking them,

00:29:29.000 –> 00:29:33.000but there is some backdoor IRAs you could talk to them about.

00:29:33.000 –> 00:29:40.000But many times I have people that end up paying penalties on their taxes because they went ahead and put money in an IRA

00:29:40.000 –> 00:29:45.000and they were already paying into a 401(k) and their income didn’t allow for it.

00:29:45.000 –> 00:29:49.000Now, if you’re single and making less than $30-some thousand dollars, I think it’s like $36,000,

00:29:49.000 –> 00:29:54.000you can get the saver’s credit and you can put money into both situations.

00:29:54.000 –> 00:30:00.000But you cannot do that if you’re making $150 or something as a single person.

00:30:00.000 –> 00:30:03.000So make sure you know the game, make sure you know how to play it,

00:30:03.000 –> 00:30:09.000and if you’re trying to set aside a lot more money for your retirement than what you can do through the basic system,

00:30:09.000 –> 00:30:12.000then you need to talk to, again, financial planners.

00:30:12.000 –> 00:30:16.000That’s where they make their bread and butter, taking the money, putting it someplace, and hopefully growing it.

00:30:16.000 –> 00:30:19.000So when you hit retirement, you have it.

00:30:19.000 –> 00:30:26.000But that is tax-wise, most of the time I usually see the penalty side of things.

00:30:26.000 –> 00:30:29.000So I want to make sure that you’re thinking about that.

00:30:29.000 –> 00:30:34.000And then obviously I’m a huge advocate for the health savings account if you have the option

00:30:34.000 –> 00:30:41.000because many of us are blessed where we don’t have to actually use insurance or go see doctors a lot,

00:30:41.000 –> 00:30:43.000at least not yet in my life.

00:30:43.000 –> 00:30:47.000And so having a higher deductible, lower insurance payment,

00:30:47.000 –> 00:30:52.000and putting more money into a health savings account is a good plan for someone like myself.

00:30:52.000 –> 00:30:54.000Again, not going to be perfect for everyone.

00:30:54.000 –> 00:30:57.000If we were all the same, how boring would this world be?

00:30:57.000 –> 00:30:59.000So I just want to make sure we’re all on the same page.

00:30:59.000 –> 00:31:03.000But start thinking if you’re a small business owner, for one,

00:31:03.000 –> 00:31:06.000try to take the next couple of weeks and find out where you stand.

00:31:06.000 –> 00:31:08.000Because I have a lot of them that come in.

00:31:08.000 –> 00:31:12.000I have one on my desk right now where they did monthly financials, I guess you would call it.

00:31:12.000 –> 00:31:16.000They had an Excel, but they didn’t do it as a continuous Excel.

00:31:16.000 –> 00:31:19.000So they don’t have a year-to-date information.

00:31:19.000 –> 00:31:24.000So they have no idea what their profit and loss is to date with the information.

00:31:24.000 –> 00:31:26.000And then second, that helps you for two reasons.

00:31:26.000 –> 00:31:28.000You know when you’re self-employed, right, guys?

00:31:28.000 –> 00:31:31.000You know you’re supposed to be making estimated payments.

00:31:31.000 –> 00:31:33.000And I shouldn’t even say just self-employed.

00:31:33.000 –> 00:31:36.000Many people that are retired have to make estimated payments

00:31:36.000 –> 00:31:39.000because you have so many different places your money’s coming from

00:31:39.000 –> 00:31:45.000that you end up having to pay taxes every year so you pay in estimates based on the year before.

00:31:45.000 –> 00:31:48.000So if you’re doing that, and especially as a business owner,

00:31:48.000 –> 00:31:51.000you need to know you can’t really wait till the last minute

00:31:51.000 –> 00:31:55.000and the next thing you know you owe $15,000, $20,000 and you’re sitting there going,

00:31:55.000 –> 00:31:58.000“Oh my gosh, well if you made $80,000, guess what?”

00:31:58.000 –> 00:31:59.000You have a partner in business.

00:31:59.000 –> 00:32:03.000And for most small business–or I shouldn’t say small–for every business owner,

00:32:03.000 –> 00:32:07.000we have a partner called the IRS or the U.S. Treasury.

00:32:07.000 –> 00:32:08.000I don’t care how you want to call it.

00:32:08.000 –> 00:32:12.000And they’re 20%, 25%, 30%, 35% of our business.

00:32:12.000 –> 00:32:14.000And that’s of your profit.

00:32:14.000 –> 00:32:16.000Not of your gross, but of your profit.

00:32:16.000 –> 00:32:20.000They are partners, and it’s easier to think of it that way than to think,

00:32:20.000 –> 00:32:22.000“Oh my gosh, why are they taking so much of my–”

00:32:22.000 –> 00:32:26.000Because they’re your partner, I guess, is the only way I can explain it.

00:32:26.000 –> 00:32:28.000The fact is tax law is tax law.

00:32:28.000 –> 00:32:32.000And if you think you’re making money, you should have for every dollar you take out,

00:32:32.000 –> 00:32:37.000you should be putting 25% minimum into a savings account for the IRS.

00:32:37.000 –> 00:32:42.000And that’s not going to cover everything because most of us don’t take all the profits

00:32:42.000 –> 00:32:46.000out of our business, but we have to pay tax on all the profits of our business

00:32:46.000 –> 00:32:48.000if you have a pass-through.

00:32:48.000 –> 00:32:51.000LLCs, sub-S corporations, C corporations, right?

00:32:51.000 –> 00:32:54.000All of them are not C corporations, Schedule Cs.

00:32:54.000 –> 00:33:01.000All three of those–LLCs, sub-S corporations, partnerships, and Schedule Cs–

00:33:01.000 –> 00:33:04.000all of those are pass-throughs, which mean no matter if you put the money

00:33:04.000 –> 00:33:08.000in your personal checking account or it stays in the business account,

00:33:08.000 –> 00:33:11.000if you made $50,000, you’re paying tax on $50,000.

00:33:11.000 –> 00:33:14.000It could all be sitting there, and it doesn’t make any difference

00:33:14.000 –> 00:33:17.000because you’re still going to be liable for that tax.

00:33:17.000 –> 00:33:23.000And so you have to start setting aside that money, otherwise you’re going to be

00:33:23.000 –> 00:33:25.000sitting there going, “Oh wow, I didn’t know about that.

00:33:25.000 –> 00:33:31.000I had an older couple come in, and they sold some property and ended up

00:33:31.000 –> 00:33:34.000having to pay tax on that property.”

00:33:34.000 –> 00:33:37.000Now in this case, these guys were smart.

00:33:37.000 –> 00:33:39.000They took a big chunk of money and just set it aside.

00:33:39.000 –> 00:33:43.000They’re not touching it until I tell them how much money they owe in taxes,

00:33:43.000 –> 00:33:45.000and they did a good job.

00:33:45.000 –> 00:33:48.000They ended up putting more aside than what we have due in taxes.

00:33:48.000 –> 00:33:52.000But most of the time, people will go out, spend the money, or reinvest it even.

00:33:52.000 –> 00:33:57.000I have people that would go sell a piece of real estate and then put it back

00:33:57.000 –> 00:34:00.000into another piece of real estate, but they didn’t do it through a 1031

00:34:00.000 –> 00:34:01.000exchange.

00:34:01.000 –> 00:34:04.000They just sold and then repurchased, thinking that if I sell something

00:34:04.000 –> 00:34:09.000and I reinvest it, that somehow that eliminates the tax, and it doesn’t.

00:34:09.000 –> 00:34:13.000There is something called a 1031 exchange, and if it’s done properly,

00:34:13.000 –> 00:34:15.000it can eliminate the tax for now.

00:34:15.000 –> 00:34:20.000But most people are just looking at, “I took it, I spent it, and I then put

00:34:20.000 –> 00:34:23.000the money back,” and it doesn’t quite work that way.

00:34:23.000 –> 00:34:26.000And then now you’ve got a tax liability, and you can’t get the money back

00:34:26.000 –> 00:34:29.000because it’s tied up in this other asset.

00:34:29.000 –> 00:34:33.000So then you end up with a payment plan, and the IRS is probably one of the

00:34:33.000 –> 00:34:37.000world’s worst loan offices, seriously.

00:34:37.000 –> 00:34:42.000I mean, you have interest now that’s a little over 10%, and then you have

00:34:42.000 –> 00:34:46.000penalties that are basically 25% here, 25% there.

00:34:46.000 –> 00:34:51.000You can easily be at 50% penalties within six months, easily.

00:34:51.000 –> 00:34:55.000So you’ve got 60% above what you owed.

00:34:55.000 –> 00:35:01.000So if you owed $10,000, now you owe $16,000 within about six months.

00:35:01.000 –> 00:35:03.000So it’s not a game.

00:35:03.000 –> 00:35:09.000I mean, you really do, if you want to keep the IRS out of your bank,

00:35:09.000 –> 00:35:12.000you need to make some plans, you need to understand, and as a business owner,

00:35:12.000 –> 00:35:15.000you need to keep good records.

00:35:15.000 –> 00:35:19.000Just putting it together and estimating or trying to add it all up

00:35:19.000 –> 00:35:20.000isn’t going to work.

00:35:20.000 –> 00:35:23.000You need to do–I don’t care if you use Excel, I don’t care if you use QuickBooks,

00:35:23.000 –> 00:35:26.000I don’t care what format, I don’t even care if you use paper.

00:35:26.000 –> 00:35:30.000It doesn’t make a difference as long as you can track where the money came in

00:35:30.000 –> 00:35:33.000and where the money went out, and the difference is profit.

00:35:33.000 –> 00:35:34.000It’s that simple.

00:35:34.000 –> 00:35:37.000All right, guys, we’re going to take our last break.

00:35:37.000 –> 00:35:40.000That’ll be the end of this show, and then next Saturday,

00:35:40.000 –> 00:35:43.000we’re going to be talking about presents.

00:35:43.000 –> 00:35:45.000That’s right, we’re going to be giving away.

00:35:45.000 –> 00:35:48.000But right now, you can reach us here live in studio,

00:35:48.000 –> 00:35:57.000615-737-9986, 615-737-9986.

00:35:57.000 –> 00:35:59.000We’re going to take your call, talking about taxes,

00:35:59.000 –> 00:36:01.000or maybe you’ve received some sort of letters,

00:36:01.000 –> 00:36:05.000or you’re not too sure if you had an inheritance like Carol had or something,

00:36:05.000 –> 00:36:08.000and you’re like, “Do I need to be thinking about taxes on it?”

00:36:08.000 –> 00:36:12.000I will do my very best to hopefully cover that and help you figure it out.

00:36:12.000 –> 00:36:15.000We’re going to be right back with The Dr. Friday Show.

00:36:15.000 –> 00:36:20.000For business planning, business, and IRS negotiation, visit drfriday.com.

Part 400:36:20.000 –> 00:36:28.000[music]

00:36:28.000 –> 00:36:31.000All righty, we are back with the last bit of the show here.

00:36:31.000 –> 00:36:35.000So if you have a question, you’ve just been, “I really want to call, but I’m so scared.”

00:36:35.000 –> 00:36:38.000Don’t worry, we don’t take down names, we don’t take down numbers.

00:36:38.000 –> 00:36:43.000There is really no stupid questions because, let’s be honest, not all of us know everything.

00:36:43.000 –> 00:36:46.000If somebody was calling me about auto repairs or how to build a house,

00:36:46.000 –> 00:36:48.000I’m pretty sure I’d be the same way.

00:36:48.000 –> 00:36:52.000Taxes just happen to be the one thing that I have the best grasp on.

00:36:52.000 –> 00:36:56.000So if you have a question when it concerns the taxes or anything like that,

00:36:56.000 –> 00:37:01.000this is the show to call, 615-737-9986.

00:37:01.000 –> 00:37:04.000615-737-9986.

00:37:04.000 –> 00:37:06.000Again, next Saturday, put the number down.

00:37:06.000 –> 00:37:09.000You’re going to have some fun, lots and lots of giveaways,

00:37:09.000 –> 00:37:14.000and hopefully the phone lines won’t blow up and we lose the host system because we’ve gone crazy.

00:37:14.000 –> 00:37:16.000But that’s all right, that would be fun too.

00:37:16.000 –> 00:37:23.000But anyway, so we’re thinking about 2023, and I was just trying to run through a quick list in my mind.

00:37:23.000 –> 00:37:28.000Really the biggest thing I could say is, guys, if you are — and I keep pushing the entrepreneurs

00:37:28.000 –> 00:37:32.000because if you have to put together 12 months’ worth of income and expenses,

00:37:32.000 –> 00:37:37.000you’re bound to miss something if you’ve got them all spread out on your desk right now.

00:37:37.000 –> 00:37:41.000Unless it’s a really small business, therefore it’s not a big deal.

00:37:41.000 –> 00:37:43.000But, you know, do you have the miles?

00:37:43.000 –> 00:37:45.000And can you even take miles?

00:37:45.000 –> 00:37:48.000Some of my clients are only businesses that do remote, right?

00:37:48.000 –> 00:37:53.000So they don’t have a lot of things that they actually drive to unless they’re considering coming to my office.

00:37:53.000 –> 00:37:56.000And sometimes they don’t even do that, they do it remotely.

00:37:56.000 –> 00:38:02.000So I want to make sure that you have all of your home office expense.

00:38:02.000 –> 00:38:06.000That is still a legitimate expense, guys, if you have a physical home office.

00:38:06.000 –> 00:38:13.000If you’re sitting on your sofa or at your kitchen table with a laptop and you’re running your business, that’s not an office.

00:38:13.000 –> 00:38:15.000Just letting you know.

00:38:15.000 –> 00:38:18.000That is your kitchen table or that is your front room sofa.

00:38:18.000 –> 00:38:20.000So you cannot write that off.

00:38:20.000 –> 00:38:22.000It has to be legitimate space.

00:38:22.000 –> 00:38:24.000That’s the important part.

00:38:24.000 –> 00:38:31.000The legitimate space, it has to be able to identify a separate room with a desk, chair, printer possibly, whatever.

00:38:31.000 –> 00:38:35.000All right, so we’re going to hit the phones real quick with Melissa because I think she’s got an interesting question.

00:38:35.000 –> 00:38:37.000Hello, sweetheart.

00:38:37.000 –> 00:38:39.000What can I do for you?

00:38:39.000 –> 00:38:45.000>> We had to get some timber off of our land and I’m just trying to figure out, like, do we have to pay taxes on it?

00:38:45.000 –> 00:38:49.000And if so, how do we file that on our taxes?

00:38:49.000 –> 00:38:52.000>> So you do file timber.

00:38:52.000 –> 00:38:58.000It is going to — some companies at least will 1099 you as miscellaneous.

00:38:58.000 –> 00:39:00.000It’s not earnings per se.

00:39:00.000 –> 00:39:02.000It’s going to fall.

00:39:02.000 –> 00:39:08.000If you have — did you guys have to pay to replant or anything or did you just pay for the lumber to be removed?

00:39:08.000 –> 00:39:11.000>> Just for the lumber to be removed.

00:39:11.000 –> 00:39:12.000>> Okay.

00:39:12.000 –> 00:39:18.000So it’s just going to — it’s going to fall on the 1040, page schedule one.

00:39:18.000 –> 00:39:21.000But it’s basically just going to be other income.

00:39:21.000 –> 00:39:23.000You’re not going to pay self-employment tax on it.

00:39:23.000 –> 00:39:25.000It’s just going to show up as other income.

00:39:25.000 –> 00:39:28.000You probably don’t have much of a deduction.

00:39:28.000 –> 00:39:39.000It would theoretically, a lot of people would say it would depreciate the value of your land because if now it doesn’t have the mature lumber on it, it may be worth less today than it was.

00:39:39.000 –> 00:39:43.000So you could theoretically do a schedule D with a deduction of the difference.

00:39:43.000 –> 00:39:48.000But if you’re — the question is, Melissa, will it be replanted and will it come back up?

00:39:48.000 –> 00:39:50.000And we don’t have the answer to that.

00:39:50.000 –> 00:39:53.000So there is two trains of thoughts.

00:39:53.000 –> 00:39:58.000And you might want to talk to your tax person and bring the one up where it says depletion.

00:39:58.000 –> 00:40:11.000So basically you would take what the value of the property was before and what it would be valued afterwards without the mature trees and then take that as your cost against the cutting of the trees, which would then be a schedule D.

00:40:11.000 –> 00:40:20.000And you’d be able to reduce your money that you receive today because obviously these trees are probably 20 years, 30 years old, maybe longer.

00:40:20.000 –> 00:40:21.000>> Okay.

00:40:21.000 –> 00:40:22.000Okay.

00:40:22.000 –> 00:40:23.000Does that make sense?

00:40:23.000 –> 00:40:24.000A little bit?

00:40:24.000 –> 00:40:25.000>> Yes.

00:40:25.000 –> 00:40:26.000Thank you.

00:40:26.000 –> 00:40:27.000Yes.

00:40:27.000 –> 00:40:28.000>> Thank you.

00:40:28.000 –> 00:40:29.000All right.

00:40:29.000 –> 00:40:30.000Bye.

00:40:30.000 –> 00:40:31.000All righty.

00:40:31.000 –> 00:40:32.000Thank you so much.

00:40:32.000 –> 00:40:40.000Hopefully — and I would suggest in that case talk to your tax person, Melissa, because there is two ways and without having a direct conversation, there would be more information I would need.

00:40:40.000 –> 00:40:41.000All right.

00:40:41.000 –> 00:40:42.000Really quick, let’s hit Deli.

00:40:42.000 –> 00:40:44.000Is it Deli?

00:40:44.000 –> 00:40:45.000>> Yes.

00:40:45.000 –> 00:40:46.000>> Deli?

00:40:46.000 –> 00:40:47.000Oh, Deli.

00:40:47.000 –> 00:40:48.000Okay.

00:40:48.000 –> 00:40:49.000Cool.

00:40:49.000 –> 00:40:50.000What can I answer for you?

00:40:50.000 –> 00:40:54.000>> Hey, I was going to ask you an RMD question.

00:40:54.000 –> 00:40:55.000>> Yep.

00:40:55.000 –> 00:41:12.000>> I know you can give to charitable organizations, but I was wondering if you can give like your — I have two sisters, and I was wondering if I could give them a thousand or a couple thousand dollars each on an RMD.

00:41:12.000 –> 00:41:15.000>> You can’t because it wouldn’t do the same.

00:41:15.000 –> 00:41:22.000I mean, you could certainly write a check to them.

00:41:22.000 –> 00:41:25.000It just would not have a tax advantage to it.

00:41:25.000 –> 00:41:31.000With a QCD or qualified charitable deduction, which is what Deli is talking about, that reduces your taxes dollar for dollar.

00:41:31.000 –> 00:41:32.000Right?

00:41:32.000 –> 00:41:36.000So if you give $3,000 to your church, then it reduces your RMD by $3,000 straight off.

00:41:36.000 –> 00:41:40.000We don’t have to itemize the church or anything, and it reduces your income.

00:41:40.000 –> 00:41:45.000>> Okay.

00:41:45.000 –> 00:41:48.000>> But they’re not a legitimate nonprofit, so therefore, it really would just be under the gifting laws.

00:41:48.000 –> 00:41:49.000>> Okay.

00:41:49.000 –> 00:41:50.000So it would have to be a nonprofit.

00:41:50.000 –> 00:41:52.000>> They would have to be a legitimate nonprofit, yes.

00:41:52.000 –> 00:41:53.000>> Okay.

00:41:53.000 –> 00:41:54.000Well, I appreciate that.

00:41:54.000 –> 00:41:55.000>> Sure.

00:41:55.000 –> 00:41:56.000That is a great question, actually.

00:41:56.000 –> 00:41:58.000A lot of people like to think they’re kids.

00:41:58.000 –> 00:42:03.000They could like to give money, you know, if there’s any way of writing it off the taxes, and unfortunately, it’s not.

00:42:03.000 –> 00:42:05.000But it was a really good question.

00:42:05.000 –> 00:42:07.000Many people wonder about that.

00:42:07.000 –> 00:42:10.000All right.

00:42:10.000 –> 00:42:13.000We have a few more minutes left here.

00:42:13.000 –> 00:42:22.000So what we want to do is first, anyone that is an existing client to Dr. Friday, you need to get on the website, drfriday.com, and book your tax appointment.

00:42:22.000 –> 00:42:33.000If you are wanting to be a client of Dr. Friday, you need to call our office, and we need to take an appointment so we can see if we’re going to be on the same page, see if we want to be able to work together or not.

00:42:33.000 –> 00:42:41.000And again, if you’re an existing client to Dr. Friday, go onto the website, drfriday.com, click on calendar, and book your appointment.

00:42:41.000 –> 00:42:44.000You know how fast those things book up.

00:42:44.000 –> 00:42:49.000Then if you are not a client of Dr. Friday but would love to be one, I mean, come on, let’s be honest.

00:42:49.000 –> 00:42:52.000We have a fun time in our office during tax season.

00:42:52.000 –> 00:42:57.000If you want to see if we can help you, save you tax dollars, maybe prepare your taxes, not a problem.

00:42:57.000 –> 00:43:03.000Just give our office a call Monday morning at 615-367-0819.

00:43:03.000 –> 00:43:07.000We can then take an interview and see if we all feel like we want to work together or not.

00:43:07.000 –> 00:43:14.000Very important, you need to make sure that whoever handles your taxes as far as I’m concerned, you need to be on the same page.

00:43:14.000 –> 00:43:24.000You need to make sure that you’re able to communicate with them, that when you call, they answer, and that you feel that they have at least the ability to do the type of taxes that you want done.

00:43:24.000 –> 00:43:27.000If it’s not a good match, then you need to find someone that is.

00:43:27.000 –> 00:43:30.000But again, we all have the same concept.

00:43:30.000 –> 00:43:34.000We want to make sure that whatever we’re doing here in our office that we match well with our clients.

00:43:34.000 –> 00:43:46.000That way it makes it so much easier and so much smoother because, you know, after 25 years of business, I will say that there have been a few times where I have a mismatch of client and myself, and it’s never a smooth transition.

00:43:46.000 –> 00:43:51.000So at this point in the game, we really just like to make sure that we’re all on the same page.

00:43:51.000 –> 00:44:02.000If you would like to set up a pre-appointment, 615-367-0819, direct number to the office, 615-367-0819.

00:44:02.000 –> 00:44:06.000Also, there’s a tax organizer on drfriday.com.

00:44:06.000 –> 00:44:13.000Anyone that wants to start organizing their papers, if you want to just — and you don’t even have to use my services, guys.

00:44:13.000 –> 00:44:16.000If you’re looking for a tax organizer, you can download it.

00:44:16.000 –> 00:44:20.000It will help you preempt whatever — or even if you do your own taxes.

00:44:20.000 –> 00:44:24.000It may help you think about — ask some questions that maybe you don’t think about.

00:44:24.000 –> 00:44:28.000I mean, I know some of these online softwares, apparently they ask a lot of great questions.

00:44:28.000 –> 00:44:31.000You know, just something, but it’s free.

00:44:31.000 –> 00:44:42.000You can download it, and that way you can go ahead and, again, for all Dr. Friday clients, if you haven’t received one, just go to drfriday.com, click on tax organizers.

00:44:42.000 –> 00:44:43.000It’s there.

00:44:43.000 –> 00:44:44.000Download it.

00:44:44.000 –> 00:44:51.000Go ahead and start filling it out, getting your paperwork all organized so that we have a nice little quick, simple tax season.

00:44:51.000 –> 00:44:53.000That will be our goal this year.

00:44:53.000 –> 00:44:54.000Always my goal, 25 years.

00:44:54.000 –> 00:44:57.000I can’t say I’ve ever succeeded yet, but you know what?

00:44:57.000 –> 00:44:59.000It’s always nice to have goals.

00:44:59.000 –> 00:45:06.000If you would like to talk about tax as an enrolled agent, what we do, of course, is tax preparation.

00:45:06.000 –> 00:45:11.000We do all tax returns, business, individuals, nonprofits, trusts.

00:45:11.000 –> 00:45:16.000We handle all of them, and we handle all different states because we’re licensed by the IRS.

00:45:16.000 –> 00:45:17.000We’re licensed for all states.

00:45:17.000 –> 00:45:20.000We’re not just licensed by one state.

00:45:20.000 –> 00:45:29.000That being said, so if you have a question and you need something done or you’re getting love letters and you’re not too sure, the easiest thing is to take an initial consultation.

00:45:29.000 –> 00:45:32.000My initial consultations are always free.

00:45:32.000 –> 00:45:33.000Why?

00:45:33.000 –> 00:45:35.000Because I want to make sure we both are on the same page.

00:45:35.000 –> 00:45:36.000Pretty simple.

00:45:36.000 –> 00:45:39.000So if you want to do that, you need to call the office.

00:45:39.000 –> 00:45:45.000It’s the easiest way to get an appointment and also to have a quick phone conversation to make sure we can help you.

00:45:45.000 –> 00:45:51.000That number again is 615-367-0819.

00:45:51.000 –> 00:45:55.000You can email Friday@DRFriday.com.

00:45:55.000 –> 00:45:59.000Also, the 615-367-0819, you can text.

00:45:59.000 –> 00:46:06.000So if you want to text something like just, “Hey, give me a call,” or whatever, that’s the easiest way to make this work.

00:46:06.000 –> 00:46:09.000So text, email, or go to the website.

00:46:09.000 –> 00:46:12.000You can also send a link right through the website and do that.

00:46:12.000 –> 00:46:25.000If you’re an existing client and you haven’t yet got the Smart Vault uploaded, then again, send an email to me and we’ll get you the link so that way you can start uploading your tax documents as they start arriving.

00:46:25.000 –> 00:46:29.000Let’s try to keep everything nice and neat and clean and secure, right?

00:46:29.000 –> 00:46:33.000We don’t want to have any issues with, you know, all you hear about is issues.

00:46:33.000 –> 00:46:42.000So last time, 615-367-0819 or Friday@DRFriday.com.

00:46:42.000 –> 00:46:43.000Hope you have an awesome Saturday.

00:46:43.000 –> 00:46:44.000Cop you later.

00:46:44.000 –> 00:46:44.500Cop you later.

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In this episode, Dr. Friday discusses the significant changes brought by Notice 2308, issued in May 2023, regarding the Tennessee Work Tax Act. This new legislation is a boon for small businesses in Tennessee, increasing the business tax filing threshold from $10,000 to $100,000. Dr. Friday emphasizes that while this increase might not affect the requirement for a business license, it potentially reduces the tax burden to zero for many small businesses. She advises listeners to consult the Tennessee Department of Revenue or use the TINTAP system to ensure they are not overpaying taxes. As always, Dr. Friday remains committed to helping listeners navigate the complexities of tax regulations.

TranscriptG’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Notice back in 2023 of May, Notice 2308, Tennessee Work Tax Act increased business tax filing threshold. With all that being said, this is actually good news. If you are a small business in Tennessee, we’ve always had to pay a business tax. Basically $3,000 or less, up to maybe $10,000 it was zero, right? But now, up to $100,000. That’s right. Doesn’t mean you might not need your business license, it may just mean that you have a zero tax. You need to check with Tennessee Department of Revenue, go onto your TINTAP, check it out. Make sure that you’re not paying taxes, you shouldn’t.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Summary: In this insightful episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday discusses the significant changes introduced by the SECURE Act 2.0, effective from December 31st, 2024. She emphasizes the new opportunity for individuals aged 60 through 63 to make enhanced catch-up contributions of $10,000 towards their retirement savings. Highlighting the increasing costs of retirement, Dr. Friday urges listeners to begin planning their finances to take full advantage of these higher contribution limits. She also reminds those 50 and older of their current $7,500 catch-up contribution option, underscoring the importance of proactive retirement planning. Tune in to Dr. Friday’s Call-In Show every Saturday from 2 to 3 p.m. on 99.7 WTN for more valuable tax and financial advice.

Transcript: “G’day, I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Secured Act 2.0, beginning December 31st, 2024, catch-up contributions for age 60 through 63 is $10,000. Again, guys, the IRS, or the U.S. Treasury, and all the people involved are trying to help us prepare for retirement. It’s more expensive today than it was 10 years ago. We need to really start concentrating on putting money aside. You still have up to $7,500 for those 50 years plus, but you can actually put a little bit more. So start planning today how you’re going to come up with that extra money so you can set yourself up for a great retirement.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.”

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In this informative episode of ‘Dr. Friday Tax Tips – One Minute Moment,’ Dr. Friday, President of Dr. Friday’s Tax and Financial Firm, highlights the recent changes in Required Minimum Distributions (RMDs) for individuals over 72 years old. She explains that as of December 31st, 2022, the age to start RMDs has been updated to 73, aligning with the reality that people are living longer. This change simplifies the process for many, as the previous threshold of 70 and a half years often caused confusion about the correct year to commence RMDs.

TranscriptG’day I’m Dr. Friday, President of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.Required minimum distribution. Now for all those that have turned 72 after the year of December 31st 2022, you will now start your RMDs at 73. Which is great because people are living longer and then having it at 70 and a half made it difficult for some people to really figure out what year they should be taking their RMDs. So at this point it’s at 73, the year that you turn 73, if you have December 31st you need to take it in that year. There is an exclusion for the first year up until April the following but basically let’s keep it simple. Year you turn 73 you need to take your RMD.You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday, a tax expert with 25 years of experience, delves into the importance of proactive tax planning. Whether you’re familiar with her or just tuning in, she offers insights on what you should be considering for your taxes. With a busy season ahead, Dr. Friday emphasizes the avenues through which listeners can reach out with their tax queries. Plus, discover more about her weekly live call-in show on 99.7 WTN.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

My name is Dr. Friday. Many of you guys are probably listening to me on Saturday at 2 o’clock, but this is the one-minute moment which hopefully is going to make you think. It’s about talking about things we need to do or things you should be planning on for your taxes. If you’ve got tax questions you can always email Friday@drfriday.com It’s a busy time right now, and I know the phone lines are really busy, but you can try calling 615-367-0819. And if you just have no idea who I am, go to drfriday.com. It’s gonna tell you that I’ve been in business for 25 years and been doing taxes, helping people with the IRS, and I can help you.

You can catch the Dr. Friday Call-In Show Live every Saturday afternoon from two to three p.m. right here on 99.7 WTN. We’re on 99.7 “W-T-N.”

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In this episode of Dr. Friday Tax Tips – One Minute Moment, Dr. Friday, a seasoned tax expert and president of Dr. Friday’s Tax and Financial firm, delves into the tax implications of the new unemployment benefits introduced by the act passed on December 21, 2020. She explains the additional $300 weekly benefit and emphasizes the importance of understanding that these unemployment benefits are taxable. Dr. Friday offers practical advice on managing withholdings to avoid IRS issues, especially crucial for those relying on these benefits as their primary income source. For more insights and assistance, visit www.drfriday.com and tune in to the Dr. Friday call-in show every Saturday afternoon from 2 to 3 p.m. on 99.7 WTN.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Under the new act that passed on the 21st of December 2020, many people started to qualify for additional unemployment benefits. That would have been a $300 additional weekly deduction or income for you. Remember, unemployment benefits are taxable so you want to make sure that you’re having withholdings come out unless that is the only income you’re going to have for the whole year, which is a little hard to tell when it’s only first quarter. So I would always suggest having at least a minimum amount of tax come out so you don’t end up with having IRS issues just because you’re trying to survive when you’re unemployed. If you need more information you can go to www.drfriday.com.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Join Dr. Friday, a renowned tax expert and president of Dr. Friday’s Tax and Financial firm, in this intriguing one-minute episode of her podcast. She addresses a frequently asked and quirky tax question: “Can I deduct my dog as a security system?” As a dog lover herself, Dr. Friday shares her personal experience and expertise, providing a clear, engaging explanation about the tax implications of considering your furry friend as a security system. Whether it’s her beloved Great Danes or your household pet, this episode is a must-listen for pet owners navigating the complexities of tax deductions. Visit www.drfriday.com for more information, and don’t miss Dr. Friday’s live call-in show every Saturday from 2 to 3 p.m. on 99.7 WTN.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

I love this question. I am asked it, oh goodness, at least a few times every time I prepare a tax return every month. Can I deduct my dog as a security system? And I love it because, I mean, I’m a dog lover. You guys all know that. I’ve got two beautiful Great Danes and no, they are nothing more than my babies. That’s all they are and I would love to take their food bill off. Come on guys, 180 pounds worth of dog isn’t exactly a cheap thing to feed. But that being said, if your dog is not actually rocky around the outside of your building securely and it’s not a family pet, then yes, it’s security. But if it’s your best buddy, I’m sorry, you can’t deduct your pet.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this informative episode of Dr. Friday Tax Tips – One Minute Moment, Dr. Friday, a seasoned tax expert and president of Dr. Friday’s Tax and Financial firm, delves into the complexities of dealing with errors on tax forms. Whether you’re facing inaccuracies in 1099s or W-2 forms as an employee or employer, Dr. Friday provides clear guidance on how to navigate these challenging situations. She explains the steps to take if you find mistakes in your tax documents, such as incorrect income amounts, wrong categories on 1099Rs, or errors in W-2 forms like address, name, or social security numbers. Additionally, Dr. Friday offers solutions for instances where contacting the employer isn’t an option, highlighting the specific forms that can be filed to rectify these issues. This episode is a must-listen for anyone seeking practical advice on handling tax form discrepancies and ensuring accuracy in their tax filings. For more expert tax advice, visit www.drfriday.com and tune into the Dr. Friday call-in show every Saturday afternoon on 99.7 WTN.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

What happens if you’re looking at your tax forms and you just found out that there’s a mistake? Someone either 1099’d you for too much money, too little money, they have the wrong categories on your 1099Rs, you did someone’s W-2 and the information, the address, the name, the social security number is wrong. What should you be doing? If you’re the employer, it’s a pretty straight answer. You need to do an amended W-2 or 1099. But what happens if you’re the receiver? What if you can’t get a hold of the employer? Well guess what? There are forms that you can file that would correct that information if you’re unable to correct it through your employer. If you need help, go to drfriday.com.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this brief yet insightful episode of the “Dr. Friday Tax Tips – One Minute Moment” Podcast, Dr. Friday, an experienced enrolled agent and president of Dr. Friday’s Tax and Financial firm, shares valuable guidance for dealing with tax issues. Licensed by the IRS for tax preparation and representation, Dr. Friday emphasizes the importance of having professional support when facing tax challenges. She understands the difficulties of falling behind on taxes and offers a compassionate approach to finding solutions tailored to individual needs. By scheduling a free appointment through her website, listeners can take the first step towards resolving their tax problems and gaining peace of mind. Plus, don’t miss the chance to join the Dr. Friday call-in show live every Saturday on 99.7 WTN for more tax insights.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

We are here to talk about taxes. I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation, which just means guys I’m here to help you. I’m here to represent you in front of the IRS. You need someone on your side. It’s not easy. When you get behind on taxes, I totally relate to what that is and how hard it is to get back on your feet. But there are ways, there are systems, and I can help you find that system that’s going to work for you. But the first thing you have to do is you have to go to www.drfriday.com and you have to click on appointment and you have to set up an appointment for me to get with you and it’s a free appointment so there’s no excuse not to have the conversation.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this enlightening episode of the Dr. Friday Tax Tips – One Minute Moment Podcast, Dr. Friday, an expert in tax and financial matters, delves into the complex tax implications faced by individuals who took early Social Security or received disability benefits during the challenging year of 2020. She discusses how additional income, such as wages from part-time jobs, can affect the taxability of Social Security benefits, including the potential need to repay a portion of these benefits. This episode is a must-listen for anyone navigating the nuances of Social Security and disability benefits in their tax planning. Don’t miss Dr. Friday’s insights to make informed financial decisions.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Due to the hardships of 2020, many people had to reach out to other situations. Maybe you took early Social Security, which may have limited your earnings. Or maybe they’re also getting long-term disability, but you also had somebody in the house that was working. So you need to determine long-term Social Security in itself from disability Social Security is not taxable unless you have other income. Same thing with any Social Security benefits. But if you’re working a job on the side, you might be making your Social Security not only taxable, but if it’s early Social Security, you might be paying back $1 for every $2 you’ve earned above the limitations.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this concise and informative episode of Dr. Friday’s Tax Tips – One Minute Moment, Dr. Friday, a seasoned tax expert and president of Dr. Friday’s Tax and Financial firm, delves into the significant tax changes that occurred at the end of 2018, particularly focusing on divorce and its implications on alimony and child support. She explains the pivotal shift in how alimony payments are treated for tax purposes post-2018 divorce settlements, contrasting it with the previous regulations. Additionally, she touches on the tax treatment of child support, a long-standing rule in tax law. This episode is essential for anyone navigating the financial complexities of divorce, providing clarity on how these changes might affect their tax obligations. For personalized advice, Dr. Friday encourages listeners to reach out to her team directly.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

We had some big changes again at the end of 2018, first of 2019, divorce. Up until that point if you paid somebody alimony, the person paying would reduce it, would take it off as a tax deduction, and the person receiving would actually pay tax on it. Now it’s a little different. If you are not, if you’ve divorced after the end of 2018, then you now don’t pay tax and the person paying it doesn’t get to deduct it. Same thing with child support which has never been a deduction on the tax return. So if you’re not sure if you should or should not be reporting it, you need to call us at 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of Dr. Friday Tax Tips – One Minute Moment Podcast, Dr. Friday, a seasoned enrolled agent and president of Dr. Friday’s Tax and Financial firm, shares her expertise in tax and financial matters. Known for her weekly radio show and her deep involvement with tax issues all year round, Dr. Friday delves into the common challenges taxpayers face. Whether it’s the fear of IRS attention, the complexities of buying a home, or funding education, taxes can be daunting. Dr. Friday addresses these concerns with practical advice and reassurance. She emphasizes the importance of not avoiding tax issues and offers her professional assistance to those struggling. Tune in for valuable insights and solutions to your tax woes.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

I’m an enrolled agent licensed with the Internal Revenue Service to do taxes and representation. I do a radio show every Saturday at 2 p.m. right here on this station and I talk about taxes 365 days a year, sometimes 366 depending on the year, and it’s awesome. But if you need help, I understand taxes can be overwhelming. It can be a time when you basically just want to put your head in the sand and say no, if I don’t say anything the IRS won’t catch me. It makes it a little difficult to buy a home, put your kids through college, or even just get back on your feet. If you need help doing this you need to start by calling us at 615-367-0819. We can help you with the IRS.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this insightful episode of Dr. Friday Tax Tips – One Minute Moment, Dr. Friday, the renowned president of Dr. Friday’s Tax and Financial firm, delves into the tax implications for young entrepreneurs, particularly focusing on newspaper carriers. A listener inquires if the income earned by their son as a newspaper carrier is subject to Social Security and Medicare taxes and whether filing a Schedule C is necessary. Dr. Friday reflects on her own experiences as a youth, undertaking similar jobs, and offers expert advice. She clarifies that earning over $600 classifies one as self-employed, necessitating proper income reporting on Schedule C. The episode is not just informative for parents of young workers but also enlightening for anyone employing or engaging with young entrepreneurs. For personalized guidance, Dr. Friday encourages reaching out to her office. Plus, don’t miss the opportunity to catch Dr. Friday’s live call-in show every Saturday afternoon for more tax insights.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

I think this is always a great question. It says, my son is a newspaper carrier. I would like to know if his income is subjected to Social Security and Medicare and if he needs to file a Schedule C. And that’s a great question because I don’t know about a lot of people, but I did grass cutting as a kid. I did newspaper delivery and I really don’t know what my parents did in those days. But I will tell you, if this person makes more than $600, they are considered self-employed. And so you might want to make sure that that income is being reported properly and it would be on a Schedule C. If you need help determining this, 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this Dr. Friday Tax Tips – One Minute Moment Podcast, Dr. Friday, an expert in tax and financial matters, addresses a common confusion faced by many taxpayers. A listener questions receiving a 1099 form instead of a W-2, despite not being self-employed. Dr. Friday explains the significant differences between the two forms, highlighting how misclassification can occur and its implications. She emphasizes the characteristics of a 1099, typically issued to self-employed individuals or consultants, in contrast to a W-2 form meant for regular employees with deducted taxes. For those facing this predicament, Dr. Friday advises on possible steps, including reaching out to the Department of Labor, to rectify this misclassification. Visit www.drfriday.com for more information and tune into the Dr. Friday call-in show live every Saturday from 2 to 3 p.m. on 99.7 WTN.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

I have a person that says, I received a 1099 instead of a W-2, but I’m not self-employed. How do I report this on my tax return? Well, sounds like misclassification if you’re not self-employed. A 1099 would be for individuals that are operating their own business or being paid in that situation. So if you’re consulting or something like that, you are considered self-employed. An employee is someone that receives a W-2 where deductions have come out of your check. So if you’re working for someone that is not treating you as a W-2, that is misclassification and you might want to contact the Department of Labor. If not, you can go to drfriday.com.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this concise, one-minute podcast episode, Dr. Friday, the president of Dr. Friday’s Tax and Financial firm, delves into the advantageous world of 1031 exchanges. She enlightens listeners on how to leverage this tax ruling to swap rental properties across states without immediate tax consequences. Whether you’re dealing with farmland, commercial spaces, or any investment properties, Dr. Friday explains how a 1031 exchange can be a powerful tool in your investment arsenal, akin to retaining tax dollars in real estate similar to a 401k. For personalized guidance, she invites listeners to visit her website. Plus, don’t miss the opportunity to join Dr. Friday’s live call-in show every Saturday on 99.7 WTN for more insightful tax and financial advice.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

One of my favorite tax, I guess you would say ruling, is a 1031 exchange. That would be is if you have a rental property and let’s say it’s, I don’t know, maybe you live in Utah and you move to Tennessee and so you decide to sell that one and you want to have another rental property here in Tennessee. You might want to sell the one in there and exchange it so that there’s no tax consequence to you at this time. You can do this on farmland, commercial, any kind of rental or investment properties. This is a great way to continuously grow your money. Think of it like a 401k where you keep tax dollars in your real estate. You need help? Go to www.drfriday.com.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Welcome to another episode of the Dr. Friday Radio Show! In this episode, tax expert Dr. Friday delves deep into the complex world of taxes, offering clarity, guidance, and solutions for listeners. Here are some of the topics she addresses:

• Nonprofit Tax Compliance: Understanding the IRS regulations for nonprofits, particularly the importance of filing the 990, 990-EZ forms to maintain nonprofit status.
• Charitable Contributions: Insights on verifying the legitimacy of charities, especially for online and overseas donations, and ensuring they qualify for tax deductions.
• Personal Tax Situations: Addressing unique tax scenarios that arose in 2023, including inheritance taxes and selling properties with shared interests.
• Tax Basis Tracking: The importance of accurate tracking for tax basis in properties to ensure correct capital gains tax payments.
• Gift Tax Concerns: Guidance on gift taxes and how to navigate them, especially in anticipation of potential tax law changes in 2026.
• Estate Planning: Emphasizing the need for wills and trusts to ensure your assets are distributed according to your wishes and not left to default government plans.
• IRS Representation: Offering advice on dealing with the IRS, including the significance of having an enrolled agent for representation in tax issues.
• Tax Planning for Life Events: Discussing how life changes like marriage, divorce, or job switches can impact tax liabilities and the need for proactive tax planning.
• Year-End Tax Strategies: Tips on year-end tax strategies for individuals and businesses, including adjusting W-4s, managing investment losses, and maximizing retirement contributions.
• Tax Loss Harvesting: Strategies for leveraging investment losses against capital gains for tax benefits.
• Retirement Contributions and Distributions: Guidelines on required minimum distributions from retirement accounts and the impact of various types of contributions.
• Updating Personal Information: The importance of keeping personal information up-to-date with financial institutions and the IRS for accurate tax record-keeping.
• Tax Record Retention: Advice on how long to keep tax records and the best practices for storing them securely.

Join Dr. Friday as she navigates these and other tax-related topics, providing valuable insights for effectively managing your taxes.

TranscriptPart 1: 0:00Announcer 0:00 Oh, no, no, no, she’s not a medical doctor, but she can share cure your tax problems or your financial woes. She’s the How to girl. It’s the doctor Friday show. If you have a question for Dr. Friday, call her now. 737-WWTN that 737-9986. So here’s your host, financial counselor and tax consultant, Dr. Friday.

Dr. Friday 0:30 Good day, I’m Dr. Friday and the doctor is in the house. We are here live in studio today. So if you have any questions, you can jump right on the phone 615-737-9986 – 615-737-9986.

I want to touch on a couple things that have come up this week. One of the big things I think the IRS and it really just depends on when your nonprofit started, you have three years if you have not filed a 990 in or 990 or 990 ez, they will discontinue or dis basically remove you from the nonprofits. I’ve had a couple phone calls this last couple of weeks on this situation. So if your nonprofit has received that love letter saying, you know we’re determination has been removed for your exemption, you do need to deal with that issue. You cannot continue to be a nonprofits, you can’t continue to take money if you’re if you don’t have in good standing. And that’s something for people that are giving money irs.gov You can just up in the search put in charitable content, charity, charitable nonprofits, that’s where it says nonprofit, sorry. And under that you can search for any nonprofit that you’re giving money to.

Because if you’re giving money to something that’s online, many of those organizations are not legitimate nonprofits. Also keep in mind that if you are not going to have if the money is going overseas, if it’s going to a family that you’re trying to help, those are not legitimate nonprofits. So you know, you want to make sure that if you’re going to plan to give it or take it off your tax return, that the are legitimate or even in good standing. I mean, if you think Well, hey, it’s our local church. Now, many times churches actually kind of fall in this little protected zone, but many other organizations that you give to wounded warriors, a great organization, any of those kind, you know, if you’re never sure you can go to irs.gov up in the search box nonprofit, and look up that organization so you can see what they have and where they’re, you know, what’s going to be and if it’s going to be a legitimate tax deduction, at least if you give with the idea that you know, it’s not, then who cares? But it is sometimes on those organizations that aren’t the same way.

So if you’ve got questions, or maybe you have some situation where something different happened in 2023, that maybe you haven’t had happen in 22, or earlier years, and you’re just not too sure exactly how you’re supposed to treat this situation, you can certainly give me a call here in the studio at 615-737-9986 615-737-9986 is a number here in the studio, you can give us a call and we can try to help you figure out what the next step is. Or if I don’t know the answer, I’ll send you either to someone that should or I will find out the answer one way or the other will be able to take a look and review and see if there’s a way of making whatever the situation is most important is really knowing or understanding how much money you might owe.

So I mean, many times I’ve had situations, the biggest probably is inheritance, because some things are and some things are not taxable. But also the same thing is when someone’s going to sell one of their rental properties or their second home, or a home that maybe they went into with their mother or father. And so that person’s passed away, and now they’re selling that house, but they only had half interest in in how that would work for your basis and making sure that you’re tracking that basis correctly. So that way, when you file your taxes, if there’s money due, then you pay tax on that capital gains, if there is no money due then you don’t have to pay tax on it.

But it’s very important to follow it through and make sure you understand how that’s going to work. So again, tracking that making sure it’s there and doing it is the very important part of anything you do with taxes. I mean, anytime I have a couple situations, because you know, I talked quite a bit about gifting. And, you know, I had a really interesting conversation with a gentleman that we actually called in on the radio show earlier, another time, but it was interesting to the extent that he was thinking outside of what if I give a lot Have a million dollars today.

And then obviously tax law changes, and then that person ends up with a gift tax a lifetime gift tax that could come back at you. And so making sure that you’re not exceeding certain things, but also trying to maximize those. So that way, you end up with not having a higher estate, because theoretically, in 2026, the estate tax will go down to 5 million, which for a lot of people that may seem like a lot, but when you consider retirement and the home value, and those kinds of things, it’s not necessarily a lot, and therefore, there’s gonna be a number of people, if you’re married,

might be fortunate because you can do a B, or you can have the one person you know, each of you have 5 million, so theoretically, the the family would be able to do $10 million, where if you’re single, and you have 5 million or more than you don’t really have the ability to shield it the same way. So it’s important to try to find out and I am working on trying to get someone like Russ cook, or one of my attorney, friends that do estate planning, to see if there’s anything we can be doing in the next few years to shield or protect our assets, if there’s anything that can be done, or if it’s pretty much going to be that you can’t do anything more than what the what we have already. But it’s going to be important. And also, I’m a huge advocate for individuals having either at least a will.

Right. And I don’t know, guys, I don’t sell this product, it’s not something. But I have seen too many people that have had to deal with situations when someone has passed away, and there was no Well, yet everyone knows kind of what the people’s wishes were. But that doesn’t make a difference. Because if you don’t have a well, the government has a plan for you. And it’s nine times out of 10 not going to be the plan that you want for yourself. So again, you know, something simple as as a certified Well, or whatever you have to do for Well, again, I use Russ cook and Associates, but there are many places I’m sure Legal Zoom would even be better than not having anything at all.

But going to someplace and making sure I mean, you’ve worked so hard to have everything. And you know, and then not having that protection, because you you know, you think well, everything will go to my wife, so I don’t have to worry about but no, that’s not the case. If you have children and your wife and you die without a will money, some of that money is going to go immediately to the children and the in the spouse may not get what you think should be hers or his. So again, just too many times seen it on my side of the desk that I think anybody and I don’t care how old or young you are. Because if you have children, you should have a well, because you want to tell people what would happen to the children. If you are older, you need a well, you know, I mean, there’s no age on wills, maybe there is in some ways people might say a trust. Not sure if that’s true.

But I’m gonna say that at least with a trust, it’s usually more about assets. And if you have none, not important, but if if you do have assets, you do want to also protect those in the best way to do that, in my opinion. And again, guys, I’m not talking as an attorney, I’m talking as a tax person. And a person that has helped many people have to deal with estates when the when someone has passed away. And the trust is always a better deal with a poor overwhelmed that goes through probate instead of instead of the entire decision being made in court. So if you don’t if you have a question, not concerning, necessarily that because again, I’m not an attorney, and I’m not too sure if I can answer a lot of those questions.

But I absolutely am an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. So that’s the kind of questions we could ask. If you have tax issues, maybe you haven’t filed taxes in a number of years. Maybe you have filed taxes, but you’re having some issues, love letters are coming in, you have some problems, and you’re looking to see if there’s any way of getting the resolution. You know, in dealing with the situation, you may not always like it I have a gentleman I’ve been working with. He’s actually one of the the most easygoing people I’ve ever worked with, to be honest with IRS issues not to say that most people but he’s willing to make all preparations and reparations to the IRS, it’s just that we’ve had a heck of a time getting the revenue officer on the phone.

And that’s not the norm. But But that being said, it is definitely a situation where you know, if you’re having to deal with the IRS, sometimes it’s nice to have someone else help in dealing with them instead of trying to do it heads on yourself. And again, as a EA an enrolled agent, that is exactly what we’re licensed to do to help give representation to taxpayers in front of the IRS. So if you’re not too sure if you’re dealing with your taxes correctly, or maybe you have even children I mean, I can’t tell you how many parents have called me and said, hey, you know what? I just found out that my son hasn’t filed taxes in 10 years or, you know, he’s just married someone and they hadn’t filed taxes in 10 years. I will suggest this if you’re in the process of getting married.

You know, I don’t I mean, again, this is from someone that is not married. So maybe this because this conversation never comes up. But it just seems like it should. It just seems like you know, you’re gonna sit down before you get married and narrow talk about how the bills are going to be paid, if you have student loan interest, or if you have credit cards, and yeah, do you owe the IRS? Those just seem like normal questions that should happen before you actually get married to somebody? Because how are you going to know much about their finances, and I’m sorry, when you get married, you are merging the finances until after the wedding, and then you find out that they haven’t filed for 10 years, that’s got to be a little bit of a shocker.

So I’m suggesting to anyone out there that has not yet married but thinking of it, maybe you don’t want to have that conversation. But I mean, if that’s the worst conversation you’re ever going to have in a marriage than I’m thinking that should be awesome. But I’m sure there’s gonna be a lot more hard. And what’s more complicated. So if you can’t have that conversation, I’m gonna be a little concerned on the big conversations that you’ve got to come up in life, how that’s going to work. So if you’re not too sure, that is a bit of wisdom from someone that, you know, her marriage didn’t last very long, so probably not the best, but I could tell you all about his finances.

Sure, that’s an important thing. All right. So if you want to join the show, it’s very easy to do pick up the phone 615-737-9986 615-737-9986 We’re gonna get ready here to take our first break. So hopefully, many of you guys are probably still out. I know, veterans day it was yesterday. But I saw a lot of people still celebrating today for Veterans Day. And, and I do want to put a big hay out to all veterans. We do a lot of work with veterans, pro bono, to help some of them that have gotten into, obviously tax situations, but totally respect anyone that serves this country. So thank you for for your service. All right, we’re gonna take our first break. When we get back, we’ll get to the phone lines and the emails again, phone number 615-737-9986, or email Friday at Dr. friday.com. We’ll be right back.

Part 2: 12:31All righty, we are back here live in studio. And if you have a question, you can certainly join the show 615-737-9986. So I know we’re getting close to the end of the year. So I thought I might run through a few things that individuals and businesses might want to start thinking about. Okay, so the first thing would be is to make sure that your W four information is correct. So if have you moved? Have you gotten married? Have you divorced? Have your kids gotten over the age of 17?

Do you need your current employer, but have you moved or relocated and had other jobs through the year of 2023. Because if you have, now’s the time before it gets crazy, and they’ve already printed, and they can theoretically bill you to get an updated w two, now is the time to update your W two. So think about it, get your information because the W four is what they use to make the W two. So you might want to consider taking that information. So another thing you want to look at is, is there any losses you’ve been wanting to go ahead and clean up your portfolio?

Let me put a caveat out there. I am not a financial planner, just as I’m not an attorney, I cannot tell you if now’s the time to clean out your portfolio or not. But many of my clients manage their own finances. So if they’re managing their own finances, then we might be the time to go and look and see if it’s time to sell something because you either made some good capital gains or sell something because you’ve already got losses and it’s you know, you’re the capture them now versus the offset other gains. So, you know, we only really have about a month and a half, now’s the time because with Thanksgiving and Christmas in the middle of that time period.

A lot of financial people, brokers, bankers, let’s be honest, people are in and out of town for the next month. So double check to make sure you have that in then take a look, talk to your financial but require minimum distributions. There’s been a lot of changes, you know, if you were 7071 7273 I think it is nowadays. When you’re supposed to start taking your requirement on distribution but have that plan put into play. If you’re already 71 or two, maybe you need to make sure that you have that setup to automatically distribute less? Thank you.

tribution, I’ve had that situation where somebody has passed away. And they didn’t really realize that they were supposed to be taking an RMD out of the inherited IRA that they received. And there’s been so many different things. But the year after the person passes away the next the next year, because the year when someone passes away that the RMD is automatically given to the person that the passed away, the next year, you are on inherited IRAs, traditional IRAs, and I even think you have to take and there may be a financial planner out there that’s listening.

But I’m not too sure if you have to take RMDs out of a inherited Roth. But I do know you have like a 10 year window to take all of that out. So you might want to consider again, having those conversations now when it’s not so crazy, because financial planners go through a lot of the craziness that as a tax accountants do. And to the extent that when we’re doing taxes, it’s hard to take that time and just sit down and really have the review and the conversation. That’s why I encourage most of my clients to be coming in now till the end of the year, because it’s so much better than trying to have a conversation in the middle of February when we have 30 minutes cycles, you know, and it just isn’t very conducive to good conversation. So putting that out there. Now, you know, possibly boost your pre tax contributions, you now know, where are you at?

Did you actually have some inheritance? Or do you have an IRA where you have to take money out? Or are you had a higher distribution of some sort, considering maximizing your 401 K at work, because then you might be able to offset some of the gains against the losses, you know, you reduce your income at work, because you have less than you’re getting the money on the other side. So again, playing the game to try to keep you in the lowest tax brackets. Another thing again, talk to your financial planner, guys, but I can’t tell you now is when the phone has just gone crazy. And it’s all about doing the Roth conversions.

People a lot many people handle their own. And there’s a lot of financial planners that I work directly with. And in those situations, they call and they like okay, well, we want to maximize the 12 we want to maximize the 22 we want to maximize whatever tax bracket, how much can they take out to maximize that said bracket because we want to do a conversion up to or for that basic situation. So again, making sure that right now’s the time making sure that you know all of your information. So if you are if you have relocated or moved or done anything, and your address has not been updated, it’s going to make it hard to get your tax records.

If they don’t have the right now I know many of these organizations nowadays you can download your W TOS or your 1099 RS or your 1090 nines. But just in case, you might want to make sure that that information has been updated. Also, you’re gonna want to make sure that you have done the review on your financial situation just to make sure is there anything I can be doing right now before the end of the year to maximize or I should say minimize my taxes maximize my growth of whatever it is I want to do you know, let’s not wait to that very last minute. Because you can’t contribute to your 401 K after the end of the year. Now you can if it’s a personally held one for yourself, but that’s usually considered a SEP but if you work for an employer, they take it out of your paycheck once that final check comes through. And many times I don’t know what the calendar year this year, but most of the time your last check in December is the one that you have not the last week you’ve worked but the last check that you would receive.

So December 29 is the last Friday in December now some people get paid on the 15th and 30th. So the 38th would be the final one. But if you’re paid Friday or every other Friday the 29th would be your last one which basically leaves us with what six paychecks till the end of the year maybe there abouts five or six paychecks so it’s very important to take a look at that and see what your last minute you know, decisions do you need to be? i My biggest concern is that you’ve underestimated something in your taxes and now you’re going to feel like you have you know, you don’t have enough paid in and now’s the time to consider that maybe you should because December is one of those months where you also have your paid weekly you have five paychecks which I’m sure is great for Christmas, but it might be also the time to actually make some work. commendations on how you can actually reduce your taxes, right, or at least have enough paid in.

Because no one wants the Internal Revenue Service as a loan officer, I hate to tell you, but they are not good. With loans people they’ve got, now their interest rates have went up to, I think it’s like 12, maybe it’s nine or 10. And their penalties are anywhere between five and so right now it’s 10% penalty interest on the IRS is 10%, up from 5% on some of the earlier years, so that one, and then you have penalties that are usually another 5% A month up to 25%. Minimum. So I mean, look at that, I mean, you’d be paying 35% without even blinking your eye. And in some cases, they have a failure to pay failure to file proper. And then of course, failure, the file failure to pay and failure to make proper estimates. Many of my clients have all three of those 2525 25, if it’s past the time period, almost. So look at you can always have 100% in penalties and interest, by the time you’re done with hitting the maximum. So it’s just not a good place to have a good, good rep, you know, a good team a good situation.

So if you want to join the radio show you can 615-737-9986 is a number here in a studio so that we can take your calls and get your information for whatever we need to do on that situation. But you know, it’s all there for us. So what other information can we do to help reduce again, the really the biggest things for individuals businesses, of course, we also need to be reconciling our bank accounts, right for business. So we know we’ve got all of the expenses, we need to be determining at this time, because when we buy equipment, and sometimes I mean, let’s be honest, I’ve had people that put their truck quarters in a year ago, I mean, to get an actual new truck, I don’t know if it’s getting any better. But it’s it’s not it’s definitely makes for interesting tax conversation.

But so you want to make sure you have all your expenses, and that you’ve paid all your bills up. So that way you can reduce your expenses. Because most people do their taxes on the cash basis, which means the money that went in the bank, and the actual paid out of pocket expenses. Now you if you write the check on December 30, you can count that, you know, the check was issued at that time reduced. But you know, theoretically, it’s it’s, you know, some people like to play that game, I like to take all the checks that have cleared the bank, you know, because that way, then cash in cash out versus more of a payable, I wrote all my checks on December 31. And I’m taking all those off. I will say that you could probably defend that with the IRS.

But it’s only really gonna work one year unless every year you do that, because you have to continue that process once you’ve done it the first year. So making sure that you have all of your income, tracked all your expenses, your mileage logs, guys just looking around and saying, Hey, I think I think I put about 35,000 miles on my car, it sounds like a good number. I think I like the way that works out. So I’m gonna go with 35,000 It doesn’t work that way. Guys, it doesn’t work.

That way. You have to have a calendar telling where you went, why you went there and who you met is very simple. And you know, because the IRS doesn’t want to be paying you for miles to go pick up your kid from preschool, or to go to the grocery store or to meet your husband for dinner or wife, whatever. You know, they want you to know that the miles that you put on your vehicle went to potentially at least generate income or branding or something for the business that you are represented. It’s very important. All right, we’re going to talk more about this and also gets the phone lines 615-737-9986. We’ll be right back with the doctor Friday show.

Part 3: 24:24We are back here. It was going in and a little bit to see you know, we’re back in live in studio here. Let’s go back to talking about what we can be preparing ourselves for for the 2023 tax season. And in that way, we can hopefully catch up on a few of those kinds of things. Again, really what we’re looking for is is there any way that you can pay less in taxes? Or do I need to pay more in taxes because I’ve only have 2324 25. That’s three more physical tax years and we’re almost through this one to maximize the current tax code that we know.

So a lot People are thinking, all right, well, if I can pay more in ordinary income, because it’s at 12%, to 22, to 24, versus 15, to 25, to 28, which will be what happens after 2025, or in beginning of 2026, then, you know, they’re trying to figure out Roth conversions. Like I said before, very popular right now, because a lot of people are trying to figure out they rather pay lower taxes now than potentially what could be higher taxes, we don’t know what the next tax codes gonna be. We really don’t all we know is what is expected, because right now, the current tax code will expire December 31 2025. And that leaves us to believe that inheritance tax are going to go down, gifting is going to go down. And so interest or tax ordinary income tax rates will be going up.

So all of that following so you know, you might want to have those conversations with your team. When I say team, you know, your financial planner, your tax person, as well as your attorney, are you doing everything you can to preserve to maximize whatever the current tax thing that you want to do? Or maybe right now, you know, all you are is work in a freaking job. And you’re like, every year, I still owe tax taxes. And you’re sitting there going, Why? Why do I always owe more taxes, even though, I will tell you first thing is, are you working two jobs, because if you are taxed, tax code still doesn’t do a very good job in taking out enough taxes, or it takes out way too much depending on how you set yourself up. But normally, it’s a single person working two to three jobs.

And every year, they end up owing money. And the reason for that is is because the tax code doesn’t do well with multiple jobs, even if you’ve only worked one at a time. But when you went and got another job, when you started at that job, that job started with the lower tax bracket, the 0%, up to 12, blah, blah, blah, up to the number you end up with. And if you’ve done that two or three times, when you add all three checks together, you’re in a much higher tax bracket than what the tax code was allowing for on those checks. So if you are an individual that is switching jobs, and you’re sitting there going, Wait, I’ve already earned $40,000 At this point, and I don’t want to be started with zero, I’m gonna end up owing taxes, then you might want to have an additional tax come out of your paycheck to compensate for the fact that the tax code isn’t going to be your friend. Same thing is when what probably one of the most obvious is in the year in which people get divorced.

Because if you get divorced now in November, and you signed the papers, and you’ve been claiming, during January through single for this part, no, you are single at that point, when you have signed the papers, you are legally divorced, you are now single, or you are now head of household. If there are children. Either way, it changes from what you were claiming earlier. So if you’re going through working through a divorce right now, my suggestion is to adjust your W four to compensate for the fact of what’s coming down the line. Because if it happens before the end of any year, it can happen. I’ve had people that have signed the papers on December 30.

They just wanted to have a new year resolution, I will not be married apparently. And so they sign those papers. And of course, they had not thought necessarily through the process of saying well, if I wait till January 1, I would have still legally been married, been able to claim married, or the children or whatever possibly versus, you know, getting divorced and then being legally single. At the end of that year, even though you were married for you know, 99% of it doesn’t make a difference. Tax law is pretty straightforward in that. So when you’re going through these life change situations, it is very important to mostly make sure that your finances are following through with those. You don’t want to have something where you’re thinking, Okay, I’m going to do blah, blah, blah. And now I did this and how is that going to affect your finances?

I know you don’t always want to have everything to do with money. It’s not like life is totally about that. But my job kind of is about how to keep more money in your pocket when it comes to taxes. There’s the common things right? I mean, but you have credits, earned income credit, college credits, green credits, energy efficient credits. Many of those you have the catch up contribution credits that you can get or contribution not really credit. But you know, if you are trying to contribute money and you’re over the age of 50, you know, now you can put 6500 Or I think it’s actually if you’re under the age of 50 $6,500 is the IRA possibly or 7000? I know Know that you can contribute to a IRA or sorry, you can contribute to a 401 k $27,000. If you’re over the age of 50. So you need to talk to your financial person, because maybe it’d be better to use a Roth than a traditional IRA, you may pay a little bit more today, but how much will you be saving over the next 1015 years, whatever your life expectancy before you have to start taking money out for retirement, how much of that and it grows tax free. So again, don’t just make decisions based on what’s going to save tax dollars today, because sometimes you need to look a little bit outside of that window and say, Okay, well, taxes are lower.

And least we know, for the next three years, maybe I should be looking at what I can change. Now for the lower tax percentage that may be higher, later on in life. We don’t know again, it’s all a game, we’re gonna have to play. Alright, so we’re gonna get ready to take our last break here for the show. If you want to join the show, you can at 61573799866157379986. Again, I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. That’s what we’re talking about anything and everything that has to do with either preparing or, you know, defending taxes that we’re taking on our things. So if you’ve got a question, join the show. We’ll be right back with the Dr. Friday show.

Part 4: 31:35All righty, we are back here live in studio. And if you want to join the show, you can at 615-737-9986, I had a text come through and I was asked how long do you need to keep your tax records, it is officially seven years, you should keep your tax records, I will let you know it does not need to be in paper format. It can be digital, you don’t have to have everything in filing cabinets any longer, you can have it scanned in, but you need to have seven years. If you are a business, you need to be keeping a minimum of seven years because theoretically, you could they could go back up to 10 years to audit you three years for the state audits licenses.

Five, so you just want to keep all of those records. And that also goes for companies that have closed their doors, you can’t just because you close your doors doesn’t mean the IRS cannot come back and audit you had that happen actually for a client. And they can they can audit you without a problem. And so you just because your doors are closed doesn’t mean the audit doesn’t exist. So you want to make sure you’re keeping up to seven years, I would suggest digital format keep it in something like Carbonite or someplace where you have a second backup in case something happens to your computer, you’re able to pull up those forms anywhere or keep it on some sort of, you know, external drive that you can put in a safe or something.

So you don’t have to have filing cabinet after filing cabinet of paperwork. One of the questions that also came in, apparently they’re listening and texting more than calling they The question is, what about for an estate or someone that has passed away, I would always suggest to keep the last couple years of taxes for anyone that has passed away, just to be able to have I’ve never actually had any kind of audit for someone that had already passed away, I can honestly say in 25 plus years, I have not had to represent an estate for an audit of an individual that they were, you know they had passed away. But I am sure there are situations in which you should be keeping as an executor, you should be keeping all the bank statements of the trust account along with any other documentation that would show distribution or anything like that.

So you can account for all money in and money out for the sake of the IRS. So again, just making sure that you’re tracking and keeping track, have all of your own personal information and doing what you need to do. So just putting that out there making sure that you have that thanks for texting that question over. So we’re not till about five, six minutes left to the radio show. And we’re going to kind of stick to the same forum that we had started with the show, just making sure that you’re tracking all of your tax credits that can help you again like earn income credit the child credit the American Opportunity Tax Credit planning, obviously for your estates, I’ve already covered you know wills make sure you have a pourover well you have pls for medical as well as financial. I do not suggest and this was something that an attorney suggested to me so I pass this on to you do not put you your children’s name, and bank accounts just to make sure they have access to the money, just in case, if you provide them with a power of attorney, if something happens to you, they can go right into the bank. And then they can have access to the accounts that you have provided the power of attorney.

Or you can even have that on an account with the bank. So if something happens to you, the problem comes is if you have your name on your children, or your children’s name on your account. And these are children over the age of 18, or 21, depending on which state you live in. But they can if they get into a situation, that divorce or an accident, a lawsuit of some sort, that bank account that has their name on it can become a part of the settlement or the situation. I mean, I had one where I mean, it was documented in the courts. But there was one where the parents bank account because the son who was getting divorced, the wife said, Well, his money here, he’s got more than one bank account. And those bank accounts were not his they were his parents. And it took a lot to prove that he did not have any money in those accounts.

So it isn’t as far fetched as you might think it’s important to be able to protect your children and vice versa, your parents. And the best way to do that is again, as far as I’m concerned power of attorneys, they can do everything you need. And I would definitely suggest talking to an attorney to make sure you’ve got the right kind of power of attorney for whatever it is you want. And we use 2848 power of attorneys to deal with the IRS. But that’s all they do is IRS issues. But you can also have power of attorneys for many other situations. And you want to make sure that you have those. So again, just making sure that you’ve got your estate set up that you’re harvesting any kind of tax losses that might be out there for you that even if this year, you can’t use it all in many, most tax losses will roll forward to the next year. So again, very important that you’re able to take that through and do what you need to do. But follow that out and make sure that you now’s the time to do it.

Same thing is if you haven’t maximized your retirement accounts, think about, you know, the $6,500 or 7500, that’s when an IRA for people over the age of 50 is 75. So 6550 years or younger, 50 years or older 75, you can put into a traditional or a Roth IRA, you get the 401 K plans that you can actually contribute 20 to an IRA, and then later find out that you need them. And then you get hit with a penalty for early withdrawal along with having to pay additional taxes. So, you know, don’t don’t just set side, I mean, so I was trying to tell people about spending money in a business, I had a long conversation with a gentleman that owns I don’t know, three or four businesses. And he was saying that, you know, every year he likes to go and spend as much money as you can on equipment. And I’m like, well is the equipment generating more income. Because, again, I know no one likes to pay taxes.

But if I go spend 10,000, and I’m in the 25% tax bracket. So now I’ve spent $2,500, or I’ve saved $2,500 in taxes, I still had $7,500 $7,500 that I spent just to save 2500. So when you’re talking please for me means people you want to save, you’re never going to be at the 100% tax bracket. But now sometimes there is advantages if he needs that equipment. And he said most of the time, the equipment makes the job easier. He’s upgrading them and he’s doing what he needs to make his nowadays employment is harder trying to find people so a lot of the equipment he’s buying makes it easier for a smaller staff to run and do the same things that he was doing before with a bigger staff but less equipment. So I think we’re all seeing more and more companies, you know gearing up I mean, you go to restaurants now you put your own order in and then you pick it up at the counter, they don’t have anyone that’s really doing the taking the orders or any of that any longer at many of the restaurants. And I’m not surprised it’s getting harder and harder to find people to do the work. I’m not sure where everyone is, but it’s getting harder and harder. All right. So we are winding down on today’s show.

So if you need to have someone to help you as an enrolled agent, you need someone that’s going to be able to represent or help you get straight with your taxes or you’re not even too sure where to get started. And you’re like I need help because I like to be straight with the taxes. But I don’t know even know how to do that. How far back do I need to go? Where do I get the paperwork, etc, etc. You need to give me a call. It’s that simple initial consultations, always free. We can’t help you. I’m not billing you. So if you need help with anything, just give us a call 615-367-0819 That’s my Direct number 615-367-0819. Again, if you’re having tax issues if you need help doing something with your your back taxes, or if you just need some representation, because you’ve already went through an audit or something along those lines, and you need some assistance, any of that, it’s pretty straightforward.

All you have to do is give my office a call on Monday morning, 615-367-0819. Also, you have the website, Dr. friday.com. You can set up your tax appointments, you can also download our tax organizer. There are different things that we’ll tell you about who I am and 25 years of doing the business and how we’re going to help you hopefully get straight with the IRS and also learn a little bit more about what is a true freshstart offering compromise. And not just one of those organizations that said, oh, yeah, we can help you pay us some money and we’ll get started.

And they really can’t help you because there’s really only a few things you can do and maybe an offer and compromise you don’t even qualify for. There’s no way of really knowing unless somebody’s actually doing the work and not just collecting the money. So you need to make sure you have someone you can contact and you know how to deal with that situation. If you want to email me it’s Friday at Dr. friday.com again Friday at Dr. friday.com One more time in the office 615-367-0819. I truly hope you guys have an awesome Saturday. The weather is beautiful. Thanks to all the veterans we have a wonderful country.

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In this quick, informative episode of the Dr. Friday Tax Tips – One Minute Moment Podcast, Dr. Friday, the president of Dr. Friday’s Tax and Financial firm, tackles a common tax query: Can you deduct home repairs on your taxes? Dr. Friday provides clarity on when and how home repairs can impact your tax situation, particularly focusing on the difference between personal home improvements and those made for business purposes, such as a home office. She highlights that while most home repairs don’t offer immediate tax deductions, they can be viewed as investments that increase the value of your home, potentially leading to significant tax benefits when selling. The episode concludes with an invitation to reach out for personalized tax assistance via her website and a reminder to catch her live call-in show on Saturdays.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

You had a lot of repairs done on your primary home this year and you’re wondering, there’s got to be someplace where I can deduct those on my tax return… and the answer is no. In most cases, again, unless it’s a home office or something where you’re self-employed and those extensions were doing to to grow your business then they actually you increase the value of the home and at that time that’s all it is. It’s an investment and when you sell the home of course we have an automatic exclusion of $250,000 for an individual, $500,000 for a married couple above what you’ve paid for it or put into it. If you need help with your taxes all you need to do is go to www.drfriday.com and click on appointment.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this informative episode of the Dr. Friday Tax Tips – One Minute Moment Podcast, Dr. Friday, the president of Dr. Friday’s Tax and Financial firm, delves into the often-confusing world of auto expenses and tax deductions. Covering essential topics like the standard mileage rates for business travel, vehicle depreciation, and the real cost of buying a new car for your business, Dr. Friday provides valuable insights into making the right decision between actual expenses and mileage. She also addresses common misconceptions about legitimate auto expenses on tax returns and emphasizes the importance of justifying these expenses. Packed with practical advice, this episode is a must-listen for anyone navigating the complexities of tax deductions related to vehicle expenses.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Standard mileage rates for your business travel also need to figure depreciation on your vehicle which is better. I mean should we take actual, should we take miles, when do we make this decision? Can we change that every year? Can we can we decide to go buy a new car and just because it’s a SUV we can take a hundred percent of it? These are the kind of things I hear every day and to be quite honest most the time people are a bit confused on what true auto expenses are, what you can take off your tax return legitimately, and how to justify those expenses. If you’re sitting there winging it and hoping that you get caught you need to call us at 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this quick yet insightful episode of Dr. Friday Tax Tips, Dr. Friday, the president of Dr. Friday’s Tax and Financial firm, delves into the complexities of renting out property to family members. The episode tackles a common dilemma faced by many: can you claim rental deductions if you’re renting out your house to a relative, like a son or daughter-in-law? Dr. Friday explains the importance of fair rent, profit intent, and the limits of deducting expenses when you’re not aiming for a profit. This one-minute moment offers a concise yet comprehensive overview of how to navigate rental arrangements with family members to ensure you’re maximizing your tax deductions. Don’t miss Dr. Friday’s valuable insights, especially if you’re in a similar situation. Tune in for more expert advice!

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s Tax and Financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Renting your house seems like a pretty easy concept. You rent it, someone rents and you have it. But sometimes you know what? Your son or your daughter-in-law or somebody needs to rent the house from you. Can you actually deduct that as a rental? And that will really depend on the situation. Are they paying you a fair rent? Are you trying to make a profit on that rental? Or are you basically just having them pay what the mortgage is? Because if that’s the case you can only write off up to what your expenses were. You can’t take it into a loss. But if they’re really paying rent just like anyone else, it’s a true rental. Making sure you maximize your deduction is what any good tax person should do.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday, an enrolled agent licensed by the IRS, discusses how she can assist those who haven’t filed taxes for years or are receiving frequent notices from the IRS. Learn about the options available to you, from making a deal to fresh starts, and how Dr. Friday’s expertise can guide you through these challenges.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. So then anyone that hasn’t filed taxes for a number of years or maybe you keep getting a lot of love letters from the IRS and you just feel overwhelmed, you don’t know what to do or how to deal with it, guess what? I can help you. As an enrolled agent I can represent you in front of the IRS. We can help make a deal. We can help make you non-collectible. We can do an offer in compromise, fresh start. These are options you have instead of just putting your head in the sand or praying that they don’t take your paycheck. You need to call us at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from two to three p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday, president of Dr. Friday’s tax and financial firm, shares a valuable tip for those struggling financially. Learn about the IRS’s free filing option for individuals earning $72,000 or less and how to make the most of it, especially if you’re eligible for the earned income credit.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

For many of you right now you’re having a hard time and filing taxes is something that’s probably not on the top of your list and certainly probably paying someone to file them is not something that you even have in the budget. There is some locations you can go for free and it’s basically at irs.gov. They have several IRS free filings for individuals that make $72,000 or less. They will file your returns for free and that’s an important thing. If you have a W-2 or something, now I will tell you, if you have children earned income credit there may be a small fee but you know what that will be money in your pocket so make sure you get it. If you need help, drfriday.com.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from two to three p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday delves into the complexities of reporting sales from a 423 employee stock purchase. She highlights the potential pitfalls of Schedule D and AMT tax implications, and the common misconception of being taxed twice. If you’ve sold stock from an employee purchase plan, this is a must-listen.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

I purchased stock for my employer under a 423 employee stock purchase and received a 1099-B for selling it. How do I report this? And this is very important because you’re going to have two situations. You’re going to have a schedule D where you report the gain, but you may also have an AMT tax that you have to report the sale with. Sometimes that can kick you into a whole different tax bracket and understanding the difference because a lot of people say, wait they already took the taxes out of my W-2, I shouldn’t have to pay it twice. You might want to revisit that thought. It isn’t tax twice, but there is a difference. Give us a call 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from two to three p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday, an enrolled agent licensed with the IRS, sheds light on how her firm can act as a shield between you and the IRS. If you’ve been receiving those daunting ‘love letters’ from the IRS or haven’t filed your taxes in years, Dr. Friday’s expertise can be your guiding light. Learn how her firm can help you pull transcripts, prepare tax returns, and get back on track with the IRS. Plus, discover how to tune into her live call-in show every Saturday!

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

I am Dr. Friday, an enrolled agent licensed with the Internal Revenue Service to do taxes in representation, which means if you’re receiving love letters or you haven’t filed taxes for a number of years, we can help you. We can help you find a place to get started. We can pull transcripts to get you the information the IRS can provide to us to prepare those tax returns. We’re like a little bit of a shield between you and the IRS because they have to contact us first to get to you. This would be a way for you to get back on track with the IRS. Nothing worse than having to deal with the IRS on your own. And so if you need help you can check us out on the web at drfriday.com or just pick up the phone 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from two to three p.m. right here on 99.7 WTN.

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Welcome to another episode of the Dr. Friday Radio Show! In this episode, tax expert Dr. Friday delves deep into the complex world of taxation, offering clarity, guidance, and solutions for listeners. Here are some of the topics she addresses:

• Year-End Tax Strategies: Dive into the intricacies of 2023 finances, the nuances of business purchases for tax savings, and the critical decisions surrounding major expenses. Discover the world of depreciation, the significance of timely equipment updates, and individual tax pointers, from medical expenses to maximizing deductions.
• Decoding Inheritance Tax: Uncover the potential tax impacts of inheritance, the capital gains maze when selling inherited property, and the latest limitations on retirement accounts like 401ks and IRAs.
• Medicare Insights: Clarify the myths and confusions around Medicare payments and get the lowdown on a recent payment discrepancy.
• Guidance on Tax Payments: If you’re bracing for a higher tax bill this year, learn why it’s pivotal to pay at least 110% of the previous year’s tax.
• Engaging with the IRS: Good news! IRS response times have improved post-COVID. Learn about the positive shifts and how the landscape has evolved in recent years.
• Tax Advocate Office Explained: An ally in the complex tax world, this office not only collaborates with the IRS but champions taxpayers. From resolving IRS-related challenges to the specifics of the ‘nine one one’ form, get acquainted with how they can be your tax savior.
• Dr. Friday’s Expertise: As an IRS-licensed representative, Dr. Friday underscores the value of professional advocacy, emphasizing her role in standing up for taxpayers.
• Navigating Tax Filing & Refunds: The clock is ticking! Understand the importance of prompt tax filing, the three-year refund window, and the need to claim stimulus funds.
• Inheritance & Disability Dynamics: Explore the tax implications when inheriting revenue-generating assets on disability. Emphasize the need for specialized counsel, especially during major life transitions, and the strategies to shield assets and revenue.
• Book Your Tax Session: A gentle reminder to secure your tax appointments for the upcoming 2023 tax season.
• Golden Tax Nuggets: As always, Dr. Friday stresses the significance of seeking advice from seasoned experts, be it lawyers, financial advisors, or tax pros. After all, in the realm of taxation, forethought and proactive measures reign supreme.

… And so much more!

TranscriptPart 1 – 00:00Announcer: No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Dr. Friday Show. If you have a question for Dr. Friday, call her now, 737-WWTN. That’s 737-9986. So here’s your host, financial counselor and tax consultant, Dr. Friday.

Dr. Friday: G’day, I’m Dr. Friday and the doctor is in the house on this absolutely beautiful Saturday. It is perfect weather outside to be working outside for some of us crazy people. I was just mentioning to my engineer that I have started to put my Christmas decorations up and I know that’s a little early for some people, but you know, it takes me a little while to get all my outdoor decorations up, so it’s time to start getting them down and getting them prepared.

So it’s getting close to the end of the year and what do we have to do by the time the end of the year? We need to be making sure that we have looked at our 2023, evaluated, do we need to buy something if that would help save tax dollars if you’re a business owner? Keep in mind, I am a firm believer that we don’t just go spend $50,000 on a truck so that I can save 20% of that in tax dollars. That doesn’t really make sense, people. You know, you go spend $50,000, 20% of that is what? 10,000 dollars, something like that in cash.

So you know, I’m still out $40,000. Now if I need that truck, if my truck is breaking down and you need a vehicle to use for work, and that vehicle is essential and you know, if you’re breaking down, you’re losing money, then yes, absolutely go spend the money. We can do an accelerated depreciation if it’s a larger truck over 6,000 pound tow rate or if it’s a smaller one, we can do spread depreciation or actual depreciation. Either way, that is a good investment. Same thing with equipment. If you’re looking and you’re saying, hey, you know what, I really need to upgrade the computer system. You know, it’s slowing down.

We need a new server. We need some new things. And if it’s something that’s going to benefit the company, then yes, absolutely do that. Save the tax dollars because you need to do it anyways. And if you can do it before the end of the year and keep in mind, the equipment has to be in use. So you can’t just go on the last day of the year, go buy a bunch of stuff and have the boxes still sitting in the office. Tax law says it has to be in operations to deduct it. So if you have something like that, that you need to do, then that’s great. Individuals, I know a lot of times people are often asking, well, if I have a lot of medical, you know, is this the year I can itemize? You know, it’s tricky nowadays to itemize because of the higher standard deduction. But again, if your medical bills and have been outrageous, it might be time to pay off a lot more of them to get you over that threshold.

Especially if you have mortgage interest and property taxes and sales tax, then you might be able to kick over that threshold to do it. But it may be also the same year that you pay your property taxes twice to get you even higher. Now, keep in mind, we refer to it as the SALT tax, the state income property tax and personality tax section of the Schedule A. That one, you can only have $10,000. So there used to be, for a long time, guys, we used to do every other year, I would pay my property taxes twice. I would maximize all of my charity every other year so that one year I would not itemize, the next year I would, and I’d be able to really maximize that. It really doesn’t work as well because my property taxes, I lose money if I pay them twice in one year. I don’t get to deduct 100% of them.

And so it’s just harder to do the itemizing the way we have in the past. But there are times when you have a large amount of purchases because you’ve refurnished the house and you paid sales tax on a lot of things. Maybe that year is, again, the year that you actually double pay your property taxes if they’re only three or 4,000. And then that way you maximize that area of the code up to 10,000. Then you have your mortgage interest. Usually that’s high enough where between that and your charity. And again, no one says that you have to pay all your charity in one year or not. So if you’re going to be maximizing, let’s say you don’t normally itemize, but if you had another $5,000, you could itemize, then maybe maximizing your property taxes twice and paying your charitable deductions in advance, some people would call it, but paying it in more, then that way you can actually really maximize because the standard deduction is that just that. If you can’t itemize, then let’s take the standard deduction. It’s higher than what you’ve paid out of pocket.

Therefore it’s a good thing. But you really need to evaluate what your taxes look like. And now’s a great time. It’s quieter. So if you’ve got questions, maybe you’ve had a situation where you’ve inherited, that’s usually a big area where people aren’t actually positive. Did they, or do they have to pay taxes? If I inherit, will it make my social security taxable? You know, if I inherit, but I inherited a few years ago and now I’m selling the property, what kind of capital gains would I be looking at? Of course we now have the 401ks or the IRAs. If someone passed away, we have basically 10 years to take out that money, which used to just be an R and D for the rest of your life. It now has limitations. When should you do that? Should you wait until the end and take out a huge lump or should you be taking out larger amounts and it’s different for everyone, but that’s the plan that needs to be put together. Right?

You need to have that plan. So if you don’t know, if you’ve got some questions, you can join the show today. 615-737-9986. 615-737-9986 is the phone number. Also want to remind anyone that is in Medicare that we’re still in that time where you can turn around. I know you probably couldn’t forget it because of the fact that you have so many people advertising out there and it’s almost overwhelming. It’s almost like tax time when people are telling you so many different things. I had someone, they called me the other day because they saw something on Medicare and they thought that people were going to get an extra payment. And so they were so confused about what, you know, is there an extra payment and all that. And just so you know, any of you that may have seen or got that advertisement that there was an extra payment in September and then no one got their social security in October.

It’s because of the dates when they change something. So September people got two payments, October they didn’t get any. And then back in November, they’ll be at their usual. And I believe this was for disability, not normal social security. So there was a lot of chit chat and many, many field phone calls that came through our office because people were thinking they were there were entitled to an extra payment or that they didn’t get it. And therefore they wanted to make sure that they were going to get it.

There was no extra payment. I just want to put that out there. There was no extra payment. It really was just the matter that, you know, everything was, you know, just the timing where September ended up with two payments, October, nothing back on track in November. If you’re not sure if you receive those payments, you’ll need to check in and contact social security. It’s not really a tax issue, but brought it up because we ended up with a lot of phone calls the last couple of weeks on that one. And I just wanted to make sure everybody was back on track because you’ll be getting your normal check this week for disability. So if you want to join the show, you can 615-737-9986.

I will also say that if you’ve had something unusual happen this year, and maybe you’re going to owe more in taxes, tax law says we have to pay 110% of the year before. So if you look in your tax return, it says you owe, I don’t know, let’s just say $20,000. That was your total taxes. And this year you think you’re going to owe more than you want to make sure you have at least paid in that 110%. I’m not a huge fan of telling people just because we know you’re going to owe 50,000 more that you need to rush and pay that out. But we don’t want to have the penalty for failure to pay proper estimates or failure to pay estimated payments at all.

You know, they love to do those. And so I would suggest, especially by January 15th, even if you’re going to file before the April 15th deadline to make an estimated payment, make sure that you have at least 110 in by that time. So that way it will, if nothing else, slow down or even stop any penalties that might have existed at that time. All right, let’s hit Rich in Brentwood real quick. We got Rich in Brentwood. Maybe yes, we do. There we go. Hey, Rich.

Caller: Hey, Dr. Friday. How you doing?

Dr. Friday: I am doing great. Thanks for calling. What can I do for you?

Caller: Yeah, I just received two BDAs this year. One is a regular, I guess, IRA rollover. And the other one is a Roth. And the Roth BDA was not held for five years. So I wondered if that has anything to do with my withdrawal rate. And I just want to know, when do I have to withdraw from the BDAs?

Dr. Friday: So the BDA is inherited?

Caller: Correct.

Dr. Friday: When you refer to them as a… Okay, that’s what I was into. Okay, so the Roth, obviously, it won’t make a difference if it was held for five years or not, because you inherited that Roth. So you inherited it as a tax-free fund.

Caller: Okay, great.

Dr. Friday: So you can take that out anytime you want. The IRA 401k situation, or was this an IRA?

Caller: It was a standard account IRA, correct.

Dr. Friday: So that one, you’ll have to take out the requirement of distribution minimum. But obviously, you have 10 years, Rich, to empty it. I don’t know how much is in it. And it may be beneficial to convert so much of it and take some of the money out of the Roth to pay the tax. So it doesn’t necessarily affect you, but that way it’s rolling over, because taxes could go up in 2025, and therefore, you could end up paying more. So you want to probably sit down with a financial person or a tax person and figure out how much is in there and what’s the best way to get it out at the lowest tax rate available.

Caller: Okay. Getting back to the Roth BDA, at the end of the 10 years, do I have to clear that account out or can I just leave that in there?

Dr. Friday: No, they’re making you clear out all of them is my understanding. So you will have to take it out. And then, unfortunately, because it stops it from growing tax free, right? So that one, I would personally probably wait till the last day to take it out if I don’t have to. So that way, I’m not sure. I don’t believe an RMD is required as long as it’s all out by the end of the 10 years. So I would just wait till that last few days and then take it out. There’s nothing, let it grow tax free as long as you can.

Caller: That was my plan, but I just wanted to check with you to make sure. And that’s great. You helped me out a lot and I appreciate it.

Dr. Friday: Cool. Thanks. Appreciate you, Rich. Thanks for calling. All right, really quick. Let’s go on to Ron in Manchester before we take our break. Hey, Ron, what can I do for you?

Caller: I see a train wreck coming with this $7,500 clean car credit. I don’t know whether the dealer does that or whether there’s a voucher that the taxpayer gets it on his return or what. Can you comment on that please? And I’ll hang up.

Dr. Friday: Yes. Okay, no problem. It is a clean car credit. It’s a lot like the energy efficient credit that we get for electric cars. And it’s a credit, it’s non-refundable. So you’re not going to get it as a refund, but it will offset your income tax. So it will apply to open taxes, but it is going to be one of those situations where you’re going to file, you’ll have to have the fin number of the vehicle, make and model, and then you’ll be able to put that on your tax return.

All right, well, we’re going to take a quick break here. When we get back, we’ll take two more of your phone calls. You can reach us here in the studio at 615-737-9986. We’ll be right back with the Dr. Friday Show.

Part 2 – 13:18Dr. Friday: All righty, we are back here live in studio. And if you want to join the show, you can at 615-737-9986, 615-737-9986, taking your calls. I want to cover a little bit about communication with the IRS, what we’re experiencing and the pros and cons. Obviously there’s good and bad, but we have found that we are getting a faster response than what we had two, three years ago, especially over the COVID period where IRS was practically shut down. Nowadays, I mean, I do want to give a big hands up to the tax advocate office. They seriously have helped our office at least many, many times. And I’ve referred a number of people to them to get their resolution and they’ve always done a great job.

So it is for you that don’t know what I’m talking about, tax resolution, the tax advocate office is a office that works with the IRS, but they actually work for the taxpayer. So if you’re looking to get some sort of resolution, let’s say you’ve been working on something. I’ve got a case here from 2019. We’ve been doing some, you know, we drove back and forth to the IRS, keep saying, keep sending nothing’s happened. We’ve sent amended, we’ve sent correct and no responses. We don’t know why they’re not responding. It just seems like we keep falling through, but yet the love letters or the collection letters are coming nicely every year telling them there’s still a balance due, et cetera, et cetera.

So what you do is you file what’s called a nine one one with the tax advocate office. And then you tell them what you’ve done, all the process and everything, you copy them on all your communication. And then you, and then in the same form, you actually tell them what would you like the the resolution person to do for you? What do you expect their help to do? And then give them the outline of what you’re trying to achieve. Maybe it’s them to correct or to accept or to make some sort of adjustment or even just get basic communication that everything’s been resolved, whatever it might be. We have that kind of situation. And then, and then you can fax this to them. And usually within about 30 days, you’ll hear from them and then they’ll assign you a human that are great. I mean, they, they are commutative.

They’ll tell you, Hey, I’m going to get back with you in 20 days. I’m going to do this, this and this, and I’ll get back with you in 35 days, whatever. And they’ve got this process. So if you’re looking to do something and you’ve been dealing with the IRS and you don’t want to hand, I mean, obviously that’s what we do, but there’s also times, you know, where you’ve been doing it yourself. You’ve been trying to figure it out. You’ve been handling the situation, but you’re just not getting any kind of serious resolution. Now, this isn’t for one where the IRS has wrote back and said, they do not accept your amended return because that’s, that’s a whole different conversation.

This is for one of those that, you know, you keep sending in communication, you’re asking for this or that, maybe it’s a penalty waiver. And you’ve been asking for it three times and you’re not receiving anything saying that they’ve rejected it, but you know, you, you, they’re still trying to collect on it. Those are the kinds of things that the tax advocate office are really good at. So you know, if there’s lack of communication, there is a, another case, but I will also say that the phone number, if you call nowadays, you’re not waiting four or five hours. I will say it’s not, it’s not back like it was in 2018, where probably an hour or two on the phone, you actually had resolution, but we are getting humans on the phone in an hour or two of waiting. So it’s, it’s definitely improved. So anyway, so if you’re having a tax issue, maybe you’re getting love letters as an enrolled agent.

That’s what I deal with guys. I’m licensed by the internal revenue service. Now let me clarify, licensed by the internal revenue service to do representation. I do not work for the internal revenue service. I never have, don’t ever expect to, but but I am licensed by them to help individuals to get representation because just like if you’re going to go to court or if you’re going to get your car fixed, you want someone that knows what they’re doing because it’s impossible for us to know everything. I mean, you could do the research and you can probably represent yourself, but never, never would suggest that if it’s a big enough case where it could cost you a lot of money, better to have somebody that has the education.

But if you’re dealing with love letters or maybe you just haven’t filed, you know, I mean life happens, especially the last four or five years, it’s been pretty unique. So if you haven’t filed those last couple of years, two things are going to happen. At least one very important thing. If you didn’t file 16 or 17, 18, and then they started giving out stimulus money in 20 and 21, 20 will be coming off. So you will not be able to get your refund from 2020 after April of this next year, unless you filed an extension, but let’s just call it simple.

So if you haven’t filed your 2020 return, then you, even if you’re entitled to a refund after April of 2024, you will not be able to get that refund. The law says that you can only get refunds for three years. So if you didn’t get the stimulus money, if you didn’t get anything, cause you didn’t file the IRS is kind of saying, Hey, you had three years to file. If you didn’t do it well, tough luck. So that is very important. And the same thing for 2021, 20 and 21 had free money out there where people were getting, at least if your income was low enough where you qualify for those, or if you had children or whatever, you may want to find out if you’re leaving anything on the table.

It’s very important. All right. So if you want to join the show, if you’ve got questions of possibly, you know, again, inheritance is probably one of the big ones, but maybe you’ve sold a piece of real estate, you know, and, and in some cases I’ve had many situations this last week where somebody was on disability and then they ended up inheriting something that is income producing, which can really mess up your disability situation. So you need to consider talking to an attorney or someone because there are disability trust and things that can be put aside to help that kind of individual. But again, for tax code, if you, if you have earnings, if my understanding is if you’re on disability, it’s a lot like early social security, there’s a limit. I don’t know what the limit is, but there’s a limit to how much you can really earn or you end up losing some of your disability payments. So again, you might want to talk to a disability specialist, especially if you’ve inherited. I had a situation where her husband passed away.

She inherited a business and now that business is generating income that she, she never filed. The husband filed under his own name, never came out. Now this is going to have a big effect on her personal life because of the disability and all that. So you need to seriously, if something like that, or even if you’re a person that, you know, if something happens to you, what you could do to probably preempt some of this problem instead of letting it slide. And then, you know, in this case, this could have been put in trust. It could have been put in a corporation. There was ways of possibly protecting his wife better so that there wasn’t such an income situation that now is going to possibly have her losing her disability and having to rely solely on the business to do, to do what she needs.

So again, there are, you need to sit down with experts, be that an attorney, financial planner, a tax person, and make sure all of your little ducks are in a row. And if you’ve got questions, you can certainly join us here in the studio right now at 615-737-9986. We’re taking your calls live, or you can call our office. I’ll give that number out a little bit, and then you can set up an appointment and see what you want to do. For many of my current tax clients, the calendar is on the website. So if you’d like to set up a tax appointment for 2023 tax preparation for 2024, it is there. So go ahead and get yourself an appointment booked. So you know how fast those things fell up. So I want to make sure all you guys are taking care of. Other things you want to think about, again, we’re getting towards the end of the year. So putting together your little checkoff list, right? I mean, where did you work?

A lot of times if you have multiple jobs, don’t forget to make sure you get all your W-2s, especially if you’ve relocated. You might want to contact your old employer and ask them to update your address or your email address if you’ve changed it, because most people nowadays are downloading their W-2s via internet. But it’s your responsibility. Employer does not have to change or do anything unless you’ve contacted them. And then they theoretically could send you a bill because you didn’t update that and then bill you for getting a W-2. So that’s kind of silly. So if you’ve relocated, contact your old employers, making sure they have the information or at least a good email address so that they can forward you your W-2s. Same thing with 1099Rs, 1099s. If you worked for somebody and you were a subcontractor, they could 1099. If you don’t have it, it’s not their fault because you did not update your W-9 with them. So now’s the time guys, right now, because come late December, a lot of people are putting together that information so they can kick them out come the first week of January.

So you need to contact them now. Put a little thought to who did I see? Who did I work with? Did I do some subcontract work? You know, W-9s, W-4s, update them with old employers or even current employers. If you’ve relocated and you haven’t let anyone know, now’s the time to update that because you really do not want to have to go chasing, waiting to file. I have one person, we still are missing something and we’re late. So we filed the return. We know it’s probably going to get bounced back because of the fact that we filed it to the best of our ability by the October 15th deadline, still haven’t gotten that W-2 and we’re just waiting for that to update the system. All right, we’re going to take our second break. If you want to join the show, you can at 615-737-9986.

I’m Dr. Friday, an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. That’s what I pretty much do all the time. So if you have tax issues, tax questions, maybe you’re trying to figure out as an offer and compromise. I’ve been making a payment plan for 10 years. I’m not getting ahead. What options do I have? Can the IRS keep collecting? You can join the show and ask that question, 615-737-9986. We’ll be right back with the Dr. Friday Show.

Part 3 – 24:13Dr. Friday: All righty, we are back here live in studio, taking your calls at 615-737-9986. And we’re going to go to Steve in Hendersonville, who is nice enough to wait through the break. Hey Steve.

Caller: Hey Dr. Friday, I just had a question on inheritance.

Dr. Friday: Yes sir.

Caller: I was wondering how inheritance affects your either gross income or just the gross and taxes there and how it may affect your Medicare payment because that goes up if you make, you know, so much money every year or something.

Dr. Friday: Yeah, that’s a great question.

Caller: How does that affect any of that?

Dr. Friday: Well, some can when we are talking about like inherited IRAs, like the first caller called in, when he takes money out, it’s going to change his adjusted gross income, which then could theoretically affect Medicare if he was in retirement because Medicare, I believe it’s 90,000, roughly 90,000 for a single person, 180 for a married couple. Anybody above that starts going up pretty drastically as far as I’m concerned. So it could. So it’s one of those things you do want to make sure if an inheritance is going to come in that’s taxable. Now sometimes you inherit someone’s house, you inherit stocks. A lot of those are step up in basis. So therefore there’s really no taxable gains, but retirement accounts, annuities, many times, those can affect your AGI, which then could affect your income bracket as well as your Medicare.

Caller: Okay. Yeah, there is a house and there is a house and only one part of it has any taxable amounts left on a gain for that account. So there’s very little bit that’s not, that has taxes left owed on it. But I didn’t know what amount inheritance went up to before it was taxed and how it affected your Medicare payments because I am paying Medicare.

Dr. Friday: Right. And so the answer is, I mean, any of it could, but it’s basically as long as your AGI, if you’re single, it stays under 90 or you’re married, stays under 180, then you won’t be affected really. But if it’s, and if it’s a house you inherited and within the last year, it’s probably not went up much, so you would sell it for pretty much what you inherited that. So it’d be a zero tax and the same thing with stocks. If anything, they’ve went down if you’ve inherited them in the last year, possibly. So those may not have, even if you sell them and make money, it may not actually be a taxable event.

Caller: Okay. All right. Well, thank you. We’ll go above the 190. So yeah.

Dr. Friday: So, and then for a year, your Medicare will be, will be higher based on whatever that new number is. And then they’ll drop it back down the next year when you file.

Caller: Okay. Yeah. I’ll note it. Alrighty. Thank you.

Dr. Friday: Hey, appreciate the phone call. Thanks. Let’s go to David in Brentwood. Hey, David.

Caller: Yes, ma’am. My question deals with, do you do? Gift tax returns or for a generation skipping issue? I’m 77 and I wanted to give some money to somebody who’s more than 37 years younger than me. And I haven’t done anything yet, but I wanted to have my ducks in a row before I did anything. And that includes having a tax person lined up.

Dr. Friday: Sure. And yeah, yes, we do quite a bit of that. So she right now where the gift lifetime gift is $11 million or thereabouts might be a little over that, but so you can give 17,000 without filing any kind of gift tax return, anything above 17. I mean, theoretically you can give them $200,000. There’ll be no tax to the person receiving the person giving, if that money comes from an IRA or something, you know, it’s not just sitting in the bank and you’ve already paid tax on it. And you will be taxed. But most of the time, most of the gift tax returns I do is people have already got the money sitting in the bank and now they’re wanting to gift it to a child, a grandchild, a friend. And so in those cases you can do that.

Caller: Well, mine’s, it would be in a taxable account in a brokerage account. It wouldn’t be in the low seven figures, but I just didn’t want to get stuck with having to pay a 40% penalty on that. Right.

Dr. Friday: You’re good on that, but you will want to make sure when you, when you, if it’s in a brokerage account, obviously are you gifting the stock or are you going to gift the, are you going to cash it out and get cash?

Caller: I realize they’re missing out on the line up when I die, but maybe they won’t be so keen to sell it if I’m going to get whacked with a nice big tax bill.

Dr. Friday: You know, I mean, that’s a unique approach, but I will say that it’s not something I haven’t heard before, David. So I would say, you know, obviously from the tax standpoint, it’s always better to inherit it because that way they get the step up in basis. But I totally hear what you’re saying that you’ll give it gifted to them now at your basis. And they may think twice about selling because then they will have to pay the capital gains later and maybe they’ll, they’ll sit and let it ride for a while instead of just immediately spending it.

Caller: You know, it’s a soft way of, of a, shall we say, keeping them from being total spendthrifts.

Dr. Friday: Yeah. Well, I will be curious to see how that works out for us, David. I can’t say I haven’t heard it. I just don’t know. I have seen people do some pretty silly things with inheritance and I’ve seen people be extremely responsible. So hopefully this person will do what you need.

Caller: Should I make an appointment and, and, and cause I want to know exactly what pieces of paper you folks need.

Dr. Friday: Absolutely. You can give my office a call. If you’ve got a pin there, David, I can give you a direct line to our office. It is a 615-367-0819. 615-367-0819. And we’ll say it again if you keep listening. But David, you can give us a call on Monday and we can set up a free appointment for you to come in and we can go over that.

Caller: Thank you. You have a good day.

Dr. Friday: No problem. You too. All right. We’re going to keep taking phone calls here and we’re getting down to the last, Oh, 10, 15 minutes. So if you have been waiting and you’re like, Oh, I’ve got a question and I just don’t know, there are no silly or stupid questions. I’ll be honest with you. Come on. We, we all have things that we do and don’t know. If you don’t ask the question, how’s anyone going to know what the answer is? So asking questions is the best way to do it. The phone number here in the studio is 615-737-9986. 615-737-9986.

That way we’ll take your calls. Hopefully at least lead you in the right direction. If I don’t know the answer, well, you go, what? We always know ways of getting those answers. If we have to go to attorneys or other individuals, we can do that as well, but at least we’ll get you started in the right direction to make sure you, the choices you make. Because sometimes, I mean, I have many people that have come through and tried to make certain choices and I’m like, why would you do that? And they’re like,

Oh, I didn’t, didn’t think to ask that or didn’t think to do that. Can we hit Tanya real quick? Oops, we lost Tanya.

All right. So you know, we can just making, making sure that you really understand just like David and I called in, I’d much rather take appointment and make sure that at least from the tax standpoint, these are the things you want, right? This is how you’re going to do it. This is what you’re going to do with it. Or it’s going to be that you, you make this choice cause you Googled it and you’re like, Oh, I think I understand it. And then you find out that maybe something’s a little different from what you really understood it to be. And so that’s really important to make sure that you understand how the taxes are going to work, at least from my, my standpoint, and that you have those things ready. I mean, sometimes it’s better to be able to do the, um, to, to, to let people inherit, for example, because of the inheritance tax right now, it’s much better.

All right, let’s hit Kevin really quick and, uh, may I can hit him before the break and then we can go to the next ones if that’s possible.

Hey Kevin.

Caller: So leave the radio off.

Dr. Friday: Okay. Yes. Leave the radio off cause otherwise you’ll hear me echoing in your head and that’s more than one voice that you need to hear. So what do you have, Kevin? What’s happening?

Caller: Um, I’ve had a couple of Roth IRA’s in the past and they were, um, they were both through Edward Jones and.

Dr. Friday: Kevin, you still there? Levidius, I think I’ve lost, uh, I lost Kevin. Tanya, Tanya, you on the line?

Caller: Yes, I am.

Dr. Friday: Hey Tanya. Okay. Well, Kevin, if you can call back Tanya, how you doing?

Caller: I’m good. I have a question for you about a personal loan to a family members.

Dr. Friday: Okay.

Caller: So this loan occurred about four years ago and there’s really no indication it’s ever going to be paid back. Um, or is there anything I can do from my point of view from a tax purposes? Can I write that off as a bad debt or something or, or is that even possible?

Dr. Friday: It isn’t, is not possible under the current loads that, uh, they, they don’t have casualty loss on our, um, code any longer. So that was one of them. They kind of gotten rid of unless it’s a federal disaster. Um, so this would not fit under that. So there’s really not a whole bunch that you, you can do as far as taking that loss off since it wasn’t tied directly to a business unless it was. Um, but if it’s just a family loan, Hey, I gave a, I gave him this money to go by. Then it’s just a loss within the pocketbook. No tax advantage or disadvantage.

Caller: Sorry. All right. Well, all right.

Dr. Friday: Thank you. No problem. Great question though. All right. Uh, Oh, Kevin’s back. Let’s see if I can get Kevin back on the line. Hey Kev.

Caller: Yeah.

Dr. Friday: Okay. Got you back. Sorry about that. Somehow I lost you. So you were saying before we got cut off that you have purchased several Roth IRAs. Is that correct?

Caller: Yeah.

Dr. Friday: Okay. Go ahead.

Caller: I mean, you know, when I got my statement at the end of the year, they were saying that, you know, I was getting 9%, nine and a half percent. But when I actually did the math, you know, all of that was eat up and feed and then buying and selling and moving them from that mutual fund to that mutual fund. And I really want to start saving up again, but I really don’t know a good reputable company to go with.

Dr. Friday: You know, that’s a great question. Okay. Let me get that really quick. Cause that’s more of a, I’m going to cut you off a little bit, Kev, cause that’s really more of a financial planner. And if you want to call my office on Monday, I can give you a couple of different financial planners we work with. Uh, but, uh, that’s one of those. And I know I was the same way for a long time back in the eighties, I put $500 a month into one and then I lost it all. I mean, it all went upside down, have none of it.

Caller: So, um, we’re going to, uh, go ahead and realize what they were doing and I just need to start putting something else aside, but I really don’t know. I mean, I’ve heard good and bad about Bob and Edward Jones and you know, some other ones, but I mean, I worked very hard for my mom.

Dr. Friday: Yeah, I understand. Um, but again, call my office on Monday. I’ll be more than glad Kevin to share a couple of different financial planners. I would suggest going with one of them that are fee-based, um, you know, just because they don’t make money off trades and that does help us. All right, we’re going to have to take a quick break. If Dan can hold through that break, that would be awesome. And then when we get back with the Dr. Friday show, we’ll go right to Dan and then, uh, we’ll be at the end of the show. So we’ll be right back with the Dr. Friday show.

Part 4 – 37:18Dr. Friday: All righty, we are back here live in studio. This would be the last part of the show. We’re going to go right to Dan because he’s been cool enough to wait all the way through that break. Hey Dan, what can I do for you?

Caller: Hey Friday, thanks for taking the call. Love the show. Got a quick question for you. Uh, in the process of inheriting a thrift savings plan, TSP, that is according to the wiki, a federal equivalent of a 401k. I want to know if that is the case. It also says I need to take action by January 24th, which would be exactly four months a day after my brother’s passing. And do I need to put this into an exist or can I put it into an existing 401k or separate or do I need to set up a separate one?

Dr. Friday: It would have to be separate cause it’s an inherited. So it’d have to go into an inherited IRA. I mean, thrift savings from everything I’ve ever heard when I’m in the meetings with a lot of financial planners, they do very well in comparison to some of the 401k. So it may be a determination. Can you leave it in the thrift savings even in have the same, I believe you still have the meet the same 10 year situation, but would it be better managed possibly than what you can get in a regular IRA? That would be a financial planner question.

But yeah, um, probably because he has, he passed away in 2023 it sounds like. Um, and so he, you know, you, any RMDs, anything that would have been required would fall on him in 23. And then theoretically you’ll be the next person in 24. That’s probably why they have that. I don’t know about the four month thing, but that may be a financial planner. But I would say, Dan, the biggest thing is first to find out, do you have to move it by so many months out of a thrift savings since you’re not, um, you know, the government employee. And then the second is if so, I know you’d have to move it into an inherited IRA.

Caller: That’s a, that’s a formal term and inherited IRA quote unquote.

Dr. Friday: Correct. Yes. And so when you talk to your financial or chase or whoever you want to move it to, I don’t know, you know, it’s all kinds of different. That’s what you’ll tell them because obviously it’s going to meet the criteria of an inherited one versus your own IRA, which will go on for your entire life and only RMDs required.

Caller: Right. So I’m under the age of 73, so I’m not required to take RMDs yet. Would I be required to do that with this under the 10 year rule?

Dr. Friday: Yes. You will. You would have to start the RMDs. Yes. After the date of death. And then you will have 10 years to take it out, but you will are required to start RMDs the year after.

Caller: The year after the year, after the year of death.

Dr. Friday: So yeah. So the year of death is 2023 I’m assuming. So 2024 you will have to take an RMD.

Caller: Wow. Okay. Good to know. Thank you very much.

Dr. Friday: No problem. Thanks, Dan. I appreciate you. All right. So if you’ve got questions or if you need help with doing taxes or you know what, maybe you’re just tired of dealing with IRS issues or maybe you’ve kind of been dealing with them, but just enough to keep them out of your bank accounts, but you’ve been making payments and you’re just not sure how much longer do you have to do this? And really the biggest thing I find when I’m dealing with most clients is it’s always just trying to keep ahead in a sense.

There’s never a break. And one of the things that I think we work really hard with our clients is let’s concentrate, for example, on 2024. Let’s make 2024 the year that we don’t owe any money to the IRS. Let’s break that down so we can afford, figure out how we can get that to the best of our ability and then deal with the past. Because what happens is people just get our payment plan and there’s continuously making payments, but they’re always adding to that payment plan because by making payments, they’re not able to pay their current bills. So you really need to sit down with someone that is an enrolled agent that deals with the IRS and you need to have a plan. You need to sit down and figure out not only, okay, you owe $40,000 to the IRS, but you’re going to owe money because you’re self-employed.

Every year we owe money. Fact of life. You’re going to owe money. You’re paying it monthly, quarterly, annually. If you have a paycheck, can you double up on federal withholding so that with your self-employed job you don’t have to worry about paying the estimates, but there is going to be money due. We all have partners in our business and it’s called the Internal Revenue Service. And in most of us, it’s 25% partners. So you need to be figuring out on every dollar you take out of that company, or I should clarify every dollar of profits, because some people don’t take it out of their companies, is Uncle Sam’s. Now sometimes we can accelerate depreciation. We can do certain things, do an adjustment to inventory if there’s been a lot of theft or giveaways, but those will be an effect that will reduce possibly the profit.

Therefore 25% of said profit will still be 25% of said profit. What you don’t really want to do a lot of is put yourself in debt to get yourself a bunch of equipment so you don’t owe Uncle Sam because sooner or later you got to pay the debt. So the game is to figure out how can I pay the least amount to Uncle Sam. In that same scenario though, I don’t want to be taking on a bunch of car notes or different equipment notes just to try to have a bunch of equipment that I didn’t accelerate depreciation on so I don’t owe taxes, but now I owe the note. So you can get yourself upside down in those kinds of scenarios and you really do, especially a small business owners, you really need to consider what is the best way for you to do what you want. But also remember, IRS is always going to be our partner in business and the best way to think about that is 25% of all profits need to go to a separate bank account because that’s taxes that you’re going to owe. If there’s a way to save money, great. You’ll have over saved money in the tax account. What you don’t want to do is spend every single dollar and then come tax time, Uncle Sam’s got his handout and where’s their 25% or whatever.

You know, I mean, percentages are different, but the likeliness is you’re always going to owe almost 15 because self-employment tax is 7.65% for the employer. We get credit back. It’s still 15% tax guys. So if you don’t owe ordinary income tax, you’re going to owe self-employment tax. So again, have a plan, figure out how you’re going to deal with the IRS. Because if your plan is just to keep filing and keep adding to the existing payment plan, sooner or later, the payment plan is going to get too high. Gosh forbid you want to retire or you have, I mean, I have people that their social security is being hit because of that same reason, right?

Because they continuously. So even though they don’t even have to pay taxes right now, they’re on a theoretically a payment plan for the past. It’s like a really bad credit card. So there are ways of getting some of those, a lifestyle and situations where you may not have to make those payments. Again, you need a plan. So if you need help with that, I’m Dr. Friday, enrolled agent licensed by the Internal Revenue Service to do taxes and representation. So if you need help with representation, or if you need help with just tax preparation, doing your taxes, getting a plan together, figuring out how that’s going to work, I’m your girl. So all you have to do is you can call my office at 615-367-0819. Again 615-367-0819.

You can also go to drfriday.com and our calendar there. So you can set up an appointment for taxes. That’s going to be coming up in January. If you need an appointment prior to that, you need to just call the office again at the 615-367-0819 number, and then we’ll be able to help you with whatever those, you know, whatever situation, if it’s a tax situation, at least we’ll be able to help you with that. You can also email your situation to us at friday at drfriday.com. That’s friday at drfriday.com.

Again, if you have IRS issues, or you’re just looking for someone that can help you out with taxes, maybe you’re looking to see have you gotten the best tax, not so much prices guys, but you know, are you getting a good, good tax person? Are they maximizing your taxes? Have they explained everything to you? If so, you’ve got a perfect person, stick with it. Maybe your person’s retiring, so you need someone else to step up. If you need help with any of that, again, you can call the office Monday morning 615-367-0819. Or you can just email friday at drfriday.com. That’s friday at drfriday.com. And we’ll be there to help you understand your taxes, run through them, make sure that you’re getting the best that you can as far as a tax savings. I truly hope you guys are enjoying this Saturday.

And I hope that you spend a little time doing the things you enjoy doing. If you need me, 615-367-0819.

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In this one-minute moment, Dr. Friday delves into the tax implications of inheriting property. She explains the difference between inheriting a property at the time of a parent’s passing versus being put on the deed or receiving a quick claim. Learn about the potential tax savings and the importance of understanding the basis of the property.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

What do you do if you inherit a piece of property and you don’t know the basis? Well, that’s not as complicated as you might think. It depends on when you inherited and what the situation was. Let’s say that you inherited your parents’ house at the time of their passing and that is always better than your parents putting you on the deed or quitclaiming it to you. If you don’t understand the difference you really do need to call us because there’s a huge tax savings because if I inherited that property at the time of their passing I get a step up in basis. If they quitclaim it to me, unless they quitclaim it for the exact amount they have in it, we’re gonna pay tax on the whole amount. Big difference. Check me out www.drfriday.com.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from two to three p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday emphasizes the importance of keeping your personal details updated with the Internal Revenue Service. Learn about the IRS Form 8822, the steps to take if there’s an issue with your information, and how to reach out for further assistance.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info, go to www.drfriday.com. This is a one-minute moment.

Making sure your information with the Internal Revenue Service is correct is your job. The IRS, sure, when you file a tax return, they’re going to update that information to the best they can. But if you have moved, relocated, or have other information that isn’t in their system, it’s your job to use Form 8822 to make sure your name, your old address, your new address, and Social Security numbers are correct. If there’s a problem with it, you need to contact the IRS. And there is a direct line, though it might be busy: 1-800-829-1040. Or if you need more help with the IRS, call us at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from two to three p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday, a seasoned tax expert with 25 years of experience, emphasizes the importance of planning ahead for your taxes. She offers insights into the services her firm provides and how you can reach out with your tax questions. Whether you’re familiar with Dr. Friday or just getting to know her, this episode is a quick dive into the world of tax planning and IRS assistance.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

My name is Dr. Friday. Many of you guys are probably listening to me on Saturday at 2 o’clock, but this is the one-minute moment which hopefully is going to make you think. It’s about talking about things we need to do or things you should be planning on for your taxes. If you’ve got tax questions you can always email Friday at drfriday.com. It’s a busy time right now and I know the phone lines are really busy, but you can try calling 615-367-0819. And if you just have no idea who I am, go to drfriday.com. It’s gonna tell you that I’ve been in business for 25 years and been doing taxes, helping people with the IRS, and I can help you.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from two to three p.m. right here on 99.7 WTN.

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In this one-minute moment with Dr. Friday, discover a unique tax tip that could put extra money in your pocket. Ever thought about renting out your primary home for two weeks? Not only can this provide a financial boost, but it’s also tax-free! Dive into this episode to learn more about this little-known strategy and hear how others have benefited from it.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Looking for a way to put a little money in your pocket, possibly? Think about taking your home, renting it out for two weeks, whatever you might give for it, guess what? That is tax free money. We can all rent out our primary homes for two weeks a year and you don’t even have to report it on your tax return. It is free money to you and that is a great way to actually consider. I know I have some friends sometimes that do house exchange and I also have some friends up in Kentucky that during the Derby used to rent it out all the time. So they would actually have two weeks of free money. Think about it, another way that you can put money in your pocket no matter what, 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from two to three p.m. right here on 99.7 WTN.

View Details

Welcome to this episode of the Dr. Friday Radio Show! Join tax expert Dr. Friday as she navigates through:

• Introduction & Upcoming Tax Season:
  • Dr. Friday’s role as a financial counselor and tax consultant.
  • Preparations for the upcoming tax season, including scheduling, deadlines, and extensions.
  • The significance of tax planning and understanding personal tax situations.
• Life Events & Taxes:
  • How events like withdrawing from a 401k, selling real estate, and changes in marital status affect taxes.
• Tax Programs & Scams:
  • Warnings about misleading advertisements, especially concerning the Employee Retention Tax Credit (ERTC).
  • The difference between the ERTC and PPP (Paycheck Protection Program) funds.
• Offer and Compromise with the IRS:
  • Handling negotiations with the IRS and the importance of maintaining good standing.
• Entrepreneurial Tax Challenges:
  • The tax dilemmas faced by self-employed individuals.
  • Emphasizing the need to stay updated on tax obligations.
• Caller Queries:
  • Inquiries on topics like inheritance, unfiled taxes, and the implications of sales and investments.
• Complexities in Taxation:
  • The intricate nature of taxation, particularly for those with varied income streams.
  • The importance of comprehensive tax documentation.
• Advice for Business Owners:
  • Challenges faced by entrepreneurs regarding taxes, including different types of taxes.
  • Guidance on the Tennessee Department of Revenue’s “TNTAP” system.
• Capital Gains & Medicare:
  • Discussions on capital gains, especially related to selling homes.
  • Potential Medicare implications due to significant capital gains.
• Closing Thoughts:
  • The significance of understanding capital gains and their broader impact.
  • A festive sign-off wishing listeners a Happy Halloween.

Stay tuned as Dr. Friday demystifies the complex world of taxes and offers her expert advice!

TranscriptPart 1 – 00:00Announcer

No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Dr. Friday Show. If you have a question for Dr. Friday, call her now, 737-WWTN. That’s 737-9986. So here’s your host, financial counselor and tax consultant, Dr. Friday.

Dr. Friday

G’day, I’m Dr. Friday and the doctor is in the house. We are very busily getting prepared for the next tax season. Honestly, I got to play hooky the last week or so. So I am all ready to get ready to get organized, really.

If you are a tax client of mine and you want to set up your tax appointment, the calendar is on the website. So you can go ahead and set up your time for your tax appointments. If you are looking to have a tax appointment.

And then of course we still have to deal with some of the issues that are still coming out there. There were a few extensions out there for individuals that might’ve been, I know in California they have an extension. There may be a couple other small ones for the year of 2022, but all in all, most everybody should have already filed your 2022 tax return. It was due on the 16th of October and hopefully that was all filed. If you’ve gotten love letters containing something in them, or you have a question concerning maybe this year, because we’re what, 10 months into 2023, about time we start really talking about tax planning or understanding your tax situation. Because sometimes life happens and you either had to take some money out of a 401k, you sold a piece of real estate, you inherited something.

All of those things continuously happening. And most of them have an effect, getting married, getting divorced. If you are a small time employer and you haven’t filed for the ERTC, I would be careful with some of the ones that are advertising out there, but it’s definitely a legitimate possibility for you to be able to get. I will tell you a number of my clients have, we have processed it with a local CPA and many of them aren’t qualifying for as much as you hear that 24,000 or whatever, $23,000 an employee, but they are getting money back. I do want to reiterate that the ERTC, the employee retention tax credit is taxable income to the employer. So you wrote off those taxes, you’re getting it back. Or it becomes income in the year in which it affects. So that is important to understand.

Unlike PPP money, this is money that you will be paying taxes on. So prepare that way so that you make sure that you understand how that’s going to work. If you want to join the show today, you can at 615-737-9986. We have been working diligently on a number of offer and compromises. It is what we do a lot of. We’ve been doing that as an enrolled agent. I’ve been doing that for 20 plus years, helping people to make deals with the IRS. It is not something that every person that walks in my office is going to be able to do. I am not one of those firms that’s going to say, pay me $500 a month or a week and I’ll take care of your problems. We’re going to have a plan. We’re going to work towards that plan. And if any of the people listening have ever worked with me, you’ll know that the IRS does not move quickly.

So it is a plan that we are going to work together and make sure that we can get fully through the process. And keep in mind, if you get a deal with the IRS, let’s say you are one of them that can meet or get the compliance and you’re able to get a deal, you do have to stay current for five years. That means no payment plans.

That means you have to be making estimated in some cases, or maybe it’s sometimes it’s a one or two year situation that would normally not affect every other year you filed their good, but you ended up with a bad situation. But if many cases, it’s the entrepreneur, the self-employed person that ends up with IRS issues. If you are one of those, there are a plan, but you do have to get yourself on track on how to deal with not only moving forward, which is probably more important than dealing with the past because as soon as you get a fix on how to stop having to pay the IRS as much money every year, therefore getting yourself in trouble, which basically means making payments or maximizing your taxes, whichever it might come down to, then you can start taking care of the past.

But we do have to figure out a way to do that because it’s not just as simple as, oh, well, I owe the IRS a hundred thousand dollars. It’s, you know, I haven’t filed them for the last couple of years. And now with penalties and interest, you have all of these kinds of situations. It goes on past that because what I don’t want to do is have you coming into my office every year because there’s an issue or a problem. I want to get you on track.

So that way every year when we file your taxes, you’re on spec, you know, okay, I owe $15,000. I’ve paid him $15,000 or I have access to the 15. So I don’t have to worry about paying the IRS more money in penalties and interest. Cause that is probably one of the worst situations is not only not filing and paying taxes, but after two or three years, you’ve almost doubled the amount of money that you owe the IRS. So, you know, you may have started out owing them $10,000, but now you owe them 20 because it’s been a number of years.

So you want to be able to make sure that that information is going correctly. Again, if you want to join the show, you can 615, uh, seven, I’m sorry, 615-737-9986. 615-737-9986 is the number here in the studio. If you’ve got questions concerning your taxes or maybe some income that you have received or you’re not sure if it’s taxable. Um, and of course, sometimes some of the things you do as well, if you receiving something like social security, then you have to also remember that social security can become taxable. I have many times have a situation where someone comes in and they go, well, I set aside that 15% on the sale of this. And then when we figure out their taxes, they actually owe more because they normally didn’t have to pay tax on social security, but because of the sale of this property of this capital gains, it created not only taxable income from the sale, but also they tax their social security benefits.

So again, that is important that you understand not only what the tax rate is, but what’s being taxed and is there a way of not being taxed in many cases? You know, it really isn’t. I mean, I hate to tell you, I mean, you have your income and you have your expenses. If the expenses don’t offset the income and most cases, how can it, because we cannot have zero income every year. It just doesn’t make any sense. I have people that come in often and they’re always telling me I didn’t make any money this year. I didn’t make any money.

I can’t owe the government because I didn’t make any money. But then how did you pay your rent? How did you make your car payments in the case of this one particular, um, you know, how did you eat? You know, there is certain minimums people that you will have. And as a self-employed individual, you didn’t pay tax on that money. You have to pay tax on what it takes for you to live.

We live on after tax dollars. So understanding again, how do taxes work? What’s the best way to make it work and where it’s going is going to be the best or the simplest way for you to really understand how to keep yourself out of trouble with the IRS. All right. We’ve got Ricky from Franklin. A question on inheritance. It looks like, Hey Ricky, what can I do for you, sweetie?

Caller

How are you Dr. Friday?

Dr. Friday

I am doing great. Thank you for calling.

Caller

Let me tell you a situation I’m in about my parents, parents that are 10 months between one another. And it’s just in the last few years when we had all this real estate craziness. Yes. Having said that, I got three sisters and we had the house appraised and everything you’re supposed to do. And like I said, that was when it was bringing a hundred thousand over asking price.

Dr. Friday

Right.

Caller

My question is we, we, we, uh, we paid 719,000 for it and wind up getting 585 for it, which is a difference of $134,000, 33,500 a piece. My question is only income I’ve got is social security.

Dr. Friday

Right.

Caller

My wife’s got a super good job. Is it any way to recuperate that last? It’s what my question is.

Dr. Friday

Well it is, if you’re married and you file jointly, you will be able to claim the 3000. It’s not a lot, but $3,000 a year of that for the next 20 years. So you’d be able to use it all. And if there was any kind of capital gains in the future, you can wipe it out. But even if you don’t have any future capital gains, you will get $3,000, which at, you know, 20% would be $600 in your pocket every year. Um, it’s, so it really just depends on, I mean your situation, but, um, I would definitely say it would, it has to roll with you because you were the individual that were inherit. So if you file married filing separately, it won’t benefit you anything cause you’re not paying any taxes in cause you’re living solely off social security. It sounded like, um, you’re exactly right.

Caller

Okay. 3000 a year. What is that called?

Dr. Friday

That is a, it’s, it’s called lost carry forward and it’s under your capital gains tax laws. Um, but you get to claim up to a negative 3000. So you have 33,000. So for the next 11 years, you’ll get $3,000 a year and offset her, your ink, your joint income on your tax return.

Caller

All right. So actually can get it back just a little at a time.

Dr. Friday

Exactly. You’ll get it back. I mean, at least in your case, it will be something you can get over your lifetime where if it had been a hundred thousand dollars lost, you couldn’t, you know, they don’t, there’s, it would end up running out before unless you have other capital gains. But uh, in your case, yeah, you’ll, you’ll get it back a few pennies every year. But Hey, at this point it’s free money because you’ve already, um, suffered the loss of the, the real estate anyways.

Caller

Right. So based on this, the reason I’m getting it back, my estimation is because I’m filing jointly, which I always do with my wife.

Dr. Friday

Right. You are a hundred percent right, Ricky. It is because you’re filing jointly with your wife that you’ll be able to get any kind of refund back.

Caller

Oh, okay. So what will they do? Just start putting it in your bank account every month or what?

Dr. Friday

No, I mean, they basically that when you file your taxes, it will be on the tax return and it will increase your refund or balance due, whichever may be the case.

Caller

Okay. Thank you.

Dr. Friday

All right. Thanks, sir. Appreciate the question.

Alrighty. We’re going to go ahead and get ready to take our first break. Again, if you’ve got questions, that was a great one because a lot of times things happen and goodness with the real estate market, we had several people that were making way above market. But then when you hit that, that point where, so she was something like that, where you list it for 700 and you only sell it for 500. There is some losses that will come along and you will be able to claim those as a person that was a beneficiary. In some cases, people will get better benefits if they have other losses they can take against gains, but either way, he’ll be able to retain those. But if you have questions, join the show, 615-737-9986. 615-737-9986. We’ll be right back with the Dr. Friday Show.

Part 2 – 00:12:26Dr. Friday

Alrighty. We are back here live in studio. And if you want to join the show, you can at 615-737-9986. 615-737-9986. And we’re going to go right to the phone lines. We have James from Nashville. Hey James, looks like you have a little tax issue. What can I do for you?

Caller

Hey, Dr. Friday. I never filed my taxes for 2020. I think it was that COVID year where they extended it. We can do it in June or something. Well, I kept putting it aside and putting it aside and never filed my taxes. I usually get, like the past two years I filed them and everything was fine. They gave me my money and everything. I got money back. So I believe I owe taxes. You know, I don’t owe taxes for that year. But I tried to get TurboTax or something to do my taxes and I can’t find the stuff to do that. So what can I do about that? Is there going to be anything special I need to do or can I just try to get the old forms and fill it out? Or is there special stuff?

Dr. Friday

Well, I don’t know. I mean, yes. I mean, all you need to do, there’s nothing really majorly special. Obviously, electronically would be easier because you do want to make sure if there’s a refund that year, you’re getting close to come April, you’ll lose the 2020 tax year. Right. So a one, two and three, 21, 22 and 23, the only refund for three years. So we want to make sure that you do this now versus later. So you can certainly do a paper copy. I think they still accept those. I know I don’t ever file those, but you can download the forms probably at IRS.gov.

I would suggest or you might want to see. I mean, I can’t believe TurboTax or them don’t have past years available. Just seems like they would want to bill you for anything because it is still e-fileable that year at this point. So you can still e-file it. But either way, I would just say, James, get it done. If you need help, you can call us as well, but either any direction you want to go, but just get it filed. So that way you don’t lose the refund would be more my concern than if you owe money. Well, then we can deal with that as well. But it’s mainly if you have a refund, I just hate to leave the money on the table.

Caller

Okay. Would there be any penalties or anything because it’s so late?

Dr. Friday

No, that’s the beautiful thing. If they owe you money, there’s no failure to file penalties. It’s only if you owe them money that you get hit with penalties.

Caller

Okay. I’m pretty sure, like I said, a few years before that and after that, I’ve gotten money back.

Dr. Friday

Right. I mean, either way you want to just deal with it, deal with whatever. And it sounds like you usually always file your taxes. So even if there is a penalty, you may have a very good standing to be able to get that removed as far as the penalty if you did owe money. But I would just say, get it worked up so that way you can get it filed, get it on track. So it’s not out there waiting and either unfiled and losing money or file and pay the few pennies that you might owe.

Caller

Okay. So you’re thinking there’s a good chance I’ll still get that money back. You said after three years, I won’t be able to get it back?

Dr. Friday

Right. So you’re good until April of 2024. So you have six months. Okay. So 2020 was due in 21. So 21, 22, 23, and we’re in 23, as you know. So those would be the years that you have. So right now, the IRS will refund for the tax years of 20, 21, and 22. That’s the three years they’ll refund money for. So you’re right there. But in six months, 20 will drop off because 23 will go on. If that makes sense at all to you. If not, trust me and say that you have six months to get your taxes filed and we don’t want to leave that money on the table.

Caller

Right. Gotcha. Okay.

Dr. Friday

All right, buddy. If you need help, just give me a holler. I’ll be right back. Bye-bye. All right. And that’s perfect. I mean, James is spot on as far as just get the taxes filed. And again, I mean, really, I’m serious with, I mean, it’s kind of teasing him, but seriously, I don’t want him to leave money on the table because if he waits and says, oh, you know what? I’ll just file 20 when I go see my tax guy in 2023 to do my taxes for 23 and 24. And then the guy or person, whoever’s filing his taxes says, oh, sorry, you can’t get it. So filing it now would be a perfect plan so that he gets his refund. And that was one of the years that there was also a stimulus money. If he hadn’t received it, he might still be able to get it on because the only way you get stimulus money now is on the tax years that it happened. 20 and 21 were the two years that there was stimulus money available.

He may have already received his stimulus money, but I’m just saying, if you did not, those are the years that you have to file to request the stimulus money. And I still know there’s a number of people out there listening. They’ll say, I never received my stimulus money. We have many cases out there where we have copies of bank statements proving that there was no money received. The IRS is tracking the payments, but at this point, we’re not hearing anything. There doesn’t seem to be any kind of resolution per se that’s available to us to be able to go out and do what we need to do, which is to find that stimulus money. And I have a number of people. And I think part of it also comes as people were married in one year and divorced in the next.

So they used the 2019 for the 2020. And if you relocated, your spouse may have received the check. And I know they were supposed to turn the check back in and not do anything, but let’s be honest, we all know that doesn’t always happen that way. So I’m just trying to say is that you want to make sure that if for some reason you never received your stimulus money, I will say I’m not chasing it for most individuals any longer because we don’t find that the IRS is receptive. So what we have, we just send people out to the IRS themselves and pull your transcripts, see if they show the money and then look, go back and look at the dates. Cause that’s what we have and you know, find and see if the money is actually there. And then from there, you’ll have to call the IRS and deal with a lost check situation. But but anyway, so if you haven’t filed taxes in a number of years, easiest thing, let’s get them filed.

If you don’t know where to start, we can help you. We can get your transcripts. We can help you get that information so that we can at least report what the IRS has able to report and then any other additional income that you can provide as far as information, all of that can go on a tax return and prepare those taxes, get them all up to date. You have to have at least filed the last six years minimum to be in compliance. In some cases you may be able to, you may have to go past that because the IRS has done assessments on prior years and you have to address those assessments as well. But the IRS is basically saying we need to see at least the last six years on file, knowing that you’re in compliance and then going forward from there, making sure you stay in compliance.

And if you don’t, then that’s when collections or they can, you know, any deals they make, they will basically just turn them off and say, nope, we made you a deal. You fell through on the deal. You didn’t do what you promised and we’re going to come back and collect for all of it. So there are, you know, the fresh start program. You hear a lot of that pushed around out on the radio and TV when you hear about companies that do that. And there is such a thing as the fresh start program. It’s not something that new.

We’ve had it for a number of years to be quite honest with you. But it’s also something that if you’re looking to truly get a fresh start with the IRS and you don’t, you know, the biggest thing is if you have assets, you know, if you own a house you know, there’s a chance that they may allow some of the equity not to be counted depending on your age. If you’re in your seventies and or, you know, late sixties, they may give you a waiver, but if you’re in your forties or fifties equity in the house is going to be equity in the house, which means you made your mortgage payment, but you didn’t pay the IRS. So guess what?

That mortgage equity is theirs. Same thing with 401ks and other things like that. There are certain things that are excludable and able to be dealt with, but I just want you to make sure you understand how important it is to be able to get that information, get it done, stay in compliance. It’s so much easier to deal with the IRS when you’re only dealing once a year with them than having to go backwards and deal with them for five, 10, 15 years. I mean, I honestly had a case. I finally got it resolved, but it was 1992 or something. There was an assessment made. It kept getting delayed because of different things like she had went bankrupt. She had done everything, but never got tied to the IRS. So she was in her late sixties and she was receiving only social security. The IRS is taking a portion of it because of this, this situation. Finally got that resolved for, for them to take it off, but it was not a simple situation.

And you’re always thinking, well, I thought the IRS could only go back 10 years. That’s not always the case. It’s from the date of their assessment or the date of your filing. And in this case, it had been assessed a number of years ago, but it was still not something that because of the way that the time clock kept getting stopped, it was a matter that you were able to do what you needed to do. You know what I mean? She needed to address it and make it move forward. So that being said, all you need to do is track the information and make sure you’re doing everything on the right steps so that you’re not sitting there going, oh my gosh, I’m in my seventies and oh my gosh, the IRS is taking part of my social security.

That is never a win-win situation. All right. So we’re going to get ready to take our second part of the show for a break, our second break. And if you want to join the show, you can do that. It’s a pretty easy 615-737-9986. We’re talking about taxes. We’re talking about money issues, but most important, my favorite subject is dealing with the IRS or the state dealing with tax issues. I’m an enrolled agent licensed by the internal revenue service to do taxes and representation. So if you need help with doing any of that, or maybe you have a friend or someone that you know is dealing with some of these issues on their own, they don’t have to, they can have someone in their corner, you know, because we can basically be a shield between you and the IRS if it’s necessary.

So if you need help with that, again, you’re in the show, if you want 615-737-9986, 615-737-9986 we’ll be right back with the Dr. Friday Show.

Part 3 – 00:24:07Dr. Friday

Alrighty, we are back here live in studio on this beautiful Saturday, even though it sounds like it’s going to get a bit nippy out there in the next few days, but I’ll take it considering we are at the end of October for all of you business owners. Again, don’t forget this is the end of third quarter. So you know, payroll taxes, 941 filings, state unemployment, all those good things are due by the last day of this month. So if you have questions or need help with that, you can always call our office, but otherwise make sure you file them on time. And the IRS is preferring more and more people to file their 941s electronically versus by paper.

So again, if you need help with that, you can give us a call and we can deal with that directly for you. But so let’s see here, we have a person that sent in a text just this morning, just said if they sell their residence and they make more than $500,000, will they end up having to pay taxes? And you know, we did have a little of that prior, like when the gentleman James called or whatever, and it’s talking about, you know, in 2021, we had a really good real estate period of time. And so I had several people that were selling their primary home and actually exceeding the current standard deduction that you’re allowed. So just to make sure you have a primary home, it’s making your primary home.

You have to have lived out of it two of the last five years. Doesn’t have to be consecutive, but you have to have been in it two of the last five years. If that is the case and you sell it, whatever you paid for it, plus the additional exclusion, which is 250,000 for a single 500,000 for a married couple, you get to claim. So in this case, they’re saying that they paid 150,000 for the house plus the 500. So their basis would be $650,000, but they’re selling it for 850,000. So in the scenario, they would have a $200,000 capital gains, which in most cases would be around the 15% tax bracket for a married couple.

It could be a little higher. Don’t forget that if it goes, if your total income is over $250,000 as a married couple with capital gains, you’re actually at 18.8% tax. And then if it goes over like 485, almost 500,000 combined along with the capital gains, you would be at 23.8. So always make sure you understand those little extras because whenever someone calls me, the first thing they tell me is, Oh wait, I’ve already set aside the 15%. I know that’s my capital gains. And my first question is, what is your income? What is the combined profit?

Are you actually at the 15% tax bracket? You know, it is most of the time, 85% of the time, I will say that the individuals set aside enough because they took the 15% and that’s where they were at. But those, those other times where, like I said, these individuals, they took 15% of the capital gains, but their social security now is 85% tax. So there’s another $20,000 of ordinary income that they could end up having to pay tax on. There are always these little catches in there that you have to be careful of. I’m just being honest, that the tax law within tax law, you had the provisional tax code, right? Which is the code that basically tells you how much of your social security tax is going to be taxed.

And then within the ordinary tax code, you have the capital gains tax, which are, of course you have capital gains, which short term is ordinary income. It falls under the ordinary income tax laws, but long-term has its own rules because that’s when you start seeing the 15, 18.8, 20, 23.8 tax. So again, a second tax code within the standard tax code. And then you always have the hidden AMT tax, which is for anyone that makes over 40 or $50,000 as a single individual. I think it’s like 90,000 for a married couple. Especially if you make it through capital gains, it’s supposed to be the way the IRS sells it to you is that it’s a way of leveling the playing fields for individuals that live off capital gains.

Theoretically, they’re making more money and therefore they can actually afford to pay more than capital gains tax versus other individuals. Yeah, you can buy that or not. It is another way of taxing you and that’s what it comes down to. And you can be from ordinary capital gains of 15%, right? AMT tax starts at 24%. That could be a big shocker if you end up having part of those funds being hit with AMT tax. So all I’m trying to say is that taxes are very rarely black and white. Sure, you go to work every day, you have a W-2, you make less than $150,000. You are likely not going to fall into any of these things I’m talking about.

You’re going to have, hopefully you’ve claimed enough on your withholdings to cover your taxes and every year you end up with a small refund. And that’s perfect world. But if you’re a person that does a lot of investing, you do a lot of short sales or stock sales or investing in real estate, REITs, all those kinds of things, then you are the individual that could end up with having multiple types of income, therefore falling under multiple types of taxation. So just make sure if you are one of those individuals, I would always suggest getting a second opinion. If you do your own taxes, there’s nothing wrong with that.

If you have been doing them and you feel that you’ve maximized your taxes and you’re not taking things you shouldn’t be taking and or you’re not missing tax deductions, sometimes it’s nice to have a second opinion. I would always suggest at least get a second opinion. More than once I’ve told the person that there was nothing more I could have done than they were doing themselves. But then there’s other times where I’m like, you can’t take these tax deductions. You’ve been taking losses on things that you’re not entitled to. And sooner or later you could be caught doing your taxes incorrectly. Or you know, you missed out on a couple of things, you know, and you really should have taken this as a tax deduction.

So getting that second opinion would be something that my opinion that would be priceless because then you know that either if you’re doing your taxes, perfect. And again, if you do your own taxes and all you have is a basic W-2 or maybe a basic 1099-R, Social Security, there’s really not. I mean, nowadays we don’t really itemize as often as we did back eight, 10 years ago, right? Because the standard deduction is so high. So you don’t really have the same situation. But if you are a person that has rentals, you’re self-employed, you have a number of investments, K-1s, different things like that, then you might want to get a second opinion to make sure that you’re meeting compliance on both sides. You’re not leaving money on the table and you’ve also maximized, you know, you’re not taking taxes or tax deductions that you’re not entitled to. So last thing you want to do is be audited.

Let’s be honest. I don’t think it’s going to be high on anyone’s table of things I want to accomplish in life, but you know, it can happen. And we all know that if they continue to try to find the funding that they’re looking for from the number of new agents, they will be out there doing more audits than anything else because that’s what’s going to generate income for the government. And no matter how they sell that, that they’re trying to help us get better customer service. I think what they’re looking for, most of the people they’re hiring are for auditing. So therefore they’re looking to create more income by auditing more tax returns. Statistically, they’re going to find mistakes and therefore generate income.

So if you’ve got questions, maybe you’re getting ready to put all your paperwork together. And I would say every year, just find a manila folder, a box, a place on your desk, a basket, whatever, and just start putting all of your tax forms in there. Also final paycheck stubs. I can’t tell you every year because somebody has moved and they worked a job and the old employer either is out of business and or they can’t reach, so they can’t get their W-2.

At least if you have your final paycheck stub, there is the ability to create a W-2 or at least then you can go back and pull your transcripts and get the W-2 from the IRS. But making sure you remember, because we’ve had more than one return sent back saying, Oh, you forgot to file, you know, something, uh, on your tax return. And they forgot because you know, life happens and you get busy and then you’re like, Oh my gosh, I forgot that I worked the first part of this year at this location because you moved, you, you know, you did all these other things.

And then you found out that you had a whole different situation. All right. So if you have questions, you can join the show at 615-737-9986. 615-737-9986 is the number here in the studio. We are live today. So if you want to join the show, maybe you have a question or you have a friend or someone that hasn’t filed taxes and you’re not too sure how you can either help them or what, if it’s you and you’re not sure where to start, I guarantee you it’s not as complicated as it might sound. And we definitely have been doing it long enough to help you figure out where to start and what to do. Same thing with businesses. I mean, we often, I mean, obviously entrepreneurs are something we deal a lot with.

And one of the reasons is we usually have a lot more taxes. We have to deal with sales tax, business tax, franchise excise tax, you know and, and then obviously federal taxes. So we have a lot more to deal with. And if you have a situation where you have more of that going up, maybe you’ve started a small business and you’re not too sure exactly how 10 tap works and you’re trying to figure out how you’re supposed to be in compliance.

And then of course your charter, if you’re a small business and you have a small LLC and you’re like, okay, now we’re dissolved. How am I supposed to get that back activated? These are the kinds of things we have been dealing with for quite a while. So just saying it is out there, you’re able to, you know, get some help if you, if you need that, because I know 10 tap can be, I mean, I’ll be honest being that we’ve been at this 25, almost 30 years, I guess. You know, we remember the year hand filing the sales tax and then used to have to do it on the web. And then finally through 10 tap makes it so much easier, seriously.

And you’re able to go back and look at prior returns and prior things, see what was filed when it was late. All of those are pluses as far as I’m concerned, but I do know it can be a little overwhelming for especially new business owners that haven’t really quite figured out exactly what they’re supposed to be filing, how they’re supposed to have access to it. And why is there penalties when you didn’t file something and you’re like, Oh my gosh, why do I have a penalty?

All right, we’re going to go ahead and gear for our last break. And so if you want to join the show, you can again, it’s 615-737-9986, 615-737-9986. We’re going to take our last break here for this show. So if you’ve been waiting and you’re like, Oh my gosh, I’ve got to get through. And I know our phone lines sometimes get a little busy, so you’re fine. Just call back. But if you have a question, 615-737-9986, we’ll be right back with the Dr. Friday Show.

Part 4 – 00:36:01Dr. Friday

All righty, we are back live here in studio and the phone lines are active. So it looks like our first caller is Tim from Bellevue. Let’s go ahead and get him on the line. Hey Tim, what can I do for you?

Caller

How you doing?

Dr. Friday

I’m doing fine.

Caller

And I am selling my house soon and I’m trying to figure out the capital gains.

Dr. Friday

So how long have you lived in it?

Caller

26 years.

Dr. Friday

Okay, plenty of time. Just ballpark, what do you think it’s worth? Just give me a rough number. Does it have to be locked in?

Caller

I’d say $300,000. I’ve got probably $120,000 in it.

Dr. Friday

Okay. So theoretically, are you single or married?

Caller

Single.

Dr. Friday

Okay. So you would be able to sell it for $370,000 without paying any taxes.

Caller

Okay, so if I go over that, would that be earned or unearned income according to Social Security?

Dr. Friday

Unearned. It would be unearned. So well, it won’t affect your Social Security if for some reason you sold it for $400,000, which would be awesome, and you ended up with $30,000 capital gains. So if you sell for $300,000, it would be unearned and it will have a zero effect on your taxes. The big problem you have with that is your Medicare, not Social Security. Sometimes Medicare, it won’t affect it on this one unless you start showing other income, if that’s making, I’m confusing you a little bit. So it will not affect your Social Security or Medicare if it sells for $300,000, everything will go smoothly. You sell it for $400,000, you make a little money.

Caller

I’ll sell it.

Dr. Friday

Okay, perfect. Then you don’t have to worry about it.

Caller

I’m not worried about the Medicare, but I’ve got my federal Blue Cross Blue Shield.

Dr. Friday

Oh, okay.

Caller

I’m one of the cards.

Dr. Friday

No worries. Okay, great. Then you don’t have to worry about it. So sell it for as much as you can, but you could sell it up to $370,000 and pay zero tax.

Caller

Oh, you’re a doll.

Dr. Friday

No worries, mate. Thanks for listening.

Caller

I appreciate you. All right, bye.

Dr. Friday

Thanks, bye. Let’s hit Steve in Nashville. Hey, Steve, what can I do for you, sweetie?

Caller

Hey, Dr. Friday. I’m a local Nashville native and I’ve rented here for the last 30 years and decided to buy a property about an hour west of here. And so I’ve developed it. I put a steel building on it and I also bought a car this year. And I’m wondering, it’s going to be a future homestead. Is there any way I can itemize this, these investments off my taxes rather than just claim a standard deduction?

Dr. Friday

Probably not. I mean, the car you purchased, theoretically, single or married, Steve?

Caller

Single.

Dr. Friday

Okay. So, you know, we have to beat the 13,000 you’re automatically going to have. You’ll have the property taxes, which you may not have had in the past. You’ll have the sales tax from the new car that you purchased. You’ll have your mortgage interest. If all that adds up to more than $13,000, then you get to itemize. Otherwise the answer is no.

Caller

So the investment itself and land and the building I put down there, there’s no write off there.

Dr. Friday

There’s really no write off. It’s what you just called it. It’s an investment, just like buying stock or anything else you’re investing for the future that’s hopefully going to grow and become bigger and better.

Caller

Well, thank you so much, Dr. Friday.

Dr. Friday

No problem. Thanks for calling, sweetie. All right, let’s hit my girl, Dana and Franklin. Hey girl. Hi there.

Caller

Hi, Dr. Friday. So I just purchased a business, a franchise, and I’m getting a small business, getting it all set up. And I apply at the handyman service. And I applied for what I thought I needed. So I have a sales and use tax certificate now. But from what I understand from my accountant, they’re saying that I wouldn’t need that because handyman services is a service. So there’s no tax on services.

Dr. Friday

No, he is completely, you might want to recheck with your bookkeeper or accountant. Service, that’s true, but it’s only services like medical or taxes. Handyman often bring in markup supplies. Unless the person’s providing everything and just the service, I think you’d even still have a tough time on not collecting sales tax in Tennessee nowadays. I would double check that Dana, because I have say, I mean, I will tell you, I have people that are handymen that are collecting sales tax on their invoices.

Caller

Okay.

Dr. Friday

So just double check with the state.

Caller

Okay. Is there anything else that I need to apply for with the state? Because I believe that’s the only thing besides the business license with the county.

Dr. Friday

Right. County and city or whichever you’re in. And then that, that’ll be the only two things, unless you’re an LLC and then you might want, you’ll have to have your franchise excise.

Caller

Yep. Corporation.

Dr. Friday

So you’ll still have a franchise excise. Any kind of entity other than sole proprietor, but your CPA probably will get that for you. It’s only an annual filing, not a big deal. So the business license and the sales tax would be the only two things you’ll be tracking.

Caller

Okay. And then what about federal tax payments? I’ve got all that information for that. Any advice on.

Dr. Friday

Well I would definitely set up a separate tax account for taxes. So as the profits come in, you can set aside a percentage, let’s say it’s 10% of a profit or whatever that you’re sitting over there. Cause you’ll have some other expenses like miles and different things depending on your situation. But I would definitely set one aside because if you’re making money, obviously 20, 25% of actual profit is uncle Sam’s between social security, Medicare and federal. Got it. Okay, great. Thank you so much. All right. Thanks. Bye. All right. Lee in Nashville. Let’s see if we can get him in and out. Hey Lee.

Caller

Hi, Dr. Friday. My husband and a friend took care of another friend until she passed away. She put her home inside a revocable trust.

Dr. Friday

Okay.

Caller

And left it to my husband and this other friend.

Dr. Friday

Perfect.

Caller

Well, we have to pay income tax on the proceeds from this home. And if we do, is it also going to make our Medicare tech, our Medicare payments go up?

Dr. Friday

Well, I’ve got great for you. So, so here’s the deal. Um, whatever at the time of that person’s passing, whatever the home was valued, let’s just say it’s worth 300,000, just the number. But if it was worth that and they sell it for 300 or less, there’s zero tax. It’ll have no effect on your taxes. If for some reason they hold it for a number of years and it’s worth 300 and they sell it later for 500, that’s when it would affect you. But, um, right now if they were to sell it after the, once it gets done and everything else, it’s likely going to be valued at the same amount as it was when the person lived in it, therefore, or what the time of that person’s passing. So you’ll have zero taxes due and it will have a zero effect on your Medicare.

Caller

Oh, that is such good news because we’re not expecting that it’s valued at three 40, but we’re not going to get that much because it’s in bad shape.

Dr. Friday

Right.

Caller

Um, all right. Thank you, Dr. Friday.

Dr. Friday

No problem. Thanks for listening.

Caller

I appreciate it. All the time.

Dr. Friday

Thank you. Bye bye.

All right. Well, thank you so much. I do appreciate you calling in and asking the questions. It makes the show so much more entertaining than hearing me just tell you all about the different tax laws. But again, for some of you that may have wondering again, when Lee called, she was talking about someone that had her husband and a friend had taken care of somebody. The house was in a trust. So at the time of that person’s passing, and this goes for anyone that inherits a home, we have this wonderful thing called a step up in basis.

So at the time of that person’s passing, whatever the house is worth, that is what your basis will be. So in this case, if it, if the basis was over 300,000 and they sell it for that same dollar amount, there’ll be a zero tax. Sometimes people will hold onto the homes, fix them up, try to make them, um, or rent them out for a while, turn them into rentals. At that point, you may, your basis stays the same, but if you hold onto it, it may increase or decrease based on the market and where it’s at. So again, really your choice.

But if at this point it will have, and when she was talking about and several calls, I think I brought up one of the biggest things I have noticed is that we end up with problems with Medicare when we have these large capital gains. So somebody sells something or does something and, um, it’s not going to be your primary home, but let’s say you have a rental or second home or you have some stock and you decide you’re going to clean out the stock and turn it into cash because the market’s not doing so well.

I’ve had all these kinds of things happen. And so somebody does that and their income goes from their usual 50, $60,000 now up to 180,000 or something like that. So if a single individual goes over $90,000 and that would include the taxable portion of social security and everything, they’re going to add a hundred percent of the social security. So just keep that in mind.

But if it’s over 90,000, then Medicare will increase. You’ve got the standard and then it will go up. I think it’s like $33 a month. And then if it’s a married couple and they have again, 180,000 and it goes above that, then your Medicare will go up and it will go up for a year or I think it’s over a year when it actually gets in and out, but it will go up for a year and then it will come back down. But that can be very expensive because I have people that end up with a large sale.

So she back in 21 and 22 where they went from their usual 60, 70,000 to like 300,000 as a single person because they sold something and now their Medicare went up by, I don’t know, four or five, $600 a month. So for 12 months, I mean, it’s seven, $8,000 that you hit with. All right. So I’m going to spin it up. This is the Dr. Friday show. I hope you guys are enjoying this Saturday.

And as we always say, happy Halloween, happy Halloween.

Cop you later. Thanks for watching.

View Details

In this one-minute moment, Dr. Friday delves into the complexities of reporting the sale of a second home on your taxes. Was it ever rented out? Was it a VRBO? The answers can significantly impact how you report the sale. Tune in to understand the difference between long-term or short-term capital gains, the recapture of depreciation, and more. For further queries, Dr. Friday is here to help.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Question that came in asked how do I report the sale of a second home? And this is a little bit tricky because was that second home ever rented out? Was it a VRBO? If none of that applied, it was truly just a second home, then this is truly just long-term or short-term capital gains reported on a Schedule D. But if it was a rental at some point, remember we have recapture of depreciation which is taxed at ordinary income rates, then the actual gain between the sale price and the original purchase price and all the other assets tied to it would be capital gains, either long-term or short-term. If you’ve got questions go to drfriday.com.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from two to three p.m. right here on 99.7 WTN.

View Details

In this one-minute moment, Dr. Friday delves into the intricacies of itemized deductions for couples filing their taxes separately. While one might think it’s as simple as taking the standard deduction, the IRS has specific rules that could surprise you. Learn how mortgage payments and charitable contributions play a role in this decision and why it’s essential to be informed before making your choice.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

My spouse and I are filing separate returns. How do we split our itemized deductions? If you are filing, married filing separately, the one that is not paying, because so often what happens is one individual is paying the mortgage, maybe even doing the charitable contribution so they’re exceeding the single standard and the other individual says, oh, I’ll just take the standard deduction. Yeah, the IRS says nope. So if the one person is taking it all on their side, guess what? That other person has to take zero or what they actually paid out of their pocket when itemizing. Married filing separately may be more complicated than you thought. Check us out at drfriday.com.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from two to three p.m. right here on 99.7 WTN.

View Details

In this one-minute moment, Dr. Friday delves into the tax implications of owning a second home. Can it be tax deductible? The answer might surprise you. Whether it’s a brick-and-mortar house or a motor home, understanding the nuances of mortgage interest and lines of credit can make a significant difference on your tax return. Tune in to get the insights and ensure you’re making the most of your investments.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

So here’s the question. If you have a second home, is it tax deductible? And the answer could be yes. If it’s not a rental, we can write it off, but it has to be true mortgage interest. It cannot be a line of credit. So that’s where we have to make sure that you’re doing your lines or loans a lot different than we used to worry about. So if you have a first or you have a second, and in theory people, motor homes can be considered second homes on IRS tax forms. So if you have questions about how or what you’re doing on your taxes, you might want to give us a call at 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

View Details

In this episode, Dr. Friday delves into the intricacies of mortgage interest deductions. With standard deductions on the rise, many find it challenging to meet the threshold. But did you know the purpose of your equity lines or lines of credit can influence your tax deductions? Whether you’re paying off student loans, consolidating credit card debt, or buying a second home, understanding the nuances can make a significant difference. Tune in for this insightful one-minute moment and ensure you’re not missing out on potential tax benefits.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Remember mortgage interest may be tax deductible and I say maybe because of the standard deductions now being so high many people have a difficult time actually meeting them but if you do have a mortgage the question is do you have a second because depending on the interest paid on your equity lines or lines of credit are deductible based on it was it tied to the house was it actually used in the house or did you pay off student loans or pay off credit card debt and then use it to consolidate or buy a second home with that line of credit if you did it is no longer a tax deduction against that home you need help 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

View Details

In this episode, Dr. Friday, a licensed enrolled agent with the IRS, dives deep into the world of taxes. She emphasizes the importance of staying updated with your tax filings, especially if you’ve missed out on stimulus checks or faced life changes like divorce. Whether you’re lost, confused, or just need expert advice on dealing with the IRS, Dr. Friday is here to guide you. Plus, discover how you can catch her live call-in show every Saturday!

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

I am Dr. Friday, an enrolled agent licensed by the Internal Revenue Service to do taxes and representation, which basically means guys all I really know is taxes, how to deal with taxes, and how to deal with the Internal Revenue Service to help you get back on track. If you haven’t filed taxes for a number of years, A, you may have missed out on two stimulus checks, and or if you haven’t even know where to start, you don’t know, you’re confused, you’ve been through a divorce, you’ve had other issues, I can help you. First thing you want to do is check me out on the web at drfriday.com, then you want to pick up the phone and call me 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday delves into a common question many face: Can you deduct nursing home expenses for a loved one on your tax return? Discover the criteria that allow for these deductions and ensure you’re not missing out on potential tax savings. Plus, learn how to determine if someone can be considered your dependent for tax purposes.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

And this is happening more and more. My father is in a nursing home and I pay for the entire cost. Can I deduct these expenses on my tax return? And the yes, the answer is, if you’re paying for this person’s care and they can’t afford it themselves, then that person might be able to be your dependent and therefore their nursing is. If you or your spouse or your dependent is in nursing or primary care, then the entire nursing home cost, including meals and lodging, is deductible as a medical expense. You may want to look at this because a lot of times people forget that they can take this deduction on their tax returns. Call me, 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday addresses a common tax query: “Is the interest amount paid to the IRS deductible?” Tune in to find out the answer and learn more about which interests are deductible. Plus, discover how to get in touch with Dr. Friday for all your tax-related questions.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

I’ve had this question many times because person says is the interest amount that we paid to the IRS deductible? You can probably answer this in your own head when you’re listening to this or you’re driving down the road. The answer would be no because that means you kind of get yourself in trouble and you’re paying the IRS interest. They’re not going to reward you for paying them interest. The only real interest deductible anyways is a mortgage tied to your primary home. So unless you’re a business and there may be some other circumstances in which that might apply but individuals cannot deduct interest paid to the IRS. If you’ve got questions or need help with your taxes all you want to do is call me at 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of Dr. Friday Tax Tips – One Minute Moment, Dr. Friday delves into the nuances of student loan interest deductions. Discover how parents can gift their payments to benefit their children’s tax returns. Plus, learn about similar strategies for mortgages. If you’re seeking ways to optimize your tax deductions, this episode is a must-listen!

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Student loan interest. Remember if in some cases parents are actually paying the student loan interest but it was for your own student loans there is a way for your parents theoretically to gift that interest to you and you take it off on your tax return. So there are ways to do that even with mortgages if they’re paying the mortgage but you’re paying it you might want to find a way to see if some of those deductions or credits might be yours. If you need help understanding what you might be missing on your tax returns you need to call us at 615-367-0819 or check us out on the web at drfriday.com.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode, Dr. Friday delves into the significant tax changes that took place in 2017, particularly the elimination of the 2106 form in 2018. She highlights a common misconception among W-2 employees about creating their own Schedule C’s to claim deductions. Dr. Friday emphasizes the importance of understanding the distinction between being an employee and being self-employed when it comes to tax deductions. If you’re an employee with questions about deductions or if you’re unsure about your tax status, this episode is a must-listen.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Up until the year of 2017 we had a big change in all taxes and people basically lost what was called the 2106 come 2018. And that was where employees, if you receive a W-2 and I can’t tell you how many tax returns I’ve seen where employees have created their own schedule C’s to deduct what they thought was a legitimate expense. But you’re not self-employed people so if you’re an employee and you have deductions they are not a tax deduction on your tax return. Only if you receive a 1099 and only the expenses tied to that 1099. You need help call me 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of Dr. Friday Tax Tips – One Minute Moment, Dr. Friday delves into a common query: Can you claim a relative and their child as dependents if you’ve provided for them throughout the year? Discover the criteria to determine eligibility and ensure you’re on the right side of the tax law. Plus, learn about the importance of the taxpayers’ test and other essential steps to protect yourself.

TranscriptG’day I’m Dr. Friday president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

This is a pretty typical situation where it says my spouse and I have provided a home for my niece and her son for the past seven months she has no income and we provided all her support during the year can I claim her and her son as a dependent so the first thing we have to find us either your qualifying child or relative they would meet that are they US citizens in this case they are unmarried and if married not filing a joint return she’s not married in addition you want to make sure that you have the taxpayers test as far as income in this case these people would be able to claim them but you want to make sure you go through those steps to protect yourself if you need help 615-367-0819.

You can catch the doctor Friday call-in show live every Saturday afternoon from 2-3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday, an enrolled agent licensed with the IRS, delves into the challenges many face when dealing with taxes. From the fear of the IRS to the impact on major life decisions like buying a home or funding education, Dr. Friday emphasizes the importance of seeking help when overwhelmed. Tune in to her weekly radio show for more insights or reach out directly for personalized assistance.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

I’m an enrolled agent licensed with the Internal Revenue Service to do taxes and representation. I do a radio show every Saturday at 2 p.m. right here on this station and I talk about taxes 365 days a year, sometimes 366 depending on the year, and it’s awesome. But if you need help, I understand taxes can be overwhelming. It can be a time when you basically just want to put your head in the sand and say no, if I don’t say anything the IRS won’t catch me. It makes it a little difficult to buy a home, put your kids through college, or even just get back on your feet. If you need help doing this you need to start by calling us at 615-367-0819. We can help you with the IRS.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this episode of Dr. Friday Tax Tips – One Minute Moment, Dr. Friday delves into a common misconception about child dependency claims during divorce proceedings. Can a state court decide who claims a child as a dependent on their taxes? Dr. Friday clarifies the distinction between state court decisions and federal law requirements. If you’re navigating the complexities of divorce and taxes, this episode is a must-listen.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Can a state court determine who may claim a child as a dependent? And the answer is, you guys probably all know the answer. No, federal law will determine who can claim the child. This is what always happens. People go into divorce court and they basically say this person’s going to get them this year, this person’s going to get them this year, it goes back and forth, etc., etc. And the IRS says, wait, that doesn’t make any difference to us. Who has the child living in their home more than six months in one day? Who is paying and where is that child physically living? That is the person that’s going to claim, according to federal law, on a federal tax return. You may actually have two different filings, federal and state. You need help? Check us out on the web at drfriday.com.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday addresses a common tax query: Can both spouses, when filing separately, claim their son as a dependent? Dive into the intricacies of tax laws and discover the IRS’s stance on this matter. Plus, learn how to ensure you’re making the right choice with the help of a tax expert.

Transcript:G’day, I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

The question is my spouse and I are filing married filing separately we both contribute to support our son can we both claim him as a dependent on our separate returns? Again a great question but I don’t know how we’re gonna split a child so it doesn’t quite work that way. You’re going to have to be whoever gave more support. If the child, since you’re married, filing separately, it may just come down to the law says whoever has the highest income is supposed to claim them because the IRS doesn’t want you to take the most benefit from the higher versus the lower. But you need to make sure you have a tax expert help you with that and you can do that by calling me at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from two to three p.m. right here on 99.7 WTN.

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Welcome to another episode of the Dr. Friday Radio Show! In this episode, tax expert Dr. Friday has invited Nathan Wright from https://medi65.com back to the show. Below are several topics discussed in this episode.

1. Medicare overview – Explaining the different parts of Medicare (Part A, B, C, D) and options like Medicare Advantage and Medigap/Medicare Supplement plans.
2. Medicare enrollment – When and how to initially enroll in Medicare and make changes during the open enrollment period.
3. Medicare penalties – Penalties for not enrolling in certain parts of Medicare when you are first eligible.
4. Comparing Medicare plans – How to use online tools to compare different Medicare plans based on your doctors, prescriptions, etc.
5. Plan changes – Reasons to review your Medicare coverage annually as plans and costs can change year to year.
6. Getting help with Medicare – Using an insurance broker/agent to understand Medicare and make the best plan selections.
7. Medicare and retirement – Transitioning from employer insurance to Medicare at age 65.
8. Medicare coverage gaps – Parts of healthcare that original Medicare doesn’t cover like vision and dental.
9. Medicare Advantage pros/cons – Discussion of the tradeoffs between Medicare Advantage and Medigap plans.
10. Medicare savings programs – State programs to help pay Medicare costs based on income.’
11. And much more!

TranscriptPart 1: 00:00Announcer: No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Dr. Friday Show. If you have a question for Dr. Friday, call her now, 737-WWTN. That’s 737-9986. So here’s your host, financial counselor and tax consultant, Dr. Friday.

(upbeat music)

Dr. Friday: G’day, I’m Dr. Friday and the doctor is in the house. We have a really good show scheduled for today. And as you know, you can always join our show live at 615-737-9986. And we today are going to be talking with Nathan Wright. Many of you guys have been listening to me for well over 10 years now. And Nathan’s been on the show a few times and he is my go-to when it comes to Medicare. And it’s probably one of the more confusing. People think taxes, Nathan, are confusing. First I should say, hello, Nathan, join the show.

Nathan: Hey, how you doing, Dr. Friday?

Dr. Friday: I am good. I was just gonna say that, you know, Medicare is a subject in itself. I know a lot of people think taxes can be complicated, but having to deal with Medicare, in my opinion, is just so much advice out there. and some of it can just seem like it’s more confusing than probably it needs to be. So I’m hoping today we can always take your calls if you’re dealing with Medicare or if you have a family member and you might be helping them make decisions. Remember, this is, I don’t know, this is the time when people can start getting ready to make changes, right? ‘Cause there’s only a certain time of the year, Nathan, that people can do adjustments to their Medicare?

Nathan: Yes, you are absolutely correct. This is the annual election period which starts on October 15th and runs through December 7th. So we are almost there.

Dr. Friday: Yeah, so this is the time. So if they’re wanting to add or if they feel that they have too much of something, this is the only window of time that they can really do that. They can’t like, if I don’t like my insurance today, I can go out and change my insurance. You can’t do that in Medicare.

Nathan: That’s generally correct. Although there is what’s called special election period. So there are sometimes life events that fall outside this time of year that you can have and you can make changes during the year, throughout the year. But this is the time typically everyone thinks about Medicare. Okay. So let’s take and explain a few things, Nathan. I’m going to work my way down a basic little checkoff list of either things people have asked me and or just typical questions I think I would have. So first thing is, what is Medicare Supplement Plan or Medigap? I don’t even know what that is. Okay, so I like this question because Medicare Supplement Plan is basically the new term and Medigap is kind of like the old ancient term. But Medigap though is kind of a better way to even think about it because it basically fills in the gaps of Medicare. So for instance, Medicare Part A has a $1,600 deductible. So you’re going to go in the hospital, you’re going to pay $1,600, except if you have a Medigap or Medicare supplement plan, they’re going to cover, they’re going to fill in basically the gaps. And then if you think of the Part B side of Medicare, you’re on the hook for 20% and Original Medicare pays 80%. So that Medigap plan comes in and it will pay that extra 20%. So just kind of, kind of in a simplistic term, if you are on a Medicare supplement plan, original Medicare is gonna be in primary position.

Dr. Friday: Right.

Nathan: – Supplement plan will be in the secondary position, if that makes sense.

Dr. Friday: Sure, I mean, it’s a lot, I mean, it makes sense. Medigap, like you said, does kind of, the terminology makes a little better sense to me because it’s the gap between whatever you’re paying in Medicare and that apparently there are some holes. That’s one of the reasons I’ve always enjoyed my health savings account because I have some place where I can set that money aside a little bit so when we always have a gap, right? I mean, no one ever pays 100% with the first insurance, at least it doesn’t seem like it. There may be some exceptions out there. I’m certainly not an insurance expert, but let’s explain a little bit then what is, let’s, we’re all jumped down to what are, ’cause you always hear about all the letters of the alphabet, Medicare A, Medicare B, C, and I think is it B that we have to take, like that’s the one that you are kind of signed up with when you go on to Medicare or am I wrong? I could be wrong.

Nathan: So it’s, that like you said earlier, is a little bit complicated. So Medicare Part A, so this is what folks wanna kinda realize is when you take Social Security before age 65, you will automatically be enrolled in Part A when you turn 65.

Dr. Friday: Okay.

Nathan: And then they’ll also automatically roll you into Part B. you just have to opt out if you decide to not. And I don’t see any reason why not to, why to opt out of part B because you definitely gonna want both part A and B. But really to kinda just simplistically, you know, answer your question as far as the difference between A and B, A is gonna cover your basic hospitalization and B is gonna cover your doctor or your like your outpatient visits and what have you. So just original Medicare, I count original Medicare as kind of like the foundational coverage. And then there’s all these other things, as we just talked, like Medicare supplements, Medicare, Medigap, Medicare Advantage, et cetera, et cetera. Right. But there’s also again, my sister went on Medicare just last year or whatever, so I had more of information than I probably wanted in this. But what is C and D? Because they were really pushing initially, you know, you need to get A, B, C and D to cover everything. What are those? Do you know what C and D cover?

Nathan: Absolutely. So that’s a great question. So like I just said, your A and B, I think of that as kind of like your foundation. And built on top of that is you can take C and not to be confused with, a lot of people say, well, you need to have your Part C of Medicare. Part C of Medicare is actually another terminology for the Medicare Advantage Plan. You do not have to. In fact, if you get a Medicare Supplement Plan, you do not need Part C of Medicare because that is the Medicare Advantage Plan. So, and that’s personal choice. You know, what we do is we educate folks in the differences between the Advantage and the Supplement Plan so that you, you know, you make the choice, but don’t let anybody tell you, hey, you have to take C because if you get a Medigap or Medicare supplement, you can’t take C. Now to contrast that with D, just remember D for drugs. So D is gonna cover your drugs and many Medicare Advantage plans have C and D built in together. So a lot of times if you get a Medicare Advantage plan, you actually have the full package. You got A, B, C, and D with a Medicare Advantage plan. But again, that’s a personal choice. If a person would rather have a Medicare supplement or a Medigap plan, they would need to pair that with a Part D, a standalone prescription drug plan.

Dr. Friday: Okay, so you brought in a Medicare Advantage plan. What is that compared to, I mean, is that a secondary insurance, the Medigap that we were talking about, or is a Medicare Advantage plan a completely different plan than just a B and then a Medigap?

Nathan: So the Medicare Advantage is a whole separate animal. So your difference is, you know, if you do Medicare, basically you have two choices. When you start Medicare, you’re gonna wanna look at either the Advantage or the Supplement. You can’t do both. So if you go with the Advantage plan, to answer your question, is it’s a private, you name, you think of any major insurance company out there, you know, you name ’em, they have a Medicare Advantage plan. And they are gonna operate traditionally like either a PPO or HMO. In most in our market, we’re fortunate enough to be in a market that the majority of the Medicare Advantage plans are a zero premium. So you don’t have to pay anything extra for an Advantage plan. But the difference between an Advantage and supplement is while you may not pay a monthly premium on an Advantage plan, you will have co-pays. We will have co-pays. The flip side of that on a supplement plan, you’re gonna have a monthly premium and either little to no co-pays, depending on what type, and there’s different types of supplemental plans. But it’s basically, I tell people to kind of just in a very simplistic term, the Advantage Plan is kind of a pay as you go, pay when you need it. A Supplement Plan, you’re gonna pay a monthly premium whether or not you need it or not. So it’s just depending upon how risk averse you are to which way to go. And I will add too that there’s certain folks in my profession that lean either one way or the other. You get on YouTube and most of the guys are gonna be pushing Medicare supplements. You get on TV and most of the guys are gonna be pushing Advantage. I do neither. I am right down in the middle of the road. I give folks an education on what the difference is between the two and let you as the consumer decide.

Dr. Friday: See, that’s why I always love about you, Nathan. I mean, seriously, is that, you know, even when we met years ago, whatever, and we started this conversations and I’m like, this is what my listeners need to hear because so often people are usually pushing what they sell. Let’s be honest. They sell a product, so they want to sell that to the audience or the people listening to them. And it’s not that you don’t sell product, but that’s not, I mean, we all have products to sell, but you give people the advantage to understanding, you know, I’m not only selling, this is the only package. It’s the best package ’cause it’s the only package. You know what I mean? Where if, you know, and some people, like you just said, some people may have more money and prefer to have a zero pay now through the month, every month, and then be able to come up with $10,000 if they have to co-pay for an emergency. Where other people may prefer, you know, I’d rather build it in my budget and know that I have to pay this much a month but I’m not gonna get hit most likely with that big $10,000 payment if I end up in the hospital. You know what I mean? You have to figure out what each person, and I like that option because no two of us are exactly alike and each of us have different risk aversions to that kind of situation.

Nathan: Right.

Dr. Friday: Okay, so now let’s talk about, so we’ve got A, B, C, and D, basically, you get your drugs, you can figure out if you want to go with the Advantage or a secondary Medigap kind of thing. But how about dentist and eyewear? Now, is that usually included in these kinds of deals or do we need to be thinking that we think we have it and then we realize we don’t because they’re not in A, B, C, or D?

Nathan: So, an original Medicare does not cover like your secondaries like vision, dental, or hearing. So if you go the supplement route, you’re either gonna have to self-insure or buy a standalone dental or vision plan. Now, the beauty of the Medicare Advantage plan is it’s kind of all in one package. So many of those have generous dental benefits, vision, hearing, depending on the company, and they’re very competitive, which is good for the consumer because they’re all trying to outdo each other. So they definitely have some good dental benefits built into the Advantage plans.

Dr. Friday: All right, we’re gonna take our first break here. Again, this is Nathan Wright with me, Dr. Friday in the house. I’m gonna give you Nathan’s number, is not the studio number, but if you would like to call Nathan, 615-823-1322. If you have a question and you wanna join the show today, ’cause maybe you’re in the midst of trying to understand what’s the best deal for you, and it may not necessarily be, we can give you the answer directly, but if you’ve got some questions concerning how Medicare is affecting your life, you can reach us in the studio, 615-737-9986. 615-737-9986. We’ll be right back with the Dr. Friday Show.

Part 2: 13:00Dr. Friday: We are back here live in studio. And again, if you wanna join us here, maybe you have some questions about taxes, which is always available on this show. But if you have some questions about insurance, Maybe you’re thinking about changing or maybe you’ve never actually, you’re getting ready to sign up and you don’t know where to start. Because I tell you, there is a lot of choices. Nathan makes it seem simple, which is what we all love. But when it comes time to us making these decisions, and especially for many of you guys, you might even be helping parents or loved ones, helping to make these decisions or keep these decisions as life changes happen. So if you have a question, you can join us here in the studio. 615-737-9986.

Dr. Friday: All right, Nathan, we are back to my questions and here’s one that I thought was a good question. So how can you compare these different plants? I mean, how do I, you know, it’s not like there’s a chart that gives it to them next because I’m assuming, you know, there’s different costs like you just said. So is there a way of really making a fair comparison with the different options?

Nathan: Absolutely, and I suggest that everyone do that. So you can actually really simply go to my website, medi65.com, and then click on shop plans. You enter your zip code and it will show you every plan available in your area. You can even go as far as putting your doctors and your prescriptions, because let’s just face it, we were talking before the break about all the benefits, and this is something that we see time and time again. Some people will get hooked on, you know, there’s plans out there that give $5,000 in dental, but they don’t cover your medications. That’s not good. That’s not a good trade-off. So it’s very good to, you know, use this tool. And if you’re not tech savvy, we can help you with it ourselves, you know, but we do have that right on our website.

Dr. Friday: Perfect. All right, we have Kathy on the line that has a question concerning prescription plans. Kathy, thanks for joining the show.

Caller: Thank you.

Dr. Friday: And go ahead and ask your question. Let’s see if we can’t get you an answer.

Caller: Okay. My question is, Part D, when you initially sign up for Medicare, typically A and B, as he was speaking of, but on Part D, I found out that there is a penalty if you do not sign up for that. And I want to confirm that or see what he knows about that.

Nathan: So this is a perfect question. Yes, so there is no penalty for part C There is a penalty for part D. So that may be where it’s coming in So you can like I said earlier some C has D built in but you have to have some type of prescription drug coverage or there will be a penalty and Unfortunately, and this is something that kind of breaks my heart when people come into my office and they have been on Medicare for ten years and then they go ahead and sign up for a drug plan or a Advantage plan with a drug plan built in They’ve got a 1% penalty that they have to pay for the rest of their life on that unfortunately So it is the D side that the penalty is incurred

Caller: Right and that’s not something that’s readily available when you enroll at least it wasn’t when I did And I kind of found out by accident. Luckily, I caught it only a few months late. So my penalty is not that much.

Dr. Friday: So you’re still penalized for something that no one tells you that you need to do in the first place, which is the crazy part of that.

Caller: Exactly. For something that I did not and I did not need any prescription drugs at that time. So I still don’t.

Nathan: Yeah, and that that’s a that’s another thing too. Yeah I’m very grateful this question because like I said, I see this every day the folks that that have that penalty and you know I hate because if I had a caught them before, you know years ago I could have stopped that even and you know, a lot of folks don’t like you said don’t take prescriptions So they’re like well, why do I need a drug plan? But if you just take the minimum like their drug plans that are very inexpensive The minimum cost that’ll at least keep you out of the penalty

Dr. Friday: Okay, so I have to ask a quick question between both of you, but is this right when we sign up for Medicare? You know, when we’re doing, you know, at 65, when we’re joining in unless we’re working or whatever, do we have to make that decision then or we are late?

Nathan: Yeah, well you’ve got a small window. You have grace period. There’s a three month after your birthday month, but if you don’t do that, you’re penalized 1% of the average national premium per month for the rest of your life. So if you just wait, you know, you’re only a couple months, you’re paying like 65 cents a month or something. It’s a penalty and it’s ridiculous.

Dr. Friday: Oh wow. That’s something I had not heard any. Kathy, thank you so much. Cause I mean, I’ve heard people say, if you don’t sign up for Medicare on the right time, you know, just regular Medicare, there is a penalty. But I didn’t realize that the other letters of the alphabet were also, Well, some of them, right, Nathan? Not all of them, but some of them, like this, Schedule Part D has a penalty. I did not, we’ve been talking about this for years.

Nathan: And I will throw something else out in there. So sometimes there are some advantage plans that this is gonna blow your mind. Not only are they zero premium, they give a little money for those folks that have penalty issues. They give you a kickback of some are $50, some up to $100 a month in kickback. Now you do, there’s a trade-off. You trade off some benefits for that, but that option is out there.

Dr. Friday: Great, thank you, Kathy, for asking that question. I think that’s been helpful.

Nathan: Yeah, great question. Thanks, Kathy.

Kathy: Oh, you’re welcome, ’cause I’ve run into so many people that were unaware of that, so.

Dr. Friday: Yeah, perfect. So while we’re on that subject, Nathan, what is, I mean, there is a penalty if you don’t sign up for Medicare as well, correct? Like you just said, after your birthday or whatever the rule is.

Nathan: So, yeah. And it’s all about the ABC and D, isn’t it? So, um, it does, right. So the B and the D can incur penalties if you don’t sign up right when you’re eligible. So that’s how that works.

Dr. Friday: I know. Cause initially my father, when he went on to it, he was under regular insurance and they were a part of, you know, The whole thing is I don’t want anything from the government. I don’t want any handouts kind of thing and all this. But we got past that very quickly when you found out how much at 65 you pay for health insurance when you’re not on Medicare. Anyways,

Nathan: …and the fact that you’ve paid into it all your life anyway.

Dr. Friday: I know it’s not exactly. You know, that’s a great point. I mean, it’s like Social Security. These are not handouts. These are people. I mean, these are actually things we have paid in. We’ve paid the taxes. These are benefits to being working and that’s a really good way of putting it because I have some people that don’t really like because they get these, I mean, they think of them as handouts, but a handout is something you hadn’t actually funded. These we funded for 10, 20, 30, 40, depending on how many years you worked, years. So yes, I am wholly on board for that one.

Dr. Friday: All right, so let’s see. So on the cost side, I think we kind of covered that because they can go to your website. You want to put that out there again, Nathan, the website that they can go to?

Nathan: Yes, that’s Medi65.com or it’s simply just spelled M-E-D-I-6-5.com and then you just click shop plan and you get right in there.

Dr. Friday: Okay, cool. For comparison. Yep. All right. So we have another person on the phone. We’ve got Todd. Todd in Tennessee. That’s a big state, but hey, Todd, what you have happening?

Caller: I’m in Carthage, Tennessee. I’m east of Nashville. I wanted to make your listeners aware of another penalty that I have had happen to me. I was with a company, I guess I’ll remain nameless and I got on their drug program and they were supposed to send me my blood pressure meds once a month. And for almost two years, they were late with my prescription. And without getting into way too many details, I ended up canceling their drug program. And I just had my doctor write me a script and I went to Kroger and got my blood pressure meds there and it only cost me like $25 every three months. Well I ended up changing coverage with a different company and it took about a year or so to catch up to me but all of a sudden I start getting these bills saying that I was late what do they call it, I was late for enrollment, which I wasn’t. And what happens was, since I canceled my drug program, they are now charging me $7.25 a month for life because of those two years.

Nathan: That is what is referred to as the late enrollment penalty. That’s exactly right. Right. That’s painful.

Caller: Even though I paid it, even though I was paying it myself, I’m getting charged, I’m getting fined a penalty for paying for myself for two years. Right. And so, and I can’t get out of it. I have, I have written in and you are stuck with it for the rest of your life unless you cancel your, your social security.

Nathan: Yeah. Yeah. That’s a good example. It is definitely unfortunate.

Dr. Friday: There are, thank you so much, Todd, for sharing that. Seriously, that helps a lot of people.

Caller: – Thank you for what you do.

Dr. Friday: No problem, Nathan. And that’s, I mean, this is what you say you hear all the time, these same situations where people are getting, I mean, just like that, he canceled because they weren’t doing their job, not realizing when he did that and not immediately going with another drug service, he now is gonna be penalized, whatever, it’s $7 now, but there could be other penalties depending on the rates, right? It’s basically a penalty based on a percentage of national standards or something.

Nathan: It’s a percentage of the national. We’re not allowed to say exactly, but we can say it’s 1% of the national average of the drug plan per month, though, that you don’t have it. So I’ve even had a lady, you know, she came into my office and she was about a hundred dollars a month because she hadn’t had it for 20 years.

Dr. Friday: So I mean, it’s, I mean, I think IRS and I know about some of the silly penalties that can happen. And I realized that, but normally in most cases, the penalties are because we actually did something by not paying, not filing, whatever. This is just nut gentlemen. I mean, he’s like, I’m just going to pay my own bill because no one else seems to know how to do it on time. And yet he’s still there in the IRS. There is some loopholes, right? We have some ways around this, I guess. You know, well, you know what, we’re all take a quick break here. and we come back, I may ask you, Nathan, is there any way of getting this penalty removed under unique circumstances? I’ll let you think about that ’cause we’re gonna take a quick break here and we get back. You guys can join the show at 615-737-9986. We’ll be right back with the Dr. Friday Show.

Part 3: 25:05Dr. Friday: All righty, we are back live here in studio with Mr. Nathan Wright, the insurance expert, especially when it comes to Medicare and all these crazy loopholes. So let’s get back to that question because I have a tendency to talk right over myself. So Nathan, I’m gonna bring back, is there any way of bringing or removing these penalties under unique circumstances? And just so you know, Nathan, your mic is off. All right, well, Nathan may not be with us right this second, guys.

Nathan: – I’m back, I’m back. –

Dr. Friday: Ah, there’s my boy. Okay. You know, I have my own issue this morning. So, all right. So what is there, is it pretty much road and stone? If you don’t do it in this time clock, you’re out.

Nathan: – Yes and no. So there is unique circumstances. It’s gonna be income related. So if you fall under a certain income and let’s just face it when you retire your income changes. So, you know, that’s a service I provide a hundred percent free to my clients. You know, if there’s some kind of program where we can apply to get it removed, we will apply and get it removed. But just like I said, it’s gonna be a lower tier income. So, and then the other option is like we discussed earlier, there are some plans that give a, it’s called a Part B give back. So, you know, instead of paying the 165 a month for your Part B, you might can reduce it down to 115 or something so that can offset some of those penalties as well.

Dr. Friday: Well, it’s good to know. I mean, I’m not surprised. I mean, you know, I mean, and again, I get the fact that we have to have a set of rules. I mean, you know, I’m not a big person that likes rules, but I will tell you, I understand why we have them most of the time, keep the world from going crazy. But that being said, it just seems like this is one of those where, you know, if you don’t need it, like, you know, then why do I need it? I mean, why do I need to sign up? But they’re saying, We need to know who’s going to be under, apparently a drug plan, no matter what. Um, so that they can use that information in some amazing way. I’m pretty sure Nathan.

Dr. Friday: All right, Nathan, why don’t you share with everyone really quick? I didn’t really introduce you very well. So you want to tell everyone why I think you’re so amazing. Go for it.

Nathan: You want me to tell everyone why you think…

Dr. Friday: You caught that very quickly. Yeah. Well, maybe you should think why they think you should be so amazing. But Hey, what can I say? Why, why should you be talking about insurance? What’s your background a little bit? So they understand I didn’t just pick you off the street and said, Hey, you know, let’s talk about insurance today.

Nathan: Well, I tell you what, so I fancy myself as a very simple person that is, has become an expert in Medicare. And I don’t say that lightly because when I have tax things going on, I call Dr. Friday. Okay. So, um, you know, when there’s Medicare things going on, there’s got to be someone in that lane. So I’ve actually been, you know, uh, practicing Medicare insurance for about eight years. Um, I got into it, you know, I had other friends in different fields of insurance and I decided, you know, let’s just specialize in health insurance, not try to be an expert on everything, but you know, focus on that one thing. So, you know, um, I, I feel like, you know, I try to stand out between, you know, all the noise of, you know, let’s just face it. Folks are just bombarded this time of year with every message under the sun and every company says, buy me, I’m better. So I take a very simplistic, laid back educational approach and say, let’s just sit down or we can do it over the phone, whatnot, and let’s just go over your options and let’s just kind of, you know, eliminate things like we talked earlier about, you know, doctors, hospitalization. If there’s a doctor that you have to see, well, there’s about five plans that don’t take that doctor. So we need to eliminate those options. So we just kind of work our way step by step and, you know, to then arrive at what’s right for you. And these plans, like I always say, they’re not like shoes. I mean, they are like shoes in that, um, you know, everybody has different styles, taste, preferences, needs, et cetera, et cetera, because what’s right for me might not be right for you.

Dr. Friday: So, you know, that’s kind of the reasons why, okay, so we went through this, we’ve got the perfect plans, but I’m assuming I know the answer, but just for people that are listening, because, you know, insurance is one of those things that we kind of just let, I mean, I’m insured, I don’t need to look at it. I know my insurance, it’s there, I pay it every month, boom, boom, boom. But what would be some reasons why people might want to be revisiting this again, every year, of a few years, whatever, Nathan, you know, why would we want to make any changes?

Nathan: So this is definitely something that’s always brought up, you know, there’s always changes in Medicare and that is unfortunately sometimes used as a sales hook, you know, there’s big changes in Medicare, you need to call this number right here, but there is what a person really needs to do is things can change in networks. Things can change in prescriptions. There are certain folks that have prescriptions that are vital for them to take and this particular drug plan may not cover that or may have moved that into our more expensive tier. So it’s very important for someone to sit down and review. And even if you don’t make a change, at least get a no cost, no obligation review to say, “Hey, you’re in a great plan,” or, “Hey, you know, you could save, you know, $50 a month in medications because this one company has changed their, you know, formulary.” So that is true. There is annual changes. They’re not big changes like they like to make them out to be, but there are annual changes in each plan, and that’s going to be on your advantage and your drug size. Now, the Medigap plans, the only thing I can say critical about them is the only change they usually make is they go up. Unfortunately.

Dr. Friday: I mean, and that’s, I mean, that was what I was thinking. Two things. I mean, I know my health insurance every year goes up by clockwork every year. And then gosh forbid, you hit one of the big numbers, 55, whatever. And then it goes up again because of your age. I mean, I am one of those people that are blessed. I’ve never used it with exception of having to go and get my steroid shots for poison ivy or something, you know what I mean? So I haven’t had, but guaranteed you’re going to go up every year. So, and that’s what I was thinking that in life changes, right? As we get older, we have maybe more need for prescription than when we were younger. Or like you said, my sister, one of her big things, she did have set doctors. She did not want to lose the doctor she had built relationships with, you know, for her, her life. So that was one of the big things she had to go with was to make sure she stayed in whatever was going to allow her to go see these said doctors. And some of the plans did not allow, or the doctors didn’t take those plans, whichever way that might happen. So I think that would be one of the more important things is if you know that you’re heading towards, I don’t know, hip replacement or something that’s going to be bigger and better, you might want to double check and see, are you really covered? Is it something that you can do without more cost to you? ‘Cause I’m assuming some of these plans may or may not cover everything that happens in life. That’s my guess.

Nathan: This is true. And like we said, the Medicare Advantage plan sound great ’cause there’s zero premiums, but if there is that life event, like you said, or a hip replacement or what have you, there are some co-pays that you’re gonna have to pay. And there’s even options out there called hospital indemnity which actually will help you pay the big co-pays that Advantage Plan do not cover or that you incur. So, I mean, you can almost, you know, have the best of both worlds if you have a Advantage paired up with a hospital indemnity. Yeah, I don’t mean to throw more terms out there, but it is a good option for sure.

Dr. Friday: That is one of those things, because again, the biggest concern to me would be, it’s not so much that, I mean, again, I’m healthy, but one never knows, right? So if you end up in the hospital and you now, and gosh knows it’s not cheap to be in the hospital from everything you hear and read. So it would be great to have that backup. I mean, to have something where you have the ability because if you end up with a $10,000 bill and I’ve had clients, that guy broke his leg, cost him $150,000 because he was not insured. It was not the best plan in the world, obviously. And it took years for him to get that settled and to pay it off and to me it made a huge life change In this particular individual and that was you know, because you think you’re invincible So again, I think one of the things people really have to come back is think about What kind of things may be coming down the line and are you covered and you know? I’m always for anyone that’s going to give me a free evaluation and I feel you know Nathan’s really cool because he’s going to give you the options. He’s not going to sit there and press you. You got to buy, you got to buy. If you don’t do this, you’re going to regret it. That’s not it. You can tell guys, that’s not his real sale approach. It’s not my nature. It’s not his sale approach, which makes it easy for you to sit down and say, “Hey, here’s what I have. Could there be a better, or this is what I think might be coming. My doctor keeps talking to me about this or this. Am I in the best plan? Am I in the best situation?” All right, we have Milton in Nashville. It might be my boy Milton, one of my loves. If it is, he’s got a question for us. Hey, Milton.

Caller: Hey, Dr. Friday. Happy October.

Dr. Friday: Ah, this is my boy. All right, Nathan, you’re in for it now. This is one of my long time clients. Okay.

Caller: Hey, Dr. Friday, I always enjoy you bringing Nathan in every year about this time. I’ve listened to him for the last two or three years that you brought him in and he always come in so knowledgeable and enlighten us to everything that’s going on. And I really, really appreciate you having him and Nathan, I appreciate you being there.

Nathan: Yes. Well, thank you for that.

Caller: Okay. Hey, my question is number one, uh, being a retiree state employee, and they always say people that retire from the state have the best plan. I searched over the last three years and as far as premiums of what we pay, it always seemed like we do because everybody else was higher. I also wanted to know from you, how do you make your money? Because if I brought, if I brought my plan in and said, Hey, Nathan, take a look at it, you know, you got to earn a living and make a living too. So how do you earn your money as relates to looking at the plan that I’m in versus the plan that I could be in that’s more reasonable and best for me and my family?

Nathan: I love this question because, um, we are actually paid by whatever plan you choose. Now, having said that, I mean, you know, I am, you know, always in for just looking at folks, whether or not, you know, you decide to do something with me or not. I mean, that’s a free service that I provide. So whether or not you go ahead and there’s been many cases I’ve had folks come, you know, see me or I went to see them and I say, “You know what, you’re just in the best plan possible, stay there.” Or, you know, I will say, “Hey, you know, you could actually benefit by going to this other plan.” So it’s, you know, it’s given in a very, you know, laid back format to where, you know, “Hey, these are your options, you know, then you make the choice there.”

Caller: Maybe I’ve missed it, but I still didn’t get, or understand how you are getting your money.

Dr. Friday: He gets paid by selling insurance, Milton. Just like I get paid when you pay me for your taxes. He’s an insurance salesman.

Nathan: Yeah, so the good thing is though, especially when it comes to the Advantage plans, they have fixed it to where there’s no real incentive for me to push one company over the other ’cause we get paid the same. So that’s a good thing. I can give you an unbiased, there’s no one giving me a cruise or anything for saying, “Hey, sell plan X.” You know, that’s illegal. So the Center for Medicare and Medicaid Services actually regulate what we get paid. So, you know, we can give an unbiased, you know, quote or an unbiased comparison.

Caller: Okay, I understand. Hey, well, I’ll be giving you a call to see about coming in.

Nathan: Please do.

Caller: And Dr. Friday, thanks again for having Nathan there. We really, really appreciate it.

Nathan: Thank you.

Dr. Friday: Thank you.

Caller: Okay, bye-bye.

Dr. Friday: All right, we’re gonna take our last break for the show here. We’ll be back in just a couple of minutes. If you want to join the show, you can at 615-737-9986. We’ll be right back.

Part 4: 38:25(upbeat music)

Dr. Friday: All righty, we are back. And if you’ve been wanting to try to get on the show, well, now would be the time, 615-737-9986, 615-737-9986. And we’re gonna go right to the phone lines. We’ve got Steve in Cookville. Hey Steve you got a question about medicare for us

Caller: Yes i’d actually do uh… but it’s regarding my mother of this week uh… last week she received a letter stating uh… said we’re writing to you concerning your social security benefits the state of Tennessee will no longer pay your medicare part b so they started deducting it uh… of her her Social Security check for the Part B because she received her Social Security check this week and it was less this $164.90. So how does that, do you know how that all of a sudden?

Nathan: Yes sir, absolutely. So this is something I do every day in my office. It’s called the the Medicare savings program. If you make under a certain amount of money per month, the state of Tennessee through the TennCare program will actually pay your Part B. And what happens is they send out renewal letters and some folks, let’s just face it, that we get so much junk mail, we throw them away or what have you, or don’t see the renewal. And if she still, the good news is, if she still falls below that income threshold, we can reapply or we can actually contest, you know, their decision, but we can actually reapply and get that reversed where she won’t have to pay that Part B premium, but it is income based though.

Caller: Ooh, I like that. So this is something that we might be able to fix.

Nathan: Correct.

Dr. Friday: What do you think about that, Steve?

Caller: Well, I think it’s great. I think it’s just ironic. My mom gives this stuff to me. I’m started helping her with her stuff I just was making a drive across town and turned on Supertalk and boy, here it was. Yeah, good clean living got me here. So, I appreciate it. Hey, Nathan, can I get your office number real quick?

Nathan: Yes, sir, absolutely. That’s 615-823-1322. And like I said, that’s a free service I provide, so I’ll be glad to help you with that.

Caller: Hey, thank you for what you’re doing that you know just helping my mom with this stuff It is absolutely crazy Yes amount of mail she gets things that I mean, it’s it’s just way over selling and people it almost Most of them seem like scams. Yeah, you know, I’ve talked to a few people and it’s like well, you know, they read It’s like they circle you around the problem, but they never get you right to what you need. So I got, you know, on behalf of folks that are helping their parents, uh, Nathan, thankful what, thank you for what you do in the service you provide.

Nathan: My pleasure.

Dr. Friday: Thanks for calling Steve. We do appreciate it. And, and, and that’s exactly Nathan. I mean, that’s where I feel, cause a lot of times people come in a lot like Steve, then, you know, the children of, and, and they don’t know where to go, which is why I seriously, I do appreciate that you do the radio show every year for us, because I think it’s important that people realize that there are places to go, because if they’re trying to call Medicare, they’re going to pull their hair out. It’s like calling the IRS. It’s so frustrating. And they’re going to get talked in circles and they’re going to be told no, yes, when they don’t, you know what I mean? They don’t really know the answers or the questions to ask. So it’s so important for people to truly have someone to be able to ask these questions, just like, you know, Steve, he’s just trying to help mom out and he’s not sure what he can do and that letter makes it sound like you know again sounds so much like the IRS you know well you know you did something wrong so we’re cutting you off um so it is important so um we’re going to uh be quitting here in a moment here because Nathan and I have managed to throw a whole hour aside and this has been awesome. Nathan why don’t you one more time send out the information on how people can reach you directly through your email or website or phone number or all three.

Nathan: Yeah, absolutely. So you can either simply call 615-823-1322 or simply visit my website medi65.com. That’s M-E-D-I-65.com. There’s plenty of resources. You can compare plans. You can make an appointment with me and I also will come to your home or you can meet me in my office in Hendersonville. If you’re in the Hendersonville area, I have an office in the city square shopping center.

Dr. Friday: Awesome. All right. So if you want to join our call, Dr. Friday, and I have all of Nathan’s information, that boy cannot hide from me. Just let you know that. Not that he’s ever tried, but just saying, you know, we have, I’ve got all of his contacts. So for some reason, if you just want to contact our office, or if you have tax issues, which we didn’t cover today because you know what you need to file your taxes.

Dr. Friday: October 15th is the deadline for any individual that hasn’t filed but hopefully filed an extension. The extension ends on 10-16. I should say the 15th is the I think a Sunday. So you need to file by that time otherwise you are late but if you didn’t file an extension you’re already late. So if you need help with taxes or dealing with the IRS. You guys know me. I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. So if you’ve got love letters, you have issues that you want to deal with and you need help doing it or just a direction, which way should I go? Like Nathan does for insurance, I do for taxes and you can join. You can call our office at 615 367-0819-615-367-0819. You can catch me email friday at drfriday.com web drfriday.com. You know, we we will help you try to get back on track sooner you do that easier. It is on life issues because if you have a child trying to go to college, which is usually or you want to get married, those seem to be the big ones that get people back to wanting to just get organized and and start doing what they need to do. And if you are interested again, October 15th through December 7th, am I right, Nathan?

Dr. Friday: That’s the time period that people have to make these choices. So now would be an awesome time to give Nathan a call, set up that free consultation, find out if you need to be considering any changes to your insurance. You know, it’s no different than if you’re looking at your homeowner’s insurance, your cars, or even looking at tax resolution. It’s always better to get that review. Make sure you have a second opinion. You may have a spot on plan that’s perfect for you, but you also may need help just knowing that because it’s just so much to take in. Do I need whatever letter of the alphabet they’re throwing out there? And how does that apply? So again, Nathan directly is 615-823-1322, 615-823-1322 or go to medi65.com. Nathan, thank you for joining me today. We will do this again, but I really appreciate it for my behalf as well as my listeners. And if you want to contact Dr. Friday again 615-367-0819. 615-367-0819 or the easiest way is always email Friday at drFriday.com. That’s Friday at drFriday.com. As we always say in Australia, cop ya later.

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In this one-minute moment, Dr. Friday addresses a common question she receives: Can a married individual filing taxes separately claim ‘head of household’ status with their child? Dive in to discover the answer and understand the implications of making this choice. Remember, it’s not about which status gives the most return, but about doing it right.

Transcript:G’day, I’m Dr. Friday president of Dr. Friday’s Tax and Financial Firm. To get more info go to www.drfriday.com. This is a one-minute moment.

This is a question believe it or not that I am asked oh goodness probably ten times a month at least I am married but my husband and I file separately so can I claim head of household with our child and the answer is always no if you think because I know When you’re in the software and you click, oh wait, if I click head of household, I’m getting such a large return, where if I’m filing, Mary filing separately, I’m not getting nearly the refund. This isn’t a game where it’s which one gives you the most. You have to do it properly. We have had more than one of those overturned and penalties and interest are pretty steep when you make those mistakes. If you need help, check us out on the web at drfriday.com.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from two to three p.m. right here on 99.7 WTN.

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In this one-minute moment with Dr. Friday, delve into the complexities of claiming your unmarried college-going child on your tax return. Factors like the child’s income, your financial support, and their student status can influence your eligibility for college credits. Tune in to understand the nuances and ensure you’re making the most of your tax benefits.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Should you be claiming your unmarried child that is in college on your tax return? And you know these questions are great, sometimes not something I can easily answer because it depends how much money did that unmarried child make in college? Are you supporting that person? And are they full-time students or part-time students? These are important questions because there is quite a bit of college credits available to you, assuming your income is in the brackets that would actually allow you to have it. If you need help determining should you or should you not be claiming your college student, you need to give us a call at 615-367-0819.

You can catch the Dr. Friday Call-In Show live every Saturday afternoon from two to three p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday addresses a common question: Are Social Security benefits taxable after retirement? Dive in to understand the circumstances under which these benefits may be taxed and the potential implications of other income sources on your Social Security. Avoid common misconceptions and ensure you’re informed about your financial obligations.

Transcript:G’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

Question that came in says I’ve retired last year and started receiving Social Security payments. Do I have to pay tax on my Social Security benefits? Assuming that this person has retired at their full retirement age, then they don’t have any other income the answer would be no. Social Security is only taxed when you have other income but if they have retirement, pensions, stock sales, dividends, any of those things, then they could have taxes up to 85% of their Social Security benefits. Very important to put it on. I’ve handled more than one case where someone did not think Social Security was taxable at all. You need help? Set up an appointment. DRFriday.com.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday delves into the importance of tracking your 1099-B’s, especially after a fruitful stock year. Whether you’ve sold property or stock, understanding your stock capital gains, dividends, and interest is crucial for tax preparation. If you’re unsure about how to file this information, Dr. Friday offers insights and resources to ensure you’re on the right track.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

We keep talking about things we need to know when we’re preparing our taxes. Another thing that came through was selling property or selling stock. We’ve had a pretty good stock year so don’t forget and many times those statements from Charles Schwab or any of the other companies come out late in the January early February make sure you have a tracking of your 1099 B’s which would be your stock capital gains dividends interest all of those are going to come in and make a big part of your tax return if you don’t know how to file that information or where to get it you can call our office at 615-367-0819.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment with Dr. Friday, delve into the advantages of opting for a split tax refund. Whether you’re looking to manage your finances by directing a portion into savings or navigating the complexities of shared refunds in a marriage, Dr. Friday sheds light on how to make the most of this option. Plus, learn how to get personalized advice on this topic and more.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

If you’re filing your own tax returns, one of the options you have nowadays is a split refund. That comes into hand in a couple different situations. One is if you want to actually set aside some money into a savings account versus what you’re going to use, but also sometimes husbands and wives. What we often find is that sometimes your husband and wife married, but maybe you want to know how much of the refund was yours, how much refund was the wives, and then putting the money back into their independent bank accounts. You know, if you need help with that, or if you need to understand more about what the benefits of doing these kind of things could do, give us a call at 615-367-0819, or go to drfriday.com.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday, an enrolled agent licensed with the IRS, discusses how her firm can act as a shield between you and the IRS. If you’ve received notices or haven’t filed taxes in years, Dr. Friday’s team can help you retrieve necessary information and get back on track. Tune in to learn how you can navigate IRS challenges with expert assistance.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

I am Dr. Friday, an enrolled agent licensed with the Internal Revenue Service to do taxes in representation, which means if you’re receiving love letters or you haven’t filed taxes for a number of years, we can help you. We can help you find a place to get started. We can pull transcripts to get you the information the IRS can provide to us to prepare those tax returns. We’re like a little bit of a shield between you and the IRS because they have to contact us first to get to you. This would be a way for you to get back on track with the IRS. Nothing worse than having to deal with the IRS on your own. And so if you need help you can check us out on the web at drfriday.com or just pick up the phone 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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Welcome to another episode of the Dr. Friday Radio Show! In this episode, tax expert Dr. Friday answers callers’ tax questions and covers various topics, including:

• Introduction and mention of the upcoming tax deadline on October 15th.
• Discussion on potential tax changes for 2023 and the impact of life events on tax situations.
• Caller question about capital gains taxes on the sale of co-owned hunting property.
• Caller question about reporting the sale of a rental property with gifted equity to a daughter.
• Importance of staying current with taxes and options for resolving tax debts.
• Mention of potential benefits of bankruptcy in certain tax situations and the advice to seek professional advice.
• Encouragement to track expenses and income for better tax planning and setting aside money for self-employment taxes.
• Explanation of 1031 exchange for deferring capital gains and advantages of long-term real estate holding.
• Emphasis on understanding tax liabilities when inheriting property or receiving gifts and the tax implications of life insurance policies.
• Reminder to file 2022 taxes by the deadline and discussion of SEP contributions for retirement savings.
• Dr. Friday’s contact information for further assistance.

TranscriptPart 1: 00:00Announcer: No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Dr. Friday Show. If you have a question for Dr. Friday, call her now, 737-WWTN. That’s 737-9986. So here’s your host, financial counselor and tax consultant, Dr. Friday. (upbeat music)

Dr. Friday: This is the Dr. Friday Show. Let’s see if we have us going here. I think I was a little bit rough getting on the show here, but I think we’re good to go. Guys, we’re live here in the studio, and if you wanna join the show, you can at 615-737-9986, 615-737-9986, the number here in the studio. We’re all working pretty diligently this next week and a half to finish up the end of the extensions that were filed. Obviously, if you filed an extension, then your taxes are due October 15th, and then you must have them filed, otherwise you’re late. So making sure, and then obviously, we’re all thinking about 2023 taxes. What’s going to be happening? Is there anything that’s gonna change? Maybe something’s changed in your life, how that’s going to affect you on that situation. Is it that you inherited something? Did you have some sort of change in marital status or maybe had a baby or got married or, you know, all those things do have an effect on your taxes. So understanding how that affects, usually, obviously getting married, it can be a different situation because now you’re going from being single on your withholdings. And if you’re merging people’s W-2s, sometimes it’s better to stay single on as far as withholding than it is to change to married and zero. You may find out that you won’t have enough of a withholding. make sure you’ve talked to someone before you make changes. Let’s go to Jim in Nashville and see if we can help him out a little bit. Hey Jim, what can I do for you, sweetie?

Caller: Hi doc. How are you doing this Saturday?

Dr. Friday: Oh, not complaining. Seriously. It’s pretty nice day out there. Beautiful, beautiful.

Caller: Hey, I’ve got a question for you. Several years ago, my best friend and I went in together and bought some hunting property. and now we have just put it on the market to sell. We own the land free and clear, so the money that we get will be split between the two of us. Help me out as far as what I’m looking at as far as capital gains taxes and any way to avoid that. I don’t plan on reinvesting that money in more real estate, but I’m just kind of looking for some guidance from you.

Dr. Friday: Sure. Well, I think you took my golden goose out of the game because the only way to avoid capital gains on that property, I guess there’s two ways. One, if you have stocks or anything else that you plan to sell and they have it for a loss, then this might be a good year to take that loss to offset a session in the year in which you know it’s going to actually be a sale. I mean, if you you just put it on the market now, land does take a while to sell usually. It’s not quite as fast as houses usually, but it may be something to consider if you have something in your other portfolios that you’ve had, you’re like, “Well, I’m just going to hold on to it because a loss isn’t going to help you.” Maybe it will in this. Other than that, you’re looking at whatever you and your mate paid for the property originally. And then if it’s hunting property, I’m assuming you didn’t have leases out on it where you You wrote it off as expenses. So if you had to do maintenance, so I’m going to assume you guys pay property taxes every year. Did you have to put up any kind of fence lines or anything?

Caller: No ma’am, did not.

Dr. Friday: Okay. So pretty much all you’re going to be looking at is maybe the property taxes annually and you can add all those up, deduct it as long with the value of that property and take it all off now. So if you paid 50 and you sell it for 150, you’ll each have taxes of 50,000 per se, less whatever property tax may have been on that property.

Caller: Okay, I was also wondering if possibly I retired or excuse me, I didn’t possibly retire, I am retired, but possibly putting that money into my rollover IRA, would that be a possibility?

Dr. Friday: No, it’s not considered earnings. So you can’t take it in and put it into your IRA in any way. If you were still working and we had the ability to possibly maximize, normally, maybe you don’t put money in a 401k or whatever, you could have taken some from your paycheck and theoretically replaced it with your own money. But no, if you’re retired, then that means this is not going to be the kind of earnings you can invest now.

Caller: Okay, all right. Very good. Very good. Well, listen, I appreciate your time and your your expert advice. Thank you very much.

Dr. Friday: Thank you. I appreciate you listening. Thanks.

Caller: All right, let’s go to Tim and bowling greens.

Dr. Friday: Hey Tim, what can I do for you, buddy?

Caller: Just quick question. I’ll do loan taxes. Sold a piece of rental property, really my daughter who purchased the rental property and I’m trying to give I give part of the equity back, so sold it for Photo photo tour gift equity. It’s paid off the loan When I do the return I’m looking at it. I did last year only Excuse…

Hello Yeah, Tim, you’re going in and out a little bit and I’m trying but it says that you have a rental property You’re working on your schedule. Well II as in Edward and that’s as far as I got right Can you try a little bit more?

Caller: Yeah, all I want to know maybe getting ahead of the game, but make sure what I do I do I when I do the disposition What’s that when I do the sale? How much I put it? I know you don’t put the gift So I just put the payoff of the loan which is about fifty five thousand or the purchase of the..

Yes, okay, so let me recap for everyone again. I’m trying to it sounds like you’re selling the house, but was it to your daughter?

Caller: No, it’s a rental.

It’s a rental. It’s a rental and are you selling it or no?

Caller: Yes

Okay, so it’s a rental that you are going to gift to your daughter

Caller: Yes, part of the equity about 80,000 and then the rest of it 65.

Dr. Friday: Yes Well when you show it as a sale to a family you have to show the total Amount because you still have to pay capital gains even if there isn’t any I mean if you’re selling it to her for what you paid for it or what the fare you do Have to make it a fair market value

Caller: I did what yes, it’s 150 firm 147. Basically what fair market? 80 over the equity paid off the loan That’s the way I’m doing it, yes,

Dr. Friday: Right So I mean when you show it on your when you show it on the schedule II that will refer over to the schedule D You’re gonna show it for 147 and then you’re gonna show whatever you would make Whatever you made for capital gains, you’re gonna pay tax as far as the other side of it That’s a gift tax return and you’re gonna shut so that you get a $80,000 out of little gains at the time that you filed it She won’t pay any tax on it because the person receiving a gift does not pay the gift tax.

Caller: So the gift the gift portion she has to show… I’m sorry you lost me on that…

Dr. Friday: The gift to be you you will file a? In this house because you’re now gifting her that and then So you’re gifting her the equity so you’re gonna show the home sale on your schedule D And whatever 147 against whatever you originally paid for whatever the cap Okay It’s capital gains then I know that you’re gonna give her eighty thousand dollars of equity in this home and in essence That’s gonna be coming out of your lifetime. You’re not gonna pay an additional tax. She’s not gonna pay any tax This is just a paper trail for the IRS to know and for her if she has to go into You know later get a you know get a loan or whatever because then the home value for her will be 147,000 once you gift her that difference then she’s paying 60 and she got 80 whatever So you do need a gift tax return

Dr. Friday: Caller: Okay

Dr. Friday: okay boss.

Caller: Thanks. Yeah, I didn’t confuse you on that one –

Dr. Friday: Thank you. All right, we’re gonna take a break here and we get back, we’ll take more of your phone calls at 615-737-9986.

Part 2: 9:51(upbeat music)

Dr. Friday: All right, we’re back here live in studio and sorry guys, I seem to be having a difficult time trying to hear on my side, so maybe just human errors here, but hopefully we can work our way through it.

So if you wanna join the show, you can. 615-737-9986, 615-737-9986, taking your calls, talking about my favorite subject, which is taxes, and the fact that we have taxes coming due very, very soon. We all know how that’s gonna work. We basically have about a week and a half, October 15th, I guess about 15 days, I guess it’s the days, the 930, 15 days to get all of our taxes completed for the year of 2022. If you have not completed your taxes by that time, guess what? You need to just get them done. If you haven’t filed an extension and you’re like, okay, I haven’t filed an extension, but I really wanna get caught up, right? I mean, ’cause you can’t move forward in many things in life when it comes to dealing with a lot of the things that we have. You know, you can’t get a house, you can’t easily buy a car. I do know people do. But you know, kids get ready to go to college. These are things that require bank statements or tax returns and bank statements at cases, but tax returns. And if you’re trying to get ahead and getting things redone, trying to get ready to move forward and maybe, you know, get married and move and decide to do these things.

One of the things you really do wanna make sure is that your taxes are in order. Last thing you wanna do is bring that into another situation. And it’s not an impossible situation. I mean, you know, we do it all the time, help individuals to get their taxes caught up and then get them into either a payment plan, an offering compromise, an installment agreement, and really understanding the difference. What can you do and what can you not qualify for? Because I know in doing this for 25 years, one of the things that it seems like to me, so often people are getting told that they should be able to just make a deal with the IRS. That’s what they call it, make a deal with the IRS. But you know what? You can’t just make a deal with the IRS. There are rules, there are things you have to consider. There are situations.

And I know people sit there and say, well, I have equity in my house, but I mean, that’s the last thing I have. And I was finding out there was some really interesting debates about some of this at a seminar I was attending last week. And I did find some of it very fascinating with, depending on the age of the person, how much of that equity might be able to be argued off that it was actually part of their retirement and can the IRS actually touch it? And so, there is always a different approaches to how you can actually deal, but it doesn’t change.

First things, no matter who you talk to, no matter if someone says they can get all of your penalties waived and they can deal, they can even get interest waived, which is impossible, may I tell you? Unless they can find an heir by the IRS, you’re not going to get that interest waived. You may get penalties, but one of the things you need to be is up to date, right?

So I was talking to a client last Thursday and he came in and he’s like, well, okay, well, you know, we’ve been working with him for a number of years. And he said, well, you know, I really want to get someone to help me with this tax resolution. I know, you know, you’ve talked to me and all this, but everyone just tells me I should be able to get this resolution. And I, you know, I came right out and said, there’s nothing wrong with being able to get resolution. But with this gentleman, the thing is he doesn’t pay his taxes every year. We’ve been working for years to get him on a monthly estimated payment so that every month he makes a payment. So at the end of the year, he does not owe the IRS. And for three years, that has not happened because of something either coming up, unable to do it. Now he’s recently gotten married and the person he’s married to doesn’t have any of her own income. So this is gonna be even a larger situation because he’s sitting there going, “Well, I’ve been paying the IRS forever. “I’m not getting ahead and now I just filed.” And he hasn’t filed 2022, which is also going to need to be added into his tax debt.

And I said, he would qualify. Personally, I think he would qualify for an offer and compromise. But if I made a deal with the IRS, I would already know that this individual isn’t going to be able to continue not to get in trouble or not to have issues with the IRS because he has to stay current and pay all of his IRS every single year for five years. Last three years, I haven’t been able to do it. So why would I want to go and make a deal with the IRS, get him all set up for failure really, because it doesn’t help him if he’s not succeeding on what he needs to do. And that’s something that people need to consider.

They always think about, well, if I could just get the IRS off my back, I’ll be fine, but that’s great. And in many cases, I think it does help. But if you’re not ready to actually, not just get the IRS off your back, but to actually get the IRS into a place where you’re going to be able to move forward to do things, meaning that you’re paying the IRS off and that you’re not having to deal with something other than that, then you’re just going to set yourself up for failure. I mean, seriously, and that’s what you don’t want to do. You don’t wanna tell the IRS you’re gonna do something and then turn around and find out, well, I couldn’t really do that. Well, that’s so not what you want. You know, I mean, really it’s not, you want to be able to go out there, get yourself set up so that way now you know that, Hey, as long as I set this much money aside, and I will tell you, it’s us, the entrepreneurs that often have the hardest time, because if you already have a w two job and you’re not getting enough money, you just go in there and tell them to take more money out. I mean, even though you might not like it, it is something that is easier for us to control where if you’re an entrepreneur and no taxes come out and you don’t have a separate bank account where you’re putting 20, 25, 30% of that check because your partner in business is the IRS. No matter what anyone else wants to tell you, you do have a partner in business. They want their share of that information and they want their share of taxes. Boom, that’s it.

So first thing when you go in business and you’re doing things, you need to remember that you do have this partner that’s expecting their share of your profits. Now it’s not a gross, it is of profits. But in some cases, some of my clients don’t do a great job of tracking every single month their expenses. They do a little better job tracking them on the quarter and then once a year they go through and for weeks at their kitchen table they spread out everything and they put it together so they have all of their deductions. But the problem with that is, how have they been able to take out the money if they don’t know what their profits were on a monthly basis? So having a system, I don’t care if it’s a matter of just doing Excel, doing some sort of QuickBooks, Quicken, I know there’s some other free accounting systems out there, it doesn’t have to be complicated. It doesn’t have to generate. What you need is what I refer to as a profit and loss, it’s income and expense. I don’t care what you wanna call it, but if you can get something that would show this is what you came in with income, here’s the expenses that you tracked and this bottom line is what I think I earned. Then that dollar amount is what you wanna be taking a minimum of 20, no matter how little it is, up to 25 to 30 to 35, depending again, you know, what your dollar amounts and your income is. But you need to know that percentage, you need to know what it is. And then you can take that and set it into the account for your partner, the internal revenue service. So that way when it comes time, weekly, monthly, I mean, I have people that will pay it weekly. I usually suggest for people that have a difficult time to do it on a monthly basis. And then obviously if you’re able, the IRS only requires it four times a year. And September 15th was our third payment. Our last one for the year will be in January. But you need to remember that because the ones that get in trouble because when the truck breaks down or when you get behind on a credit card, or usually, to be honest, it’s something happens that’s unexpected. Normally a vehicle breaking down, or maybe at that point, then you don’t generate, if you’re a driver or something, and you don’t generate income for a few weeks, you have to start borrowing from the only account you really have, or you don’t set that money aside.

So, next thing you know, you’re basically upside down, and now you’re in a situation where you don’t have the ability to really fix that problem. And once you get to that, it’s so hard because when you’re paying backwards for back taxes, and then I’m telling you to pay forwards. So there is a system, once you do it, there is a way, but you have to look at, when you have a job and a W-2, it’s not like you can borrow the IRS tax money, it’s not there for you to borrow. So what would have you done then? You know, and that’s what people have to start thinking when you are an entrepreneur and you have this partner in business, whatever that percentage is, that money needs to be set aside and you don’t touch it any more than you would touch the ability to go to your boss and say, “Hey, I’m short this week, I need $1,500.” I mean, the logic is that’s not going to happen with most bosses and you’re going to have to figure out another way instead of just using your partner’s money.

Well, that’s what this is. So once you are set and you are able to live off of the 80% of profit or 70% of profits, and that’s what your lifestyle is, then you’re in a better situation because then, you know, if you do have some extended expenses and that brings your income down, now you’ve probably overpaid or you have extra money in your savings. And at the end of every year, you can clean that out. If you only need to pay 15% of it to the government and you save 20, you’ve got 5%. Gosh knows you might even set up a retirement account. Who knows?

All right, so let’s get ready. We’ll take our second break of the show. When we get back, we’re going to hit some of the calls or emails that you have. The phone number here in studio is 615-737-9986. 615-737-9986. We’ll be right back with the Dr. Friday Show.

Part 3: 20:58(upbeat music)

Dr. Friday: All righty, we are back live here in studio. And if you wanna join the show, you can. 615-737-9986, 615-737-9986, taking your calls, talking about my favorite subject, taxes, money issues, dealing with the IRS or the state.

We have had a couple people that have been dealing with the unemployment issue where they got unemployment and now the government’s coming back and saying they didn’t qualify. I will tell you that is not my expertise for those kind of situations, but I have understand there are a couple of different court cases that have come out of this. So hopefully that will help with some of the individuals that are coming back and saying that they were, they’re now being billed for something that may or may not apply in that scenario. So we’ll have to stay tuned and keep track of all of that.

My biggest thing is making sure that we have two things. One, making sure taxes are filed because that’s what I mainly do. And then the second thing is mainly I do a lot of tax resolution. As an enrolled agent, I’m licensed by the Internal Revenue Service to do taxes and resolution. And that’s really what we do a lot of trying to help people get past the point of, all right, you know what, something happened, businesses fail, especially in the last few years, we’ve had a number of businesses that have failed and ended up with trustee tax issues. These are just situations that you can’t really change, right? By the time you’re in my office, the fact is, here’s where we are.

So being able to take a fresh look at your situation and seeing is there a possibility of getting some sort of payments. Like I always talk about businesses can do offer and compromise as well as individuals. And then obviously just finding out what would be the settlement and how would that come about. Would it be in less than 12 months? Would it be in 24 months? What kind of payment plans?

These are options we do have. And the last thing you really want is so the government to come and do a, you know, a levy on your bank, right? We don’t want them taking money, especially when it’s set aside usually for rent, food, the essentials in life. And there are hardship filings. So if the IRS did take money out of a bank account that you had set aside for the emergency of paying your rent or paying food, there are ways of getting those funds back. you would have to prove that hardship that you don’t have the ability to pay your rent or to to eat. So those are the kinds of things we deal with all the time.

But part of it comes down to this is understanding what is your individual situation like? Because I know there’s so much stuff out there if you’re Googling or even if you listen to the radio or TV, there’s all kinds of those organizations that come out and say, we can help you do We can save you a thousands. We’ve we’ve done this and anybody that’s been in the resolution business has a story where they had someone That had owed over a hundred thousand dollars and they settled it for less than 25 Anyone that’s been in the business will always have those stories But what’s the reality for you because that’s the story you really want to understand Just because I could sit here all day and talk about the different types of resolutions We’ve done and maybe that would give you the idea that I know what I’m talking about about, but it’s not going to really give you the idea. Can I do it for you? Because you are unique. Your situation is going to be different.

You know, were you married at the time of this resolution? Did you file things jointly or not? Uh, had, I had a situation where someone called me and was telling me, um, about their child and, uh, this particular situation, the person is in a, um, an unhealthy relationship. Let’s put it that way. And that does come into play because filing a joint tax return with somebody that just tells you to sign it or else does lead to the government understanding that that wasn’t really a choice. And if you didn’t have those kind of choices, if you were in a situation with someone that was extremely dominant or even threatening or abusive, obviously, that changes your personal responsibility.

But if you were in a normal, healthy, I guess you can say a healthy marriage of some sorts, then, you know, you, you ended up divorced. But at that time, when you did the divorce, you owed the government. And because the government basically, you know, in the divorce, you said that. She’s going to pay all the taxes because she was self-employed. I paid my share and this is all her fault. So she agreed to get out of the situation, uh, by basically saying, sure, I’m going pay all the taxes? Well, from first-hand experience, I can tell you we had a situation just like that and due to the situation, I was able to get that particular individual out of tax debt with an offer in compromise. But the court had said that she had to pay the taxes and we got her in an offer in compromise, which means she did not pay at all. And since they weren’t legally married any longer, the IRS then turned around and went after the husband who obviously at that time, because the court and the IRS are completely two different things. You’ve got to understand that.

If you have a legal document from a court that says you’re supposed to pay all the taxes and the IRS comes after you or the other person that they’re not supposed to, the IRS is going to come back and say, we don’t care what your divorce papers say. You sign those taxes and you agree to that tax that as a couple. So it doesn’t make a difference that your tax, that your divorce decree says that other person’s going to pay it. And the IRS is like, well, we’re not getting paid. So guess what? You’re going to pay it. And you can then theoretically, I’m not an attorney, but I’m assuming you can then take that person back to court and sue them for the money that you had to pay the IRS. And you’re not only liable for 50% because you’re each on the tax return, you’re each liable for 100% of that debt.

So again, my suggestion is always, I mean, if you’re getting divorced and there is a a tax liability and you have the ability to put it on their credit cards to pay them off and then the credit cards can be paid by that person or their credit or something goes bad. That’s a whole different story. But IRS is not going to allow that person that basically may have caused it to be the only responsibility. So in this case, I got the person that was responsible off and no longer in debt to the IRS. Now the other person was going to have to deal with the IRS, which that they would have been able to get an offer and compromise. So they were going to have to pay the IRS and then they were going to have to take their spouse back to court and sue them for that money, which to be quite honest, would have been interesting since there wasn’t any real money there. So, you know, and everyone knows a judgment is just as good as the paper it’s written on when it comes to certain aspects. I mean, if someone owns a house or someone has a lot of cash in the bank, well, then you probably aren’t going to sit and make an offer to the IRS and you’re not going to have these issues because you’re not the one that’s going to have those particular problems because you’re going to pay them. But if you don’t have those and then you have the ability to do that, and you know, that’s, that’s the tools that we have. It’s like bankruptcy or anything else.

I mean, I am surprised so often on how many people don’t like bankruptcy. I’m not saying it’s for everyone. I’m not saying it, but it’s no different than divorce or anything else really. You know, at the point of, if you’re that far into a situation, you need to consider all elements and keep in mind the IRS can go into bankruptcy if if it’s ordinary tax debt, ordinary income tax debt. So that can go into after 31 months to a bankruptcy. So if you owe for 2017 and that’s the only year you have, you might want to consider a bankruptcy. It may be the only, you know, but often I find with my clients, it’s not just one year, it’s multiple years. So again, I had a client that came in and they said, well, I was going thinking about bankruptcy, what do you think? And in this particular pace, they had 17, 18, 19, 20, 21, 22. So they might’ve been able to get 17 or maybe even 18 off, but 19 through 22 were not within the 31 months in their situation. So going bankrupt wasn’t going to solve much of their tax issue in this particular story. But again, we want to look at all elements.

If you have old debt that you’ve been paying on a long time and you maybe can’t pay the IRS or maybe an offer in compromise doesn’t apply. I am not an attorney. I’m not going to say I understand bankruptcy. I have worked with some attorneys and dealing with the IRS and bankruptcy. And there are certain rules again, like everything else but sometimes you can do bankruptcy and you can’t do an offer in compromise. So you need to consider your options. make sure that you’re not just, you know, flying blind and make sure that you’re able to do what you need to do. Right? Because that’s the important part. As an enrolled agent, my job is not to just get a deal with the IRS and say, okay, my hands are ripe. You know, here’s your deal. It’s to make sure you’re not, you stay current, that you can live up to the deal that we have and to make sure that it fits what you need.

Just because you might get an offer and compromise doesn’t mean it’s a good offer and compromise. Maybe it’s more than you can afford. Even if I tell you, you owe them 150,000 and you can pay them 40, they’re gonna wipe it out. 40 may have been just as bad as saying you owed 150. You don’t have access to that either. So you need someone that’s gonna understand not only what their responsibility is to help you with that, but also where you’re at right now and what is going to be the best resolution. Maybe non-collectible for a little while and then getting into a different type of deal. It may not be as black and white.

So again, if you have issues with the IRS or if you’re looking to have your taxes done and we might be able to help you, you can certainly call us or just go to the internet, drfriday.com, that’s D-R-F-R-I-D-A-Y.com or email friday@drfriday.com. All right, we’re gonna take our last break for the show and if you want, you can join us here live in studio at 615-737-9986. We’ll be right back with the Dr. Friday Show.

Part 4: 32:23(upbeat music)

Dr. Friday: Alrighty, we are back. Goodness gracious, today I can’t figure it on and off, off and on. Here we are, live back in studio. So if you wanna join the show, this will be the last bit. Otherwise you will have to wait till next Saturday or you can call me in the office, obviously throughout the week. But if you have a question right now, probably best to pick up the phone. 615-737-9986, 615-737-9986, taking your call, talking about my absolute favorite subjects, other than myself, obviously, which is taxes and finances.

So if you have something you wanna talk about, or again, keep in mind when you’re dealing with your own personal taxes, you know, and all of us are, just keep thinking about what, you know, If you inherit something, if someone’s gifting you something, where’s the taxes going to be? Social inheritance had several cases in the last couple of weeks. Property inherited, but they inherited it a couple of years ago. Now it’s finally being sold. We had somebody that has a unique situation where they had an annuity, they inherited, And then they were distributing that money to their grandchildren or to their children. And they inherited it from their parents and then they were gifting it to their children. But you know, trying to figure out where the taxes were being paid, how the gifting was supposed to be handled, all of that kind of conversation. Even life insurance had one that came in this year, this last few months that it was in a unique annuity. And therefore it was, even though it was called life insurance, it wasn’t tax free. So you know, which obviously was a surprise because the person didn’t report it thinking that it was a tax free situation and it wasn’t. So you really need to understand what you’re, what you’re getting and what you have so that you can make good judgments.

Just like the gentleman that called in earlier, Jim, that has the piece of hunting property, you know, it’s always good while you’re thinking, okay, you know what, we’re listening at first So now I have the time to preempt. Okay. This is what I’m expecting. We’re gonna sell it for this would be my share This is how much the closing cost fees blah blah blah This is what I’m expecting and depending on if it’s puts his personal income over 250,000 or if he stays under that it would be a matter of it’s 15 18 point eight or twenty three point eight capital gains tax And it like he said is there something he could consider? There’s not a lot of options. Capital gains is still probably the lowest taxation that you’re going to run into But if we could avoid it, we’re all in line for it so what is and it’s not like he’d already done his research because really the only way to avoid if you’re in that kind of Situation and you’re standing and listening to us, you know He was talking about a 1031 exchange Which basically means that if he wanted to buy another piece of property be it maybe not hunting but a piece of rental property or investment property could be commercial. But something that he wanted to turn that into, he could do a 1031 exchange and go buy it. But there are rules. There is a very tight time limit in which when you make a sale and when you have to reinvest that back into another property. But it is a way of deferring capital gains. And it’s a way of deferring depreciation recapture, which especially in Jim’s case, there won’t be any because land is never depreciated. But in people that have rental properties, many of them would have.

And I actually had a really nice surprise last Friday when I was working on one of my clients. And he now he is starting to offload a number of his rental properties, but he has had them for over 33 years, which means recapture depreciation isn’t going to happen. So there is a golden parachute in those kind of situations, but most people don’t hold on to real estate that long. So, um, but if you had held on to over 25 years, there is some, some advantages to doing that. So, um, you know, it’s still gonna hurt when you have to pay capital gains, but at least you don’t have the recapture of depreciation, uh, that does come along with it. So when you’re calculating a gain on a piece of real estate and it is a piece of real estate that has been used as rental, so there’s been depreciation. Remember, depreciation was ordinary income, which is great if you were able to actually take those losses and it would have offset your ordinary income, that’s great. Many cases that really just rolls over. If you make more than $125,000 and you have rental losses, you’re probably not actually getting the advantage of a rental loss right now, but when you do sell those properties, they will come back at you as a better situation.

So you will have those, I know a lot of people want more of that instant gratification, but you know what? Sometimes you do and sometimes you don’t have the advantage of that. So all you can do is move forward and see what you have. So if you want to join, not during the show, but if you want to call me on Monday morning, if you’ve got a question, I’d be more than glad to do my best to help you with leading you either towards resolution on our side, or if you need some other assistance through attorneys or state planning, we can do that as well. We have people we’ve worked with. But the phone number in the office is 615-367-0819. 615-367-0819. Remember, I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and resolution. similar, I guess you would say, to a CPA, but they’re licensed by the state. And normally a certified public accountant does accounting.

Now I have some great friends that are EAs or they’re certified in the accounting and they do taxes. So some CPAs will be and do the same thing we do. Not all, just like some attorneys are EAs and they actually do representation as far as the same situation. But in most cases, if you’re looking for someone that’s going to help, make sure that that’s what they do. Just because they are CPA doesn’t mean they’re going to do tax resolution. In fact, just because they’re EAs, it doesn’t mean they do tax resolution. Because some of them have found that they just like to do taxes. Some accountants like to do audits. Some like to do forensic accounting. There are all sides to many of these professions. But in our case, we do resolution and taxes. So if you have a problem or if you’re just really wanting to try to see what’s the next step. How can I improve upon where I’m at right now because it feels like I’ve been paying on my IRS debt forever. That’s usually the first thing people say I’ve been paying on it or you know I haven’t done anything for 10 years and I really would like to get back on track. That’s what we do as enrolled agents. We help people do just that.

So if that’s what you’re looking for again the phone number for the office is 615-367-0819. You can also email me Friday at drfriday.com. You don’t want to forget, I know I keep pushing it, but seriously, it’s only a few weeks away. You need to file your 2022 taxes. If you were fortunate enough to file an extension that never extended the money you might owe, It did extend the penalty for failure to file which can be a 25% penalty, but it did not extend the money So when you’re filing you want to try your best to actually make the payment back in April when when you file extensions But sometimes that’s just not on the table It’s not even an option and I understand sometimes it’s just the reason to push it down but also one of the nice things about filing in September or October 15th is that if you have a SEP, if you’re self-employed, it does give you till that day to make a payment into your retirement.

So that is also a wonderful advantage for many of us to be able to maximize our retirement now in October, where you can’t do that. IRAs extend only to April, but a SEP does extend all the way out to October 15th. So if you have it maximized, you still have time to put money into your retirement. And a lot of times you can’t even figure out how much the maximum is until you do your taxes because it is based on your income, subtracting your social security, getting you to a dollar amount that you can then figure out. So again, you can email friday@drfriday.com. If you have a question, again, friday@drfriday.com. You can also check me on the web. If you haven’t heard of me or you’re not too sure, or you haven’t seen my big old truck driving down the road, then it’s a good thing that you can also check and see who I am. That’s a simple address, drfriday.com, D-R-F-R-I-D-A-Y.com. And again, if you have questions, you need help, I will do my best to try to lead you or help you in doing that. You can reach us in the office Monday morning at 615-367-0819. 615-367-0819. Do not ignore the IRS. As all I can tell you, if I was to leave you with anything, if you’re getting the love letters, if you’re getting communications, it’s not something you want to do. You don’t want to just ignore the IRS. What you want to do is basically respond. Communication can make the difference of having someone coming right at you or being able to deal and move forward in that. You’re not sure how to do it? Call me 615-367-0819 615-367-0819 I hope you guys have an awesome Saturday. Cop ya later! (upbeat music)

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In this episode, Dr. Friday delves into a common tax dilemma: what should you do if you’re unsure about the accuracy of your tax return? Whether you’ve made an error or omitted income, Dr. Friday sheds light on the pros and cons of waiting for the IRS to correct it versus taking matters into your own hands. Discover the importance of the 1040x form and learn why acting promptly can save you from hefty penalties and interest.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

So, what do you do if you don’t know if you’ve done your taxes correctly? Maybe you made a mistake, maybe you forgot to add income. Do you just wait and see if the IRS corrects it for you or should you correct it yourself? And the answer isn’t as black and white as you might think. In some cases it might just be as easy to allow the government to make the adjustments but 90% of the time sooner you correct it especially if there’s an outstanding balance the sooner you pay it lower the penalties and interest will be. So the first thing you want to do is if you figure out you’ve made a mistake on your tax return you need to correct it on a 1040x. You need help? Call me 615-367-0819.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 p.m. right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday delves into the often-confusing topic of claiming dependents on your taxes. Is there an age limit to claim your child as a dependent? What’s the difference between the child test and the qualified relative test? Dr. Friday clarifies these terms and provides insight into the government’s perspective on dependents. Whether your child is 24 or older, understanding their status is crucial for your tax filings. Tune in to get the clarity you need.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info, go to www.drfriday.com. This is a one minute moment.

Is there an age limit on claiming my child as a dependent? To claim your child as a dependent, your child must either qualify as a child test or qualified relative test. This is often where people get confused. A lot of times people will turn around and say, “Well, I can’t claim my child over the age of 24.” No, they’re no longer a child. They are now considered by the government as a relative. I know, it’s just the terminology, but it doesn’t make a difference. If you are providing more than 50% of their support and they are not making more than $12,000 a year, then they are or can be possibly your dependent. If you need more help or if you need a separate appointment, go to drfriday.com.

You can catch the Dr. Friday call and show live every Saturday afternoon from 2 to 3 right here on 99.7 WTN.

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In this one-minute moment, Dr. Friday, an enrolled agent licensed by the IRS, dives into the importance of staying updated with your taxes. Whether you’ve missed out on stimulus checks, faced personal challenges like divorce, or simply feel lost in the tax maze, Dr. Friday is here to guide you. Discover how she can help you get back on track and ensure you’re making the most of your financial situation.

TranscriptG’day, I’m Dr. Friday, president of Dr. Friday’s tax and financial firm. To get more info go to www.drfriday.com. This is a one-minute moment.

I am Dr. Friday, an enrolled agent licensed by the Internal Revenue Service to do taxes and representation, which basically means guys all I really know is taxes, how to deal with taxes, and how to deal with the Internal Revenue Service to help you get back on track. If you haven’t filed taxes for a number of years, A) you may have missed out on two stimulus checks, and/or if you haven’t even know where to start, you don’t know, you’re confused, you’ve been through a divorce, you’ve had other issues, I can help you. First thing you want to do is check me out on the web at drfriday.com. Then you want to pick up the phone and call me 615-367-0819.

You can catch the Dr. Friday call-in show live every Saturday afternoon from 2-3 p.m. right here on 99.7 WTN.

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Welcome to another episode of the Dr. Friday Radio Show! In this episode, tax expert Dr. Friday answers callers’ tax questions and covers various topics, including:

• Warning about scams involving fake IRS calls and fraudulent emails.
• The importance of being cautious with personal information and verifying the validity of payment requests.
• Retirement planning, including when to start collecting Social Security and the tax implications of different sources of income.
• Clarifying the tax bracket based on pension, Social Security, and 401k withdrawals.
• Inherited funds, taxation of life insurance proceeds, and financial management for seniors.
• An anecdote about a scam involving fake IRS calls and the significance of verifying emails and bills to prevent fraud.
• The necessity of being in compliance with the IRS before entering into any deals or payment plans.
• The challenges of dealing with the IRS and the value of having representation.
• The limitations and qualifications for offer in compromises and payment plans.
• The importance of cautious spending when dealing with the IRS.
• A caller’s inquiry regarding tax implications when selling a house in a different state for a family member in a nursing home.
• The tax-free limits and potential Medicaid look-back period for the sale of the house.

And much more!

TranscriptPart 1 – 00:00Announcer: No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Dr. Friday Show. If you have a question for Dr. Friday, call her now, 737-WWTN. That’s 737-9986. So here’s your host, financial counselor and tax consultant, Dr. Friday.

Dr. Friday: G’day, I’m Dr. Friday and the doctor is in the house. So what a beautiful Saturday, the first day of fall, but it is gorgeous out there. A little warm when you’re working outside, but I’ll take it compared to rain or any of the other things we could be having. So appreciate the weather. Hopefully you guys are enjoying it.

If you wanna join the show today, where I’ll be talking about my favorite subject, taxes. I’m an enrolled agent, licensed by the Internal Revenue Service to do taxes and representation. So that means if you haven’t filed taxes, if you’re getting love letters and you’re like, I don’t know what the IRS really wants, or you’re trying to make a deal with the IRS and they just don’t seem like it’s making sense to you why they want something, or you don’t know if you can make a deal with the IRS, you don’t understand how that works, that’s where I come in. That’s my expertise, that and just basic tax preparation.

And again, I’m an enrolled agent, been there for almost 25 years doing taxes and representation. So if you have questions, or maybe you’re pying something, you’re like, I don’t know if I sell my home, am I gonna owe taxes? If I inherit something, is it taxable income? Is it not taxable income? What’s the difference between the two? Big difference, obviously, all of us know, no taxes, taxes, never a good thing when you have to pay taxes.

You can join the show at 615-737-9986, 615-737-9986 is the number here in the studio. You can also email friday@drfriday.com. If you’re a little bit shy, totally relate. Calling a radio wasn’t something I ever really was doing until I started this 15 plus years ago. Now, of course, it feels like a second job. So if you’ve got a question or you just, maybe you have a friend or someone that you’re not sure of, you know, they’re behind, they’ve gotten divorced, that’s always a big reason, or like many of my clients, it’s one of the big reasons why people end up with tax issues.

What can you do? What’s your options? How are you gonna make it work? That’s what we do. We can help you get back on track because I don’t care what anyone, if you call, there’s national phone numbers you can call and many of them will immediately sell you something, but you’ll find out a bit different. It’s not that, you know, not that anyone works for free, but our initial consultation is always free. And we’re gonna find out, is there actually an offer in compromise, a payment plan, a partial payment plan? What can we do for you? And our billing is based on that, not just start paying us money.

I always share this story. It’s been a number of years now, probably 10 plus years. But back in a while, there was a scam that people were doing where they would call and say they were the IRS and that you owed them money. Well, I got a gentleman that got this phone call and then he immediately called one of the national numbers that were out there and they said, “Oh yeah, we can help you. It’s what you need to do. You need to start paying us $500 a month and then we’re gonna get this all straightened out for you. Turned out, I started that conversation with scam, right? This gentleman did not owe the IRS anything. He just got scammed. And when people say the IRS is going to collect, I mean, it is one of those people that we are not too happy to hear from. He did not owe any money, but they still collected for three months until he called and said something. And then he asked me and I said, “Well, who is this?” And they said, “Well, I think he said something like the county Mounties were gonna come to his house.” I said, do you even owe the IRS? Cause that was one of the things they always called our police, something other than the police. They always call them, you know, the Bobby’s are coming or the, the troopers are going to get troopers to come out to your house. We don’t use that terminology. And you ever look at the emails that come in and they’re frauds. One of the first things you want to do is really read the email. Did they, did they have something? I had one that said I needed to pay something through PayPal, but instead of a decimal point, it had a comma. And to be quite honest, I never heard of the company anyways, but it was a dead giveaway. It wasn’t in our normal way of doing. So anytime you’re thinking or you’re not sure, obviously, first thing you do is you want to call whoever it is, if it’s a bill for somebody or a product, and find out if they’ve even sent it.

Because if later, if you look at the email addresses, sometimes there’ll be like a Gmail account. I would Comcast or any collection from a major company would be coming from an email from Comcast from Google or some other email. I think that’s personally a dead giveaway, but you want to be careful. So anyways, anytime you’re not sure, definitely, because we do have cases come in all the time about, you know, someone’s identity has been taken or someone’s tried to get into someone’s bank account or, um, had an unusual one with my nephew. lives in South Carolina. And he basically had a situation where we have a rental there and a package was delivered.

And next thing you know, a police officer comes and picks up the package. And he’s like, “Oh my gosh, it wasn’t for us.” He said, “It wasn’t.” He goes, “No, no, we know that somebody had stole someone’s credit card and the credit card had contacted the individual saying that this was being delivered to this address.” They called the police and this person.

The next day our videos picked up someone knocking on the door and window trying to get someone’s attention in the house. Nobody was home. Thank goodness, but I’m just saying these things happen. They’re scary There’s not like you have any control over it so your best bet is be careful when you’re giving out that information and Always double check if someone’s asking you to pay something make sure you really owe it That’s my two cents and my bit of warning on that since it hit home very close with my nephew

So if you want to join the show, talk about taxes or financials situations, you can 615-737-9986. 615-737-9986.

This week I was in a class for the last three days taking about taxes and representation. It was really quite fascinating to be honest. And I know not everyone’s going to get excited when I use the word taxes or representation, but anytime I can find something out, I always say, anytime I take a class and I can walk away with just one thing out of three days, then it’s great, because that’s one more thing I can have in my toolbox to help the next person that comes into my office. And there was actually two or three things that came. Part of it was automation. You know, when you’ve been doing something for a number of years, sometimes you get stuck on how to do something because you know how to do it that way. And then change, obviously, sometimes seems like it’s harder but I think the IRS is coming along with being able to do more things as far as faxing and emailing people’s power of attorneys.

Sooner I get power of attorney, sooner I can start representation, sooner I can help get my client back on track. Because anytime you’re dealing with the IRS, before you do anything else, you have to be up to date. That’s plain and simple. That means you have to be in compliance. So if you haven’t filed your 2022 taxes, which are due 10/15, right around the corner, and you owe back taxes and you have back issues, well, you need to have that one completed just as well as anything else. So if you don’t have it, you need to go ahead and consider, what can I do to get myself into compliance? Because if you make a deal, in most cases, they won’t make a deal with you if you’re not in compliance. But sometimes I’ve had stories where people say, well, I was able to call up and get a payment plan, but then we go and file and get them into compliance, they get kicked out of the payment plan, now the payment plan’s higher. and it makes it harder or people get themselves in a high payment plan ’cause they’re just so afraid. And then you turn around and find out that the government’s saying, “Well, they were paying $500 a month. What do you mean you wanna take it down to 280?”

Which is all they really had to be filing or paying, but they were just wanting to make sure that they paid and it’s so much more difficult to go backwards with the IRS than it is to go forward. So if you’ve got a question, you wanna join the show, you can. 615-737-9986, 615-737-9986, taking your calls, talking about taxes. We had several people that came in the office last week. Of course, last week was also the final, the 15th was the end of business return. So if you haven’t filed your 1065 or your 1120-S, unless you’re elective to be on a fiscal year-end, then you are in trouble. Otherwise you are spot on and you will be great because you filed them. If you haven’t, you’re late. And if you didn’t file an extension, you’re already late anyways. I had a gentleman call me yesterday and said he got a $5,600 bill because he hadn’t filed his taxes. And then he turned around and filed them. But he was a year late in filing his taxes. And of course didn’t really have a extension at that point. Remember extensions do only extend a period of time, normally six months past the due date. And so there isn’t a second one just for any of you that want to call and say, is there a second one? Because it doesn’t always happen, but there is not a second one. It used to be three and three, but they just went directly to a six month extension.

And that makes things, it actually does make things a bit easier when it comes to that kind of situation. But anyways, so you want to make sure that you are in compliance, that you’re getting ready. And if you’re going to be in compliance, that means filing now for your 2022. Don’t get everything organized and done up through 2021. Hit the, you know, hit the finish button and then you’re already behind again on 2022 in less than three weeks. Not the best plan.

All right. Let’s see what Lewis in Mount Juliet has to say. Hello, Lewis.

Caller: Hey, uh, my question was, I’m fixing to be 62 and a lot of people I’ll hear them say, Hey, go ahead and collect your social security at 62 versus 65 or 67 because you’re going to really get more on the front end than you would get if you weighed it later, of course, because you’re collecting for more money. But as you get older, if you make it to 80 or whatever, you’d collect more on the back end. But my question is along with that, though, I’m going to get a pension. I’m going to get about $2,500 a month in Social Security, according to my paperwork that I’ve I’ve got and I’m going to get about a $2,500 a month pension and then I have a I have a 401k and an IRA that I can pull some money from but now my wife’s not old enough to collect Social Security yet because she’s younger than me. How much money, my first question would be if I’m collecting 25 Social Security and 25 from a pension that I haven’t paid taxes on yet and then I’ve got a 401k and I collect let’s say a thousand dollars a month from that that I haven’t paid taxes on obviously right is it am I am I gonna be down in that 12% tax bracket or is that going to put me up in the 20% bracket well I have to ask first how much does your wife make my wife doesn’t make anything right now oh okay so she’s not okay that’s good well I’m not good but it’s good for my side you won’t make anything.

Okay.

Dr. Friday: Well, I mean, one of the things that I want to put a caveat, Lewis, this isn’t going to affect you. But if somebody had a real job and then wanted to go on early social security, you could only make like 19,000 earned income, nothing to do with pensions or, or, or retirements. But if they had a W two job, there is limitations if you take social security early, putting that out there, because that is not what you’re asking me. And you don’t sound like that’s your situation.

The biggest thing you should be in the 12% because you’re less than $100,000. But just keep in mind that you’re going to have 60, well, 12,000 plus 25, 30, and 12, which is, sorry, having to do this on the fly here, around $67,000 taxable because Social Security, they can only tax 85% of that. And then everything else you’re bringing in is taxable. So you’re going to have, you know, 67,000 times 12% roughly worst scenario. That’s about $8,000. Roughly, you’re going to have it taxes due every year and you’re going to either need to make quarterly’s or you’re going to want one of your retirements to have that come out of. Right. Okay. So you’re just saying, because I’m going to make $2,500 a month on just my pension right and then you got $25,000 so but on my social security I’m not gonna have to pay tax yes sir yes sir you have more than you have more than $25,000 coming in you’re gonna hit at least 50% tax depending on how much you take out of that 401k it’s gonna be up to 85 so but you’re already at the 50% but you’re saying that’s only because I’m pulling out of my 401 right well I I mean, theoretically, you, sorry, you, have $30,000 coming in from your pension.

Caller: Right.

Dr. Friday: So you’re at the very edge of when social security, ’cause they take half of your social security and that dollar amount. That means that you’re at roughly 45,000. You’re already at the 50%. They’re already taking taxes out of your social security. No matter what you do before, you take the $1,000 from your 401k. So you might as well figure 85%.

Caller: Yep. Okay. Okay, that’s kind of what I wanted to know.

Dr. Friday: So you might as well look at it about eight grand a year going out in taxes, my love.

Caller: Okay, well, I guess it’s less than what I pay now.

Dr. Friday: I’m sure it is.

Caller: Okay, thank you so much.

Dr. Friday: Thank you for calling, sweetheart. I appreciate you.

Caller: Okay, bye-bye.

Dr. Friday: All right, we’re gonna take our first break. If you wanna join the show, you can at 615-737-9986. 615-737-9986. We’ll be right back.

Part 2 – 14:38(upbeat music)

Alrighty, we are back here live in studio. And if you want to join the show, you can at 615-737-9986, 615-737-9986. And we’re going to go right to Jamie in Nashville. Thank you so much for calling. What can I do for you, Jamie?

Caller: The question is about inherited funds, whether the funds are inherited through a will, through probate, or because someone is listed as the beneficiary of a bank account that was owned by the deceased or life insurance proceeds. How are those taxed, if at all?

Dr. Friday: So usually, usually, I have only had one situation where life insurance was held in a unique annuity situation that did come back as a portion of it being taxable. But 90% of the time I would give life insurance if you’re the beneficiary is gonna be completely tax-free. That’s the purpose really of life insurance is to go to the next generation tax-free ’cause we usually pay with after-tax dollars.

Bank accounts, as long as the person closing the estate has filed the final tax return for that person ’cause sometimes interest and dividends can be in a bank account, all the rest of the funds are usually completely tax-free because they’re usually after-tax dollars that’s sitting in the bank or the taxes were paid at the time of the final filing for the estate under the individual.

And then what was the third one? If you have an IRA, biggest ones you have to be careful of, inherited IRA, which sometimes you can be paid on death, you can be a beneficiary of, everything in there is gonna be taxable, unless it’s a Roth, let me clarify that. Many annuities, if you’re on the name of, if it’s just annuity, many times an annuity will have some taxable dollars. One of the good things that many of annuities do, they actually take out first the taxable amount. So by the time someone passes away, much of the money left in there is actually after tax dollars but like anything else, it’s never black and white.

But so you usually can be pretty good on bank accounts. You’re usually fairly safe on life insurance or real estate, like a primary home. If you sell it within a few months after the person passes away, usually the basis that you have will be the same as what you sold it for anyways. Does that help at all, Jamie?

Caller: It does, very much, thank you.

Dr. Friday: Cool, thank you for asking, I really appreciate it.

Alrighty, so if we’re gonna continue on here, that’s a great question. Many people listening are often wondering if I’ve inherited this, is it taxable? Again, depending on in a will or if it’s in a trust, doesn’t necessarily change the taxability. Sometimes in a trust, when we handle them, we will pay the taxes before distributing. Probably one of the largest or biggest mistakes I see that executors do of estates. And we do handle that in our office for some of our clients, not very many, but every once in a while, we’ll have to do it because they don’t have a immediate family and that kind of thing.

But in all honesty, the biggest mistake is they distribute too early. So I had a situation just recently where a big piece of farmland was inherited, but it was one of those things where it was generationally inherited. So the step up in basis was somewhat difficult to track. And then the children that actually are now growing, older individuals were the ones that were on the paperwork for 30 years. Now it’s been sold and of course the profits were millions of dollars and distributions were made before this was held in a partnership, actually an LLC and the state franchise tax, which was several hundred thousand dollars, had to be paid and then people had to give money back, which makes things very uncomfortable, very difficult for them to understand, But it is what it is. And that’s the executor’s job is to make sure that you’re not distributing or doing anything that would create, that’s why I’ll be honest, I’m the opposite. I’m very hard to let go of the money until everything is done. Taxes have been, tax letters have been accepted. Clearance has been received. Because once you close an estate, once you’ve given the money to the individuals that are the beneficiaries, most of the time it’s best if we can do it as a tax-free situation, even though I will tell you that trusts often pay higher taxes than individuals, but it does come down to where the individuals do want to inherit tax-free, right? They don’t really most of the time, they don’t care as much, even though my clients are probably a little bit more on top of it than some people, I’m not saying all, but they often question that. And we usually work with the beneficiaries if possible, because if you’re in the 12% tax bracket and the trust is in a 25% tax bracket, that’s kind of a no brainer to say, it’d be better to give that person and let them pay the taxes than the other way. But anyways, those are the kinds of decisions. It’s not as easy for people to understand unless you’ve ever had to be an executor of an estate to understand how hard it is. There’s always one person that needs the money today, always needs the money before everyone is ready to really distribute. They needed it yesterday, but they’re waiting until today, you know? And it could be months, even in some cases, I have one that the state, the person wanted them to wait until certain ages. And so they’re being distributed.

And with the market being as crazy as it is, it’s definitely a unique situation. But all of that being said, it really comes down to is just make sure if you’re an executor or a beneficiary, make sure you understand, will I be inheriting this after tax or before tax? If you got paid on death, then it’s gonna be your responsibility because if you received stock paid on death, they’re gonna roll it over or they’re gonna cash it out. Personally, I would roll it over ’cause you get a step up in basis. And then you could hold that until you’re ready and you could sell it at a loss later, or you can, hopefully if it was a good stock, you can then keep it growing until you hit retirement or whatever you need to do. But again, I’m not a financial planner. That was just my opinion on how to do it. There are probably people out there that would be much more qualified to really tell you how to manage your retirement other than a person that specializes in taxes. I can tell you how to keep taxes out of your retirement. And we work very hard to pay the littlest amount that we can. And sometimes that really means paying more now because we know taxes are going up and then having to pay more later on if we wait until we’re in our, you know, wait till 26 or 27 or 20, 27, 28. Because we all know that depending on who’s, when’s the political side of things, we will see. But the way the spending has happened, people, we all know there is no money in the coffer. So therefore they’re going to have to come back to us to get money to pay for these things. And the only way to do that, the easiest way for them to do that is to allow inflation to go crazy and to taxes higher. Well, inflation has already went crazy. So now we’re going to go with the taxes to increase taxes, because that’s just the way they pay for all the bills. And, you know, be careful who you vote for. That’s about all I can say, ’cause there’s really no perfect answer on, if it’s a political one, I would lose that one because we both know both sides of the parties have done poorly, to be quite honest. Even a lot of people, which I liked Reagan, and some of his was good, but you know, There’s always good and bad to every person that was a politician as far as I’m concerned.

Alright, let’s hit Jeff real quick before we take our next break. Hey, Jeff from the borough, what can I do for you, sweetie?

Caller: Yeah, the question is, what are the services that we hear about on the radio do you provide? Like, can you work for companies for like oversight of accounting firm or management or for people who are older and take care of their bills? Do you have those kinds of services available?

Dr. Friday: We don’t. At one point we were talking about taking on for the seniors, helping them with that kind of service. But we found out by trying it to be quite honest, it’s not as simple as you like. People really don’t like to be managed. And it’s a difficult thing. We have had a couple of situations where we helped manage doctor’s offices on their spending. And I will tell you that is a very difficult job, Jeff, to tell people they can’t.

Caller: Herding cats, I bet you.

Dr. Friday: Yeah, because really the job is for us is really just keeping Uncle Sam. And normally we’re called in these situations a lot of times ’cause they have a large debt to the IRS. So we’re like, okay, let’s reevaluate. Where’s the money going? How can we set it aside? And like I just said, it sounds good. And then somebody opens up a new credit card that you didn’t know about because we were tying their hands. They just go open another credit card and that kind of defeated the entire purpose. I realized I was not good at that. So yes, that is a service that I think there’s probably people out there that are better than me.

Caller: Well, you’re an expert at what you do. Really appreciate it. Thank you.

Dr. Friday: No problem. That’s a great question. Thank you. Appreciate it. Alright. So we’re going to take our next break here. We get back, we can go back to the phone calls if you want, or we can go to your emails. The phone number here is 615-737-9986. 615-737-9986. So you can hit the email Friday at drfriday.com. We’ll be right back with the Dr. Friday show.

Part 3 – 23:59(upbeat music)

Dr. Friday: Alrighty, we are back here live in studio. It’s the one thing about the Zoom, you never know when I’m supposed to jump back in. You can reach us here in the studio at 615-737-9986, 615-737-9986, taking your calls, talking about my favorite subject, taxes, or just dealing with tax issues, like I said before, it’s not always as simple as people like to think.

And, you know, every day, I love to say, it’s not that, you know, often, but pretty much daily, we have someone that comes in that has had either back payroll, where it’s called fiduciary, you know, situations or businesses that have gotten out of control with payroll taxes, or just not filing taxes at all. Then we have individuals that haven’t filed taxes or they have filed them and they’re either completely wrong or they are under audit and et cetera, et cetera. There’s all kinds of reasons, all kinds of situations that you’ll get into. And that’s just the way life happens.

None of us have a perfect situation, but once that happens, then you’re in good shape to be able to make your decisions and do things the way you want to, to be able to get yourself back on track, doing exactly what you want done and how you want it done. So that’s the important thing is that we wanna keep sure, make sure that we’re keeping you out of trouble and making sure that the government is not calling and making your life miserable when it comes to doing that kind of thing. So I just wanna make sure that’s what we do. When it comes to really our expertise, it’s really is the tax side of things. That’s what I’ve done for so long is dealing with the IRS, dealing with the state, dealing with tax issues that do or do not make sense to the individuals and how they’re going to do things, making sure that you have the representation.

Because sometimes it can be so confusing. I mean, one minute someone’s telling you, “Oh, you should be able to make a deal with the IRS and you should be able to put 10 cents on the dollar.” But then there’s other ones that turn around and say, “Well, you can’t make a deal. You don’t have this.” And you know, the problem is it is a bit of a system where you want to be able to make a good firm decision. I will tell you, not everybody qualifies for offer and compromises. Not everybody’s gonna get a partial payment plan.

Just because money is tight doesn’t mean you don’t have access. Kind of like the gentleman that had called me and asked about the money management side, because the problem is sometimes people just aren’t good with money. You know, I mean, it’s just, it is a fact. And so if you’re not great with money and then you turn around and then you have the IRS knocking on your door and you’re saying, well, I’ve got two car payments. I’ve got a mortgage. I have, you know, I have kids in college. I got kids in private school. I have, you know, and there are some things the IRS looks at you and says, wait a second, you owe us money, but you have your child, for example, in private school. They’re like, that’s not allowed. I mean, from their standpoint…

I’m not saying you can’t do it. I am saying that when they’re looking at your tax finances and they’re saying, where’s all the money going? And they see, you know, $500 a month going to a private school, unless you can show that that is a special needs school, then there’s no problem at all. But if you just have a child going to, you know, good Catholic school or whatever you might choose to send them and you owe the IRS debt, keep in mind that that is going to be a problem if you’re trying to make a payment plan as far as a partial payment plan.

If you can pay them on a monthly basis in full and do what you want, they don’t really care as long as they get what they’re supposed to get on a timely manner and take it from there. But that’s all I can tell you on that aspect. So if you do wanna join the show, again, you can join the show at 615-737-9986, 615-737-9986, taking your calls, talking about taxes, representation, because, you know, again, we all are going to have life happening to us. There’s going to be times when making a choice between paying Uncle Sam and keeping the roof over your head or fixing your car or whatever it might be that comes up, you’re just going to have to make those decisions. And then, hey, if it gets to a point, you’re going to give my office a call or you’re going to give someone like an EA or a CPA that does representation.

And they’re going to hopefully help you do what it takes to get yourself back on track. Because if at any point you think that, you know, everything’s just going to be all just going to go. I can’t tell you again, how many times someone comes in and says, well, I’ve got the money to pay the IRS. I’m thinking, great, this is awesome. This will be the simplest deal I’ve ever had. And then there’s always that, but, well, I have the amount, but this is a six-year-old debt. And what you have is the original amount due and no penalties and no interest calculated in their calculation. So you don’t have the money to pay back the IRS. You have enough money to pay back your original amount due. The government is no different than anyone else in the world.

They are not going to let you borrow at least without interest. Interest is not a negotiation. I’m gonna let you know that. I don’t care what anyone tells you. Interest is not a negotiation. Anytime we negotiate that is with an offer in compromise. But in a payment plan or a payoff, you’re not going to get it. The only thing we may have the ability to have a discussion on is penalties. If there was extenuating circumstances, if there was a hardship during that time, you might have a very good chance of getting that off the books, but not the interest. Anyone that tells you they can do that, I’m going to tell you right now, they’re fibbing to you.

Alright, let’s talk to Kelly in Ashland City. That’s a little bit of way. Hey Kelly, thanks for listening.

Caller: So I, my wife and I have a unique situation. My mother-in-law has been moved to a nursing home and just got approved for Medicaid. So they’re eating her social security income pretty much the entire month all but like $30.

Right.

Caller: So she’s not able to pay her mortgage, and she’s going to be falling behind. So we are in the process of trying to sell her home.

good

Caller: and my wife has power of attorney uh in order to make financial decisions and medical decisions so um i’m trying to understand the the tax purposes now this is even in uh this is not in Tennessee we live in Tennessee in the Nashville area but this is in a different state so i’m trying to understand what what the best play is for tax purposes and everything

Dr. Friday: so there’s two things if she’s going to be dealing with she’s on Medicare, right?

Caller: Yeah.

Dr. Friday: I mean, Medicare housing where she’s living there taking care of her housing bill with her Medicare and Social Security.

Caller: She’s actually in the nursing home.

Dr. Friday: A nursing home. Okay. Well, Medicare is going to do a five-year look back. So whatever you give for that house, first thing you can’t spend unless you spend it directly on her personal care. Then it’s spendable just to let you know. Second thing, um, how much did your mom buy the house for or inherited or wherever she, however she got the house in the first place?

Caller: Yeah, she bought it outright. I don’t know how much she bought it for. She’s been there probably 10, 15 years.

Dr. Friday: Okay. So if she, whatever she purchased it for plus $250,000, it is tax-free money.

Caller: Okay.

Dr. Friday: Okay. So hopefully the whole house isn’t worth more than 250 plus what she paid for it. So hopefully that will be so whatever she gets for the house will be tax-free most likely. I mean there’s always the possibility it’s in the right neighborhood at the right place and the land’s worth more you know whatever but so the first 250,000 above what she paid for it originally will be tax-free and if the above that would be taxable. But then she does need to talk to because that now that money will go to bank to help mom take care of whatever she needs to until she passes away. And then theoretically since she’s in a nursing home, depending on how much Medicare has paid for that nursing home and you know I don’t know the situation, but there is a five-year look back so that money could end up going to the government.

Caller: Okay, is there now I know my wife and I have paid for some of her expenses, we can get reimbursed for that I’m assuming for whatever we’ve paid for her.

Dr. Friday: I would say you might be able to. I’m not an expert, I mean everything I’ve ever heard about those, you know, I mean anything you’ve done to help keep the house you can have a time of closing paid back to you, no question. You know, if you’ve had to help make some of the payments or fix it up or whatever that may be, you will get that money at time of closing because that was your money invested into the home to keep it from foreclosing or whatever. If you’ve paid anything to help her outright, I’m assuming she could write a check to you for that. That is an assumption. You probably need to get again, double check. They are extremely, I mean, I’ve got two people I know that got sued by them because they didn’t realize that some of the things that they were doing. They thought they were helping. But anyways, long story short, you just want to be careful. That’s the only reason I’m bringing that up. You want to be careful on how that money is spent. And since your wife has power of attorney over it, she’ll be the authority that they would come back to.

Caller: So you don’t think there’ll be any tax implications? How does at all, because we’re doing this in a different state. So if in the other state does have personal income, you don’t think they would tax that income even though

Dr. Friday: No most of the states follow the same uh federal tax code i mean at least the ones around us what state is she in

Caller: Uh louisiana

Dr. Friday: okay yeah she’ll be fine um so again do you know how much the house is worth total

Caller: i would probably less than i would say less than 250,000

Dr. Friday: Okay wonderful great so we’re that was my biggest thing so that’s perfect So yes, she should be fine on both sides. Louisiana’s actually got some pretty decent laws for the older, the seniors, you know what I mean? They treat them pretty good on their tax code. So I think you’ll find that both Louisiana and the Fed won’t have a problem with that. It’s going to be, as far as any tax issue, it will not come from that issue.

Caller: Alright, well I appreciate your time. Thank you so much.

Dr. Friday: No problem. Appreciate you listening.

Alright. We’re going to get ready to take one more break here before the end of the show. And so if you’ve been holding your breath and you’re like, Oh my gosh, I have a question. I have a question. And you want to ask that question. The best thing to do will be to pick up the phone because that’s really the only way, cause I can’t not read your brain from over the radio. So you just basically want to pick up the phone 615-737-9986 or you can email friday at drfriday.com i know sometimes that is easier than calling so she had a beautiful saturday like today it is absolutely gorgeous outside so all you have to do is give me a holler here and send me an email we’ll be right back with the dr friday show.

Part 4 – 35:54All righty we are back with the last bit of our show so if you If you want to join the radio show, you can right now. It’s 615-737-9986, 615-737-9986. Taking your calls, talking about all kinds of exciting subjects here, at least things that excite me.

What can I say? I’m excited fairly easily when it comes to tax issues. But I do want to put out there guys, one more time, tax day 10-15, if you haven’t already filed. And if you do not have an extension, your tax day has come and gone people. This is only people that filed an extension, individuals, their taxes are due on 10/15. So if you haven’t, and this did not extend the money due. So, you know, when you prepare your taxes and you have a balance due, don’t be shocked that there’s going to be a little bit of penalties and interest on that. Because when we file an extension, we are only filing extension for the time that your tax return needs to be filed, we are not filing a tax return for any of the other situations.

So just put it out there that if you owe money, this extension does not extend any of your services. If you have a situation, your best bet is to make a deal, talk to the IRS, figure out what needs to be done and take it from there, because that is going to be the most pain-free way of handling them. If you’re already in a payment plan and then you file in October for your 2022s, keep in mind, guess what? They’re going to probably kick you out and make you put up another payment plan. So just putting out there, that is kind of the way it works. It’s not quite so simple. You can only have one payment plan with the IRS. So if you have multiple years, it will be all combined into one payment plan.

You can, by people for years, just add to it. And they pay off the oldest you know, the IRS is fairly flexible that way. But again, just making sure that when you file your taxes, that you know, kind of how it works, what you’re going to do, where it’s going to be. So that way you can make sure that you have what you need and how it needs to go through.

So if you have questions, all you have to do, if, and again, if you’ve got questions and you want, myself to take a look at your situation, maybe you’ve, haven’t filed taxes in a number of years, and you’re just not sure what the situation or how it’s going to go. Our initial consultations are always free to see if we can actually help you do something and if that’s the case then we’ll be more than glad to give you a plan and show you how that’s going to work. You can give us a call at our main office Monday through Friday and that is at 615-367-0819. 615-367-0819 is the number there at the main office. And then basically, if you want, you can always email your questions.

Sometimes it’s just a matter that you’re trying to figure out what’s the best way to go. So we can usually do an initial consultation, at least get an idea of where we’re at, how we’re doing it, where we’re moving, all that kind of good stuff. Because let’s be honest people, we have to have a plan on how to deal with the IRS, just like you would have a plan dealing with any other financial decision that you’re going to make.

And if you’re getting close to retirement and you’re thinking, I need to do Roth conversions, those kinds of things, as long as you have, in my opinion, you’d wanna first run that through a financial planner, because when you talk to your tax person, my goal is to keep your taxes as low as possible in the year I’m working on usually. I don’t have, unless we already have a five-year plan.

And the only time I usually have those set up are individuals that have actually sat down normally with a financial planner and said, okay, this is what our plan is. we’re gonna do so much of conversion, or you’ve made your own plan where you decide, I’m gonna convert this much to keep myself in the 22% tax bracket or whatever bracket it is. And I wanna convert as much as it is that it’s gonna keep me in that tax bracket every year for the next number of years. ‘Cause when I retire, I really want all of my, or a big chunk of mine, it really depends on how much you have, of your retirement in a Roth instead of in a traditional, or maybe all of yours is in a traditional and by the time you hit retirement, you like to have a little bit of an other off ’cause you know, Roths are tax-free people and traditionals are not.

And again, this also comes to what will your tax bracket be when you hit retirement versus it is right now and how much of that will be offset possibly? ‘Cause normally, I mean, I don’t know about anyone else but sometimes when we hit retirement, the goal is not to have to have as much. I’m not too sure if that’s actually the case with many of my clients.

Many of them have done a very good job, and their financial planner. So they have as much now as they did in retirement as they did when they were working almost. So it is a good plan to have, but you do need to be a plan. That’s the secret to the Antofagasta. You need to have a plan on how you’re going to do that. Same thing with that exit plan in business. I mean, many times we sit down with business owners because obviously entrepreneurs, I love my entrepreneurs, um, happen to be one, but also, you know, love the minds and in the way, but most of us work, work, work, work, work. We build, we work, hopefully we become somewhat successful. We keep working and we don’t really have an exit plan. What’s the plan for us to stop working? Because right now our mindset is go, go, go, go. And we know how to solve our problems. We know how to do things. We know how to keep moving, but is there really an exit plan? Is there a plan that says, Hey, when I hit 75, am I going to be able to slow down and do this? Or should I sell the business? Should I do this or that.

My exit plan is not to exit. That’s my exit plan. Not so much just I love doing what I do. So I’m really, really lucky. Most people don’t have that. So I mean, especially if your job is very, I’m not moving my fingers. All I have to do people, I don’t really have to be physically fit. Some jobs do require if you’re a plumber and stuff, some of my guys, their knees go out, their backs go out. And it becomes an extremely painful situation to actually do the job that that they usually did before. So having that exit plan so that when a time comes or the age comes, whichever comes first, you exactly know what your plan is instead of wait, one day I’m here and next minute, oh wait, I can’t do it anymore. I have no idea how I’m gonna survive. I have no idea. That’s not what we wanna do. That isn’t the direction we want to head.

What we wanna do is actually start talking about it now. So that way, if it’s a five, 10 year plan, you actually have the ability to have a second option, a second plan on how you’re going to do something. Because if you’re just sitting around thinking about, you know, I mean, that’s the same way people, Oh, I’m not going to fire my taxes this year. Okay. Gets a little away from you. Life happens, whatever. And then boom, second one, you know, second year, and then something happens and you don’t get the third and first year you filed an extension. At least you tried the second year, you know, just so now you’re three years into it and life has happened. Same thing happens there. Next thing you know, you’re three years, you haven’t filed taxes. Now you’ve got what might’ve been a small bill in one year, a large bill for three years, especially if you’re an entrepreneur, because we don’t pay taxes until we, um, either make quarterlies or file our tax return.

So these are the plans we need to be thinking of. It’s the time of the year where we all need to stop and think a little bit about how or what is our next year plan. I mean, before you know it, we’ll have our new year’s resolution. So now’s a good time to start thinking about how are we going to make that part of our lifestyle. Again, it’s not something I’m going to tell you is a perfect science. Life happens. We none know what’s going to happen.

Only the big guy upstairs really knows when, what, and where, but we can plan for what we can plan for. And those are the things I think so often, especially my entrepreneurs, We have a tendency to put everything into our businesses, but we don’t really think about ourselves as much We don’t pay ourselves first in many cases. We don’t have the retirement plans we’re hoping in some cases to sell the business as our retirement and That’s leaving a lot to chance, you know, I mean because you’re assuming someone’s gonna find your business valuable Some businesses are some businesses are not you know, I mean I mean, if you have an electrical business, some, I mean, I had a gentleman that could sell his business for quite a bit of money, over a million dollars. And then you’ve got some guy that, you know, can’t even sell it for $50,000.

So, you know, it’s a little risky to assume that our businesses are going to be what we need to have for our final retirement. We need to think a little bit further than that. So now we’re getting ready, starting the end of this year, we got one quarter left. Maybe we start thinking about, do we need a SEP? Do we need an IRA? Do we need to talk to a financial planner? And my answer would be yes to all those things and figure out where we need to go. All right, well, I have managed to get this radio show almost off the air here. So let me give you some information.

Again, Dr. Friday, you can Google it, you find me, but my phone number is 615-367-0819, 615-367-0819. You can email friday@drfriday.com. again Friday at drFriday.com. If you have no idea who I am, you just turn on the radio and you heard this crazy person talking, you can check me out on the web, been doing this for quite a while. Just go to drFriday.com, again, d-r-f-r-i-d-a-y.com. Friday is my first name for many of you that are listening. It’s just a unique first name thanks to the parents. So that’s what I go by, Dr. Friday. Again, if you wanna call us at the office Monday morning 615-367-0819 or email Friday@DRFriday.com. I hope you guys have a wonderful Saturday. Enjoy yourself. Cop you later.

View Details

Welcome to another episode of the Dr. Friday Radio Show! In this episode, tax expert Dr. Friday answers callers’ tax questions and covers the following topics:

• Discussion about upcoming business tax deadlines on September 15th
• Explanation of estimated tax payments and their requirements
• Advice on making proper estimated tax payments
• Discussion about penalties for late filing of business tax returns
• Reminder of the October 15th deadline for individual tax returns
• Importance of tax planning for the current and upcoming tax years
• Advice on converting or taking money out of an IRA for various purposes
• Introduction of the Sweet Addiction, a job readiness program for women in recovery
• Announcement of the Tip the Waitress breakfast fundraiser event
• Explanation of the difference between non-profit and not-for-profit organizations
• Answering questions about IRA distributions and tax rates
• Advice on gifting property or money to family members

And much more!

TranscriptPart 1Announcer: No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Dr. Friday Show. If you have a question for Dr. Friday, call her now, 737-WWTN. That’s 737-9986. So here’s your host, financial counselor and tax consultant, Dr. Friday.

Dr. Friday: G’day I’m Dr. Friday and the doctor is in the house so if you are working on your business tax returns because if you filed an extension for your partnership LLC’s your sub S corporations and even for C corporations those will be due on September 15th again September 15th which is this coming Friday.

So if you haven’t, and if you did not file an extension, you’re just late, period. But that’s also the same day that we have to make our third estimated payment. Kind of want to touch base a little bit on the requirements for estimated tax payments. The tax law says we have to make four equal payments based on the year before. Now that doesn’t mean that if you want, some clients say, well, do I have to make four?

Can I not just on the first payment in April, can I just send all of the money or on the second payment?

Can I make a first payment and then the second?

As long as those payments are paid before the due date, those are considered for equal payments.

So if you wanna make all of your payments at one time and the original due date for every year is the first estimate is April the 15th or the filing date, whichever it might be, you may make all of them.

If you had an unusual situation, So let’s say you sold a piece of real estate that is taxable, not your primary, possibly it could be your primary, but in most cases with the exclusions, people don’t have a lot of taxes due, but let’s say it’s a rental property or a piece of investment land property, whichever that might be, then let’s take that and say that you owe taxes, maybe 50, $60,000.

So you are required within 90 days to make an estimated payment.

Again, estimated payments are based on the prior year.

So as long as you have made all the proper estimates for the year before, so you need to make sure you make 110% for this kind of situation.

So you might want to pay in a little extra.

It doesn’t mean you need to pay all $40,000 in taxes that may be due, but you do need to make an estimate, especially if you normally don’t owe taxes.

Two reasons I usually suggest this.

One of the big reasons is if the money is sitting in the bank and you are not a good person as far as being able to hold that money until tax time, you don’t want the IRS to ever be a loan officer.

It’s never a good experience.

Their interest rates are high, their penalties are high.

And if the money’s sitting in the bank, you’re less likely making money on it anyways, or maybe you’re making 4% or 5% versus paying out 25% for not paying proper quarterly, not paying on time and not making proper estimates.

Again, some of that can vary, but those numbers need to vary as well.

So if you have something like that and you’re not too sure, you can certainly call the show.

We’re live 615-737-9986, 615-737-9986.

But you do want to make sure, ’cause the last thing you really wanna deal with is having to pay a penalty on top of all the other taxes that are already coming out.

No one likes to pay extra money to the IRS.

And that also goes, if you did not file an extension and you haven’t filed your business tax returns, $300 per shareholder per a month that it’s late, up to the 12 months.

So that can add up to quite a bit of money.

Well, a group of four, it’s like $5,600 of a penalty if you don’t file it on time and you wait till the last date.

So you do wanna make sure that these are the situations.

Yes, there is sometimes a penalty waiver that you may be able to apply for.

It doesn’t mean you’re gonna get it if we can do it before and not have to worry about asking for forgiveness.

Sometimes it’s nice to do it right.

And then if you filed an extension as an individual, just a reminder, 10/15 is our due date.

So you do wanna make sure if you haven’t already filed, you wanna get those taxes ready, make sure you’re on the calendar, whoever your tax person is to make sure they haven’t, you know, got sidetracked or something’s happened so that you make sure you can file your taxes.

So that was one of the first things we wanted to touch on since that deadline is less than a week away for the business returns, you do wanna make sure those are filed and then go back and then you can file your personal.

So because again, if you have a sub S or a 1065, the other side of that is if you haven’t filed that, you can’t file your personal tax returns if you’re one of the shareholders because how do you file your personals if you haven’t already filed that?

So again, making sure that that information is correct and that you have filed it is essential.

Time clock is ticking.

Again, we’re also what, almost three quarters through the 2023 tax year.

So now is the time to probably sit down, especially with your tax person sometime after the 10/15 date and just say, “Hey, what do we need to look at?

Are we going to be doing a conversion?

If so, how much is that going to cause in taxes?

Did you sell or rebalance your stock portfolio?

Should I be worried or thinking about making a payment on that as well?

You know, because any change or major situation you’ve had will have a tax effect on you.

And that tax effect is going to be huge.

So, or it can be huge, it may be minor, but I’d rather prep before tax season when as a tax person, we are always so busy, right?

During tax, during the February through April deadline, It’s very hard to sit down and actually do tax planning.

Now’s the time to talk about tax planning.

Now’s the time to think about if I sell my real estate, should I sell it this year?

Should I sell it next year?

These are the kinds of decisions you don’t just jump into and start making unless you have little to no input on it.

Sometimes we don’t always have the ability.

Sometimes if it’s an inherited property, you may only be one of the people.

So it may not be something that you can turn around and say, well, it would really be better for my taxes If we don’t do this, but it’s always good to be prepared.

So that way, when the money comes in, you can take Uncle Sam out of your money.

And then if you’re reinvesting or doing something, you’re not investing the money that could come back and bite you.

So again, it’s really important to understand that right now is a good time to think about 2023.

It is also the, almost the only time that we can finish 2022 on time.

And so you wanna make sure all of that is happening.

If you’ve got a question, you can join the show.

615-737-9986, 615-737-9986.

Had a client that came in this last week and he was totally shocked.

He hadn’t filed taxes for a number of years, but he wasn’t worried about it because he had basically always worked as a W-2, always had enough money coming out, usually end up with a small refund.

So he was gonna, as long as he hit the three year, he’ll get his refund back for each of those years and it’s not a problem.

But then he realized he had a situation where one of his parents had passed away and they had settled the estate.

And he said, well, it was all life insurance.

And there was a little bit of an IRA, but none of it should have been taxable.

And this is when you really, really guys need to talk to whoever is your tax person when these situations come about, because sometimes the money that comes out is taxable, especially any money that comes from most annuities and from IRAs, obviously traditional IRAs, are going to come to you as a beneficiary, but as taxable income in which then normally, the custodial will say, “Do you wanna have withholding come out?”

And at that point, you can have enough money come out of it before you cash it out.

Nowadays with IRAs and only having 10 years to completely deplete them, there are some planning that sometimes needs to be done to make sure that we’re taking advantage of that time period because maybe that’s the time that you haven’t really been maximizing your 401k.

So maybe you maximize your 401k and then you take out so much money for the IRA so your lifestyle doesn’t change, but theoretically you’re converting that money into a retirement account again, into yours, because you can’t take an inherited IRA and convert into your own numbers.

It doesn’t work that way.

So what you really wanna do is make sure that you have all the right information, see what’s gonna happen, see how you can make it work for you.

And then you’d be able to maximize your taxes and also possibly increase your retirement with someone else’s retirement.

And again, wanna put a little caveat out there.

I’m not a financial planner, I’m a tax expert.

I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.

I don’t do financial planning.

I can help you with the tax aspect of financial planning, but I can’t help you as far as where should your money be?

Is this a good portfolio?

Not my expertise.

You wanna call a state financial strategy, Hank Parrott or whoever is handling your accounts now because those are the experts that’s gonna do that.

Now, if you wanna convert or do a conversion or take money out of an IRA to pay off your home mortgage or any of those kinds of things, then I might be your girl because those all lead to taxable situations and then I can help you figure out what’s maybe a better way of doing it, usually working in conjunction with your financial planner.

So that way you’re not, you know, ’cause sometimes as a tax person, we’re looking at the given year, right?

I mean, we can do five, six years tax planning out depending on current tax laws.

But normally when people come in, they just wanna know, well, if I do this this year, how much is that going to affect me in taxes?

Where a financial planner may say, yeah, we’re gonna pay taxes right now, but that means five years from now, you’re gonna pay zero tax ’cause the way we’ve got you set up, we’re gonna get all the tax dollars out of your thing and you’ll be living off a Roth and therefore your social security or have minimum IRA distributions and therefore have you in a zero capital gains or any of that kind of situation.

That’s their expertise, how that’s going to work and what’s gonna work for you.

But from the tax point, if you decide you’re gonna take money out today or you wanna pay off something or you wanna gift money to your children, and that’s, I mean, I have a lot of clients that do do that, but keep in mind, if you take money out of your IRA to gift to your children, that will not be a good plan, personally speaking, because now you’ve got to pay taxes, your children will not, you will be paying the tax.

Now, if that’s your plan, maybe it’s a perfect plan, who knows?

But that’s the kind of the planning you wanna do.

And now’s a good time, because if you have something you don’t wanna leave on the table, I always work a lot with Hank Parrott, he’s a financial planner here in Nashville Brentwood area.

And he, and we’ve been doing this for 25 plus years.

And in some cases, you know, I’ve seen him do conversions that are zero.

I’ve seen him maximize for several years where people pay zero tax because it’s more beneficial to do that.

But understanding how the taxes affect your retirement makes it easier for you to understand how do I change or what is my best option?

And so sometimes people get so hung up on the taxes that they don’t understand the big picture of how am I going to make something work?

So again, you wanna make sure you’re maximizing your tax deduction, but on the other hand, you also wanna make sure that you are taking care of your big picture, right?

She is the one that you wanna be able to make sure in the big picture that you’re not paying a dollar more than you need to in taxes.

And sometimes with tax law going up in 2025, right?

We know that the current taxes are going to have to either be extended or we’re going to be looking at higher taxes.

How do we make that happen?

And where does that go?

So that being said, we’ll be able to take that.

And we’re going to go ahead and take our first break.

When we get back, I have a special guest that we’re going to be talking about some event that is happening here in town that a lot of you may be interested in.

It might be something you want to participate in either as a sponsor or is just someone coming to breakfast.

So you can do that.

You can reach us.

We’ll take a quick break and we’ll be right back with the Dr. Friday Show.

Part 2(upbeat music)

Dr. Friday: All righty, we are back here live in studio and I’m gonna go ahead and take Adam real quick and then we’ll get to Robin and talk about some important things.

Hey, Adam, what can I do for you?

Hey, thanks for taking my call.

I just had a question about a bonus that’s coming up that I’m receiving and wanting to figure out the best way to maybe minimize the taxes on it.

I’m looking at potentially just fully funding an HSA and then taking the balance and throwing in a 401(k), but I was wondering if there’s anything more advantageous than that.

Now that would be your best because the HSA, obviously, depending if you’re married or single, you could put, you know, $7,300 if you’re married in, and I think it’s half of that for a single person.

And then what’s nice about that is you can also maximize your 401k which for an employee is the highest I mean otherwise an IRA you can’t do both so you’d be better off to maximize everything through the 401k and then the HSA.

I mean if you never use the HSA it turns into an IRA theoretically at the time of RMDs anyway so it’s a good investment.

Okay appreciate the Thank you.

Hey, thank you so much All right, we’re gonna go to get Robin on the line.

Hey Robin.

Thanks for calling Hey Friday.

Thanks for having us No problem at all.

So for all those that have never heard of the sweet addiction Can you tell them a little bit about what our nonprofit does?

Our nonprofit is a job readiness program for women in recovery So we are the second step when people go through a halfway house, they’re in any halfway house, we bring them into our program and we partner with the halfway house and we teach these ladies who have barriers to employment, most of them have come out of incarceration, they’ve been institutionalized, we take them and teach them the basics of how to be a good employee.

Teach them when to go to break, conflict resolution, communication, all the things they need to be successful when they get on site at a full-time employer.

Now we have a special event coming up in October on the 25th, limited seating of course, but if we can get a few more people, tip the waitress, tell them a little bit about what that is.

Tip the waitress.

This is where the ladies are gonna be able to show off their talent in their cooking, ’cause we use catering and food as our venue teach these ladies in the job arena and Tip the Waitress is going to be a VIP event for people to come.

$15 a ticket, they get to enjoy a wonderful breakfast and I mean a wonderful breakfast.

I have a young lady who’s from the midnight community and she makes a killer biscuits and gravy, that’s all I can say.

So they can come, enjoy a wonderful breakfast, we’re going to have a magician there, silent auction and yeah Yeah, just a great event.

It’s gonna be from 7:30 to 9:00 on the 25th at the Warehouse in Murfreesboro, Tennessee.

And all proceeds 100% go to support the Sweet Addiction of these ladies.

And the website is thesweetaddiction.com, correct?

It is, thesweetaddiction.com.

All right, so, ’cause I always have a tendency, Robin, to call it sweet addiction without the the, and therefore I wanted to make sure I put that out there.

So if you’re looking on the internet, make sure, If you actually Google Sweet Addiction TN, they’re the number one name, but thesweetaddiction.com and right on the front, you can actually buy either sponsors.

So if you’re a small business and you would like to have some promotion going on, and this is in the Murfreesboro, Rutherford, but they cover all of the Southern Tennessee, Eastern, whatever section we are in, Tennessee area.

‘Cause I obviously I’m in the Brentwood area and I’m a big avid supporter of this.

And I think if you just wanna know how to help do more.

This is a wonderful organization.

Now we also have a food truck, right?

Or if somebody has an event coming or something like that, this is something they could also book?

They can book food trucks.

We can do private events.

We’ll also be at Uncle Dave’s making days at the end of the month.

We’ll be at Depot Days in September.

But yes, they can book for private events.

And it’s a sweets truck.

And we offer sweets, two or three different sweets you you can pick to be able to talk Italian cream sodas and everything not for private events is by donation.

Right now, again, if you’re interested at all in having them come out or even just talk more about that, you can go to that website, the sweet addiction dot com and you can actually book a catering event.

They do birthdays, they do it all.

And the food is just I mean, I’ve been fortunate enough to get some free samples.

So I can honestly attest to how good it’s it’s good southern cooking good sweets, but they have some amazing catering.

So what else can, I mean, obviously they can, can they also donate?

I mean, would there be things that you may need from, if someone’s listening, do we have, you know, some other programs that people can help donate?

How is there anything else that people can do if they can’t make it to this event?

Yeah, if they can’t make it to event, they can go on the sweetaddiction.com.

We also have an Amazon wish list and because we have a kitchen that we’re running right now we have an Amazon wish list or they can call me directly if they want donate time or help with an event or maybe they want a mentor and they’re willing to bring with the ladies on site at their job for a couple days just to get to give them a feel for different opportunities they can call me at 615-580-8001.

615-580-8001.

Yes, ma’am.

All right, just making sure because you know, since you ever learned wrong, we have to say that three times for it to sink in.

Okay, just saying.

I’m just teasing you.

Okay, totally teasing.

But no, and again, if you’re interested, this was on October the 25th, Wednesday, it’s a breakfast.

So you don’t even have to take the whole day off, take the morning off at 730 to 930.

Is that correct, Robin?

Yeah, 7:30 to 9:30.

7:30 at the warehouse in Murfreesboro, Tennessee.

Got it.

Murfreesboro, Tennessee.

And what is the cost per seat?

It’s $50 a seat, but you can also sponsor if you want to sponsor a table.

And if you’re interested in a sponsorship packet, we can provide that.

And we probably We need to put that up on the website, but they can get a table.

I think it’s for like $300 and then they get some, you know, or $500 and each level they’ve got all kinds of advertisement.

You’ve one level of advertisement that you get your stuff plastered on our truck, you know, everywhere.

And then just, just to recap what she’s talking about, cause I get to cheat Robin is not there.

Uh, the platinum is a $5,000 sponsorship, which includes just about anything, anyone up to 12 people to the event.

Um, you helped to stage a logo displayed on the event, video announcements at any of the media situations, company banners on the website, logo on the truck, and a dozen treats every month for one year.

Right there is worth the freaking $5,000.

2,500 is the gold, 1,000 is the silver, and then 500, almost all of those, the first couple of them allow you to be on the truck.

And keep in mind, if you are in the, again, Murfreesboro, Rutherford County, These guys are out and about all the time at all kinds of events.

So if you’ve got something just like my business, any business that needs branding, this is a great way to connect yourself to a wonderful organization that is constantly branding.

So if you have any interest in doing this, let’s go ahead and go to thesweetaddiction.com, thesweetaddiction.com.

And if you have something, you’re not seeing it on the website and you just wanna talk to the person that started all this is Robin.

And that’s how I got into knowing her and everything.

Well, kind of 615-580-8001, 615-580-8001 is the direct number to her.

So if you have something you wanna go, and again, even if you’re just interested in helping out the Amazon wishlist is at the top of the website, thesweetaddiction.com.

This makes such a huge difference in women’s lives that have maybe never had a hand up, Maybe I always consider myself extremely blessed because I’ve never had to, this kind of thing has never directly touched me.

Doesn’t mean that most of us sometimes are only a step away from some of these things that could or would have happened.

So I think we help each other.

It can make a huge difference in just one person’s life.

You know what I mean?

Robin, anything you wanna add?

‘Cause you know, I never shut up.

I just have a great way of always talking.

Well, no, but I wanna tell everybody out there that Friday’s been doing my taxes for years and she’s a girl to go to.

(laughing) – There you go, cross promotion, there you go.

Well, I have been and it’s always been a pleasure to, I’ve been excited about this nonprofit when she had it in a notebook and said, “Oh, I wanna do this.”

Never thinking that she would take it and now she has a ton of people backing it.

A lot of organizations impressed, including myself.

Totally anyone that’s ever worked with a non-profit knows how hard it is to get to that level.

So to get it truly helping every day, she’s helping women that otherwise would never have a job.

I mean, they would go back to what they knew because no one would take this risk to help change these lives.

So again, thesweetaddiction.com.

Robin, appreciate you jumping in.

I’ll push a little bit more on that.

And if anyone has a question directly for Robin, one more time, 615-580-8001, we’ll get you directly to her and she can help you with any questions that we might not have covered or that may not be on that website.

Thank you so much, Friday, I appreciate it.

No problem, we’ll talk soon.

We’re in our second break.

So again, I am Dr.

Friday, an enrolled agent licensed by the Internal Revenue Service due to taxes and representation.

That’s what I do.

So if you haven’t filed taxes for a number of years, if you’re not too sure how to do your taxes, because either something’s happened, some changes, and you’re just at a point where you’re a little lost on it, then I’ll be more than glad to jump in and help you figure that out.

That’s what we do.

We can help you find where your paperwork, maybe you’ve had situations where you don’t even have the last few years of paperwork.

That’s something we can help you with.

We’re gonna take a break and we’ll get back to your phone call.

615-737-9986.

We’ll be right back with the Dr. Friday Show.

Part 3(upbeat music)

Alrighty, we are back here live in studio.

And let’s see if we can get Jim back on the line.

Hey Jim, thanks for calling back.

Yeah, I had a question about converting some 401k money to a health savings account.

Is there a way to do that and save any taxes?

Not really.

I don’t think you can do that without taking it out first, even though they’re both, that may be a financial.

I’ve never had anyone ever ask that.

It’s actually a really good question.

I mean, both of them are tax deferred.

(indistinct) So in my mind, a 401k and an HSA are basically both tax deferred.

But the problem is HSA stays tax deferred as long as we use it for medical reasons.

So I’m thinking that they’re not going to allow a conversion from a already deferred account into an HSA, I don’t think.

Again, if anyone knows this for a fact, I may need an expert on this one or I’ll have to send Jim to Hank Parrott, which will be able to answer it probably.

But I don’t, my guess would be if I were to take you in a guest, Jim, I would say you couldn’t do that.

I would think they probably would not allow the conversion because I like your attitude though, because then it would stay tax deferred And then, you know, obviously then you spend it for medical until the day you pass away, pretty much you can, you know, take that advantage where we don’t have that in a 401k, they make us take it out first.

That’s why I think a lot of people don’t maximize it.

I could do.

I wish, but I’m pretty sure the government would say that’s a loophole they don’t like.

So I’m gonna guess that they’ve already put a stop to that somehow, but I’m gonna find out.

I don’t think there’s anything else you can move it to that would keep it like a health savings account.

Now you can choose instead of maximizing your 401k to contribute to your HSA, but I’m assuming you’re probably doing that anyways.

And you can only put in the maximum each year into a health savings account.

You can’t over contribute or they penalize you.

I don’t even contribute to one now.

So I thought this would be a great time to start one.

Look at you.

Yes, well, I am a huge advocate, don’t sell the products or anything, but I am a huge advocate for a health savings account because the nice thing about that is even when we get older and we’re on Medicare and we’re not working, the health savings can still be used as tax deferred money to take care of our medical until we die where anything else we have to take the money out and spend it, which let’s be honest, we’re gonna have medical sooner or later, even if we’re fortunate right now.

So anyone that can maximize it every year, I would say go for it, Jim, but I’m not helping you with your question ’cause I don’t know the answer.

All right, so I’ll have to check on that tomorrow.

On another thing, if I’ve got a small pension going and I’ve got Social Security going and I want to take the max out of my 401k, what’s the equation?

Well, Social Security, you’re gonna take 85% of, you’re gonna take whatever the pension is total, and then you’re gonna subtract the standard deduction.

And then whatever that difference is, is gonna tell you how much you can either take out tax free, or if you’re married or whatever, if you’re.

Keep it at the 10%.

Keep you at the 22% or are you thinking the 12?

I’m thinking 12.

Okay, so you’d have to keep it all under 55.

55,000, okay.

All right, well, I appreciate my talking to you.

You too, thanks Jim, appreciate you.

Alrighty, that was interesting.

I do love questions.

I’m not always saying I’d always know all the answers because that would be impossible in the world that I live in, but it is always challenging.

And he’s gonna make me think and I’m gonna have to go see if I can figure out if there’s a way of doing what he suggested.

I’m gonna guess I can’t, but I like his concept of doing that.

But I will say again, especially for the self-employed, not always, but many of them have to pay for their own health insurance.

Anyways, employers sometimes control if you have the ability to have a health savings account or not, but as a self-employed, if physical reasons allow and I don’t, you know, changing is not always good because sometimes you can’t, but if you’re a self-employed individual and you have the ability to go on to a health savings account, personally, I say, maximize it.

It’s like having a second IRA.

I mean, in fact, when you hit 72, it will be part of your RMD.

You will be mandated to start taking money out of your health savings account.

So there will be that particular penalty that will happen.

But other than that, if you use the money on medical, it will stay as a protected medical situation.

So I would say, and I think all of us will have some medical if you can make it till you pass away, would never have a medical bill, then that would be awesome.

I guess it would turn into an IRA and it’ll be left to the people as your beneficiaries.

But if you have a health savings account, My suggestion is maximize it every year.

It may not have the same growth.

So again, this is a financial planner thing.

If you have to make a choice, do I maximize my 401k or up to the match that my employer or my HSA, they would have to answer that question.

I don’t know the answer.

Anytime someone’s matching, I’m thinking that’s free money, but there are little loopholes here and there.

And that’s what Jim’s looking at.

And I liked the way he was thinking, even if I didn’t actually have the proper answer for him.

So if you’ve got a question, you can join the show today.

615-737-9986, 615-737-9986, taking your calls, talking about my favorite subject, which is taxes.

And today we had our little extra bonus, trying to sell out Tip the Waitress, a breakfast fundraiser for the Sweet Addiction.

It’s a really great organization.

If you have never heard of it, you need to go on the web and at least check it out.

Even if you can’t attend, maybe you can sponsor a table or you can even just go to the Amazon wishlist and see if you can’t help them.

It’s time or money spent that’s well worth it.

I will tell you that.

And if you get the opportunity to go to the breakfast, you’re going to find that the girls or the women, I should say, really do have an amazing amount of talent in the kitchen for someone that doesn’t have an amazing amount of ability.

I like to obviously go and eat.

I don’t have the ability to cook very well or bake.

So just something to put out there.

Again, if you want, if you’re interested at all, it’s an easy name, thesweetaddiction.com or just Google thesweetaddiction.com, T-N or whatever, you will find it out there.

It’s a wonderful, and you can get all your information right off the front page.

well-designed little website there to help you do what you need to do.

And if you want to join the radio today, and if you’ve got a question or you have a statement or something I can help you with, it’s not too hard.

615-737-9986, 615-737-9986, taking your calls, talking about my favorite subject, which is money.

So we’ve already covered today, the 9th, September 15th and we’ve reminded all of you guys about the October 15th.

Very big deadlines.

Our office is obviously working straight through to try to make sure we’ve got all of them.

And don’t forget that if you are a company, when someone sent in and said, don’t forget to remember that you also have your franchise excise.

If you are a single member or multi-member LLC, if you did not file an extension, you’ve probably already gotten love letters on it.

But if you have filed the extension then you have the ability to move on from there.

All right can we go ahead and get Stephen on the phone real quick?

I knew you could do that.

Hey Stephen what’s happening?

Well I’m just out here living the dream.

I love it.

This specifically pertains to a 501c8 fraternal organization.

Okay.

And we get into these arguments about whether or not we are a non-profit or a not for profit.

I know that our gains are not taxed.

Not for profit.

You’re not for profit.

When most of us think of, and I’ll cut you off right there, most of us think of a non-profit, we think about if people give money to it, it is tax deductible.

When we think not for profit, it’s still, meaning that whatever you do, you’re not going to pay tax on it.

It still falls under the 501(c) or 501(a), I mean, there’s several 501s.

But if people contribute in most cases to these organizations, they’re not going to deduct it.

It’s tax-free money for the organization.

They’re going to grow it.

It’s a good nonprofit.

But in most cases, the 501(c)s are not.

You you should have a letter that will say if you can actually deduct, if you’re allowed to take contributions that are deductible or not.

But, um, from my experience, most 501 C sixes are, uh, more of a association kind of situation.

I’m sorry.

501 C eight.

Oh, C eight.

C eight.

I don’t know if I even know that one is.

All right, let’s see what that one actually comes up as.

’cause now you’re throwing in a whole nother alphabet.

Oh, I know, I know.

But to clarify what you said, the C8 is gonna be a not-for-profit.

Not-for-profit, right.

So the C8 organization is a fraternal society that provides benefits to its members.

So it is a lot like the C6, where it’s more of an organization in my mind.

You have a set number of members who share the vocation, blah, blah, blah, blah.

But it is a not for profit, not a nonprofit.

I mean, again, all 501Cs fall under the IRS code, not nonprofit organizations.

Let me clarify that.

But when most people ask, most people think of a nonprofit is, if I give money to Goodwill, I can deduct that on my tax return.

People that are in the fraternal society, Usually, and I haven’t seen your bylaws or I haven’t seen, so I want to put a little caveat there.

Normally those are not deductible dues because it caters to a very specific type of organization.

Now you may have a letter that tells me differently, but either way you need to by filing definitely at 990, which is a nonprofit corporation.

It falls on the 990 period.

That I know.

you so much.

No problem buddy.

Thanks.

Hopefully I didn’t completely blow Steven away there because I’m not too sure if I answered his question.

Let’s go to Jim in Lawrenceburg.

Hey, Jim.

Jim, you there?

Hello.

There’s my boy.

What can I do for you?

Yes, I was wondering what about an IRA.

If you get it out or leave it in and what the tax rate is on it or what the bank failed.

So did you say a bank failed?

Well no, I was wondering what would go on if you know if the bank failed or whatever, what they’re talking.

Well I hear you.

Well most IRAs are invested unless it’s self-directed, usually in annuities and they’re diversified.

So you would have some protection, even if the organization that is managing the IRA, it would be protected by the Fed.

So you would have some protection there.

So far as I know, I mean, I’m not a financial planner and I’m pretty sure mine’s protected, at least I would hope so.

As far as the tax rate, that’s unfortunately a tricky question.

Jim, can I ask, are you married or single?

You’ll be married.

Married.

Okay.

So the easiest way would be kind of like the gentleman that asked me about the other tax rate, but if you and your wife were to add up everything you get, social security, pensions, W-2s, whatever you have, and you add it all up in anything that is under $108,000, you’re in the 12%.

So you would basically say if you were to take some money out of your IRA and it would keep you under that $108,000, sorry, the $108,000, then you would then be at 12%.

So if you took $10,000 out, you would pay 12% on that.

If that money you took out of your IRA was above $108,000 up to 250-ish, you’re at 22 for the money that’s above the 108 to the 250.

So it’s not a simple mathematical unfortunately Jim and we have progressive tax code.

So my suggestion if you are really thinking about taking some money out of your IRA would be to talk to a tax person so they could give you you know like okay here’s the real numbers and I want to take this much out how much would I have to pay in taxes that way they can give you an exact number or at least a very close estimate so you don’t you don’t really want to go over that at 108,000 if you don’t have to, if you could take it out over the next few years versus just cleaning it out because you’re afraid.

I would not be, just to put out there, I wouldn’t be afraid of an organization going under.

I think if you’re not comfortable with where the money’s at, you can always move it to a larger custodial, TD Ameritrade, any of those that have been in business now and have a very large portfolio.

so you wouldn’t have to worry about losing it if you’re having a small bank.

Does that help Jim?

Yeah.

Okay.

I feel a little better about it.

Okay, good.

All right, buddy.

I appreciate you calling.

We’re gonna take a quick break here and we get back.

We’ll go to the phone lines again.

615-737-9986 is the number here in the studio.

We’ll be right back with the Dr.

Friday Show.

Part 4(upbeat music)

♪ Live, live, live ♪ – All right, we are back here live in studio and we’re gonna go right to the phone lines.

We’ve got Billy from Lawrenceburg.

Hey Billy, what can I do to help you?

Hey, I’ve got a question on a piece of property.

It was my old home place where I was raised and when my mom passed away, there’s four siblings, me and a brother and two sisters and she left it to all of us.

And over the years it was this, they decided that they were going to give it to me, uh, to do.

And I told them, you know, well, if they was going to give it to me, but I’d make sure it stayed in the family.

You know?

And, uh, I was looking to, and plus I came, I sold another piece of property at one time and I told him, no, I was going to go ahead and pay them for it.

So at that time I figured maybe today it’s a half acre, but I’m going to make it into an acre of land for her to put this house on.

And she was wanting to do the old home place, redo it, but termites had got into it and it was going to cost more, so it’s going to have to be tore down and she’s putting up a modular home there.

And I was just wondering what the best way to give that to her right now before I pass or because she’s needing a place to move to and settle up here, you know.

So I thought she was the one I decided I was going to give it to anyhow, you know.

So that’s what I was looking at, the best way to do that.

Okay.

Well, I mean, the best way is not to do it during your lifetime only because what you’re going to gift her which is what you’re basically talking about by switching the title you would be gifting her at your value.

So this would have been back when your mother passed away and then whatever the other half acre you’re talking but it would be whatever you paid for it would be the value that you can gift it to this person.

They have to inherit it at your value where if you pass away they would inherit it at the current value.

Now I don’t know what the difference of the values are, you know, but if you were to give it to her, Billy, um, you would have to give it to her at the value that you inherited or took it over at.

Okay.

Okay.

I mean, otherwise you could sell it to her, but then you’d have to pay taxes.

So say that again, that last part.

Otherwise you would have to sell.

I mean, you could basically show it as a sale, um, in theory for the current value, but then you would have to pay tax on the difference.

Okay, yeah, I got you, I got you.

Okay, okay.

Okay, sorry, not a lot of help.

But you could do a life estate, you could do a trust, so if you pass away, it automatically goes to this person.

That way it stays within your bloodline, nothing happens to it.

Those would be legal things.

I’m not a lawyer, but that would be another direction to go.

And the only reason I speeded it up was because she was gonna hunt a place to buy up here.

You know she lives about 40 or 50 miles away, or she worked but retiring and She just needed a place, and I thought I’d go ahead and do it now So she wouldn’t have to buy another place.

You know or whatever right I hear you all right Well, we’re gonna have to take a quick jump.

Let’s see if we can get David really quick on the line.

Thanks, Billy I appreciate it.

Hey David Yes one reason, skipping tax issue.

Uh, I want to give some money away before, uh, 2025 and we might change the credit.

And, uh, uh, if I’m just making a, a transfer out of my brokering account, uh, that is a heavily, uh, an account open in the name of the, uh, beneficiary and, and, and, And then, and then this time I’m basically dragging the stocks that I picked over into that account.

Paperwork wise, what’s the best way for me to be documenting that to fill out the tax return?

You would have to do a gift tax return.

Yeah, you would need to be doing a gift tax return because on there it will show if you’re gifting stock, gifting a home, gifting cash, gifting whatever it is, art, whatever the value is.

So you would need to be doing and tracking that through the 70706 or 709706.

Yeah.

Could I just, you know, use them, have a printout at the end of the day and put them both in the house?

Value is a value.

Yes, sir.

No, at the time at the time of the transfer, what the value was at that point.

So that would be the value that you’re transferring it to.

Okay, thank you very much.

No problem, appreciate it.

All right, we’re gonna take, this is actually, no, we’re not gonna take, we’re gonna be ending the show here in just a second.

So if you wanna reach my firm, you can at 615-367-0819, Monday morning at 615-367-0819.

And again, I just wanna get, I wanna blow up this website.

I wanna make sure we completely sell out.

Tip the waitress, breakfast fundraiser.

You can go to, the easiest way is thesweetaddiction.com or call Robin directly at 615-580-8001 is the number directly to the president, 615-580-8001.

And if you don’t wanna, if it’s not the tip, the waitress breakfast fundraiser is not for you, again, click on the Amazon wishlist, help these girls get to the next level of what they need to be able to continue to run their truck and to keep learning how to become more prosperous and just relearn how to deal with the world.

So if you have questions on my stuff, taxes, accounting, anything like that, again, 615-367-0819.

Also check us out on the web at drfriday.com.

Again, drfriday.com.

Another easy way to reach me is email, Friday at drfriday.com.

Again, Friday at drfriday.com.

Do not forget our deadlines.

And the biggest one is this Friday, September 15th for all business owners that have LLCs that are partnerships, corporations, 1120s, 1120s.

Very important to get all of those filed on time.

That’s assuming you filed an extension.

So if you have questions, the easiest thing to do, pick up the phone at this late date 615-367-0819 or just email me Friday at drFriday.com again Friday at drFriday.com.

I hope you guys have an awesome Saturday enjoy this weather it feels like the fall weather has come out again and maybe you’ll have a little time to enjoy this Saturday keep listening to 99.7

View Details

Welcome to another episode of the Dr. Friday Radio Show! In this episode, tax expert Dr. Friday answers callers’ tax questions and covers the following topics:

• The Importance of Filing Your Taxes on Time
• All Business Tax Returns Due on September 15, 2023
• All Personal Tax Returns Due on October 15, 2023
• Self-Employment Tax Should Always Be Between 10% and 30%
• How To Manage Quarterly Tax Payments as Self-Employed
• Best Way To Claim on W4 When Married
• How To Take Advantage of Qualified Charitable Deduction
• The Importance of Setting Money Aside for Retirement and Taxes
• How to Get in Touch With Dr. Friday
• How To Make Sure You Have Enough Money for Taxes
• How To Do Tax Preparation and Financial Planning The Right Way

And much more!

TranscriptAnnouncer 0:01No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Dr. Friday Show. If you have a question for Dr. Friday, call her now. 737-WWTN. That’s 737-9986. So here’s your host, financial counselor and tax consultant, Dr. Friday.

Dr. Friday 0:30G’day, I’m Dr. Friday, and I’m here live in studio. So if you want to join, the show you can at 615-737-9986, we’re gonna be talking a lot about some of the things that’s kind of coming up here.

Dr. Friday 0:51We have, obviously, September 15th, which will be here before you know it, that’s when all of our business tax returns are going to be due. And then October 15, for all those that have waited to that last minute to file the paperwork. Keep in mind that does not extend the money you owe. But if you’ve paid all your taxes, and you’re just waiting, I know if we don’t finish the business tax returns, those individuals cannot file their personal tax returns.

Dr. Friday 1:19So many of you had to wait for K-1’s or other documents. Once you get those then we have until October 15 to file those taxes. So very important to make sure you make those deadlines because otherwise, you’re going to get hit with failure to file on time penalties, which add up a lot faster than and failure to pay. So you know, if you’ve got questions, you need to figure out what we need to do, how you’re going to move forward.

Dr. Friday 1:46And of course, we’re going to talk a little bit about people that have had some back issues. I mean, if you haven’t filed taxes, especially in the last couple of years, because in 20 and 21, we had quite a bit of free money, that may either be able to go back and pay for some of your tax issues or help you pay the tax years that you may have may not have a keep in mind, 2021 and 22 are the three years we’re able to get to get actual refunds from the IRS.

Dr. Friday 2:15So if you don’t have, if you haven’t filed, it’s going to fall off. And before you know it when when 2023 comes on 2020 is going to drop off. And that was one of the stimulus checks they had to that year, adding up to somewhere between I think it was 600 and 1200 may have been $1,800, that you would have been able to get for free that year. And then 2021, I believe was 1400. But either way, you don’t want to leave that money on the table.

Dr. Friday 2:46And so you might want to think about making sure that you’re filing all of your taxes. And there are some situations where maybe you haven’t filed taxes in 1015 20 years, and I have that happen more times than a lot of people think doesn’t mean we have to file all those years in some cases, we may not have to file more than six years to get you into compliance.

Dr. Friday 3:08So it may be an important now doesn’t mean if the IRS has already assessed you, well, then there’s not much we can do about that besides file a tax return and then deal with the tax issue that might arise from it. But if the IRS has not contacted you, and you’re like wow, I you know, I’m I’m just gonna keep my head down and my mouth closed. And maybe the IRS will never know if I’ve ever actually done anything and therefore I can just go without having to file it pay taxes.

Dr. Friday 3:35And I’m not going to say I will say I have never been that lucky in life to be able to just ignore and not do but there are people that I know that have haven’t filed taxes because of either being self employed, or because they move around a lot. You know, the IRS hasn’t been able to catch them. And so at that point, you know that either not enough income has been triggered in to them so they don’t have any idea how much money is being made.

Dr. Friday 4:02But if you want to buy a house you want to buy or a car if you want to get credit if your kids want to go to college and have to do the FAFSA, you are required to file taxes. So it is important to make sure that you have those in place if it is something that you’re going to need to be dealing with at some point. So if you want to join the show, maybe you’ve got all your tax papers or you’ve gotten some love letters. Some of them are pretty interesting one of them of course one of the big ones that’s coming in as people having to prove their identity.

Dr. Friday 4:34So if that is the case, then you might want to you can join the show 615-737-9986 are are all there for us. So again, if you want to join the show you can 615-737-9986 Are the phone numbers that we have on file, and we will be able to help you hopefully answer those questions. Do you need to do anything with them? Do you want to, you know, make it happen or whatever, it’s really up to you on? Do you want to deal with the IRS? Or do you want to wait to the IRS is going to give you little to no option, and then you know, then you will have to deal with them. I mean, sooner or later, you’re not going to get away with not filing taxes. Even if it comes down to wanting to collect social security, I have people that haven’t filed taxes, therefore, especially for the self employed, they don’t have enough of the information to be able to get their 40 quarters or their 40. Yeah, 40 quarters, 10 years of taxes are not showing up.

Dr. Friday 5:44Because as a self employed person, we have to report most of that. So they’re not going to qualify for what they think they should be qualifying. So again, one of those situations where you want to make sure that you have you know your papers in order. And that way, if Gosh, you need to collect social security or you have a Medicare, you know, you do are not required to file 40 quarters, or 10 years worth of taxes. And in some cases, some people have not done that. So, again, just making sure.

Dr. Friday 6:16So if you want to join the show, call 615-737-9986. So a couple interesting things. I know, this is a live show, some of you have questions, you will be on the radio, just to let you know, someone just texted and said is it live? I know last couple of weeks, I’ve been out of town. So we’re getting back into the office here. But this is a live so if you call it is 615-737-9986 is the phone number here in studio. So that means that if you want to figure out what’s next that we need to be dealing with, of course, we also are getting what almost the 15th of September is also when we pay our third quarter estimate.

Dr. Friday 7:02So if you haven’t an estimated payments are required for people that owe money, it doesn’t mean you have to be self employed. If you are an individual that have money coming in from multiple sources, and you owe more than $500 the next year, theoretically, you should be making a quarterly estimate to compensate so that you’re not short on your taxes. So if you are an individual that maybe have rental properties, or you have investments, stocks, portfolios, or you have k ones and you don’t always have control over are we going to make money, are we going to lose money, we don’t always know the answer to that.

Dr. Friday 7:39But you do need to do to the best of your ability estimate, which is always whatever happened the year before. That’s how we do that. So if in 2021, you owed 600, or 1000, or $2,000, they’re radically, you should be making four equal payments of that balance, do up to 110% of that year, for the next year. So that way, you at least don’t have it. So I have some people, maybe they sold a large investment in the year of 2022. And they’re saying well do I need to pay in this money to the IRS. So what we have to pay into the IRS is 110% of what she owed or in 2020. So in theory, you might owe $40,000, for the year of 2022, you may not have to send all of that in to keep the penalty from happening.

Dr. Friday 8:29Now, I usually suggest especially if you’re not great with money, some people are really good, they’ll put it in a savings account, make a few dollars on that. And that’s perfect. But sometimes people if they have access to the money, it will get spent. So if that’s the case, what you really do want to do as you do want to take that money, put it on a 1040 es or go to irs.gov make an estimated payment, because you rather have that money out of the bank in the hands of the IRS, versus if someone’s gonna prepare their taxes come March or April of the year and say, “Hey, you owe 40,000,” and you no longer have it.

Dr. Friday 9:04Now the interest in penalties will be much higher than what you probably would have earned if the money was just sitting in the bank earning interest. You know, I mean, so again, one of those situations where you really, really do want to make sure that if you owe the IRS, you’re not going to earn more money in the bank. Now maybe if you’re a great investor and you know how to do something, but there’s a risk to that and who wants the IRS as a loan officer personally, not me.

Dr. Friday 9:32So if that’s the case, put that money aside as any self employed individual should always have a bank account should always have a separate bank, one for business one for taxes. Every dollar you make, depending on your income bracket should be as little as 10% as much as 30 or 40%. Depending on how much earned income you have. We always have self employment tax. So that’s always going to be a minimum of the 10%. And then you know, obviously ordinary income Tax starts at zero to 12, and then up from there. So you should always have that aside. And I will be honest, I often tell my clients to take it from the gross learn to live off 80%.

Dr. Friday 10:11Now, that may not work for everybody, because if your profit is only 15%, on what you’re selling, then you can’t take 20% from gross, but that conversation needs to be had with your tax person, because you don’t want to live off of the IRS. They’re not good loan officers, guys, they’re not a good credit card. So if you are self employed, if nothing else, the net effect, whatever you’re bringing home, whatever you’re taking out to live on, you should be taking 20% or 25 I don’t know what you know, based on your income, but a percentage should be going in just like you work for somebody else, you get a paycheck, you never get 100% of that, that money you earn, you make $2,000 you bring home 1500.

Dr. Friday 10:52The same thing needs to be done for the self employed, because I will tell you, in my world, a lot of the issues is often the self employed or someone that sells or takes money out of a retirement account. Those are usually the larger issues, if you’re taking money out of an IRA. You know, a lot of times people are like, well, I’ll pay the tax later, you need to pay the tax when you take it out. And there’s always unless you’re over 59 and a half, or or there is a few exclusions $10,000.

Dr. Friday 11:20For the first time homebuyer things like that, you need to take out the penalty of 10% plus whatever the tax bracket is. So you know, if you’re in the 50%, and if you take it out and you have a 15% tax or 12%, you need to take out that plus 10. If you’re under the age of 59 and a half at the time you take it very important because with the exception of what we had in 2020, when we were able to split it over three years, and that’s happened a couple different times, you usually get hit in the penalties and the the payment plan that you have on that is never going to be as good. So sometimes we have to take the money out, I get that life happens.

Dr. Friday 12:01But make sure you take enough out to cover the taxes because most people that’s one of the reasons they end up in trouble. And then they end up with liens against their houses and everything else. Because it didn’t go as well as you thought. All right, we’re gonna go ahead and get for our first break. If you have a question or you want an email, you can call me call the studio at 615-737-9986. The right number is 615-737-9986. Or you can email friday@drfriday.com. friday@drfriday.com. We can take your emails or your phone calls, we’re gonna take a quick break and we’ll be right back with the Dr. Friday show.

Dr. Friday 12:46Righty we are back here live in studio. I’m Dr. Friday an enrolled agent licensed by the Internal Revenue Service, they do taxes and representation. And that’s what we’ve been doing for 25 years, and probably on the last 15 1015 years here on the radio. So if you have questions, maybe you’ve got love letters, maybe you’re getting some changes on what’s going to be coming down the line keep in mind, they are going to be doing that 1099k At least that is now scheduled for the year of 2023. For anything that exceeds $600, it may change again. So let’s hope it does.

Dr. Friday 13:24And then we’re going to be making some in basically in 2022, we had this where the Earned Income Credit and the Child dependent credit dropped back down to the 2019 levels. So things are often changing from year to year, even from sometimes they’ll change it what we think and then they’ll backdate it into another situation. So we need to make sure we stay on top of filing. But we do need to file a taxes. As an enrolled agent we do represent which means if you’ve getting love letters, if you haven’t filed taxes, you’re not even sure where to start, you know you’ve been avoiding or you’ve been moving, just trying to keep your head above the water and you know, you just don’t want to drowned.

Dr. Friday 14:06And there are ways of getting you in to a program either in with the IRS the smart. You can you know Fresh Start program as well as if you want to just file and find out amazed how many people leave money on the table. A lot of times, it’s just I want to leave, I don’t want to deal with it. I just want to not file taxes. And you know, in probably 50% of the cases I have they’ve left money on the table in a year or two of what’s happened so and then we’re also dealing with unemployment audits, not so much that we’re directly employed but we have a lot of employers and they’re now going back and requesting information on employees that claimed unemployment to see if they worked how much money they earn.

Dr. Friday 14:58Several people that were in the restaurant business they said they, you know, they were on and off, and they were. So you know, so just be prepared. If you have received, you might be getting some more information on that. Coming down the line, that I know the state is working very hard in trying to get all of those audits done. I would also suggest, at some people, at least this last year, we seem to have quite a few people that owed money that didn’t the year before part of it was because of child credit, they reduced it back down to what it was in the year of 2019, which offset some of the people that may or may not have been able to adjust their W2’s.

Dr. Friday 15:38Other parts of it was where people just change jobs, and they put in there, I don’t know, married and zero, you know, whatever it might be. And of course, nowadays, it’s really am I married and then put the number of children $2,000. For every child you have, if this is a second job, let us know how much the first job, there’s a lot more to a W 4. I’m not too sure if it’s actually been a good thing that they changed the W 4’s. I’m sure there’s other people listening, maybe some of you have had positives, I have found it to be more frustrating for my my people, because I think most people were used to married I have two children, I put two in that box and it automatically goes now we have to be, are they over under a certain age? Is this one way or the other?

Dr. Friday 16:25So whatever it might be, it’s just a matter of making sure that you are having enough money to come out. Because there’s nothing worse than filing your taxes, you think you have everything in line, and boom, now you owe money from doing something else. And you know, what’s you know, what’s look good is that so if you’ve got questions on that, and you want to know how to help, we can help you at least try to get the adjustments made based on the fact and so often married couples, both people claim married. And so often they’ll both claim the same child. So we’re married and one but you both can’t be married. And one there’s only one child. And keep in mind married means two.

Dr. Friday 17:07So you’re already claiming your spouse, both of you are claiming, if you have the higher income bracket, then you know, I’ll be quite honest with you that sometimes that doesn’t work in our favor, it’s sometimes better for one person to claim single, and I’ve had, I can’t tell you how many people have walked in my office and said, “Oh, I’m married, I can’t claim single on my W 4.” There’s nothing in the W 4 that says you can’t claim single you can play married at the higher rate, you can collect the box single, it’s only withholding for taxes. It’s not saying that you are legally married or you’re not legally married, it’s making sure enough money is coming out. That is the most important part of that conversation.

Dr. Friday 17:49We don’t want to have you doing something you shouldn’t what we do want is for you to have enough money coming out of your taxes. The second thing, the IRS has warned that there is obviously always scams, right, there’s a ton of different places that have especially people saying that they are the IRS that you owe money because of them. And that you know that’s coming in two different formats. Apparently, they are making phone calls saying that they are the IRS. And again, because of the fact that you can’t say the IRS won’t call you because there are circumstances in which the IRS can call.

Dr. Friday 18:26But most of the time, if you’re in my opinion, your intelligent person, you will get the name, you’ll get their badge number and you will get the phone number. You’ll also say who is your supervisor, and what is their number. And then you can either look up those numbers to see if they’re legitimate numbers. And if they’re in Tennessee, and you’re talking to someone local, it will be 615-250. Normally, I’m sure there’s some expansion on that, but most of them are started out at 615-250. If it’s from another state, then I’d be a little bit more curious why someone calling me from a different state unless you just relocated from that state. And it’s a state representative, not a federal.

Dr. Friday 19:08But that would be something you need to be very, very careful, do not even under those circumstances, don’t give your social security number or your date of birth. Unless you have verified that that person is verifying that information. I will tell you as an enrolled agent and I’m on the phone with the IRS, I do have to give them my social security number as proof of who I am every time I talk to a representative.

Dr. Friday 19:37But but you want to make sure you’re on the phone with a true IRS agent not just somebody that you got a letter and you call the number on that letter. Just be careful. Same thing with your your older parents. They seem to be the ones that are often targeted for whatever reason. So we just want to make sure that those individuals are safe. So again, and same thing with filing taxes. I mean, most people, one of the things I have to say is if you have a, an older parent, and you are living and they’re living in your home, and the only they have, they are a dependent of yours.

Dr. Friday 20:17If you’re paying the rent, and you’re providing the electricity and everything else, theoretically, you’re providing more than 50%. And, and Social Security is not considered earnings. So it’s really not a situation. But if they’re living on their own, and you’re helping them with their taxes, and one of the Cubii is one of the biggest are qualified charitable deduction. QCD, to be quite honest, QCD is something I still find a lot of people that are over the age of 65 that have that they give money to charity. And we all know it’s hard to itemize right now under the current tax law, especially people that don’t have large mortgages or large property taxes, or state income tax, whatever.

Dr. Friday 21:00So most people in Tennessee, especially seniors don’t have those kinds of debts. But they can do a qualified charitable deduction if they have 401, K’s or IRAs. And these are standard, right, because if it’s a Roth, they’re not having to pay the tax anyways. But if it’s on a standard 401 K or IRA was most of converted to IRAs, if they’re over the age of 65. They and then even at 65, you can take charitable, qualified charitable deductions, even though RMDs required minimum distributions don’t start for most until they’re 67, they did not change the law for qualified charitable deduction.

Dr. Friday 21:38So you can take a draw at 65 from your IRA, as an RMD. And then take that and immediately have the custodian of that account, make the check out to whoever you want as a charitable deduction, I mean, a legitimate charitable deduction. And instead of you paying any tax, it’s completely tax free. So if you want to find a way of giving money to charity, or you’re already giving money out of your pocket, to these charities, especially tithing to your church, people, six $7,000 a year, and they take it and every week, they write their check or put cash in the tithing, they’re not going to deduct it from their taxes, because it’s not enough to itemize.

Dr. Friday 21:38But if they took that from their QCD, and maybe they’ll take one or two checks a year, instead of doing it every single week, that now becomes their $6,000, fully tax deductible, it does not have to be itemized it is a complete tax deduction. So have this conversation. Many of you are helping your parents with their finances, or talk to their CPA or their EAS or their tax people and find out if they already take advantage of this. Even if they don’t need to take that money out. And maybe in their wishes, they want to give money to charity anyways, why not take it out, they can take up to $100,000 a year, do it while they’re alive, reduce and give it to the charities while they want.

Dr. Friday 22:16It is a tax planning as well as an estate planning tool. So again, just make sure that if you’re a custodial, or if you’re just have an older parents then and you know that they give so much money every year to these different organizations. And no one says it has to be 1000s of dollars, it can be hundreds, but why not get it tax free. And that would actually may encourage them to give more it’s possible. But even if it’s just whatever they usually give either way, it is a perfect plan. It is tax free money, how often do we get tax free, especially out of a fund that is growing with tax dollars.

Dr. Friday 23:39So it’s something to consider if there’s something in the state plan and as well as just, you know, they’re doing it anyways, why take it out of their pocket when they could actually take it out tax free? It’s not tax free out of their pocket normally. So that is two things to think about. Sometimes you don’t have that.

Dr. Friday 23:56But if you have a question, sorry, cou can reach the show at 615-737-9986 is the number here in the studio if you’ve got a question, or you’re working on 2022 and or 2023. Again, we’re working on the last few months here we go about four or five months left to make sure we plan for this. So have you maximized your set because if you haven’t filed your 2022, you have until your extension date to maximize your SEP IRAs. If you cannot do a standard Ira it’s already expired. But you know if you’re going to put money in an IRA, maybe you should put it in now versus later. Let it grow a little faster. Talk to your financial advisor. All right, we’re gonna take our second break if you want to join the show you can at 615-737-9986 We’ll be right back with the Dr. Friday show.

Dr. Friday 24:48All righty. We are back here live in studio. And if you have a phone or question and you want to join us on the phone lines, you can let 615-737-9986 taking your calls talking about my absolute favorite subject, which is taxes.

Dr. Friday 25:16And we are in the midst of finishing up the 2022. And we are talking about things that will be happening in 2023. So if you have a question, you want to know what we need to do remember, the highest tax bracket is going to be 37% at this point, greatest income anything over 693,000 for married couple 578 for single person. So that changed. And that’s pretty much the exact same, I mean, all in all the the the rate of how much, but 10 to 37 is what we’ve been dealing with, for the last couple years, obviously, just keep changing the dollar amounts on it.

Dr. Friday 25:57We also have capital gains rates, remember, we do have a 0% capital gains rate. So talking about another way where you might be able to help the parents, sometimes it’s a matter of how can we get the money out because two things if it’s in an IRA, and they’re at a very low tax bracket, and they could convert for zero tax, because of all they have a social security and money in an IRA, it may be smart to take out bigger chunks, put that money into an after tax account.

Dr. Friday 26:27So that way it will grow theoretically tax free the tax or even file especially if your income is at a higher bracket than your parents. And then when they pass, it will come to you in a simple because if it’s in an IRA, and they pass away, we have, what 10 years from the date of their passing pretty much or the the first of the following year to take out all of those funds. So if there’s a way of converting, I know I have some that have pretty healthy IRAs, and they’re doing bigger conversions than what we would have normally done in the past because they’re trying to make the money tax free to their children.

Dr. Friday 26:59So they’re eating the taxes and then letting it regrow tax free. On the other side, this is something you should definitely talk to a financial planner, as well as a tax person to figure out what’s the right numbers, what’s the right percentages to do these conversions. And then where’s the right places to put them because, again, we don’t want to be just, you know, this is a suggestion through the radio, it’s not something that I’m telling any one person to do. So, but these are things that you might be able to do, where sometimes tax rates are lower today.

Dr. Friday 27:30So what can we do to maximize the lower tax brackets, we know, in 2025, we’re going to start seeing a higher potentially a higher tax bracket again, we don’t know what’s going to come in and how it’s going to offset the Tax Act and jobs, the tax cut and job act that came in 2017. But we do know inflation has come up huge, right? We all know inflation is crazy out there. I mean price of petrol price of food.

Dr. Friday 28:00So doing those conversions at some point, obviously, you’re making more money, but you’re not actually seeing more money. So again, very important to sit down, especially with either your person that knows your numbers, I don’t care about age in this particular situation. If you are a person that has been paying taxes, are you maximizing what you can to do, but if you’re over 59 and a half, then we have some advantages to making sure that you have a few extra things you could do where normally, we don’t have any extras that you can deal with.

Dr. Friday 28:36So just making sure that we have exactly what you need to get you to where you want to do. The biggest thing about this show is really just a place where people can ask questions, I will get you the answer. I don’t know I will get you the answer. And then we can actually move forward and try to save tax dollars. No one likes paying taxes, but most of us have to so how much can we pay? And how little can it be paid? If we’re dealing with higher inflation, and all those things that are coming along with the typical tax situation, right, because right now, we’re all needing more money to actually maintain the exact same lifestyle that we might have had, you know, a year ago.

Dr. Friday 29:17So are we they say people’s credit card debt. I mean, truly, in 2020 people almost had a zero credit card debt. They’re paying it off monthly now and 2023. We’re back to what we were back in 2016 and 17, where people every household has a minimum of $5,000 in credit card debt. And it’s going up part of the reason they’re saying is because of inflation, people are still living the exact same way, but their dollar isn’t going as far as it used to. So that’s an interesting concept to actually address. Because how long can you last under that pretense how much you know how, how long can you keep increasing your taxes until it gets to a point where he can’t do that any longer.

Dr. Friday 30:01So the second part of that is, is you want to make sure that you’re maximizing for retirement. So that’s why I so often telling you guys heard me talk earlier in the show, but I tell most of my people take in for every dollar you make, put 20% over in your tax account and leave the other 80 to live off of the reason for that is also normally that 20%, especially for people that are making less than 100,000 for an individual and 150 for a married couple, those individuals will have extra money. And then that money can then be invested into a sup into an IRA into some form of retirement that they then can use for that purpose. So not only are we setting money aside for taxes, but now we’re preparing for money to go back into our personal tax situation, right, we’re growing it for retirement, those are the kinds of things that we really want to make sure we’re getting the most from so, you know, if we can learn to live off, it’s harder, I just said inflation’s went up, right.

Dr. Friday 30:59So even though you were making $1,000 a week, and now that $1,000 Feels like $800. So now you make it up on credit cards, and you’re still having to set that money aside for Uncle Sam, because taxes aren’t going down. Very important to make sure you’re mapping all that now’s the time to really start revisiting, you know, our lifestyles, because let’s, let’s really be honest, if taxes are going up, inflation is going up. And yet, they’ve just said that most jobs were going up by 10%. This year, they’re going to be seeing a 10 person decrease because people are reducing jobs. For me, the roller coaster has started right for a year for months, we kept hearing nobody has enough, you know, no one can get enough employees.

Dr. Friday 31:42There’s not enough people working, then you hear, you know, on the news that they are going to be reducing salaries, and they want people back in the workplace. And it’s going to be interesting to see how that works. I have particularly certain tax clients that have moved out, they’ve brought property they’ve moved out because their jobs allowed them to work remote. Now we have several of the big Amazon and several of the other larger employers that say, “Okay, yeah, we had that. But now we’re ready for people to show up back in our offices, we need to have people back in the office.” And now that you’ve brought a house out in the country, and you thought, “Well, this is going to basically be where we’re going to be able to do.”

Dr. Friday 32:23It’s going to be interesting to see how is that going to work against our taxes? Are they going to have to take a pay cut so that they can actually still live out and enjoy the farm and all the things that they have going? Or are they going to have to sell those properties and move back into town where they can actually drive and commute to to the office? Again, it’s not something I know the answer to but I’m sure many of you are facing that. And many of that comes again, with tax savings. I had several that the they moved out the husband was working remote they had the kids, they were homeschooling, there’s a lot of different things.

Dr. Friday 32:59But if you’re mandated to return to work, how are you going to make that work for you in the big picture. And that’s going to affect your earnings, which affect your taxes. All right, so we’re going to be taking a break here. Keep in mind, if you have tax issues, I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. That’s all I’ve been doing for the last, I don’t know 25 years or so. So that means that if you haven’t filed taxes, you’re getting love letters in in the mail from our friends at the IRS, you’ve been communing, communicating with them for years or over issues, and you’re not getting any kind of resolution.

Dr. Friday 33:37This is the person I’m the person you want to contact and see if I can’t help you, our initial meetings are always free. Because if I can’t help you, I don’t want to be taking your money. I want to be paid for what I can actually do. And so I want to make sure that you’re going to be able to get a source of revenue of resolution. And we’ll be able to help you do that. If we can’t, then we want to make sure that we can either head you in the right direction. This week alone, I sent some to an attorney, I let one who had been doing all their own representing just to finish it up. We’ll be interesting to see how that works out for them.

Dr. Friday 34:11But sometimes it’s not a tax issue. Sometimes it becomes a bankruptcy issue, because it’s smarter to go bankrupt than it is to deal with the IRS depending on how old your debt is. And sometimes it’s an offer and compromise. Remember, you have the Fresh Start Program, which means just as it sounds, the IRS has a program that says hey, you know what, we know that you had some issues we know life hasn’t been perfect for you. But if you are really at a point where you’re just starting over again and you don’t own a house with a ton of equity and you don’t have a large 401k and you have basically lost most of everything and you just want to get the IRS off your back then a fresh start program is a possibility.

Dr. Friday 34:54It doesn’t mean that if you have equity in your home you can’t do a fresh start doesn’t mean if you have an IRA or a 401 K that you can’t do the fresh start, but it is taken into consideration. So if you owe them $20,000, and you have equity of 85 in your house, why in the world would you think that they’re going to make a deal with you? I’m just saying they’re, I mean, they’re, they’re in the business of paying taxes, they’re not in the business of walking away from him. So you know, I will shoot it straight. So you’ll know what your options are and what you need to do and how it’s going to work. All right, we’re gonna go into our last break here.

Dr. Friday 35:28If you do have a question, if you have something you need to share with us, 615-737-9986, that’s 615-737-9986. This is the Dr. Friday show. And we’re talking about my favorite subject, at least I know in this big, hot, sunny Saturday, many of you are like, I don’t want to be dealing with taxes. It’s not that time of the year yet, because you’ve already filed. But I’m talking to all of those that haven’t filed or are ready to start planning for their next year. That’s what this show today is about. So you can join the 615-737-9986. We’ll be right back.

Dr. Friday 36:12All righty, we are back live on the radio. So if you want to join the show 615-737-9986 talking about my favorite subject, and hopefully some of yours taxes, leases the subject we all have to live with no matter if you like it or not. So we’re looking at how and what we’re going to do with with our taxes and how we’re going to move forward. Again, we have some corporate taxes, normally 1065, 1120’s or do come 9/15/2023. And then we have personal tax returns do 1015. And obviously, you have to wait so many of them have the K 1s to finish your taxes when you’re dealing with that issue.

Dr. Friday 37:04Once you’ve got that, then you got to pay your taxes. So we’ll take a look and see how that’s gonna work for everybody. But if you haven’t filed 2022, but again, we’re in 2023. And we’re already making our third court estimate on September 15. So you need to be adjusting your your taxes also for the year of 2023. Even if you file extensions, you still have to make all your payments and your estimates on time, and you need to make sure you’re paying in enough money to make that happen.

Dr. Friday 37:31So if you have the ability to do that, definitely do because otherwise, you’re looking at the ability to pay 10 penalties and taxes on all of those situations. So it will be something that we will be dealing with and how we’re going to make that happen. I did have someone send me in and ask if capital gains rates have changed? And the answer is no, we still have the zero 15. And as far as I’m concerned, this should be an 18.8. And then a 23.8. actual physical capital gains is zero, 15 and 20.

Dr. Friday 38:04But we have the 3.8 that kicks in on individuals that make more than 200. And married couples that make more than 250. So if you have, and that’s including all of your income, so you have that, that you have to also look at. Keep in mind also in 2023, another email 17,000 is the gift that you can have, which was up from 16. So again, 17,000 is up from 2022 is $16,000 to 2023 is $17,000. So you have the ability to take that and gift it over and and I tried to explain to individuals, there are a limit to how much you can unlock people are like, “Well, how do they know if I think it might hit $100,000?”

Dr. Friday 38:54Well, I’m not saying they know, but do we really want to live the idea that if they catch us, then we end up with a tax issue? I don’t think so. So what we really want to know is you need to file a gift tax return, if you give your child over 17,000 You have an exclusion of $11 million dollars, many of us will never hit that exclusion, or even have to worry about it but why not follow the rules it’s it’s basically tax free as long as the money and keep in mind the money that is from the person that’s giving so if I’m giving somebody $17,000 I am the person responsible for the taxes not the person that is receiving the money the person that receives the money doesn’t have to do anything besides possibly document that they received the gift.

Dr. Friday 39:38And the same thing for any any of those situations. So I have some people that will give their children down payments for homes. And you know, they write a gifting letter and that’s fine you give them but if you give them your son 40,000 for a down payment with exceeding the 17,000. So the remaining dollar amount will have to show up on a gift tax return. So that shows that If that’s coming out of your lifetime, that’s all it comes down to. It’s not that complicated. It’s not something you have to sit around and really worry.

Dr. Friday 40:06It’s just making sure you’re tracking that information. So that way later in life, if money comes back, or somehow you end up in an audit, or your child ends up in an audit, and that income shows up in the tax return, so they don’t have to worry about paying tax on it, because there’s already a paper trail, it shows that was a gift from your parents, and that you paid that money out the way it needs to be paid. So you just need to be able to go forward and make sure that that’s working the way you need to. So if you have questions, you want to join us on the radio right now we have few more minutes 615-737-9986, you can also set up an appointment, we are, obviously to see us if you want to go over your tax situation.

Dr. Friday 40:53Easiest way to do that is just pick up the phone and call me at the office on Monday morning. 615-737-9986 is the number to our office. So you can give us a phone call. And we can set up a time where if you’ve got a question like the ones I’ve just read off, you can always email friday@drfriday.com. friday@drfriday.com. That is an important way of for you be able to email us and see what we have and see if we’d be able to answer those questions or at least get you into the right place or to the right place.

Dr. Friday 41:32Because sometimes I know a lot of people don’t like to hear the word, you know, bankruptcy or anything like that. But you know, I don’t know if people maximize the uses of bankruptcy along with offering compromises. If there are limitations, there are rules you have to follow like anything else in life, but if it applies, and you’re able to do it, you don’t want to leave it off the table just because you need it. And sometimes you want to go ahead and deal with that. All right, let’s hit Jean really quick in Manchester. Hey, Jean.

Caller 42:02Hey, yes, I have a life insurance policy that I have been leaving interest and dividends in with the policy. And wondering about the tax implication of the dividends?

Dr. Friday 42:35Are you thinking about taking the money out yourself?

Caller 42:39No. At my death.

Dr. Friday 42:41Okay. So as long as you don’t take it out, when the person inherits that life insurance, it’s tax free. So it’s one of those little catch 21. So sometimes people will cash out their own life insurance, maybe things change, and they don’t need to have the life insurance any longer. That can become taxable income. But in your case, if you’re just going to let someone inherit, it’ll be tax free to them.

Caller 43:06Even the dividend interest income?

Dr. Friday 43:09Yes, ma’am. Yep.

Caller 43:11Okay. Thank you so much.

Dr. Friday 43:13No problem. Thanks, Jean. Appreciate it. So okay, so we have a few more minutes. So again, if you’ve got questions, and you’re not sure of which way to go, or you know, you’ve heard this or you’ve heard that easiest way to reach me 615-367-0819. You can also email Friday, just like the day the week, friday@drfriday.com, friday@drfriday.com. And if you have no idea who I am, and you’re like, “Oh my gosh, I just turned on the radio, this person is talking. I don’t know who she is, what I need to be doing,” you can just check us out on the web at drfriday.com. drfriday.com is the website.

Dr. Friday 43:58So again, as an enrolled agent, I am licensed by the Internal Revenue Service to do taxes and representation. So that means if you have IRS issues, you’ve got love letters, maybe you know somebody that hasn’t had resolution with their taxes, they you know, they they just been avoiding or maybe they’ve been making payments forever, and they don’t know exactly how to make it work.

Dr. Friday 44:21How can I get myself out of this? How can I make this work? So I’m not always paying the government maybe it’s a matter because a lot of times people are always paying the past but then they’re not paying enough in the future because they’ve got to keep enough money coming in to make the payments and that’s not the best system you want to have.

Dr. Friday 44:38First thing you always want to do is get current with the IRS and you want to pay your most current. Right now, I’d be concentrating on 2023 2024 I don’t care how much money you owe from the past that’s going to either take care of itself one way or the other. What you don’t want is to keep adding to that clock because of the situation you’re in. So first thing you know you want to get that resolved and then you want to turn around and go ahead and get the, you know, concentrate on what happened in the past.

Dr. Friday 45:09Because if you’re working out your budget for the IRS, they will take into account your current numbers going in. So again, we have systems that will help you get organized, help you get caught up, if you haven’t got your tax documents, we can help you, you know, get those documents we have the IRS transcripts that will tell us how much the IRS shows for all your W 2 is mortgage interest, student loan interest, all those kinds of things will show your stock portfolios. So we can help you obtain that information as well. If you want, you can set up a free console at first easiest way call 615-367-0819.

Dr. Friday 45:50And again, you can always email me your question or just email and see if you need to set up a time. You know, again, that’s friday@drfriday.com. This is a every every Saturday we’re on from 2-3. And we’re talking about taxes, financials, dealing with self-employed individuals, trying to figure out what’s the best way that we can set up our entities, do we need to be an LLC, do we need to be a corporation? That’s the kind of things we cover here. And you can join us every Saturday and take on your calls. Or again, sometimes people don’t like that and they’d rather email or call us. So the phone number one more time is 615-367-0819.

View Details

Welcome to another episode of the Dr. Friday Radio Show! In this episode, tax expert Dr. Friday answers callers’ tax questions and covers the following topics:

• Sales Tax Holiday in Tennessee Starting August 1, 2023
• Dr. Friday’s Tips on Saving Money on Taxes
• How Do I Avoid Paying Taxes On My Investment Account?
• Should You Exclude a Home Sale From the Schedule D?
• The Difference Between Gifting and Inheriting Money
• How to Protect Your Assets From a Lawsuit or Creditors
• What You Need To Know About Bonds and Taxes
• How To Set Up An Irrevocable Trust
• How To Make Sure You Have Enough Money for Taxes
• How To Do Tax Preparation and Financial Planning The Right Way

And much more!

TranscriptAnnouncer 0:01No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Dr. Friday Show. If you have a question for Dr. Friday, call her now. 737-WWTN. That’s 737-9986. So here’s your host, financial counselor and tax consultant, Dr. Friday.

Dr. Friday 0:29Good day, I’m Dr. Friday and the doctor is in the house, I will tell you it is a very warm day outside. So hopefully, you guys are all getting a chance to listen to me. While we are inside either an air conditioned vehicle or actually at your house, listen, I Heart Radio. But if you are out there having to put up with a lot of this weather then drink lots of water and keep yourself hydrated about the only thing I can share with you. But let’s talk a little bit about some of my favorite subjects first, you can join the show 615-737-9986.

Dr. Friday 1:11So right now from Friday through Sunday, in Tennessee, we have the sales tax weekend we call it and it covers three different categories. You have school and art supplies. So any supplies, folders, pens, pencils, as long as that individual item is $100 or less. And you can’t do anything crazy like and say, Well, I want to buy this art kit. But this is one big kit and you want to say well, I’ll buy this and this and split it in half, and it’ll be under the $100. Now if it’s usually sold as a kit, that’s what they’re going to say. So anything under $100 per an item, which is great, especially for school supplies, paper supplies, things like that, that you might have. Even small business owners think about it, you can buy reams of paper, you can buy pens, papers, folders, whatever you might usually use might be a great weekend here in Tennessee and Williamson County, I believe were 9.75 Murray County 9.25. And in some of the other counties 9.5, no matter what we are at nine plus percent.

Dr. Friday 2:14So that is a healthy savings on every dollar. The second one of course is clothing, right? You actually have your general apparel, anything less than $100 per item, that would be Jeans, shoes, you cannot split the shoe. So you can’t buy $200 with the shoes and put one on each, they’re not going to allow it. But anything else socks, dresses, etc, etc. Anything that you might have if your kid goes to school and has a dress code or uniform, again, buying the pants or the shirts that would qualify as long as each of those items are under $100. And again, this is only from yesterday, Friday till midnight on Sunday. So today is a busy day for a lot of people another one for small business owners as well as just individuals or people that have kids in college or nowadays all grades almost is the computer $1,500 or less.

Dr. Friday 3:07If you want to buy a computer, now might be a time to think about it. They always talk about Black Fridays and all that. But nowadays we have black Friday’s goodness in May, June, July, they kind of took the true black friday away, but this is definitely going to save you the sales tax. So again, if you’re looking for something that you would normally have now, this doesn’t include game consoles, it doesn’t include flash drives, any kind of keyboards, monitors, etc, etc. It does obviously provide computer printers and supplies, it is not going to cover just the computer.

Dr. Friday 3:45So if that’s you know what you’re looking at, and then as soon as this one ends on the Sunday, come Tuesday, we start the sales tax three month holiday for food, and that would be fresh food. Now if you go into your gas station and you go buy a sandwich that’s not going to qualify for the sales tax free. They want you shopping at a grocery store, buying fresh foods, it’s not going to cover your tobacco or your candy or any of that kind of situation what it will cover is your fruits, your vegetables, your meat, all the basic things and this is for three months until October 31. So it’s a good time.

Dr. Friday 4:24I always think about I don’t know about everybody but in our house we always have a pantry and a lot of times we want to stock up on some of the things that we like tomato sauce, you know, things we use when we’re cooking and different things. This is a perfect time again, this is a 9.75% savings in Williamson County. So it is a healthy savings if you’re going to have to buy it anyways. Right so that is kind of the way this next week or two especially to this weekend. I’m sure most people are concentrating on school and school clothing and school supplies. But again, starting August 1 You’ll be able to start are buying food products with a sales tax three months sales tax free situation, which takes you through October, which, you know, considering Thanksgiving and Christmas.

Dr. Friday 5:10And that’s some of the big times that some of us that aren’t really great cooks, buy a lot of things you might want to think about, Do I need to buy some flour? Do I need to buy some sugar to make all those wonderful desserts, that kind of thing you might want to pre buy, some of them don’t require having to be purchased that day to you. So a little prepping is what it comes down to just the little preppy. Alright, so if you want to join the show, you can at 615-737-9986, taking your calls talking about my favorite subject, which is pretty much money, how we can save it, what’s the best way.

Dr. Friday 5:49And then you know, this last week, we had an individual come in my office, and I thought it was an interesting conversation because a lot of people come into my office thinking, Okay, Doctor Friday is gonna tell me how I can save money. And saving money is part of what we do. But we have to also look at the big picture, sometimes paying taxes today, knowing where the tax rate is, and having certain expectations that taxes will be going up in the next few years. Sometimes it’s better to look at if we were to go ahead and do this now at 12% instead of 15. Or, or even higher than that in this particular situation, was it worth doing certain conversions or selling something that had a high value to be able to make that difference?

Dr. Friday 6:36And so sometimes we’re crunching the number not only to try to save you tax dollars today, which is often what a lot of tax people do. But also thinking about the big picture 2025 The end of the current tax code. What will that mean, in 2026? If you were to do the same thing today in 2026, because sometimes we have the choice, sometimes we have options of do we want to do this or that when should we do it? You know, even I had one that sold like three of their pieces of real estate. And of course, we got into a 1031 exchange situation. But these people were reaching retirement.

Dr. Friday 7:14And so we were also talking about you can’t do just for anyone listening a 1031 exchange is what a lot of people if you have investment property, you can sell that investment property, not pay any tax and reinvest in other investment properties. Your home, your primary home is not an investment property. So if you sell your primary home or you sell real estate that then go buy a primary home, you cannot qualify for a 1031 exchange, it’s kind of important to understand because 1030 ones may or may not be in the future. I mean, I know that bharden would love to eliminate 1030 ones in the eye. And it’s a two sided edge. Because in my opinion, in some ways, if we pay the tax as we go, it probably would produce a better tax situation for the government and tracking because 1030 ones make it more difficult, especially when you have generations of doing it. So it does lead to a situation where if you didn’t have 1030 ones, we probably have more tax dollars going in. But the the offset to that is will be half as much investments going.

Dr. Friday 8:24Alright, let’s hit Jay from Franklin real quick. And we’ll see what we have. Hey, Jay.

Caller 8:30Good afternoon. How are you today?

Dr. Friday 8:32I am awesome. Thanks for calling. What can I do for you?

Caller 8:35Yes, I have been investing in comic books for the last 45 years and sold a sizable collection back in February. My question is, can I take off the investment amount when I go to pay taxes on that?

Dr. Friday 8:49Absolutely. It is considered a collectible, which is going to be taxed a little bit higher than on capital gains. You probably know this if you’ve been in the business, but your basis would still be deductible on that. And then any cost of selling if there was a commission paid or anything else that may have tied into those comic books, but yeah, unique collection, but I have had friends that have done the same thing. And it’s, you know, it’s just like wine collectors or anything else. There’s a market for comic books. Definitely.

Caller 9:23Yeah. Especially if you’re looking for you know, rare ones from the early 60s on on. That’s kind of what I invested in and had them sent off and graded and a lot more autographed by artists and authors and stuff which increased the value.

Dr. Friday 9:37So yeah, I should have had my brother saved his comic books. Had I been a smart person they would have been used. Hey, I was from the 60s.

Caller 9:45Dad threw him out. Got great escape got rich on people trying to pay their Vanderbilt tuition by selling bands comic book collections.

Dr. Friday 9:55Oh, wow. Okay, there you go.

Caller 9:56Well, I used to be like a block and a half from Vandy. Andy Belmont, they used to buy collections when everybody was time to pay tuition.

Dr. Friday 10:04Well, that was smart actually mean someone held on to him. So I know we’ve got some old baseball cards around here, my brothers had saved and I think my parents locked away somewhere. But other than that, we didn’t, didn’t keep the see that’s even the lunchboxes. Right. I mean, there’s some of them. I know if they use lunchboxes nowadays.

Caller 10:21But again, like I said, the ones the rare, the more expensive everything is so

Dr. Friday 10:28Well, thanks for calling. Hopefully, that helps.

Caller 10:30Thank you. Thanks. Bye.

Dr. Friday 10:32Bye. All right. And yes. Anytime you have a question, that’s what this shows about, I can lead you in the right direction, not always be able to give you 100% The answer, but that was a simple one. But if you have questions, you can certainly call the show at 615-737-9986, I would definitely say if you have a situation, one of the things we talk a lot about usually here on the radio is inheritance. Because if you inherit certain things, there’s what’s called a step up in basis. But I you know, what, I have a story to share after the break, we’re gonna be taking one in about a minute.

Dr. Friday 11:11And then we really want to be able to, to cover a little bit about people documenting how they inherit things. Because sometimes people are inheriting things years before they’re basically wanting to sell them. And where the base is, has to come from. And if mom or your aunt’s in the case of a situation that happened this week, gifts you their their land that they’ve been sitting on for 45 years, and now it’s worth, you know, in the millions, but they gift it to you how that isn’t necessarily the best way to inherit, unless, unless, of course, it’s just as well for you to sell it then her but all in all, that’s that creates a lot more tax situation.

Dr. Friday 11:56And basis is not the same as if you inherit. So it becomes a lot harder to generate, especially when someone inherits it. 40 years ago, what was the value then what was the step up and basis, etc, etc. So we’re gonna take a quick break here, and then we come back, we’ll talk a little bit about how those bases is affected. And also, I think we might have a caller on the line. So we’ll get to that as well. This is the Dr. Friday show and we’ll be right back.

Dr. Friday 12:25Alrighty we are back here live in studio, you can join the show at 615-737-9986. And we’ll go right to Robert in Clarksville, who was nice enough to hold to the break. Hey, Robert.

Caller 12:43Hi there, Dr. Friday, I have a daughter who who lived in a home in Tullahoma. For a year and a half. He sold it for about an 80,000 gain, she moved 50 miles away to a new job. And that’s where I’m hung up because when I do the taxes, it shows that she has about $80,000 gain on the Schedule D. But the exception on the 50 I was reading said that you get to exclude that 18 months out of 24 which is more than $80,000. So in effect, getting to exclude that.

Dr. Friday 13:17So how long did she live there? When did she move? I mean, how long did she live in the house?

Caller 13:2318 months.

Dr. Friday 13:24Okay. So she lived in 18 months.

Caller 13:28She didn’t. She didn’t live there for years now.

Dr. Friday 13:31Okay, she didn’t meet the two years. But she had, did she sell the house because of job?

Caller 13:37Yes, he took a new job and moved to an apartment in that city. So from Tullahoma the Murfreesboro was you know, 50 miles.

Dr. Friday 13:45Okay, so when you’re filling out the home sale sheet, you’re using that bottom section which says, you know, you’re you’re meeting the exclusion for in, they’ll take a percentage, she won’t get all $250 1000. But she’ll get a percentage of that based on the time there because she had an extenuating circumstance.

Caller 14:06The percentage is more than her gain. What I’m saying is my when I’m using a software, it’s not doing that it’s going into the Schedule B. I guess I’ll have to do it manually then.

Dr. Friday 14:19Well, yeah, it should not be well, the homesale shouldn’t be on a Schedule D at all. D should be deleted. This is a homesale. So you should be doing under the homesale. She, I mean, they should have a separate worksheet for a home sale. And on that sheet. There’s where you’re going to enter the price that you paid the the date it was sold, the data was purchased, blah, blah, blah. Lot like it but don’t put any of that on Schedule D because D is going to think of it as capital gains as investment property. This was a primary home so you need to fill out. Hopefully in the tax software, we actually have a form called home sale it doesn’t have a number on it or I’d be more than glad to share that number. It doesn’t share it. I’m sorry. In a look myself right now to come up and see if there was actual number but all it comes up with is a home sale. See if I don’t know we use an Intuit product. Not that you know, but I’m just saying. So if nothing else, ask them because if it’s on the Schedule D, it won’t offset it.

Caller 15:16Okay. And being in Murfreesboro, she got to July 31. file. So that’s coming soon, too.

Dr. Friday 15:22Yeah, yes, exactly. I’m so glad you remind me of that. So yes, that way, there’s no penalty. But yeah, just go back and delete the Schedule D and put it onto the homesale and see if that won’t make the problem go away if you can find the right form.

Caller 15:34Okay, your lifesaver. Thank you very much. Bye.

Dr. Friday 15:36No problem. Thanks, buddy. Bye. All right. And Robert brought up a good thing, I should have wrote that down. But just for all of you that may be living in Rutherford County, that’s the main one that’s in this couple other counties, you guys have to the 31st of July, if you did not file an extension, you didn’t do anything, because maybe you actually did have storm damage. But either way, you meet the criteria that you have till the 31st of July. To file what many people had to file back in April. That was your deadline due to federal extensions. So if you’ve been sitting around and you’re like, “Oh, shoot, I need to file I forgot to do my extension.” Boom, they need to be done by Monday. Right? I think Monday, because I think maybe it’s actually Sunday, whatever day Today’s the 29th rights 30/31. No, it’s Monday. So you need to file those by Monday.

Dr. Friday 16:30And you know, really, this can save you in some people’s cases 1000s and 1000s of dollars. In other cases, you don’t owe any money. It’s probably not a big deal. You don’t get penalized if you don’t owe money, you’re giving the government alone. So therefore they’re not complaining. But it is one of those situations where you want to make sure that you you do file, I mean, I know people always did, you know, I found that a really cool thing I was doing middle of an audit. I know I changed gears quickly, guys. But in Tennessee, I was in the middle of a state audit with some of my one of my clients that was just brought up and as it turned out great. But you know, a lot of times people just don’t file right.

Dr. Friday 17:11This particular client due to not understanding how certain things worked, put zeros on but he was always on time, always filed it always zero. And so what was interesting was they don’t charge a penalty if you file I thought that was pretty good. Because the IRS isn’t that way, if you make a mistake, they’re penalizing you for making a mistake. The state is not I will tell you though the state is now charging 12.25 interest, that’s pretty high guys, it’s you might want to think twice about not paying the state their full dollar amount, even if you don’t have a penalty, which they do have healthy penalties if you haven’t filed, but the interest rates are going to kill a lot of us.

Dr. Friday 17:53So you really want to make sure that your information business licenses franchise excise sales tax are filed on time paid on time. So you don’t get hit with any more penalty than you have to in dealing with, you know, with not getting something done. And it’s easier sometimes I understand for people to say than others. But either way, you want to make sure you have that going, Oh, I was talking a little bit about basis before the last break and the basis. When I say basis, it’s what you either inherited something at or it is what somebody is going to use when we inherit or when someone gift it to us.

Dr. Friday 18:37So gifting is totally different than inheriting first thing people get that confused a little bit. So if grandma or your mom a lot of times parents love to, to gift their children, their homes, their land everything they can because they don’t want to have a problem if something happens to them. Well, for one, there’s a five year look back on Medicare doesn’t always help by gifting it to your children, you’re not going to avoid Medicare coming back if that is prior to that deadline.

Dr. Friday 19:08Second thing is by doing that you’ve just eliminated in many cases, hundreds of 1000s of dollars now becomes taxable because your home is worth $400,000 You paid $40,000 Your children have to take what you paid. And the problem with that is is that sometimes we don’t know what you paid. And the IRS says if you don’t know what someone pays, guess what your balance is? Zero. That’s right. So if someone gifts you a piece of a home a piece of land like something I was talking to someone this last week, they were gifted a piece of land that she had inherited like 40 years ago, and now she wants to make sure he has it so she gifts it to him.

Dr. Friday 19:54And in all honesty, we have no proof of what it was valued at the time of her and her ordinance 40 years ago, there was really no paperwork, there was nothing there. Were working on trying to pull proper comps, trying to get someone that can actually do a pass appraisal. Sometimes that can be done to come up with people like to use property taxes, but the IRS is not always taking property tax as an accepted appraisal. So it is very important for if you’re an older individual, or even just you and I guys, whoever’s listening. But if you have property and you have the paperwork where you purchase that property, it is a vitally important piece of paper that should be put in with all of your other important documents.

Dr. Friday 20:42If you don’t have that, during your lifetime, it might be nice to go ahead and try to come up especially if you’re going to gift it doesn’t make a difference. If you let your children inherit after you pass away, we don’t need to know how much you paid for it, or how much it was worth when you got it. Because we get what’s called a step up in basis, we get the appraised value at the time of death, when we inherit. What messes up is when people try to bypass that by giving it to their children before they have passed away, then we only get the value that it was when you purchased it or inherited it.

Dr. Friday 21:21And like I said 40 years ago, and you know, Rutherford County, the land was worth like $1,000 for every 10 acres. And now it’s worth you know, $100,000 every acre. So it is a huge difference. And by thinking you’re giving someone something that they can do something with, you may want to rethink it, or just sell it in your own name, deal with it as an you know, as if it was yours and just pay the taxes and then you can gift the proceeds to your children up to $11 million. So most people will never have to worry about exceeding that gifting law, under most circumstances.

Dr. Friday 22:03So I’m just saying that is the way that kind of work. So if you have property, if you have assets, and you want to make it easier for your children, put them in a will or better yet. I’m not an attorney, so don’t take this as an attorney’s advice. I am a tax Enrolled Agent, but put it in a trust. Nice thing about trust is you have a pour over well, that goes through the courts basically. And they basically says we’re going to handle everything through the trust. So nothing is disclosed, none of your personal information is in the courts. Then the person that is the executor or executor tricks, they then process the trust, and then everything goes to the people you want. Without everyone knowing your business.

Dr. Friday 22:49That’s my two cents on that. Now a good attorney, I’m sure will have more personal advice. So you should go to an attorney like Ross cook or Jack McCann, both great guys that I’ve received, then I have been working together probably for 25 years. But both have extended waiting, educations on how exactly to make sure that your wishes will be followed through. And that’s again with a trust with a well it has to be probated, theoretically a judge gets involved in some cases, and then people can come in and say, Well, I don’t agree with what my mom says she said I was gonna get the house and you shouldn’t get it. Another way of protecting everything is most of the things your bank account, your 401 K’s, your investment accounts, all of those can be po deed to anybody you want. So if you’ve got two children, you could pod 50/50.

Dr. Friday 23:40And that means paid on death. Boom, you don’t have to have to worry about it doesn’t have to go through anything. It’s automatically distributed at that time. But again, there are rules and there is ways and you want to talk to an attorney to make sure your estate is in good shape. But just think twice before you eliminate the tax advantages. That’s what the whole point of that long conversation was. We’re going to take our second break when we come back we’ll get to more of your phone calls and emails. Phone number here is 615-737-9986. We’ll be right back with the Dr. Friday show.

Dr. Friday 24:18Back here in studio and we are taking your calls at 615-737-9986, taking your phone calls. I had an email come in and I just want to remind any small business owner that had employees keep in mind there are a lot of scams going on out there about E RTC employee retention tax credits. You first have to have employee second if it was only you the owner on payroll which some small businesses you will not qualify for ERTC if you receive p p one and p p too, you’re not going to receive that $22,000 an employee or whatever I had someone just call me the other day and said, “My company qualified for certain things. And I don’t know how any of them know what we qualified because the information is not public knowledge of how many employees or you know how much I pay or anything else.”

Dr. Friday 25:17So, they’re just putting a number out there trying to get your attention. So just be careful, it is still available right now. But you do really want to try to get them put in and make sure you have all of that put into the system. But if you have, if you have had employees, 2020 2021, you had full time employees, you may qualify for ERTC, I’ve had several small ones, but you know, we’re talking and in some cases, 1015, I’ve had a couple that do not qualify, they didn’t have enough employees, they didn’t have enough income loss, it’s all comes into the calculation. If your business did better during COVID, then then worse, like, you know, using 2019 as a guide, you may not qualify there, again, there are different qualifiers for it.

Dr. Friday 26:05And it’s very important that you, you know, understand and have someone that is qualified, I’ll be honest, our firm has hired a CPA firm to do it, because it’s not something that we have done. And I don’t feel qualified to actually be able to get the information through. But if you have someone, just make sure it’s someone that you trust, and that the information is being put out there correctly. Because we had people with PPP, several of them ended up having to pay the whole PPP back because they did not get it correctly. We have people that went out and got unemployment. We talked a little bit about that a week or two ago, where the unemployment, people are coming back and saying you now owe money for the unemployment even though somehow these people qualified for it at that time.

Dr. Friday 26:48And so it comes into the situation where you need to make sure that if you’re signing your name to these forms, and to this information, that you at least understand enough on how it’s going to come out for you. So it’s quite important that you understand how the system works enough to be able to get your data, you know, again, you’re you’re signing, you’re saying that this is correct. So if it is great, if it’s not don’t sign because the government is going to come after you. They’re not going to come after that company. All right. Looks like we’ve got Bob and Woodbury I think he’s available. Hey, Bob, what’s happening? Hello, Hey, Bob.

Caller 27:31Hey, I’m sorry, I’ve been kind of running around, doing a whole bunch of stuff and haven’t been able to pay attention to the show. And I didn’t know you had your special things that you’re doing, but and I did. I thought I was calling the radio show. But I guess I was calling your office. So when you go in there Monday just disappeared? Yes, you can disregard that.

Dr. Friday 27:55No problem, Bob, no problem. So what the question is, what do you have?

Caller 28:00Well, excuse me. I was in the service. And then I worked for the government stuff and got my payroll, government savings bonds, and all that. And then, you know, listen to the different shows, they say, you know, those are really not good investment, tools and stuff. And then at some point I heard, well, you can use those interests free for like a child’s education. I said, Well, okay, I guess I’ll hold on to him. And then and so they just been sitting there. And then once I got into them, it’s it’s the doubly bonds and it’s 1989. Well, I’ve got the single bonds, and they’re pre 1989. I will have some of those eventually. But I’ve got all those and so I know I can’t you know not have to pay the interest on that just like income. But I was wondering, when I was trying to research all this and I’m not a good researcher. I’ll say that up front. Going different ducks. I’m just like anybody else trying to save a buck? And so it looks like you could from some of the cost of his school, take off some of those deductions. And so that’s I guess my question.

Dr. Friday 29:31So you said this is a Series E as a Series EE, series I. What series is it?

Caller 29:37It’s the single e in they’re pre-1989.

Dr. Friday 29:41Okay. Again, some of those I’m not a financial planner, but I know that the Series E and what the series I believe both can can be transferred over for college education. Most people will cash them in and roll them over to what like a 529 plan or something but I can honestly tell you I don’t know much about bonds per se, with extension of, you know, like you just said, once they come mature yours are going to be taxable, which is not a, you know, now, I don’t know for sure, I would say the answer to that to get a better answer on that would be to call either Hank parent, and if you want to call me, I can always text you that information, a financial planner, because many of them deal with the bonds. And there may be a way like you just said that still, the higher education can be somehow transferred.

Dr. Friday 30:38I know we can do some of them, there is a tax form and 8815 that we use that explain some of the ins, you know, instead of cashing in, it goes converted over. But first, I would say you need to make sure that these kinds of bonds, because again, I usually am dealing more with E or I I don’t know for sure much about the IE bonds. To be honest, I just don’t want to give you bad advice on that one. But if you call me earlier, I think I see you because all you know, I’m one of those people that love her cell phone. And don’t go very far with that one. And so I can text you a financial guy that you could probably ask that question of and he might be able to give you a little better. I’m with you. Let’s not pay taxes if there’s a way of investing into your child’s education.

Caller 31:21Absolutely. Well, I just wanted to say that. I said I had started this when I was in the service. And I had a I didn’t get the opportunity to go to Australia, but half of our group did. And that really, they really loved it. That we split it up. I don’t know exactly. It’s been so long. I can’t remember the all the reasons all that happened. But they went to Australia and to Tasmania. And I went to the where was it? I can’t remember. I know we went to Tinian where they watch us with qualm and where they flew the atom bomb from I was I was in the Navy as a Navy corpsman with the Marines over there. And so, but we went to the Philippines at a different place that they don’t We don’t normally go to.

Caller 32:15I came late at Tacloban City which was in the news a couple of years ago, you know, they had the typhoon went through there. And I’ve talked a little bit in this and talk club in that way. Did a lot of bad destruction over there. But anyway, I just want it for serving. Oh, yes. Well, those were the really good years. There wasn’t anything going on back then. It was it was I had a lot of fun back then. But they just yeah, just you know, love, listen to your show, love the accent and everything. And there was a guy he traded. And excuse my my Australian accent. He said, a mate, how you trade me or your kidneys. And I didn’t even know what he’s saying. But it’s those little medical conduces that we wear on our collar. And he actually you which you can get at the px for, you know, probably $1 or something like that. Got that guy. The Australian guy traded him a bush hat. And one of those Australian footballs for it. So my buddy, he came out way ahead there. And he was really proud to have those.

Dr. Friday 33:28Well, there you go. It was pretty cool. Thanks.

Caller 33:31Well, I enjoyed talking with you and have a nice, good day there. Yeah.

Dr. Friday 33:38Yeah, good day. Thanks mate.. All right. Bye. Bye. All right, that was always always nice to have a conversation. If you have a question, hopefully I can do a little better. Unfortunately, with Bob, he got into savings bonds. And that’s not necessarily my expertise unless he cashed them out. And then we could talk about the taxes that were the implication. But hopefully, we can get him over to a financial planner that could probably answer that question better. But if you want to join the show, we’re gonna have a few minutes when we get back from our next break. The phone number here is 615-737-9986. And we’re gonna be talking more about taxes and tax issues. Again, just want to put a shout out there.

Dr. Friday 34:19We have two big deadlines this weekend. We have the filing for anybody that was like in Rutherford County and a few of the counties surrounding there for storm damage, you are now going to have to file your federal taxes many of you may have already sent them in, but for some of you that may have just got lucky or waited, you need to hit that button by July 31. And then this is the big sales tax free weekend for computers, clothing, and school supplies.

Dr. Friday 34:46So if you have a list or and I do know, there are some organizations that are probably looking for some school supplies, so if you’re even thinking about just buying some extra and dropping them off at the schools are at those organizations, that’s always a great way to probably help out. I know, my niece is a teacher and it seems like they never have enough supplies to make it through the school year no matter what. So it’s always probably nice to have some extra. So right now, maybe you can give 10% more, right? Because you’re going to save almost 9.75% in Williamson County. All right, we’re gonna take our next our last break here. So if you’ve been waiting and you want to get through, you can.

Dr. Friday 35:26The phone number is 615-737-9986. I’m Dr. Friday, I’m an enrolled agent licensed by the Internal Revenue Service. Did you taxes and representation, plain and simple, that’s all I do is talk taxes and represent you. If you haven’t filed taxes in 10 years, guess what, I have a way to help you out. If you have a love letter sitting in a drawer and you’re like, I don’t know what to do with them. Yes, what, that’s what I deal with. So we can help you get back on track, get into compliance, and maybe start living life again, instead of just trying to avoid the IRS. So if you need help with that, keep listening. You can give us a call in the studio right now. 615-737-9986. We’ll be right back.

Dr. Friday 36:19You’re back here live in studio. You can reach me at 615-737-9986. This is Dr. Friday. Can you hear me from Dixon?

Caller 36:45Yes, ma’am.

Dr. Friday 36:46Hi, what’s your name? Sweetie? Sandra, Sandra. Okay, sorry, I couldn’t tell what it was. What can I help you with?

Caller 36:55I am an 80 year old widow. And I’m considering putting some of my savings into a long an irrevocable trusts for my grandchildren. Okay, hoping that would keep me from paying so much tax. I don’t know.

Dr. Friday 37:16You know, in theory, some of it can be but since it’s savings, you’ve already paid tax on that money. You know, in essence normally with with a trust, it’s more of a farm a home, you know, something that could become taxable with your savings, the only difference will be I mean, because the money in the savings has already been taxed the interest or the growth on it hasn’t. So there may be some investments, you could put it in how old are your grandchildren?

Caller 37:4527, 24, 17.

Dr. Friday 37:50Okay, so, with the hopes that the youngest one is 17, I think you said, as long as, as long as you plan to hang around for a few more years, all of them will be old enough to be able to be able to inherit pretty much. You know, at that time, none of them were minor children. Least the younger one will, hopefully. So I mean, it’s a great idea. I mean, I think in some ways, but if it’s if it’s just cash sitting in the bank, in all honesty, and I’m not an attorney, but you can do what’s called a pod or paid on death.

Dr. Friday 38:22And at that time, you can take whatever percentage you told the bank that I want to go to this child, this child and this child, they can do a distribution, right at the time of your passing. If it’s if it’s cash, because they really won’t pay tax audit, whoever handles your estate will have to pay tax on any interest earned like you do every year, right? I mean, you know, you have to pay tax on it. And then if there’s a house or something like that, there won’t be much tax unless, unless somebody holds on to it for a while because they’ll get the step up and basis. So the house itself will be an another gift that you’ll be giving them in that situation.

Dr. Friday 39:03So, again, normally 401k is IRAs, tax deferred accounts, that’s the ones that we have to be a little bit more careful with. But you know, it’s certainly up to you. And I would definitely say talk to a tax attorney, or even your tax person you’re dealing with just to make sure you’re not spending 2500 to $5,000 to set up a trust, which, again, there are good reasons to have them just to pass something to the grandchildren that are almost all over the age of 18. Okay, you know, so I would just have a second conversation on that. But again, you do want to have something because normally the generation skipping normally you would have it go to your children and the children will give it to their grandchildren. Yeah. So you have to figure that out. Does that make sense? Sandra?

Caller 39:54Yeah, it does.

Dr. Friday 39:55Okay. I’m glad you called. Thank you. And if there’s anything else I can do, you can always call me at the office. Okay?,

Caller 40:02Okay. Thank you very much.

Dr. Friday 40:03Thanks Sandra, I appreciate you. Alright, so we’re going to see if there’s anyone else, I guess there’s no one else on hold. So we’ll be good there. We’re going to cover up one more time again, guys, I’m only pushing the sales tax free thing because well, it’s only this weekend. And I think there’s two a year actually. But right now, the biggest things that you want to look at computers under $1,500, clothes items or school supplies, any one item under $100. And, and you don’t have to pay tax on it.

Dr. Friday 40:35And in this state, we have quite the healthy sales tax. And then starting on Tuesday, the August 1, you have the food for three months sales, tax free, fresh food, let me clarify, you go into your I don’t know grocery store, and you buy, you know, dried, frozen solid, dehydrated, those foods are the you know, those are great. fruit, vegetables, eggs, all those will be part of this. But if you go into the gas station and you’re buying a sandwich, even though it’s still food, or candy bars, or tobacco, any of those will not be part of this.

Dr. Friday 41:11So again, just making sure that you have it. And then if you’re in the Rutherford County in the neighboring counties, just double check, if you do actually have a tax return that hasn’t been filed, and you did not file an extension, you need to file the extension, or you need to file your taxes. Those are the very, very important situations for you. And if you have questions, you can always also email Friday at Dr. friday.com. Again, Friday at Dr. friday.com, making sure that you have the ability to at least ask the question, if I don’t know the answer, which you know, obviously can happen, I will send you to the expert that should know the answer, or we’ll find out the answer for you.

Dr. Friday 41:57That’s what we enjoy doing here. That’s what the show, then we’re getting what 1414 plus years that we’ve been on the radio. And it’s it’s been fun listening and helping people try to figure out taxes, which is what I do a lot of. And so if you have questions, when you’re not on the radio, I have to do is call my line Direct, which is 615-367-0819. As I said before, I’m an enrolled agent, licensed by the Internal Revenue Service to do like to do taxes and representation. The difference between CPAs and enrolled agents is we’re licensed by the IRS CPAs are licensed by the state. Now there are some my friends that are EAS and CPAs, and even an attorney all in one package. So you know their licensing is different.

Dr. Friday 42:46All we do is taxes. So if you have tax issues, maybe you haven’t filed taxes for a number of years, or maybe you have a friend or a family member that you know, is maybe not up to date, or they’re avoiding certain tax questions or just not filing taxes. In some cases, we all know that they’ve lost money. But keep in mind 20 and 21 were big years for the government to give money out that 20 year is dropping off very soon. I mean, we’re talking April of next year, after that you’re most likely not going to be able to collect. If you did have that money, the IRS only gives us three years to collect our refunds. They can collect up to 10 years, but we only get three years up to collect for refunds.

Dr. Friday 43:33So if you haven’t filed taxes, or even if you owe money, think about it. If you owe money, wouldn’t it be nice for them to pay some of the bill so that way you have it out there and once it’s out there, then we can deal once you’ve got your your compliance no matter if you have to go back 10 years, five years, six years minimum normally six years, you then can start talking payment plans, offering compromise, adjusting so that you can eventually get out of tax debt. And also it also gives you the ability to go do things right? I mean, you you have the ability to put your kids through college because without it FASFA will not work. You can apply for a home loan. I don’t know some car places I understand. You can get car loans without tax returns, but you’re not going to get a home loan. And maybe you don’t want a home.

Dr. Friday 44:25But even renting sometimes requires tax returns people. So you may be able to live off the grid and not have to worry about it. But if you’re actually at a point where you’re ready to start talking about building your credit back up and trying to get back on track with the IRS. It is not an impossible situation. But it will take a little time. Take a little patience and take the ability to start someplace and that’s where we can help you we can help you figure out where to start, get the transcripts figure out what we’re going to do and then make that deal with the IRS so that we’re able to make sure that we can get the payment going. So again, if you want to reach me, you can do that at 615-367-0819.

Dr. Friday 45:14Open Monday through Friday. You can also email friday@drfriday.com. That’s friday@drfriday.com. Or you can check me out on the web drfriday.com. Check us out, figure out what we’ve been doing been doing this for 25 years here in this town. So we’re right off of in the Brentwood area right off Maryland way. And you have the ability to find a place to start, right because that’s really what’s most important when it comes to doing or catching up with the IRS. So again, and the initial meetings are always free, because if we can’t help you, I don’t want to bill you if I can help you, I want to be able to tell you what I’m going to do to be able to do that. So if you want to set up an appointment, the easiest way right now is to actually just give us a call at 615-367-0819. The easiest way to get a hold of us. But also you can email friday@drfriday.com. friday@drfriday.com I hope you guys are enjoying this Saturday. Try not to spend too much time outside it’s too hot as we say in Australia, Call you later.

View Details

Welcome to another episode of the Dr. Friday Radio Show! In this episode, tax expert Dr. Friday answers callers’ tax questions and covers the following topics:

• Owing Money to the state of Tennessee Increased the Penalties to Almost 13%
• How to Get Money Back From your Child’s Bank Account When the IRS Pulls It
• What Is a Revocable Living Trust and How Does It Compare to an Income Tax Return?
• If You’re a Business Owner, Take Seminars at the Tennessee Department of Revenue
• When Is the Best Time to Start Making Your Quarterly Estimates?
• Is Living In A State With No Income Tax Better Or Worse?
• When Is the Best Time to Start Making Your Quarterly Estimates?
• Qualified charitable deduction for those over 70.
• Tax Responsibility for 2023 and the 30% Energy Tax Credit
• The Tax Deadline Is October 18 for Individuals
• How To Do Tax Preparation and Financial Planning The Right Way

And much more!

TranscriptAnnouncer 0:00No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Dr. Friday Show. If you have a question for Dr. Friday, call her now. 737-WWTN. That’s 737-9986. So here’s your host, financial counselor and tax consultant, Dr. Friday.

Dr. Friday 0:30Good day. I’m Dr. Friday and the doctor is in the house on this beautiful Saturday afternoon. Let’s start out the day with a couple just reminders for some of you that may be still procrastinating a little bit on Monday, July 17 is the final day to to file and you have to do this by mail, we cannot file electronically your 2019 return.

Dr. Friday 0:54So if you have not filed and if you would like to get your refund if you actually have one that would happen by July 17. Which of course is this coming Monday, I believe. So we have that notice. And then the second notice, I just wanted to make sure if you are also a person that lives in Rutherford County McNair Macon, and Haywood and Lewis, there’s about five counties out there cannon, your final deadline without extension is July 31, 2023, due to the storm damage that you were under federal disaster extensions.

Dr. Friday 1:32So one to start the show out with those times and extensions, just so if you’re listening, and you still haven’t filed your 19, or you forgot to file your extension, and you happen to live in one of these other counties, about eight of them most common for my listening audience, Kenan Rutherford and making you You still have time and you won’t be late, which is the important part of that conversation.

Dr. Friday 1:57So if you’ve got a question, you can join the show 615-737-9986 State of Tennessee has come out with their new interest rates. I think I told you guys last week, maybe a little bit about this. But they’re pretty ridiculous. If you owe money to the state of Tennessee, federal, you know, for sales tax or any of that, then, you know, they have increased that to almost 13%, I believe.

Dr. Friday 2:32So that is huge. When you’re trying to make a deal you’re trying to get paid to get things paid off. I also found out an interesting thing. One thing I like about the people that do actually handle audits, and I know most of you guys are like no one likes audit as well, you know, it’s a job, it’s not something that anyone else, it’s just it’s a job that anyone has to do. And sooner or later someone has to be done.

Dr. Friday 2:55And sooner or later, most of us will probably be audited by some format, if you’re in business, especially, but had a situation where a young man had filed reports be that sales tax business tax franchise exe, but he filed them, but just did not file them correctly. So when we got audited, all that had to be corrected. And when that was done, it actually eliminated the fact that the penalty was assessed, which I thought was pretty neat.

Dr. Friday 3:22Because, you know, normally we have as much in penalties that we’re dealing with, than we do with anything else. And because of the way the state law is written, they do not charge a penalty. So again, it goes to show that if you are trying to do things, right, if you’re working on things, then you know, you make sure that you are not going to be that person that causes I mean, you know, penalties could have been 25% on top of the interest on top of the amount due.

Dr. Friday 3:52And you don’t want that to be a problem with any one individual. So, you know, just just putting that out there that you want to make sure that if you’re going to be doing your business taxes, your sales tax, and sometimes people think well, if I don’t file anything, then maybe everything will be fine. Everything would be great, right?

Dr. Friday 4:14So, but if you file something, and even if it’s wrong, then at least you have the ability to make sure that you can make it right. So just saying that is important, as far as being able to, you know, make it happen. And that’s all we want to do. We want to try to keep our penalties and everything down again.

Dr. Friday 4:37If you want to join the show you can 615-737-9986 is the number here in the studio. I did get some calls. Last week I was talking about having your name and someone else’s name on your bank account. So I just want to recap exactly how this is is going to work for individuals, mainly, our biggest concern is, is having what’s the easiest way to put this? Our biggest concern is what if there’s a lawsuit someone gets in a car accident and they have their name on their mother’s bank account? Is it chance that if they’re sued, is that money going to be considered theirs?

Dr. Friday 5:20Now, according to what I was told any bank account that has your name on it, even if you are only there as a backup plan, I guess you would say that that can put the money into a situation where you are going to possibly cause a problem with someone thinking that money is yours. So if you get sued, and your name is on your parents bank account, and your pay and you get sued for that, then they can theoretically say that money is yours.

Dr. Friday 5:55Now, I’m not going to say that attorneys can’t turn around and prove otherwise, that it wasn’t your money. I don’t know, I’m not attorney, let me put that out there. Right now, I’m not saying that that is the case. What I am saying is that there are ways of protecting your parents assets, making sure that you’re safe, that your everyone is safe. And that if someone gets incapacitated, or God forbid dies, that you have control to do what you want without putting into jeopardy, the people’s bank account, I’ve had it happen directly with clients I’ve representative for the IRS prime example I had was the IRS pulls every bank account that your name is on.

Dr. Friday 6:38And in my case, it was a child’s bank account that the parents had opened, which you can’t not open. As far as I know, a child under the age of, of 16, or 18, maybe cannot open their own bank account, right. So a parent goes in, they open a bank account, they put the children’s name on, you start teaching them exactly how it works, you know, you want them to learn how to manage a bank account how to do things properly. So you I did this.

Dr. Friday 7:06And when the IRS pulled up this bank account, which was their teenage child’s bank account, it had money in it, and they took the money in a levy because the parents were behind in taxes. So again, this was one of those situations, I will tell you, in our case, we were lucky enough that we were able to justify proof that this was not the parents money that the parents had not put any of that money into that bank account.

Dr. Friday 7:34And therefore this particular case, they were able to get that money back, it took months to get that money back. So if it had been something vitally important, we would have been in serious trouble, like if they’re trying to pay off their college or something you never know.

Dr. Friday 7:49So all I’m saying is, if it’s something with and more, more likely, the one that my attorney friends shared with me was a divorce is what this one was talking about and how the parents or the mother’s bank account got pulled into the divorce because her son’s name was on the account. And when the attorneys pulled all the information, they had found this account thinking it was a fake account. That was his. Now again, I’m I’m hoping I don’t know for sure. But they hopefully figured out that this had nothing to do with him and he wasn’t hiding money from the divorce.

Dr. Friday 8:23So the only way to really do this is a Find yourself a great attorney that does estate planning, planning. Very important. I use Russ Cook, Jack McCann, both of them are awesome attorneys in town, but I’m sure there’s others. If you have one, you know, go there, make sure that instead of having put your child’s name on the bank account, that you have provided the proper power of attorneys.

Dr. Friday 8:47So if you become incapacitated, if you are unable for any reason that they are then able to go to the bank and have the privilege of being able to handle paying your bills or whatever it is that needs to be handled. That’s the right way to do it. Now, again, I don’t have a perfect answer for the case I had because this was a minor child. There’s not like you can’t you couldn’t close the bank, I suppose.

Dr. Friday 9:11But you know, most children need to learn how to manage money. And the only way to do that is usually with our parents opening up bank accounts for us. So, you know, obviously the next suggestion is is let’s not get in trouble with the IRS and then we don’t have to worry about but you know, the world is so perfect, we wouldn’t have some of the problems going on them we do. So right now, the biggest thing is, for many of you that may not know who I am.

Dr. Friday 9:36I am Dr. Friday. I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation which basically is all I do. So it means if you haven’t filed taxes, maybe you’ve received some love letters or you know someone that’s just basically losing sleep. They’re panicking because they know they haven’t done something but they don’t know where to start. And that’s always the hard part right? It means I haven’t filed taxes in 10 years.

Dr. Friday 10:00How in the heck am I going to come up with the paperwork? Where do I start? What’s the process, and guess what we have what we can help you start from where you are today and help you get back on track. We’ve done it for a lot of people in the last 25 years. And we can help you as well or your friend or family member. First thing you need to know is all it takes is a phone call, first we need to do a consult, figure out what we have, possibly get a power of attorney, and then you know, we can talk about what’s going to fit best into your situation isn’t an offer and compromise payment plan non collectible.

Dr. Friday 10:33None of that can happen unless you’re in compliance. Very important to get all of your tax pictures taken care of. And the second thing is no, this will not happen fast. I mean, I have people I’ve been working for, I should say with for years, I mean, we’ve been you know, knock it out, getting things moved around. But it takes a lot longer than most people realize when when you think , “Okay, all I want to do is get caught up, pay off the IRS or get a payment plan or make a deal.”

Dr. Friday 11:02And all of those can take I mean, offering compromises have been renowned to take, you know, eight to 16 months to get resolved. So it’s gonna it’s not something you’re going to have happen. And the best time to do if you’re really thinking about trying to get even with the IRS is when you aren’t at your best. I know it’s so hard to believe.

Dr. Friday 11:21But the fact is, if you’re making all the money you want to make and you’re you know you’re you have equity in a house and you’ve got a 401k and you’ve gotten everything that way, guess what you’re going to end up with not the kind of deal you keep hearing about on the radios that says, “Oh, I’ve got 10 cents on the dollar. I can make sure we’ve made many of those deals.”

Dr. Friday 11:41But to be quite honest, that’s not people that are in homeownership with lots of equity. They’re not people that have a ton of collectibles are cars or, or money in 401, K’s or stock portfolios, you know, the government’s going to say, “Hey, you guys invested into that with our money because you didn’t pay us.”

Dr. Friday 11:59So they want their share of it. But if you know, if you’re at the rough time and you’re trying to get things squared away, then that’s going to change a few things. So that’s important. We’re also going to talk and see if anyone’s actually listening that knows anything about the whole unemployment situation where people are being told they have to come back and then they have to pay back the unemployment that they received from Tennessee Department of Labor. We’ll talk a little bit about a case or so I have going on. But to be honest, we don’t deal with Tennessee Department of Labor audit.

Dr. Friday 12:33So anyways, we’re gonna take a quick break when we get back you can join the show c. We’ll be right back.

Dr. Friday 12:38All righty, we are back here live in studio. This is the Dr. Friday show. And if you want to join the show, you can at 615-737-9986. Taking your phone calls. And it looks like we’ve got Jean on the line. Let’s see if we can get Jean on the show. Hey, Jean, thanks for calling.

Caller 13:12Hello, Dr. Friday. I have a question regarding revocable living trust. I believe you have to file an income tax justice if that is an individual. And I want to know a comparison of the the right like $50,000 of income to an individual or couple would a trust that they had applied to their farm land and the income came from the farm? Would a trust wind up with time, right?

Dr. Friday 13:57Well, revocable living trust is basically the kind that you don’t file a tax return on but irrevocable and I get those sometimes I will tell you, you know often there’s two sides, but if it’s a revocable that one comes into play after you’ve passed away. So the tax rates don’t really come but if it’s an irrevocable that one does have and they do have a higher tax code in the in those situations, then then a normal individual for tax rates on on that situation.

Dr. Friday 14:32So their tax rates basically the highest tax rate is 37% which is pretty much the same as ours, that run under there, but they end up starting at like 24% and we start as low as 10. So it it is definitely not a compatible situation. There are there are usually legal reasons that people want to have an irrevocable trust or inheritable reasons but the Normally with a revocable trust, which is what I have, and probably many people have it, that will only happen if we pass away.

Caller 15:07All right. So with a revocable trust, the income from that property that end the trust flows to the individual, right?

Dr. Friday 15:20100% Correct. Yes. Yeah. Oh, well,

Caller 15:24You are so informative, and we enjoy your program. And thank you.

Dr. Friday 15:30Thank you very much for listening. I appreciate it. Okay. All right. Thanks. Have a good Saturday. Okay, so we’re gonna, if you want to join the show, you can I appreciate the phone call 615-737-9986. Taking your calls, talking about all my favorite subjects. And then hopefully, some of your favorite subjects. If there’s something that you have happening again, it is still tax season for 2022.

Dr. Friday 16:01And so we’ve been working a lot on getting them completed, partly because a few people were actually in the storm area. And so we’re trying to get those completed before the deadline. And otherwise, it’s just the quieter time. So if you haven’t, you know, if I know a lot of people or many people prefer to have their taxes done on or before April 15.

Dr. Friday 16:21The nice thing about waiting until after the April 15, or thereabout deadlines is that if you have a business or if you have a a number of rentals or just a larger tax return, it is usually probably more beneficial to have someone do it after because then we have more time, things aren’t quite as crazy in our offices than they are when you are actually, you know, dairy in the midst of seeing a client every half hour and and producing tax returns.

Dr. Friday 16:52But there hasn’t been a whole lot of changes in the tax code for for the new year. So far, am watching a lot. There has been discussions again, they’re trying to add more there, they’re successfully add a more revenue officers. Again, when I was dealing with Tennessee, Department of Revenue, who was handling a couple audits for a couple cases were handling. They have taken on a number of new trainees in the they’re out of the Cookeville area.

Dr. Friday 17:24And so they have Ratan. So they are training a lot more people to be able to help perform, obviously more audits, which actually produces more income for the state. So therefore, that’s the reasons for it. And, you know, there are some pretty interesting changes. If you’re a business owner, I would definitely suggest taking some of the seminars at Tennessee Department of Revenue. They have usually one they have a bunch on their website, but they also have many of those that you can go on live ones that will also be available, especially for small business owners, hotels, because many of those things are constantly changing.

Dr. Friday 18:02I still run into people that haven’t set up 10 Tap accounts. So I mean by by law, now you have to pay electronically for your franchise, excise your business tax, unless you had been able to get a waiver, there was a couple of older individuals that were able to because they didn’t have computers to be able to get that waiver.

Dr. Friday 18:21But most of those have now I think expired. So again, things that you want to do making sure that your business is in compliance, not just for the federal government, but also the state. You know, I mean, we have last week, I must have had eight different people. They got letters from the state of Tennessee for their annual reports and none of them knew exactly what they were supposed to be doing and usually comes on a big yellow sheet of paper or there abouts and it says notice of determination and has your company.

Dr. Friday 18:24And you know that’s that’s not even really attacks. That is your annual report that you have to file and then you know pay your annual fees to stay as a corporation or an LLC. But again, if you know to do to operate a business in Tennessee, especially if you’re operating as an LLC or a corporation, you’ll be dealing with the Secretary of State Tennessee Department of Labor most corporations have to have employees not every LLC does but most corporations do so you’ll have labor then you have the federal and then of course you have Tennessee Department of Revenue which handles all of our business licenses and our franchise excise and and then if you’re a truck driver, right guys, you guys all have different taxes, road taxes and things I think most of those are also paid liquor taxes, all those are almost paid right through the Tennessee Department of Revenue or ABC. So the problem with this is is that there’s so many little people, little situations out there.

Dr. Friday 18:52But if you are not able to file all of those reports and stay in compliance, you’re going to get somebody caught knocking on your door. And in many ways, I believe that the small businesses have a harder time in many ways, because they sometimes just forget, or they, you know, they have a friend and they buy inventory directly from them instead of buying it through the vendor, and therefore, the retail accountability doesn’t add up, or those kinds of things.

Dr. Friday 20:24But you know, once you get everything going the right way, you’ll find that it’s a little less stressful. So if you’ve got a question, maybe you’re thinking about, what should I do to open up a new business? How do I make a new business? You know, it shouldn’t be an LLC or a corporation? What’s the really the big difference? And yes, you do need an attorney to set those up.

Dr. Friday 20:43But yeah, I can certainly tell you tax wise, what is the best way for you to set it up at least as far as what I’m doing and where I’m doing it, and what we have going. So we will be able to take a look at those. And also, when an owning a business is smaller to save money and tax living. So okay, I’m gonna answer those questions. In a few minutes, I’m getting some emails or taxes in guys, sorry, I’m one of those people, I can’t necessarily talk and read at the same time. So it makes it for challenging I’m sure for all you guys that have been listening to me for almost 15 years, you’ve probably heard me more than once babbling over on my side, because sometimes that’s what you have to do.

Dr. Friday 21:26But if you want to join the show, you can 615-737-9986. We’re going to talk a little bit after taking a break, we’ll talk a little bit about what it will take for you to get back into compliance. What should you be watching? What is the what is the more what what could cause an audit? I’m always asked that I’m asked that many, many times, what is the you know, what is the most likely thing I could do that would cause an audit, you won’t be surprised and what those kinds of things can be.

Dr. Friday 21:59I’ll share with you what the IRS has shared with all of us the most of the time, whenever I start an audit, I will let you know that they come up and they say it’s, it’s a random pick, you are randomly picked for this audit. But we find that sometimes that isn’t always the case that sometimes the word random is not so random, that there’s a you know, actual computer system that picks out the things that are irregular, or something that’s happened a little less or a little differently than other things.

Dr. Friday 22:28So we make those choices in there. And sometimes sometimes we don’t have a choice. I mean, you sell a big piece of real estate or you relocate or you change jobs, those are things that’s going to make your tax returns seem or move a little differently. And then also what the things they see that will sometimes consistency, it doesn’t wave as many flags them when you might do things differently.

Dr. Friday 22:52So that’s really the biggest secret the IRS basically has triggered or the the IRS is looking at something like they’ll be auditing people that all have stuck, right? I’ve had that many times certain number a number of transactions or something like that, where it comes out and, and becomes more of a situation. Alright, hey, sweetheart. Let’s go ahead and do Karen before the break. If I go over a bit, and then my we can not have her hold through.

Dr. Friday 23:17Hey, Karen, what can I do for you?

Caller 23:20Thank you. My surgery is the executor of my father’s estate. She picked her husband over $6,000 to do work there to get the house ready to sell 99 for that work?

Dr. Friday 23:37Absolutely. Absolutely. If she paid him, he is not a beneficiary of the state. So she can’t even consider that as a, you know, an advancement. I’m assuming the checks were made out to the husband. So that it wasn’t it was work. I mean, he prepared, he cleaned. He did whatever he did, which was actually considered labor. It wasn’t part of the inheritance.

Dr. Friday 24:02So he needs to pick it up. And then you know, obviously, he can write off any expenses he might have had driving back and forth. If he was, you know, whatever his situation might have been he may have some deductions to write against that. But yes, there should be a 1099 issue to him on behalf of the estate, because of the work he did.

Caller 24:23I greatly appreciate your help. Thank you.

Dr. Friday 24:26No problem. Thanks, Karen. I appreciate you calling. Okay, let’s go and take our next break guys and we get back we can hit Charles and some of the other people that might be joining our show. We’ll be right back with the Dr. Friday show.

Dr. Friday 24:42Back here live in studio, you can join the show at 615-737-9986. And let’s go ahead and hit Charlie. Hey, Charlie, what’s happening?

Caller 25:03Yes, ma’am. I am interested in buying an electric vehicle and utilizing the $7,500 tax credit. Okay. My, my only problem is, is because my wife and I are retired, and we use live on Social Security and a small IRA withdrawal every year, I do not have a taxable income.

Dr. Friday 25:32Well, I’m not laughing at you. It’s a wonderful problem to have at the moment, but also the credit if I’m correct. And let me just double check to see if it’s refundable, but I don’t think it is. If it’s refunded, well, if you don’t have taxable income, you can’t file it. Well, you can file a tax return still. So that just curious,

Caller 25:54I file every year. And I always give back everything that was withheld from my withdrawal from Ira. I guess my question is, I’m not sure this would be a sound judgment. Could I take a very large distribution from the IRA to the point where I would have?

Dr. Friday 26:13Yeah, yeah, no, you I love your thought, because it’s not refundable. But you could spend it. So you could take a larger do a conversion, maybe convert some over to a Roth, even if you don’t need it, and use that money and put it towards those taxes. And you could convert, you know, whatever, depending on your income bracket, you know, anywhere between, I mean, theoretically, 4050 grand possibly, I mean, again, I’m throwing a number, I don’t know you personally, but it would be a nice healthy conversion that you could use, and then either roll it over or do what you want to do. That’s totally your choice. But I think that’s a great idea.

Caller 26:53Our Social Security jointly is probably around 50,000 a year. And I just thought it might be a good idea to liberate some of the money out of an IRA, and let the government pay the taxes.

Dr. Friday 27:09Well, that’s, I mean, that’s until especially if it’s something you want, I always try to tell people, you know, we don’t want to just go buy something, because we can maybe save some dollars, but in your case, it’s something that you want anyways, so it would be a win win, because unfortunately, otherwise, it’s a loss, you know, I mean, you’re gonna go out there, you’re gonna buy what you want.

Dr. Friday 27:29Because it’s, you know, it’s a smart investment, but you’re not going to get the benefits of it, or at least the Benefit They’re handing out right this second it, but if you did the conversion, that would be very, very intelligent. As far as I’m concerned, you can always put, like I said, put it in a Roth, let it grow tax free, you don’t have to physically take it out of your retirement. But now the mandate for having to take your RMD is out. So I think that’s a great idea. Definitely thinking outside the box, my friend.

Caller 27:57I really would. I guess my other kind of question would be, how would I calculate, I realized my Social Security would become taxable, or at least a portion of it.

Dr. Friday 28:08Right? So what you’re gonna want to do. Do you do your own taxes usually?

Caller 28:14No, I have someone do it.

Dr. Friday 28:16Okay. Anyways, as I say, sometimes if you do, but what you’re going to want to do is take yourself to be on the safe side, take the Social Security and take 85% of that added as income. Because that’s the worst scenario, then take whatever you might have for your RMDs that you’re just normal life raw RMD, add that in, and then take a look at the tax code.

Dr. Friday 28:39Because if we take out another $30,000, we’re going to be making most likely your Social Security. That’s the mistake a lot of people forget is that right? Now, your social security may not be taxable, because you’re able to live off Social Security and your RMDs and not actually have a very high taxable situation. But if we take another 30, or 40,000 out, now you’re doing dollar for dollar, almost of the conversion.

Dr. Friday 29:03So every dollar you take out you actually taking and paying another dollar and Social Security, you know, I mean, so you need to make sure you add back in and if you have a question, I can certainly throw it into our system, if you want to give us a call during the week. And we can do you know, give you a rough idea of what that will be like, just to give you an idea of how much you might want to convert that week that you’d be able to use with the 7500 wouldn’t take that much.

Caller 29:28Okay, excellent. I will probably do that. I think you thought about the Roth rollover.

Dr. Friday 29:35Well, a lot of people, I mean, at least seems like whenever I’m in the, you know, office or whatever, that’s a big thing to do. And again, especially if you don’t need the money, you still want the people to be keeping it invested. I mean, that’s what most of us hopefully the same investor and it grows tax free and people inherit it tax free versus the traditional IRA which now they put the mandate of having to be out in 10 years after so, you know, I’m just saying they Nowadays, if I inherited an IRA, I have to cash it out within 10 years, I believe.

Caller 30:05Okay, thank you very much.

Dr. Friday 30:07Sure. I appreciate the phone call. Thank you. All right, we’re going to be taking more phone calls. If you want to join the show 615-737-9866. I had someone send over a quick question. I thought it was an interesting one. It was, is it is there a better tax advantage to people that live in a tax free state like Tennessee, where we don’t have a state income tax versus states that do have income tax, and I’m sure, I’m gonna probably be a little bit less.

Dr. Friday 30:41I mean, I love Tennessee, as far as myself, and I love the idea of not paying a state income tax, I have a brother that lives in California, I do his taxes, and with the current tax code, and not being able to write off 100% of his state tax, he’s now leaving from back in 16/17, when we did taxes, you know, he would have 20,000-30,000 between his state income tax and his property taxes.

Dr. Friday 31:08And now he can only maximize that area. So instead of having 30,000, in there, he can only take off 10 or so states that have a higher state income tax, or you happen to be lucky enough to, to make a decent living, that you’re able to, you know, in your paying state income tax those states right, the second are being penalized in my opinion. So it definitely not an advantage.

Dr. Friday 31:32As far as for tax purposes, there may be other advantages to living in other states. But the advantage as far as I’m concerned, right, the second out of the tariff tax could not an advantage to be in a state where you have not able to write off all of your state income tax that is not a winning winning situation. So just putting that out there an answer to that question and having to get in do something with our situation. All right, well, hey, I got lucky enough. Hey, Gary, from Lebanon. Hey, Gary, what do you got happen in my friend?

Caller 32:09Thank you, Dr. Friday for taking my call, appreciate it, enjoy your show, starting a new job. And they’re gonna treat me as a self employed individual contractor, and just need to know about how to set aside money for my income taxes. Is there a formula for that? And how often I had to pay for for those taxes?

Dr. Friday 32:33That’s a great question. So I’m gonna give you a basic rule of thumb, you should in the first year that you started out, it’s ideal to try to start making your quarterly, which the usual dates, April, June, September, and January, always on the 15th, you can download those forms, they’re called 1040, e S stands for estimated statement, and you can put in and fill those, you can also go to irs.gov, and click on the pay button and pay them electronically.

Dr. Friday 33:02Either way, they usually, I mean, again, it really will depend on how much money you’re making, if you’re married, or if you’re single, there’s a lot of other things. But I always suggest any of my clients, a minimum of 20% should go into a separate bank account called taxes. And then the remaining and this would be from your profits, not from gross. So I don’t know for sure exactly what the job would entail.

Dr. Friday 33:28But if it’s all your brains meeting, like I do, or there’s not a lot of cost to what I do, but more of what my expertise in Therefore, most of the money I make is taxable give or take a few dollars for my, you know, computer or something like that. So, but I would say if you’re, if you’re single, and you’re making more than 55,000, or if you’re married and your joint income is more than 115, then I would change that to 25%.

Caller 33:58Okay, well, it’s a counseling job, I’ll be in I am married, four kids.

Dr. Friday 34:08Just put it aside. Now, you may find out in this first year, you know, I my tax law says we have to pay in 110% of what we owed in 2022. So I would look at that number and assuming your income is going to be somewhat the same. I would not give the government more money than what they need, I guess is what I’m trying to say, Gary. So if you look at last year’s taxes, it says total taxes were $5,000 before all of your credits and deductions. That’s what you’re on be targeting again for this year, roughly 100, you know, so maybe 5500.

Dr. Friday 34:40If your wife works, a real job W 2 job I should say she’s going to pay in some money. You’ve already worked half the year possibly paid in some money. So I would only be trying to match that number. And then the rest of it will be sitting in a bank account. So when you do your taxes and you find out you might owe a few more dollars, you’ll still have it sitting there but you won’t pay penalties, I’m not making the payment. I just want to make sure we don’t make a payment and then have to worry about it later.

Caller 35:07And I can use my associates current social security number for doing that.

Dr. Friday 35:13Absolutely, absolutely. You’re just gonna go in because this is going to fall on a schedule C on your personal tax return. So yes, 100%, you’ll just File this under your so so when you file your taxes, there’s a category it says that you make any estimates and you’re just going to use that is where you’re going to put them. But yes.

Caller 35:30Okay, thank you very much. I appreciate it. Have a good day.

Dr. Friday 35:33No problem. Great question. All right, so we’re gonna take another break here. And the last one of the show, if you want to join the show, you can at 615-737-9986. I’m Dr. Friday, an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. And so if you need any help with those, that’s what we’re talking about. And we’ll talk a little bit more when we get back from this break with the Dr. Friday show.

Dr. Friday 36:03Dr. Friday, we are back here live in studio, the last part of the show. So if you’ve been holding your breath, trying to figure out oh my gosh, am I gonna be able to ask this question or not? Now be the time to pick up the phone 615-737-9986, taking your calls, talking about whatever the tax issue might be money, that’s all my favorite subjects, obviously, trying to figure out the best way to handle each situation, and then trying to make sure that you’re asking the question before you go and do something because sometimes two heads are better than one, sometimes we can come up with something better than just thinking, “Well, I can’t do this, or I can’t do that,” just because you didn’t think it through sometimes.

Dr. Friday 36:55So that’s an important element in many things in life, but especially when it comes to our finances. Because sometimes I’ll talk about Roth conversions. I am not a financial planner, guys, it’s never my suggestion to ever tell someone how to deal with anything when it comes to that element. But I would always suggest, especially if you’re a person that is taking requirements, required minimum distributions RMDs and, and you’re over the age of 70.

Dr. Friday 37:24And you give money to charity. You know, I talk about this a lot, because I don’t feel enough people talk about I can’t tell you how many times every year people walk in my office and they still have not heard about the qualified charitable deduction. It is for I don’t know why more. And maybe there is some financial planners that are talking about it. I have not heard it, because obviously people are walking to my office. And they’re like, “Oh, I didn’t know that.”

Dr. Friday 37:47So you know, it’s a pretty straightforward situation. Most people when you hit 70 or older, we used to have to take our RMDs at the age of 70 and a half, the new law says we take it at 73. But qualified charitable deductions start at the age of 70 and a half, you can take your QCD, which is great, because now let’s say you want to give or maybe every year you give $5,000 to your charities. And now we can itemize it right. It’s smaller than your standard deduction.

Dr. Friday 38:18So there’s no way of really getting a tax deduction for it. But you can if you’re over the age, and you’re able to talk to your financial planner and say, “Hey, I heard about this qualified charitable deduction.” The money comes directly out of my IRA, it goes directly to the charity through you, they usually write checks, give them to you, you then give it to the charity, and then you and you file your taxes you back that out and it is dollar for dollar tax deduction people.

Dr. Friday 38:47So you would automatically reduce your income by the amount of your charitable deduction. It is a huge situation when it comes to getting your taxes down and enjoying still be enjoying being able to take your charity and most people don’t give to charity just because they can have a tax deduction they give because of the other advantages, but why not have both? All right, let’s see if we can get Dean from Lebanon. Hello, Dean. What can I do for you, sweetie?

Caller 39:21Yes, ma’am. After listening to the gentleman, talk to you about the energy credit for an automobile. Just prompted my question. We have calculated what I believe my tax responsibility will be for for 2023. And we have a 30% energy tax credit that’ll be coming our way for about $1,500. So it’s going to enable us I think to have a refund simply because of that. Credit coming our way. But listen about the EV, would I still be entitled to that refund? Or the government says, “No, you only, you know, you can’t go into a positive situation, simply because you bought a new heating and air system.”

Dr. Friday 40:14Right. Well, I mean, it sounds like to me in your case, and I can be completely wrong again, not sure. But if you actually owe any taxes, that money will offset those taxes, and you’ll get a refund of the money you physically paid in for your taxes. If you have a zero tax bill, you know that you don’t owe any taxes and you don’t have then this will be the same exact problem. These are. I don’t believe that the energy credits or any I know I looked up the car, but I don’t think these are refundable, either. I think they only reflect or go ahead. What did you say?

Caller 40:51I would be benefit myself. And if I’ve lowered the amount of withholding coming out of my paychecks, so that I’ll actually in an owe situation at the end of the year?

Dr. Friday 41:02not necessarily if you I mean, it sounds like you have other income and that you usually end up owing taxes. I mean, they they take some you may get a refund still but your own money coming back at you. So as long as your tax bill is $1,500 or more, you’re going to get everything refunded above that anyways. So anything that comes out of a paycheck or an RMD or social secur, wherever you might be paying in federal withholdings, they’re going to reduce your taxes by that $1,500 credit. And then whatever else is due or left, you’re going to be refunded.

Caller 41:36They wouldn’t send me more than, they wouldn’t send me $1,500 If I were to have exactly the right amount withholding.

Dr. Friday 41:45Exactly, no. I mean, if you again, if if when you filed your taxes, you had a zero balance due and then you took that credit, you would lose that credit.

Caller 41:54Okay, thank you so much.

Dr. Friday 41:57No problem. I appreciate that call. All right, let’s see if we can hit Ken really quick. I know the clocks kick in. But we’ll see. Hey, Ken.

Caller 42:05All right. Thanks for taking my call. My situation is I’m selling a home. I’ve lived there two out of the past five years. And I’m wondering how much money is tax exempt? It’s the first home I’ve ever owned. And I believe there is a tax exemption for that.

Dr. Friday 42:20Yes, you’re 100%? Correct. Are you single or married?

Caller 42:23Married.

Dr. Friday 42:25So it’s, it’s 250 and individual and 500 for married 1000. So in your case, if you if you both lived in that house, two out of the last five years, you would have a $500,000 exclusion.

Caller 42:39And I’ve only been the one that’s lived there. My wife is not. I’m living in her house. So it would just be 250 for me, then.

Dr. Friday 42:48That’s correct. So and then you would add whatever you paid for the house. And that would be your basis.

Caller 42:54So if I sold it for 250 and paid 50,000, the basis would be 300,000?

Dr. Friday 43:00That’s right. So you’d have I mean, you’d have a zero tax. You can’t take a loss, but you’d have a zero tax.

Caller 43:06Wonderful. Okay, that’s great. That’s what I needed to know. Thank you very much. Perfect answer my question.

Dr. Friday 43:11No problem. Thanks for calling in. All right, guys, we’re gonna get down to the nitty gritty of the show here. I really appreciate all the phone calls. I know it’s a kind of a crazy Saturdays right now a lot of people are out traveling kids are out of school, getting ready to relocate, I have several clients buying, moving relocating, so I appreciate you listening.

Dr. Friday 43:31And also making those phone calls if you’d like to have some help with taxes. Again, I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. So if you need help being represented before the IRS, or if you have questions concerning your taxes, or just getting into compliance, or maybe you’ve done it all, but you just don’t know what the next step is, then you can give our office a call on Monday morning, that phone number would be 615-367-0819 is the phone number for the office. If you’re trying to figure out you know, if you’ve got someone and you’re like, I just need to talk to someone.

Dr. Friday 44:13Remember, our initial consultation is always free. So to get a feel for what we can offer you and also gives us the ability to find out if we can even offer you you know what you need? Or if you need to go in a different direction do you need to really be talking to someone to deal with bankruptcy because your collections or your your IRS debt is really really old and it hasn’t fallen off yet. But you know, if you go to bankruptcy, you can clear it or is it something that you need to go to, you know, other types of representation.

Dr. Friday 44:42So, that’s why we always take our initial meetings and we make sure that they’re always free because we just want to make sure we’re all on the same page. Make sure we can help you and same way that we fit into what you need. So if again, if you want to join, call the office the phone number would be 615-367-0819 as an enrolled agent, one of the biggest things that we do is actually representation.

Dr. Friday 45:06So if you’re getting love letters and you’re putting them in a drawer, there are time periods that we can do certain things, we can try to get reconsideration on different issues, we can try to get the IRS, but the fact is, in many cases, even like the one I was dealing with, or had come into my office, it’s not what we’re representing.

Dr. Friday 45:26But you know, had did the Tennessee Department of Labor repayment, these people, if you leave things in a drawer and you’re not looking at them, then you’re going to be in trouble because that time clock goes by. And then you don’t have the ability to actually even give your side of the story unless you’re lucky enough to have a reason why you were not able. So if you’re getting those love letters, let’s not apply them in a drawer. Let’s take a look.

Dr. Friday 45:50And let’s try to figure out what we can do to actually come up with resolution and then you can actually start rebuilding your life and not worrying about if Uncle Sams going to come in and levy lien or see something. So again, phone number 615-367-0819. You can also email firday@drfriday.com. Friday is my first name drfriday.com or you can check me out on the web at drfriday.com. That’s our website drfriday.com I hope you guys are actually having a awesome Saturday at least in the Spring Hill area. The rain has stopped. So as we always love to say in Australia, call you later.

View Details

Welcome to another episode of the Dr. Friday Radio Show! In this episode, tax expert Dr. Friday answers callers’ tax questions and covers the following topics:

• What Are the Interest Rates In Tennessee?
• Over $1.5 Billion in Tax Refunds That Have Not Been Claimed
• Tax Rules For Buying a Vehicle For Work
• Tennessee Residents Given Until July 31 to File Federal Tax Returns
• How Do Capital Gains Work on Inheritance?
• What Is the Fastest Way to Talk to the IRS?
• Is Private School Tuition Tax Deductible?
• The Tax Deadline Is October 18 for Individuals
• How To Do Tax Preparation and Financial Planning The Right Way

And much more!

TranscriptDr. Friday 0:00No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Dr. Friday Show. If you have a question for Dr. Friday, call her now. 737-WWTN. That’s 737-9986. So here’s your host, financial counselor and tax consultant, Dr. Friday.

Dr. Friday 0:25Good day. I’m Dr. Friday and the doctor is in the house. It’s a wonderful Saturday out there. And many of us are trying to get some things together, especially still trying to work on tax returns. But right now we’re really working on a lot of cases, dealing with the IRS directly as soon as back taxes or making offering compromises.

Dr. Friday 0:50Remember, I’m an enrolled agent licensed with the Internal Revenue Service do taxes and representation, which basically means guys, that’s all I do is Texas and representation. So if you are a person that has been dealing with IRS issues, if you’re thinking, I don’t know how I’m ever going to get the IRS off my back, or how, you know, where do I even start? Because a lot of times you’re gonna haven’t filed for 10, 15, 20 years, what does the IRS have expectation for you to do? Where do you stand? And that’s where we come in?

Dr. Friday 1:20To be honest, there are so many different things that you need to understand. How far back do you really have to go? What is the IRS has expectation for you moving forward, as well as moving backwards? What do I pay? If I’ve got a little money? Should I be paying forward? Should I be paying backwards? These are really in it’s different. I’m not going to tell you there’s a perfect science that I could say right here on the radio, this is the step step steps you’re going to take. And that’s how it’s going to work. No, it doesn’t always work that way.

Dr. Friday 1:20What I might suggest for one individual will be completely different for a different individual, depending on how many years we have to do. If there’s been assessments in past years. What’s the window of collections? You know, I mean, there’s said date. So what are those said dates? Had the clocks been stopped? The IRS really only has 10 years to collect. But if you haven’t started the clock, or if the IRS started for you by assessing you in those tax years, what does that really mean? Do we need to amend do we need to just get the taxes filed because we’re going to be doing an offer and compromise anyways.

Dr. Friday 1:48So making the right information, and then making sure not only dealing with the past, but also dealing with the future, right? Because in the future, we have to stay current for five years, otherwise, the IRS will go back and they’ll say, “Sorry, Charlie, you didn’t keep your end of the deal. So we’re going to eliminate everything.” So if you made a deal that saves you hundreds of 1000s of dollars, and you didn’t keep your deal with them, they’re going to come back with penalties interest and continue to collect that money.

Dr. Friday 2:57It’s important to have a plan, have the steps and have someone that’s in your corner that can help explain how all this works. Because, you know, it’s it’s not as simple as just saying, Hey, I’ve got a little money, I can’t tell you. I mean, people walk in all the time, and they’ll say, “I have enough money to pay the IRS this much.”

Dr. Friday 3:15Will they take it as if what you have in the bank, or what you’ve saved up is going to be the number they want. There’s a whole system. How much money are you earning? Are you married? Or are you single? Is was the tax that part of you before you got married or not? And then how many children? You know, what kind of money? Do you have a 401 K are in your house? How many cars do you own? Do you have any collectibles? All of this is going to be calculated to come back up with what money can you afford to pay? And what money should you have to pay?

Dr. Friday 3:50Because in some cases, it may be more or less in most cases, people are always sitting there and they’re like, “Well, you know, I have to send my child to private school because of you know, it’s it’s a better school.” But the IRS isn’t going to take that into account, if you’re making a deal with them. You know, I mean, they’re not there to put your child into private school.

Dr. Friday 4:11So they’re going to come up and say, “Well, that is a elective, this is a choice, you’re putting them but you’re going to pay us first. And then if there’s extra money you can put your child into private school.” That being said, if your child has special needs, and that private school is a mandate to give them the quality of life that is required. That’s a different conversation.

Dr. Friday 4:30So again, really understanding how tax law works and how it’s going to apply against you, the individual that we’re talking to. And before any of that can be done, you must file your taxes and be current you must be up to date, depending on what your situation is a minimum of six years have to be filed in a row.

Dr. Friday 4:51And then if there’s been assessments or other years that we’re still dealing with back situations, what does that mean and do we need to address those as well? Besides is the fact that if you were in business, maybe a fiduciary taxes or you have some sort of corporate back tax or late fees, trust fund fees, these are all ones, we also have to bring into the same situation, we have to come back and look at the entire package.

Dr. Friday 5:16Because sometimes again, people say, “Well, you know, the business has gone out of business. So I don’t really have any money to pay the IRS, the PAC taxes.” Well, if it’s fiduciary tax, or payroll taxes, the IRS is immediately going to assess you and basically say, “Unless you can prove that you had no authority to pay those taxes, in essence, you made a choice, you didn’t have your name on the checking account, and you didn’t have that ability.”

Dr. Friday 5:41That’s one thing. But if you chose to pay the rent, trying to keep your business open, and not pay the payroll taxes, that can be a problem. So it’s how it’s approached. It’s how it’s put together. And it’s making sure that you have addressed all of the issues. When you’re doing this.

Dr. Friday 5:58I’ve had one that came in recently, where they had been doing some of their own negotiating, and didn’t realize that they had to be a current. So they had the offer and compromise brought back with and which is why they came into my office. And they were just trying to make a deal for the one year that the IRS was collecting on not for the entire time period, that they did have taxes even filed not even knowing if they actually owe money or not.

Dr. Friday 6:21They were just trying to deal with the one issue that they saw in their in their way, you can’t do that it is an entire package and process and you need someone that can at least help you through that process to make sure and this is not a fast process.

Dr. Friday 6:36I mean, from the moment you probably meet with us to the hope that the moment that everything goes relatively smoothly, you’re looking at at least a year of working together, just trying to get back taxes filed, then they have to get posted, then we have to open up the negotiation for either an offering compromise partial payment plan payment plan, or the ability to delay while you’re in the process of trying to get a loan or a second mortgage, and then getting all that and then possibly some penalty waivers that will be will to follow up with once we have the taxes and assessments have been done.

Dr. Friday 7:08Those are the basic sets for each person is going to be a little different. So if you’ve got questions, of course, it’s tax time, we’re still working on 2022. So keep that in mind that if you haven’t filed your 2022, hopefully you have an extension out there, you know, on filing the taxes.

Dr. Friday 7:28But if not, you need to file them as soon as possible. If you have an extension you have until October, but if you don’t have an extension, you should look at that as soon as possible. Not waiting to that last minute, even if you owe money, it doesn’t benefit to drag your feet to not not have the information prepared. So at least you now know how much money you need, is there a way of getting that money together? Do we need to merge it with multiple years?

Dr. Friday 7:56And even if you may, or may not qualify for the offer and compromise you can payment, you know, get into a payment plan, or even just a non collectible. In some cases, sometimes people are so afraid, because they don’t have any money. They’re basically without a job. They’re transitioning, they’re on a fixed situation, and they’re like I can’t I’m afraid if I tell them then they will come after what I have. And it doesn’t quite work that way either.

Dr. Friday 8:18The IRS is not truly looking to take and put you you know in a one bedroom home and and you know you have nothing to eat or anything else they have certain rules that they have to follow. And those same rules apply to everyone.

Dr. Friday 8:33So if you’re at a hardship, which is why I always try to tell people, the IRS when they’re dealing with offering compromises and things, that’s another huge thing is that everyone’s always looking for that perfect time when they’ve actually kind of gotten out of the hard times and they’re going into better ties now they’re sourcing a lot at the end of the tunnel and then they’re like wait, I’ve got to deal with the IRS.

Dr. Friday 8:55And when you do that, it’s kind of important to understand that you know, you’re dealing with them at the wrong time, the best time to deal with the IRS. It’s truly when you’re at your bottom when there isn’t anything worse that they can take or touch. That’s when you kind of want to start the conversation the IRS doesn’t predict that you’re going to continue to be at this place or that place they’re looking currently where are you in what is your situation now I’ve had a couple situations where they feel that people may be underemployed or whatever the situation but the IRS can’t make you work they can’t make you go back into a profession that maybe you got out of even if you were making good money.

Dr. Friday 9:35So these are the kinds of things we really need to address so that way when you’re going out and dealing with these issues, sometimes you think, “Just gotta wait till I get my back on my feet a little bit then I’m gonna deal with this.” You know, but you know dealing with it when you’re in a bad situation dealing with it when you’re single versus getting married because even if your your person you’re marrying, is not legally responsible the IRS can’t touch them financially, they found a way of doing it, because they do combine the incomes.

Dr. Friday 10:07So therefore they can take the person that owes the IRS all their money because they basically will say, Well, your spouse makes enough money to support the family. So therefore, your money is disposable. And you know, so that can make it very difficult. There are some ways around some of that, but all in all it you know, the IRS is not going to say, well, that person doesn’t have any responsibility. So we’re not going to take their income into the household and account for it. No, no, no. They say, “Well, we can’t touch your payroll, but you can now pay for all the bills, even though that wasn’t kind of the agreement. And you know, and we’ll take the money that’s disposable now from your spouse because of that situation.”

Dr. Friday 10:46So again, one of those situations, you just want to make sure you understand how it’s going to affect you. Now is the time guys, because who knows what the next year is going to be bringing us with the new revenue, people being brought on more audits, more reviews, the status, certainly I was just at a meeting with Tennessee Department of Revenue, one of my clients was going through, we’ve been working with an audit there and and they were just saying that they have brought on a number of new employees to help with the audit situation.

Dr. Friday 11:19So again, even the state of Tennessee is hiring, everybody’s going to eventually end up with a probably a Tennessee and if they have their way, it’s like the the personal T tax audits. It’s the same situation with sales tax franchise excise business, they look at businesses that have, you know, one, two, or all three of those. And auditing is something that they’re going to be doing many, many more of once they get the process down because it is it well, let’s be honest, most of the time they find errors, therefore, they’re able to come back and deal with it.

Dr. Friday 11:53I even have one that’s getting audited on the hall stacks, which obviously we no longer have. But back in 2019, there was one and they’re getting called for that. So. So yeah, audits are up, definitely more audits going on. We’ve been hired for many more audits than we’ve had in the last three years. So just getting your documents in order, making sure that you have all of your paperwork is going to make your life a lot less stressful.

Dr. Friday 12:18All right, if you want to join the show, you can 615-737-9986. We’re gonna take a quick break. When we get back we’ll get some of your phone calls and emails. We’ll be right back with the Dr. Friday show.

Dr. Friday 12:43All righty, we are back here live in studio. And if you want to join us, you can 615-737-9986 I did want to bring up and remind people Tennessee residents that were impacted by the tornadoes and severe storms back in March, were given until July 31 to file their federal returns. This includes your business returns and your personal tax return.

Dr. Friday 13:15If you had a March 15 partnership or corporation, or you had individuals that were doing April, even nonprofits that were doing in May, all of them were extended until July 31. Without extension these are for people in Cannon County, Cannon county Hardyman county Hardin, Haywood, Lewis, Macon, McNary, Rutherford, Tipton, Wayne, are the counties that they’re giving me listed biggest one for most my listeners probably be would be Rutherford, the Murfreesboro area, you guys all were extended, even if you weren’t affected by that storm, you are still extending until July 31.

Dr. Friday 13:55So if for some reason no extension was filed, you were just busy, or you’re not thinking or maybe even filed taxes in a number of years. And you’re like, you know what, you can still make this deadline because you live in Rutherford County, you’re not late, you can get your 2022’s filed on time maybe even paid, which will eliminate some of the penalties. So, it’s a thought, if you don’t have it, you don’t have to. I mean, in theory, the the extension would be able to be extended at that point.

Dr. Friday 14:28So you could file an extension but just want to make sure that you know, if you haven’t filed your taxes or if you forgot to file an extension this year and you’re in those counties, it might be a great time for you to think about, you know, what can I do? What can how can I make this work? What can I do to make it go so July 31.

Dr. Friday 14:49Again, in those areas, also, some other states who are affected so if you are not from here and you’re listening on iHeart Radio or something like that you might want to check the irs.gov website and find out if you had any extensions that you can take full advantage of, because that’s what we want to do, we want to take as much of advantage of this as we can to make sure that we’re dealing with the type of stuff that we can get into.

Dr. Friday 15:16So if if you want to join the show, you can 615-737-9986, we are taking calls talking about taxes, and other issues. But the big one, obviously, is taxes right now. And today, really just wanted to hit on individuals that were wanting to really just get back on track, right? I mean, you guys always hear all those ads, “We can settle for 10 cents on the dollar.” You know, and to be honest, I always find many of those are stretching it if lack of a better term.

Dr. Friday 15:55I’m not saying we haven’t filed cases, I filed cases as low as $25, which is the minimum, I’ve gotten people that evolved the more than 100,000 for that. But let’s think about individuals and the more of the reality that individual had absolutely nothing, no home, no 401k, no car in this particular situation. You know, they had no assets, and they were living on Social Security.

Dr. Friday 16:20So there was nothing there for the IRS to continue to try to collect this back money on. But that isn’t going to always be the case. And so you know, if you want you can get a free consult. That’s what we do. We can sit down, give you a plan it you know and work with you to figure out what’s going to be the best way to get you from where you are now.

Dr. Friday 16:20Maybe you’re with some back IRS issues, to basically be able to build your credit, go out and buy a house if that’s your dream buy car if you I know you don’t need tax returns to save for that, or one of the biggest ones that lead people into mind is the children are getting old enough where they’re going to have to start thinking about college and college requires FASFA, which requires you to have filed tax returns.

Dr. Friday 17:06So you’re not going to qualify for FASFA if you’re not current on taxes. So if if your children plan to borrow or have, you know, any hope to do much in credit in college, then that’d be something the parents, you guys will have to take care of, and make sure that you have whatever it takes to deal with those, those situations. So other things that we have happening here right now is like, again, you know, obviously it’s we’re getting a little faster time for anyone that’s trying to deal with an IRS issue, the IRS is working a little quicker as far as getting us power of attorney and then that way giving us the ability to, you know, resolve or get to resolutions.

Dr. Friday 17:55But everyone or anyone that might be on the net, you will also see where the IRS is, is hiring a lot of new people and doing some training. If you go onto the website I was trying to see because I know some of the funding got lost. But apparently they have some some funding because they have in this area alone, they taking on about 400 jobs, according to the website.

Dr. Friday 18:23So that’s going to be interesting to see if they can fill those new jobs, what they can do, and you know, but that means the one job they’re going to file guys, you know, it’s always wonderful to say, You know what, the IRS is going to get more people on the phone so we can get better resolution so we can have a better conversation. And we don’t feel like every time we call we end up going in circle.

Dr. Friday 18:45I had a client yesterday, she called me her husband and finally called there was a an old IRS issue and she got on the phone with them started talking to them. And they were saying that there was a tax return that might have been filed. But yet this one was filed late or and then it was it was filed early that none of the dates they provided was the actual date that the tax return was filed, which we have E-file confirmation on. We don’t even know for sure what this person was looking at. It was almost like they were just trying to come up with an excuse or reason why the IRS had or had not done anything with the request that this client, you know, had requested from the IRS to do something.

Dr. Friday 19:34So you know, you get on the phone, you get a lot of people in there and then you don’t really seem to to get somebody that knows what they’re talking about. And if you do, unfortunately, sometimes at least one of my situations had where they basically dropped the ball, the phone got hung up, I was not able to call that person back.

Dr. Friday 19:58So that was not a good day for me, was really making headways. And then unfortunately, Now sometimes you’ll get really lucky. And they may have taken your number down, and they’ll be able to get back with you on that. But I will be quite honest, that that is not the situation with, you know, with that.

Dr. Friday 20:18So if you have questions, you can join the show guys 615-737-9986, taking cars doing all the wild and crazy things that we have happening. One of the tips that the IRS is providing out there is to make sure that everyone has updated their W 4 for their W 2. And I will say I’m not very happy with the new W 4 form because it doesn’t seem like it isn’t really taking out the right amount of money.

Dr. Friday 20:56In this last year, a large number of people seem to have owed money where we haven’t voted in the past, which is kind of funny because 2022 If you have children, I can see if you you broke even in 20 to 22, because you had a lot more credits coming back to you. And then maybe in 2023, it didn’t happen.

Dr. Friday 21:15But what I have found is that we’re having to go back in and not really changed the W 4, we’re just asking the employer to take additional money out, because it’s not taking I mean, we used to be able to go married, single 05 dependents whatever head of household, and you said married and zero, right or single and zero. And then everything was supposed to be calculated out Natalie to do it based on $2,000 per child, if this is your first or second job, this your spouse work, these are all questions on the new W 4 that you have to answer to try to get this correct.

Dr. Friday 21:52They just it doesn’t seem to be really working the way that they had planned it. So my suggestion to anyone that has done their own taxes and have found that they are not getting any kind of refund back, they’re not getting any information, you know that they’re not getting? And you’re like, “Well, I filled out the W 4 it says that I’m married and it says, you know, I didn’t take any credit or I took $2,000 because I have one child on it.”

Dr. Friday 22:20My suggestion is plain and simple. Make sure that whatever you were short this year, and I don’t I’m going to be honest, I don’t want you to get 1000s of dollars back is not why why would you want to have huge refunds unless it’s some sort of credit you’re getting, I would say you know, like educational credit, or, you know, child credit or earned income credit. You don’t want that to be the case.

Dr. Friday 22:44So if you know I want you to break even I’m fact if you can owe two or three or $400, there’s no penalties, there’s no interest, that would be perfect, because then you lived off your money, you’re giving the government their few dollars at the end of the year, and everything is great. But if you actually have either huge refunds, or you owed more than 500, or let’s say $1,000 At the end of the year, then you need to be making an adjustment to your W 4.

Dr. Friday 23:11And again, we do this a lot in our office. And so it may be that you just go in and ask for an extra $25 per paycheck to come out and you multiply that and it comes out and you should have it we’re already six months through the year. So you may need to double up on that.

Dr. Friday 23:26If you’re really trying to make sure at the end of the year. You don’t have to write a big check especially if you don’t have it. I mean you know basically owing the government is never a good thing. Never a positive situation. But it is one of those situations where you want to make sure you have the money because interest penalties they just brought up the interest rates in Tennessee I don’t know you guys if you’re small business owners, and let’s say you get a penalty because you filed your business license late and they charged you penalty and interest 13.25% It was what I was told that my last audit 13.250 Am Gee, that is high interest for for a state but I mean interest rates is are what you know there is a discouragement I guess you would say but I mean it went from eight that’s a huge jump from eight to 13 You know, on the on the on the scale as far as I’m concerned. Huge, huge, huge. So we’re I’ll take a look I’m not sure if the IRS is supposed to be bringing theirs up as well.

Dr. Friday 24:30I’ll take a look and let you guys know after this break we’re gonna take a quick break. You can join the show 615-737-9986. We’ll be right back with the Dr. Friday show.

Dr. Friday 24:51All righty, we are back here live in studio again. If you have a question concerning taxes or maybe has a friend or someone that hasn’t bought Alder, you know, just wanting to get striped for this year 615-737-9986, the IRS just put out a final reminder for 1.5 billion in tax refunds they’re estimating for unfiled tax returns in June. Sorry for 2019. So they have estimated there’s over $1.5 billion in tax refunds that have not been claimed here in the United States for the filing of 2019. If you have not filed your 2019, the deadline is July 17 to get the refund.

Dr. Friday 25:39So if you filed it, great. If you have not filed it, then well, you have 10 days, no nine days, Why mine, nine days to get that file than any filed. So see if you can get it out to where you need to get it. So maybe you’ll get your refund. That’s a lot of money sitting out there that has not been claimed by taxpayers. So this is what we’re always talking about. I mean, how many times have I share with you guys stories of people that I do 6, 7, 8 years of taxes, and it wasn’t that they had money do they were either just busy, something had happened, divorces always a big reason, anything like that, and then they turn around, we file them and we find out they have refund after refund after refund.

Dr. Friday 26:25And they’re leaving the money on the table. They don’t have an IRS issue. They just haven’t filed taxes. And in some cases, they just don’t want to file because they don’t you know, they know they didn’t have any money do so they’re fine. But now they need to have some tax returns done. So now they’re thinking about why would you leave money on the table, especially with the Internal Revenue Service people.

Dr. Friday 26:45I mean, I’m not saying that any government agent would be an awesome place to be living that. But personally speaking, that would not be a win win situation for any of us, and what’s going to happen with that situation. So again, 1.5 billion unclaimed, if you haven’t filed your 2019, you may be one of them. So you might want to get that filed ASAP to try to get some resolution on that.

Dr. Friday 27:11So, again, July 31 is the deadline for people that are in the storm damage, mainly the people in Rutherford and cannon counties that might be able to hear my wonderful voice and you haven’t filed your taxes, you have an automatic extension. So even if you didn’t extend, it might be a perfect time to try to get an order everything so you can get that done while you can. So we’ll we’ll continue with those questions. If you haven’t, if you have a question, feel free to give us a call here at 615-737-9986. And from the email bag, it’s an interesting question.

Dr. Friday 27:50And I will tell you, I have had a number of clients try to pull this off. And I mean, some people are going to say I’ll I would do it, some aren’t going to say, All right, so this individual decided to go buy a camper, they do construction, so they bring the camper to the construction site. And they use it while they’re at the construction sites. But they also use it for personal use. They they use it to travel into to do things.

Dr. Friday 28:19So it’s not staying on the construction site all the time it is being used personally. And they want to write it off as a piece of equipment for the business. Because they do take it from time to time out to the job sites. So I’m going to tell you my opinion on this, my opinion is you cannot deduct 100% of that camper for the purpose of business because it’s not being used 100% for business, if you had told me that you bought the camper, you use it at the job sites, you leave it out at all the job sites, there’s someplace for somebody to stay change shower, whatever and you find that it’s you know, it’s a good use, then it’s a definite piece of equipment, you’re using it at the job sites, it is exactly what is being used.

Dr. Friday 29:04But when you say that you taking that piece of equipment and you’re using it for vacations, you’re using it for family use. You’ve taken it from being a business piece of equipment to maybe a partial, possibly a usage, but not going to be a and this is this is $150,000 camper just to let you know, we’re not talking about some five or 10 or $15,000 piece of equipment. It doesn’t change the purpose of that equipment, but it would change the situation as far as how much you can do.

Dr. Friday 29:35There is a section 179 and this is the same one that at every end of every tax season for the last 25 years. I had people telling me the call week two weeks before the end of the year, I’m gonna go buy a big truck. I’m gonna go buy an SUV, because I want to take that section 179 I know that you guys probably know this because you Listen to me, but I’m going to say this, again, any individual that purchase an SUV or a large vehicle for work only.

Dr. Friday 30:10And that that’s the first part, guys, if it is a vehicle that you’re using, it has to be 100% for business, it cannot be your personal vehicle that you’re using for business. And I don’t care if you say I don’t do anything but work, I have no life, I do nothing. But you do. You go to the grocery store, you go to the you go other places, to restaurants and different things for personal use, the vehicle is not being used 100% for business, you use it, especially if you don’t have any other vehicle. Because nobody works 24/7 Even if we feel like it’s sometimes.

Dr. Friday 30:48So let me reiterate first check off, is this a 100% business use vehicle, you have another vehicle you can use, and it’s actually a running vehicle, not a vehicle. It’s a new Drive. So you think, Oh, the IRS will think well, there’s another vehicle. But if it doesn’t run people, it’s not another vehicle. Second, is this vehicle necessary? necessary. So if you go by yourself out a Land Cruiser, or a Land Rover, whatever for, you know, $150,000 or Tesla truck or something, and you are a person that runs a local restaurant?

Dr. Friday 31:29Is it really necessary for you to have a vehicle like that? I mean, that’s what the government’s going to ask, “Was it necessary to go spend $150,000 on a business vehicle because you don’t use it personally? Therefore, it’s only driven while you’re in business, why do you need a vehicle to do that unless you have a true purpose, your delivery service.”

Dr. Friday 31:51A prime example is most construction guys have trucks, because they have to haul things back and forth all the time. They have to pick up things. So the truck is an essential part of earning money. I have the same problem with some real estate because there has been several court cases recently, where the IRS has taken the exception that they didn’t need a high end vehicle to sell real estate.

Dr. Friday 32:20Many of them have brought Ferraris and many things like that. And, you know, do you have million dollar listings and the people you’re dealing with deal with those, so you need to look successful and be able to sell their home? That’s what the IRS is asking. That’s specifically what was asked. And in the case of one of them, the person didn’t sell million dollar homes, they sold homes for two and $300,000.

Dr. Friday 32:42So driving up in a Ferrari, was that really going to generate you more income, and was it totally they wrote it off as a work vehicle. So therefore, they wrote it off as if it was only driven for work. And the IRS did win that case proving that that wasn’t the case. So again, it’s not that you can’t write off your vehicle. But in most cases, it people are not using it 100% therefore you can’t depreciate if it’s not a 100% usage on a section 179 It’s not going to fly.

Dr. Friday 33:16Now if you want to go lease a vehicle and part of its being used, you can do a percentage of rental and lease and all of that for the work for the purpose of work. But I honestly think miles especially right now, when mile rates are so high that you don’t have to worry about actually trying to find a better situation, mileage rates are already at an all time high.

Dr. Friday 33:42So, you know, again, making sure that you have what you need to do your taxes is one thing, but if you don’t have that, you know, it’s 65.5 cents a mile for for 2023. That’s a pretty good return on your Petro even for people like myself who drive a diesel. So if you’ve got yourself a hybrid or a small little car, you’ll probably even do better at that 22 cents a mile for medical and 14 cents a mile for charity is the current rates that are on the table again, 65.5 for standard business, miles 22 for medical and 14 for charity. If you’re itemizing, make sure you don’t forget the medical miles. It’s so important.

Dr. Friday 34:24I mean, if you’re gonna if you’re able to actually hit that number, which is 7.5 of your adjusted gross income you have to deduct before you can start itemizing your medical and then you have your your property taxes and mortgage interest and charitable contributions. But if you’ve hit the mile marker, make sure that you are also putting in your miles for medical because, well you have to go see the doctors you have to go to the pharmacy and many times you have to you know go the physical therapy and all those miles are countable to help you get through the threshold of doing Your medical deductions.

Dr. Friday 35:02So very, very important when you’re thinking about it. All right, we’re gonna get ready here to take our last break before the end. So if you’ve been sitting there saying, oh my gosh, I do have a question, but I don’t know if it’s gonna sound silly. A no silly questions, no stupid questions. If you don’t ask the question, how are you going to know what the question is? I mean, what the answer is, I mean, let’s be honest, if we all knew everything, then we’d be Alexa or something, you know, I mean, I’m just saying you have to be able to pick your your battles.

Dr. Friday 35:33So if you have a question, pick up the phone 615-737-9986. We’re gonna take a quick break, and we’re gonna done we’ll be at the end of the show. So at this point, you need to give us a call. Otherwise, you can call us at the office on Monday, because I know not everybody enjoys calling radio shows.

Dr. Friday 35:54I totally relate to that. I didn’t ever do it before I was on the radio, still have only done it about two or three times. Alright, so we’ll take a quick break with the Dr. Friday show. We’ll be right back. Today we are back here live in studio on Dr. Friday, we we have Mike from Clarksville. What can I do for you, Mike, thanks for calling.

Caller 36:22My grandparents Harrington property. It was really good. My uncle. And upon his death, it was supposed to go to me and my brother. But he’s, we’ve all decided to sell it before he dies. So we’re gonna split it three ways. How does the capital gains work on that?

Dr. Friday 36:42Yeah, it’s not it’s not going to be beneficial. To be honest. I mean, obviously, it may be good for him because that way he has some additional income to live with. But the capital gains is going to be so the basis since it’s in his name, it’s not in all three of yours. Correct. Right now it’s in his name. And then when he passes, you would have inherited.

Caller 37:06All three of ours. We’ve all gotta go to close.

Dr. Friday 37:08Okay, so when did you inherit when when your grandfather died?

Caller 37:17It was in 99.

Dr. Friday 37:18Okay. So whatever the value of that property was back in 99. OB what you guys are half for a basis. And since you’re already audit, only, only step up we would get would be his share Anyways, if he had passed away, so at this point, it’s not going to be a huge difference, Mike. But whatever this land was worth back in 99, fastest and easiest ways, just look at property tax, you might want to get a better appraisal, but that will give you an idea at least. And then whatever you sell it for today, the difference will be capital gains.

Caller 37:53If I reinvest that capital gains into my property now, do I still pay for it?

Dr. Friday 37:59Yeah, you’d have to do the taxes first, the only thing that you might be able to do would be what’s called a 1031. Exchange, you’d have to talk to an attorney, they do it or closing agents do it. But you can take that money without paying taxes theoretically, and invest it into another piece of land, but it can’t be a piece of land that you already own.

Caller 38:22Okay. All right. Well, when this closes, can we can take care of all this?

Dr. Friday 38:28Oh, absolutely. Not a problem at all.

Caller 38:31All right, I appreciate it. Man.

Dr. Friday 38:33Thank you talk to you later. All right. And that is one of those questions that we have that often comes through, obviously, and handle parents and grandparents, siblings. It’s amazing how we can try to make things what we think we’re trying to simplify. A lot of parents, for example, will put their children on their home titles.

Dr. Friday 38:57And by doing that, you are kind of messing up the process of the step up in basis. That the reason you do it. I’m not actually sure maybe there’s legal reasons. I’m not an attorney at all. But for tax purposes, you really want your children to inherit your stock your home through the inheritance process through the death and then the will or trust, be that irrevocable or revocable trust that will happen so that way it you know it comes through for for you.

Dr. Friday 39:31But it is important to make sure that you have all those documents up to date. But don’t put your children on your bank accounts. Don’t put your children on your homes or in your portfolios for stock because then you’re you’re going to make the taxes more expensive.

Dr. Friday 39:52In most cases, you may not be able to avoid certain things and I know part of it is to try to avoid long term care and all These are the things that might come along with the price tag. But if you are, I would definitely suggest talking to an attorney that does estate planning, and your tax person, have them work together to find out what your options would be, other than just going into the bank and signing over and putting your child’s name on your bank account.

Dr. Friday 40:22Did you know I have a Russ Cook, great friend of mine and attorney in Brentwood, and we’ve known each other for a long time, and I can remember years ago now need to get him back on the radio show. But years ago, he’s on the radio show. And he came out and said, you know, he had a case where a child they someone had gotten in a car accident or something like that. And they got no, it was a divorce, they were getting divorced.

Dr. Friday 40:49And the person had their name on their parents bank account, and one of their, you know, just in case mom had put it in there just in case. And that became part of the assets of the divorce because they had their name on that account. So your mother’s money in this case could have become part of the assets of an a divorce, because the mother had put the child’s name on that tax on their thinking that if something happened to her, her child would be able to continue to write checks and take care of the situation.

Dr. Friday 41:26If that’s not scary, for other people, it’s scary for me, there is power of attorneys that you can get from the bank, you can get from your attorneys, you can probably download from Legal Zoom, that would take care of this in case you became incapacitated, then then your children would have the power of attorney to take care of all of your wishes, there’s also a medical power of attorney again, you need to make sure you have a financial medical, some cases a pour over will or will, you need to go to Ross Cook or in a good attorney that can help you with setting up these documents.

Dr. Friday 42:04Because we now know besides the big guy upstairs when our last day will be here. But what we do know is that we’ll never be able to predict when that is. So that being said, you’re going to want to make sure that you have everything in line without putting in jeopardy your taxes. Because when you do some of those things, you now have eliminated the taxes on this scenario, where I mean even like Mike they called you know, I mean, now he sounds like he inherited part of it, his brother and his uncle.

Dr. Friday 42:38But if it was supposed to stay within the generations, you know, it may have been better to let the uncle and then the uncle, pass it on to the kids. Again, not something that you always going to have full I mean, you really do want to keep it directly in your own bloodline, you’re directly down descendant wise, as far as I’m concerned.

Dr. Friday 42:57That’s why you want to make sure you also have trust for children that are married. Because why would you want I mean, the last thing you’d want is you pass away, the money gets given to your child, they of course, put it into the marriage, the marriage breaks up, then their spouse now gets 50% of everything, if not more, in some cases, if there’s children, etc, etc. And your money now has been used. If it’s in trust, hello, can’t be brought into the marriage.

Dr. Friday 43:25So these are the kinds of things you want to think about because we none know what’s going to happen. And I’m not an attorney again, guys, but that’s the way we want to preserve our taxes. That’s the important part of this conversation, taxes, taxes, taxes, and the step up and basis. And the child inheritance laws, they’re, they’re trying to mess with some of those, you know, we all know that Biden doesn’t want to do the 1031, he really wants to eliminate that, which is one that we can use, like the gentleman, if he wanted to Mike could do what I said to him at 1031, go buy another piece of property in his name and use all of the money.

Dr. Friday 44:02And that way he can preserve that money and not have to pay taxes today, he has spaces will stay good. And he’ll just keep moving on. Those are especially business owners or people that are into real estate. Many of my clients do 1031 exchanges, because it’s a great way to take the entire investment and move it to another investment and keep growing that investment. Instead of having to pay the taxes each and every time that will likely you’ll lose 20% or whatever of that money every time Biden wants you to pay the taxes.

Dr. Friday 44:37Hey, if the tax law says we don’t have to, let’s take advantage of it. If they change the tax law, you and I will deal with that when it happens. But right now we’re talking about the step up and basis. And what we want to take the advantage of and again, this is something you really do want to talk to an estate attorney to make sure there are Medicare trusts and things you can do to preserve your power. Are several funds. But you do want to have someone that’s an expert on that.

Dr. Friday 45:04So just put that in there. All right, guys, we’re winding down to the last part of my show. It’s been a quiet Saturday, which is, I guess good every once in a while, even though, you know, I never really like to hear myself talking. So we’ll, we’ll hopefully bring in some more exciting topics as we get going here. But if you want to have help with your taxes, or if you’re thinking it’s time to get straight with the IRS, you can give my office a call on Monday morning at 615-367-0819.

Dr. Friday 45:43Again, I’m an enrolled agents licensed by the Internal Revenue Service to do taxes and representation. I am local, I’m going to be the person you’re going to meet, not just some phone number with an 800 that you’re connected with somebody else that they sell, sell the connection so that some other attorney or Enrolled Agent, you’re going to be dealing directly with Dr. Friday so you know who you have. If you want you can also email friday@drfriday.com. Again friday@drfriday.com or check me out on the web drfriday.com you can find out who I am been doing this for 25 years I’ve been on the radio for almost 15 years here.

Dr. Friday 46:21So again if you need help 615-367-0819 I hope you guys have an awesome Saturday. It seems to be a little bit crazy with the weather but I hope you enjoy it. Catch you later.

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Welcome to another episode of the Dr. Friday Radio Show! In this episode, tax expert Dr. Friday answers callers’ tax questions and covers the following topics:

• What You Need To Know About the American Families and Jobs Act
• What Is the Small Jobs Act HR 3937?
• Retirement and Selling Your Home
• How To Buy Your Parents Home at a Fair Rate
• What To Do If You Inherit Property
• What Is the 1099 Reporting Threshold for 2023?
• The Tax Deadline Is October 18 for Individuals
• What Is the Required Minimum Distribution Table for 2023?
• The Importance of Having a Disability Trust
• What Is the Standard Deduction for Middle-Class Families?
• How To Do Tax Preparation and Financial Planning The Right Way

And much more!

TranscriptAnnouncer 0:01No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the how-to girl. It’s the Dr. Friday Show. If you have a question for Dr. Friday, call her now. 737-WWTN. That’s 737-9986. So here’s your host, financial counselor and tax consultant, Dr. Friday.

Dr. Friday 0:05Good day. I’m Dr. Friday, and the doctor is in the house on this somewhat crazy weekend, one minute, it’s nice and warm and sunny in Spring Hill. Next thing you know, we’ve got thunderstorms and rain coming down. So be careful if you’re outside, it’s a bit of a crazy day for for enjoying the outside weather. But if you’re inside and you’re thinking, wow, what’s going on in the world of taxes. I know, I always seem to be thinking about that most of the time, because I’m working on individual tax returns or business ones.

Dr. Friday 0:57And one of the things that came down during this last week was that House Republicans released a draft of three separate bills they’re trying to pass, it’s all called the American Families and Jobs Act. And it basically one is for helping to cut out certain things, the HR 3936, which is for working families, helping to negotiate better and to include some sort of job tax credits. And then you have the Small Jobs Act HR 3937, and then Build an America Act of 3938, trying to get businesses that bring their their assembly and things back to the United States to give them credits that will help increase those situations.

Dr. Friday 1:43At this moment. The standard deduction, which is what we’re looking at, they’re trying to increase it and make it a guaranteed deduction bonus. For middle class families one of the big things it’s $2,000, for single 4000 for married couples, that would only begin and 24 and 25. But reduce the bonus amount taxpayers will modify justed income of to over 200,000, they love to use that one 200,000, they don’t realize how many people, it sounds great. But when you sell a piece of real estate or you get ready to retire and you’re transitioning, sometimes those numbers can get completely skewed and you don’t have what you need.

Dr. Friday 2:23And then you end up paying tax on things that normally you might not think about having to deal with. But because of those situations, you have a lot more to deal with on that on that plane. So making sure that you know how much things are going to cost before you go in to cash out a pension or retirement plan of some sort, because you’re retiring. Also, you know, 401k is taking money out of them. There is usually unless you’re over the age 59 and a half, you get the 10% penalty plus 20% or 30% tax depending on the tax bracket you’re in. So it’s really, really important to encourage you too, just make sure you’re crunching those numbers. So if you’ve got a question, maybe today you’re thinking, “Hey, you know what? I do have something I’m thinking about doing. I’m thinking about, you know, refinancing the house, maybe I’ll just get a line of credit, because right now interest rates are up. So maybe I’ll get a line of credit, redo something on the house? Or I’ll get a line of credit, pay off all my credit cards, is that going to help me tax wise? If I sell something? How am I going to pay in taxes?”

Dr. Friday 3:26These are the kinds of questions you need to follow up on before you do them. Because then we can say, hey, you know what, instead of selling that real estate that you are not your primary, but another piece of real estate, you are going to use maybe doing a 1031 maybe doing something else is a wetter better way of doing something versus just the immediately sale than having no option but to pay federal taxes most likely on them in there are some loops or catches, if obviously, it’s inherited, inherited piece of property. But here’s a good one.

Dr. Friday 3:58And I’ve had this happen a lot in the last number of months, when we we talk a lot on the radio, obviously about inherited properties. And one of the biggest things are is a lot of times parents wanting to make sure that nothing happens to their own primary home. They put their children’s names on the title. Now, once you’ve done that, you have messed up what we call the step up in basis. So even though you might not have the ability to fully sell that home because you’re only one of a member, if your name is on that house, and it was just put on theoretically the parents at that time gifted you their share of that house at least that share that you have whatever, at their own price. So that can be a problem because a lot of times the parents maybe purchased the home when 10, 15, 20 years ago when the house was 30, 40 $50,000 now selling for three four $500,000 when someone passes away, we love the idea of inheriting step up and basis. And then we have the ability to sell at the current rate and not pay taxes.

Dr. Friday 5:11But it’s really important in how you do this, because so often, a parent wants to make sure the children’s names are on everything, so they don’t lose them. But it’s one thing to be a POA, a power of attorney on something that doesn’t give you the right to buy or sell it or to put you physically on the title. So I would definitely suggest talking to an estate attorney, talking to your financial planner. And yes, talk to your tax person to see is this the right way to do it, to try to preserve as much of your money because if you’re inheriting at 40,000, or you’re inheriting that 400,000, there’s obviously going to be a huge difference in taxes.

Dr. Friday 5:53So that is a really important question, understanding and maybe having some of these conversations or if you’re, you know, heading towards the the older years, whatever thinking about retirement, we now know when our day is going to come on to the guy upstairs, he’s the only one that really is going to know when we’re going to leave this place. But being organized and making sure you don’t just do something because you’re afraid of some reason, then that seems to always be the answer I’m given is that, you know, I was just afraid that if I ended up in a nursing home, or I ended up with dementia, that my children went to get the house or would be a problem.

Dr. Friday 6:31Well, you know, by putting their name on the title, you’re not stealing the house from Medicare, which is always the one biggest firm that we’re biggest thing we’re afraid of when we hit that age is if we end up having no other money and then having to use our home as the money to pay for our home care or our for our, you know, extended care homes or convalescent home, whatever you want to call them, then that is going to be one of those situations where you do need to talk there are Medicare trust, that you can preserve during your lifetime, at least some money so that way, it can be used to take care of you. Or, you know, just making sure maybe reverse mortgage or something that actually takes the money out. And then that way, Medicare, you’re not on Medicare until you’ve actually exhausted all the value of your home, if you are a child and you’re sitting there going wait a second, you know, the best thing I could do is buy my parents home at a fair rate. And then that way Medicare can’t come back and take the home from them.

Dr. Friday 7:38Well, you have to be very, very careful in doing that. I’m not saying you can’t do it, because it is done. It is a doable situation. But you do have to make sure you have my opinion, you have good real estate person that’s giving perfect values and a good appraisal on an actual appraisal that was taken. So that was legitimize the value that you did. Because if you under mark that house by anything, and then the Medicare people come back and they evaluate, okay, wait, they had a home and you know, mom went into Medicare or whatever, and she came back and now we’re looking at this house, is it really money that Medicare should have because that house was sold for less than fair market value, basically trying to keep it in your own family name, that is a problem.

Dr. Friday 8:27Okay, so you do want to be very careful on how you handle if you’re going to buy your parents home, which again, I have number of clients that have purchased their, their parents home, the parents can still live in it. And then that way, if something were to happen, the house is shielded from any kind of Medicare, and it goes from there. So you just want to make sure that when you do something like that, you’re not opening up the door for Medicare to come back in and do an assessment. And either you have to pay them more money than you paid for the House to offset it or you’d have to be able to truly prove that the value paid was a justified value, maybe Zillow because that’s what a lot of the government agencies use. Maybe Zillow was saying this house was worth $350,000.

Dr. Friday 9:15But you know it need a new roof. The air conditioner wasn’t working. Zillow doesn’t know any of that they’re just matching square footage for square footage in the neighborhood you’re basically are in. So if the house has been rundown that you have to upgrade it, change it and do things, then again, that’s not really a problem, you would need to have a good appraisal though documenting these to get that information. So again, don’t just think that when you know the easy problem is oh, I’ll just take care of buying my parents home, I’ll get it paid off or whatever and then they can live in it without having to worry about Medicare something it may not be worth that conversation. So you do not have to be again, attorney, financial planner.

Dr. Friday 9:57Make sure you talk to both of those to make sure that What you’re doing is a good choice and not just kind of reacting to things that happen. I will say I’m not a huge advocate for reverse mortgages, they are out there. The reason I mean, the concept behind the reverse mortgage, I think is awesome. The problem is, from everything I’ve heard talking to people that have reversed, and especially children that have been left real estate that have had reverse mortgages on them, is the interest rate and the fees, they just seem to charge and amazing amount of and I get it, they’re taking a risk that someone’s going to pass away at some point on a reverse mortgage, they’re giving money out, but they’re still holding it in a house. But the house may not be maintained the way it would normally be maintained.

Dr. Friday 10:41But that being said, it, it just seems to me that if you’re going to do one, just really look into the whole dollar amount, what’s its worth, maybe it’d be better to go sell your house, take all the money, and then just pay rent someplace, he didn’t have to worry about it, versus trying to maintain a house and doing the reverse mortgage. But again, that is an assessment from outside, every individual is different, every situation is different.

Dr. Friday 11:07So if you want to join the show, you can, we’ll take a quick break here in about a minute or so. But if you want you can 615-737-9986. We’re talking today about taxes, tax job changes, but also what we need to be doing to prepare for the 23 taxes, as well as helping if you have seen your parents or if you are a person, you know, 65 and older and some of the things you might need to look at, including RMDs that you will have and maybe the qualified charitable deduction, what that means to you.

Dr. Friday 11:30And again, if you’re a child helping a parent out, it’s very important that you actually have some of this information because if they’re not seeing their financial planner often, and or the a financial planner they have maybe isn’t really keen on doing a lot of tax planning more about just growing the money. These are things that’s going to help people that are 65, or at least 70 and older as far as the qualified charitable deductions. But if you’re 65 and older, there are certain rules, Medicare, Social Security that’s going to come into play. So we’ll talk more about that. If you want to join the show you can 615-737-9986. We’ll be right back with the Dr. Friday show.

Dr. Friday 11:53All right, we’re back here live with the Dr. Friday show. Sorry, couldn’t hear one come in. And if you’d like to join the show, you can at 615-737-9986 we are talking about some of the changes that the House of Representatives have put out there and that they’re working on one of them is one a lot of you might be excited about. They are on this one of the bills is to change the information reporting, including the 1099 Ks, which we all know are issued by third party networks such as Pay Pal square Venmo, eBay, the bill would reverse the $600 reporting threshold scheduled to take effect starting January 2020. Starting in 2023, to 99 case, right.

Dr. Friday 13:19So we all know in 2022, they were supposed to send out 1099 Ks to everyone that made $600 or less or, or less $600 or more excuse me, even if it was just selling your cell phone stuff or sharing dinner with your friends, it seems like so they are trying to get this bill passed that would start as of January of 2023. The the 1099 K would bring back the old rules, which was over 200 transactions or $20,000. So they’re trying to get that reversed. I got some time here but not a lot. And if it does, they’re going to revert it back to January 1, 2023. So for some of you that have small transactions that have been worried about using Venmo, or PayPal is not passed yet. So there’s right now it’s still on the table that at the end of this year 1099 Ks have to be issued to anyone that has over $600 of reported income going through PayPal square Venmo or eBay and that’s just some of them.

Dr. Friday 14:22There’s other cash apps that are out there. But it’s important to know that they are working on trying to get that basically reversed or removed. So that we go back to the 200 transactions or over $20,000 They’re also trying to see about taking that $600 figure now in place for 1099 miscellaneous in 1099. Any see so a lot of times for our subcontractors like our lawn, people that do our rentals, things like that where maybe I only pay them eight or $900 I still have to 1099 them because it’s over 600. On that same bill, they’re trying to place a $5,000 need that would actually help with a lot of small transactions. Because right now there are millions of 1099, any season 1099 miscellaneous that are being performed, you know, sent out every time. And they’re saying that it’s kind of overwhelming.

Dr. Friday 15:19Keep in mind the IRS. And always, always try to make sure and I know a lot of you guys that listen, understand this, but the IRS does not write tax law, all they do is implement it right. So when we deal with the Internal Revenue Service, we’re really just dealing with the collection agency. So they make sure that we stay in compliance, which means filing tax returns filing 1099 MIS and 1099 NEC’s, all of the forms, W 2s etc, that’s their job is to make sure that we’re complying with the rules that the House and Senate and in the Presidents have passed down through time. So and since we’re changing these rules on a yearly basis, you can only imagine how hard it is to try to keep up with these tax changes that are out there.

Dr. Friday 16:08But that is their job, their job. So when you get upset and say, “I hate the IRS!” I mean, you know, it’s kinda like hating, you know, the person that collects the money, they didn’t write the rules. If you don’t like what the IRS is having to collect for, then you need to talk to your congressman and your senators, because they’re the ones that are passing these rules that then change what we have to do for taxes. So they always talk about how they want to simplify the tax code. But in the last five years, they’ve used the word simplify, they’ve done postcards, everything else. And let’s be honest, they’ve added more pages to the tax code than we had before. They said that before Trump came in and, and was trying to reduce the amount of papers that we had the file ended up being extra pages, now we have form one, two, and three, actually had them all the way up to five or six, and then they reduced them bound to one, two, and three, but we also brought back page two of the 1040. So as you know, everything’s always changing.

Dr. Friday 17:07So the biggest thing you want to do if you have a question about taxes, and it’s something I can help you with, you can pick up the phone right now at 615-737-9986. Remember, we have taxes do come in September for businesses. And then October 18, is the tax deadline for individuals. Hopefully, that is for only individuals that filed extensions, if you did not file an extension, then you are late, and you need to get those taxes filed. Now, don’t keep waiting. And if for some reason you haven’t filed taxes, I mean, I have probably five or six cases right now, we just finished up doing the last 5, 6, 7, 8 years on individuals getting those all out there. And in three of those five cases that I did in the last week, the three of the five, they had refunds on yours that we’re not going to get refunds for remember, IRS can collect for 10 years, we can only collect from the IRS for the last three years.

Dr. Friday 18:12So if you haven’t filed taxes in six or seven years, then guess what, you have a refund in 2019 18, 17, then you’re not going to get them and in 2020, which is our stimulus year 21 and 20, I’m sorry, 2020 and 2021. Both those years, if you haven’t filed for the last six or seven, you may not have received the stimulus money now assuming your income and everything matches, you might be leaving money, even if even if you owe money, it might be smart, because that money can go towards what you owe the government, if you don’t file and claim it, and you certainly won’t get a refund of it, then you’re going to lose it. It’s that simple. And I just want to say I know there’s some of you out there that never received the stimulus that should have.

Dr. Friday 19:02At this point, the IRS is basically I mean, what we can do. And what we’re trying again, a lot of this is trial and error in our office at least is amending the tax returns showing that we never received the stimulus pulling the transcript showing, attaching that saying that the stimulus wasn’t there. And then hopefully, you’ll be able to get those refunds the most of those checks that had either bounced or went back or people received a check and shredded on or whatever may have happened. Those Those should be able to be reissued now, because they should have already closed out that period of time. But again, it will be a process.

Dr. Friday 19:41So if you haven’t, my suggestion is is to call the IRS first and foremost. I know you’re sitting there saying Friday, we can’t call the IRS no one answers. It is getting a little better. I don’t know why probably because it’s not tax season. So maybe there’s not quite as many people just calling with questions, but it it it least from my office we have gotten through in the last week or two several times when we’ve actually tried to get through. So it is important that you, you know, if you are leaving money on the table, just remember 2021-2022. Pretty much the years you can collect refunds on any earlier years, you can’t. So if you’re one of those procrastinators, who just says, Well, you know, the IRS hasn’t contacted me. So I’m pretty good. I don’t need to worry about it. I mean, I’ll wait till they get back with me. But if you’re leaving money on the table, they’re not going to turn around and say, “Hey, you know what, you left all this money on the table. So we’re going to just call you call it even, let’s call it even you left this on the table.”

Dr. Friday 20:38And we that’s not how it works, guys. It doesn’t work any more like that than if you say, Well, I can pay what I owe you. But I don’t want to pay the interest in penalties. Well, they’re sitting there saying, Well, if you can afford to pay US interest in penalties, and that doesn’t mean you have the money in the bank, but that you can afford to make payments to them, they’re going to make you make those payments. I love the ads that always tell everybody you know, if you owe the IRS more than $10,000, we can settle this case for you kind of thing. Yes, we do it all the time. I’m an enrolled agent licensed by the Internal Revenue Service to do representation. So what I do, but I’m not going to sit there and fit to you, I’m not going to say “Hey, you know what? We can make you 10 cents on the dollar.” It doesn’t work that way.

Dr. Friday 21:22Guys, there’s a certain system we have to go through, first, get you into compliance. Second, find out how much money you owe. Third, how much can you afford to pay? Then we can start having that conversation? Is there a deal to be made? Or are you sitting on a house with $100,000 equity and you owe the government $50,000? Then why would they make a deal with you? You made the mortgage payment, but you didn’t pay them? Therefore the house is there’s the equity in now? Can you get the equity out of the house? That’s a whole different conversation. And that’s the one that’s always the hardest with the government because a lot of people, especially if you’re like self employed, many of us have a difficult time sometimes borrowing money.

Dr. Friday 22:04But it’s knowing how to approach the system, what is the rules that will help you get through that and get on to the other side? I can tell you it client after client after client I can give you that we have worked through the system we have made it through we have gotten them settles settlements. And then we have gotten on to the next and staying compliant for the next five years. Do we what we need to do. That’s doable, guys. It may not always be exactly what you want to hear and certainly isn’t always what people want to pay because nobody wants to pay 100% adds I owed 50. Now I owe 100. No one likes that. But what we can do is tell you the truth and help you get out of debt with the IRS.

Dr. Friday 22:48And if you want to do that, you can always call my office on Monday morning. But meanwhile, if you’ve got questions, maybe you haven’t filed taxes in a number of years, and you’re wondering a little bit about what can be done, or if you’ve got a friend or someone else that can help you, you know, understand how the taxes work, and you’re just like, okay, you know what, if I sell my house, do I have to pay taxes? Yes or No? Do I? If I inherit a piece of land, I don’t sell it for five years? What am I looking at on possible percentage of tax on that? These are the kinds of things you need to understand if you have debt to the IRS, and you want to sell your home and upgrade your home or something? Is that a smart idea? Is there a lien against the house? What’s your options? That’s the kind of things we can help you understand what those options are and where you need to move to try to get the IRS settled, as well as just moving on, you know, no one wants to have all that hanging over their head.

Dr. Friday 23:43Alright, if you want to join the show you can at 615-737-9986 is the number here in the studio taking your calls talking about my favorite subject, which is taxes or money issues, decisions that have to be made. When you’re working with your taxes. Are you going to be reporting this? How much is it going to be this is what this show is about trying to give you a heads up so you understand more about taxes so you can make the right decisions. We’ll take another break and we get back we’ll get to some of your emails and possible phone calls again, 615-737-9986. We’ll be right back.

Dr. Friday 24:27All righty, we are back here live in studio and we were ready to talk a little bit about if you are aged 65 and older a few things that you might need to understand. And actually, you know, if you’re helping your parents, the biggest thing is, of course is making sure that they have taken the required minimum distributions right now. If you haven’t started it yet, you have to be 73. Keep in mind, there were people that were taking it at age 70. Now they’re 80 or whatever. And they’ve been taking it for a while. But the raw rule is right Now, you have to take it in the year in which you turn 73. Now there is a, I believe a generation or a skip rule where it says something about, you can basically take two payments in the following year. But basically, we want to start taking our r&d requirement of distributions from standard IRAs, or 401 Ks, at the age of 73. Work this with your financial planner, that’s their job.

Dr. Friday 25:25Second part of that, more importantly, is to tell you the tax advantage to if you are 70 years old or older, and you have money in an IRA or a 401 K, not a Roth, that’s not going to help you. But if you have it in a regular IRA, standard IRA or a 401 K, and even if you’re not mandated yet, to take out RMDs are required minimum distributions, you can start paying your qualified charitable deductions from that account directly to your organization, and you will pay zero tax.

Dr. Friday 26:01So what’s usually the funny or the easiest way to explain this normally, when I’m talking to people, and I love it, is that normally people go to church and, or they, they write a check, or they bring in cash, and they put it in the tithing bucket for every Sunday. And over that tax year, they can put in five, six, I mean, I’ve a lot of giving 810 $1,000, whatever it might be, they take it from their regular wallet, their checkbook, their cash, whatever, and they put it at the church through the tithing. Well, if you do a qualified charitable deduction, and keep in mind, most people are not itemizing right now, especially when you’re age seven year older, many people don’t have big mortgages, they don’t have enough to meet the mandate to do it. If you’re single possible.

Dr. Friday 26:46If you’ve got a mortgage and you give seven $8,000 a year to charity, you probably are possibly itemizing, but most people percentage wise in the United States are not itemizing like they used to, which means if you’re giving four or five or $600, or 2000, or $3,000, or even $5,000, to a charity, from your wallet, and your age 70, and older guy keeps saying that 70 and older and this is coming from and you do have an IRA or a 401 K, you can pay that money instead of coming from your wallet, you have your custodian, write the check the check out to the new let’s say it’s whatever Red Cross and and then you basically they would get the you would mail the check or drop it in the tithe and fit your church, you would give them the money.

Dr. Friday 27:38But now you would pay zero tax where before you are hoping to itemize it possibly. And again, I realize that a lot of you guys don’t I mean, most people don’t give to these charities for the idea almost save tax dollars. You don’t it’s just the way you are you want to give to help to to make things better for other individuals. But why not do both? Why not be able to give tax free to these organizations as well as you not paying taxes on it. It just seems like to me that is a win win.

Dr. Friday 28:09So again, this is something you need to talk to your financial and I have had a couple financial planners actually call me because they didn’t realize if you were not yet taking RMDs required minimum distributions because of the age, but you are 70 or 71. Right? You’re too young to actually be mandated right now. But you can still do a qualified charitable deduction from those accounts. That is very important, because why not pay those few $1,000 out through there versus taking the draw, put it in your bank and then paying taxes and then giving it to the charity?

Dr. Friday 28:46That doesn’t seem like that’s a smart as efficient way of doing things. So these are the kinds of things you really want to have that conversation with your financial planner on this one, okay, I’m gonna give you the concept. It’s called a qualified charitable deduction. And if you’re working or helping with your parents, you want to also be able to take that information and give that to their financial if they do their own financial and talk to their custodian over the 401 k or IRA to help them make the decision to make sure this is a good idea. I don’t see from the tax standpoint, why this would be a bad idea. But you know what, sometimes financial planners and tax people are not always looking at the exact same picture.

Dr. Friday 29:28My job is to save you tax dollars, there’s as the longevity along with everything else, to hopefully make sure that you are going to be able to continue to live off of what you have saved. So again, that will be one of those situations. Don’t forget your RMDs because the penalties right now are like 50% of whatever so if you had to take a $20,000 RMD and you don’t take it on time you can pay $10,000 in tax penalty for not taking it it’s a ridiculous credit. It ridiculous penalty for individuals. So making sure you have that information is vitally, vitally important.

Dr. Friday 30:09So here’s another thing executors who want a state tax closing letters must request them online. So I know when I work with individuals that have estates, and we have to close them. Many times people are like us to be able to get on, as soon as you basically a state closed, they would send us out these letters. So this was like 15 years ago. But now it’s $76 fee, I’m sorry, a $67 fee, and its form 706, you want to request this, the reason you want to do this is if you’re an executor, or executrix of an estate, and you want the IRS to make sure everything is closed, and it’s finished. And you can do the final distributions, you want to do that so that you get the letter, then you can close out the banks and do the final distributions. Otherwise, something could come back.

Dr. Friday 31:00And then you’ve already distributed the money. And I can’t tell you how many times this kind of thing has happened. And people have come in and, you know, either tried to write off the expense, because they’re like, Well, I didn’t I distributed money. And I didn’t know we were going to owe taxes, for example, on the estate. And, and you do so you know, again, let me clarify, if you’re the executor, Trix of an estate, first do not distribute money until you know if that money has been fully taxed, and all of the creditors and other things have been dealt with. Because once you give the money back or given to the beneficiaries, getting that money back is practically impossible.

Dr. Friday 31:41I’ve seen one or two situations where, you know, it was just a good family situation, and everyone understood, but most of the time, the executive tricks ends up taking it out their portion, because they can’t get the money back from the other family members. So don’t get bullied by the people that are calling. And they’re like, oh, where’s my share, I need my money, I’m gonna lose my house had that happen once, you know, obviously, you know, you weren’t going to lose your house, or what would you done if this person hadn’t passed away.

Dr. Friday 32:09So just, you know, make sure when you’re doing these, and it’s difficult at times, but especially get this letter, the closing letter is very, very important for you know, for you, because it tells the government and everyone else that you’ve kind of did your job, right, and that you’re closing these things up, and you’re making sure that they’re all in the right place. So just make sure you follow up with that and, and take care of it. Because as an executor of an estate, you are responsible for the distribution of that information. So making sure that you have that.

Dr. Friday 32:45If you want to join the show, you can 615-737-9986. We’ll take your calls here in the studio, talking about a lot of my favorite subjects, what we can and what we don’t, and what we’re going to be dealing with, also part of the family, American Family Tax hacked, that they’re putting on the table. Many of you guys might live in Alabama or some of the other states, they’re trying to eliminate that $10,000 that we have in what we call the salt tax. People that live example is my brother who lives in California, his property taxes alone exceed the $10,000 Besides the state income tax, so he he’s losing, you know, $20,000, a year that he used to be able to write off, but now he can’t.

Dr. Friday 33:40So they are looking at finding a way of possibly reverting that back out so that there isn’t that kind of limitation. It’s great living in Tennessee, because of the fact that we have only sales tax and our property taxes aren’t nearly those as New Jersey, California and some other states. So we don’t have you know that that $10,000 is I mean, we used to do the odd and even years remember where we always talked about where every other year, I paid my property taxes twice, and then I would pay my charity twice. And I’d be able to itemize because I was exceeding. Well, the problem with that is I would lose money now on doing that because my property taxes would not be able to exceed the $10,000, which is obviously one of the things we were counting on when we did that. So we’re not doing as much of that kind of planning at this time.

Dr. Friday 34:34Sometimes people their main if the if they were doing that because their main deduction was charity, then we still have the ability to have them write the charity checks twice. But again, if they’re over the age of 70, we’re not having to worry about itemizing charity any longer because they’re able to take the qualified charitable deduction. So again, those are the kinds of information you want to follow up on you want to make sure I had someone just texted and said is tree damage going to be something that they can write off? Well, right now we’re not under a federal disaster in Tennessee, at least not here in the Mount Juliet, Nashville area, which is where that came from.

Dr. Friday 35:13So if you had a tree come down, there would not be an insurance claim as far as I know, unless you have homeowner’s covers that kind of situation. But just to let you know, no, I don’t believe I don’t think the storms are gonna be bad enough for any kind of federal disaster. But hey, what do I know? Here a little rumbling outside, but I haven’t seen anything that has taken down trees here in Spring Hill. So all right, we’re gonna take our last break. So if you have have a question, and you’re sitting there going, oh my gosh, it’s so rainy outside and Nikki and I, I don’t want to have to call but if you have a question, you can certainly join us. This will be the last part of the show. To do that you want to call 615-737-9986. We’re gonna take your calls and more the email bag when we get back from this break. This is the Dr. Friday show.

Dr. Friday 36:10All righty. We are back here live in studio and looks like I have few people that might have a couple questions. Let’s start with Tracy in Nashville. Okay, one question. Hey, Tracy.

Caller 36:22Hello. Hi there. Thank you for taking my call. I am one of 10 acres to my cousin’s estate, he died intestate. And so it’s been a mess. But we were just recently contacted by CPA. And she wanted our names and social security numbers, because she was going to send out a k one. But she didn’t bother to explain what the k one was. And this is not a trust, nothing like that. But can you just briefly explain what a K-1 is?

Dr. Friday 36:57Absolutely. So even though you don’t have trust, what you have is an estate since they were in us that it’s went through, and they’ve got a federal ID number because they have to handle everything. And everything is going to run through this estate. And so theoretically, depending on what was left in this, this person’s life, meaning if there was a retirement account, if there were stock portfolios, those have taxable dollars, and those could wash over to you, the beneficiaries, one of 10. But so what what the K-1 is going to do is it’s going to distribute the taxable portion of the estate. In some cases, the estate would pay its own taxes, and then do the distribution after they’re deciding to do a pass through estate taxes are usually higher.

Dr. Friday 37:45But my question would be in possibly they can or cannot answer yet Tracy for you. But would be because they would have till September, depending on when they did their extension, or, or whatever, they have six months Anyways, after the due date. So you may have to amend your 2022. They may be in a split year. So this may actually fall in your 2023. There’s some flexibility with an estate, but the most important question would be as to call them back and ask them, can they give you an idea of what kind of taxable income just a ballpark, they probably don’t have all the details. So you know, if you’re getting if you get a check today, for $50,000, that 10,000, based on your income bracket needs to go to Uncle Sam, you don’t go and spend whatever that money is thinking that it’s tax free. So that would be our biggest question. Have you received any distributions yet?

Caller 38:42No. We have not.

Dr. Friday 38:45So I’m going to make an assumption that they’re trying to get that information for you. So that way you guys would know, “Hey, you know, here’s what we’re distributing.” And, you know, part of this is going to be if there was a house and there was a step up in basis, most likely no taxes do. But if there was an IRA, a 401, K, a stock portfolio, anything like that, then there would have been tax dollars that would have to be paid when they distributed or cash those accounts.

Caller 39:16Okay, so it’s, so it’s for any account that actually makes interest.

Dr. Friday 39:22Right? Well, I mean, like, retirement account was deferred, right? So if she if this person, he or she died with a 401 K, an IRA or a SEP unless it was a Roth, all of those when they cashed them out, would have taxes needed to be paid. So the estate may do an estimate, just as if you went in and cashed out your own 401k. Today, you would have to pay taxes when someone passes away. We have to pay taxes on that money. And they’re going to have to cash it out to distribute it to all 10 beneficiaries.

Caller 39:54Yes.

Announcer 39:56So that’s the kind of stuff now there may be many things that they sell the household good’s their money, and that was in the bank already, those kinds of things that’s going to come to you most likely cash free, but all of its going to transfer through the estate, which means whoever is handling the taxes is going to do those distributions, what portion is taxable? What portion is not. So, the k one is just going to give you mostly the taxable income. So, until you get a distribution, there’s not much you can do Tracy, but at some point, some of the money you’re getting, I can already tell you, if they’re asking for that information, some of the money you’re going to get will be taxable. How much? I don’t know.

Dr. Friday 40:40Okay. All righty. Let’s go to Willie in Nashville. Hey, Willie, what can I do for you?

Caller 40:49Hey, Dr. Friday. Thank you for all the good stuff you’ve, I don’t know, somehow we have a connection, because you seem to talk about what I’m thinking about.

Dr. Friday 41:04Good. I’m glad.

Caller 41:06What I’ve got here is a man of brother and sister inherited my mother’s property when she passed away in September. We had to do some fixes on the property and wanting to wait out. So you know, we could put on the market once it was close to actually being free, you know, from the six month hold period. And in that time, I you know, my situation is I’m on disability. So I’m worried about the money. And what happened is they distributed the money. And we decided to do what I think you had mentioned before, it’s like I have a health trust.

Dr. Friday 41:51Okay, disability trust, yes.

Caller 41:53All right, disability trust. So that’s what I’ve got in place. Let’s see, there’s another piece of property and have those expenses on that property. And my mom’s just personal that, you know, it had me I went about $7,000 to my brother. And what happened is, I went ahead and paid that to a bank account that we all three are on, that had the other piece of rental property that she left for us. But I’m scared of hate having that and thinking, um, she felt my interest. So that I don’t definitely afraid of losing my Medicare. I’m gonna fix on Kansas law where, you know?

Dr. Friday 42:39Yeah, no, I hear you. But it sounds like you’re on the right track. But you are going to want to make sure that whoever’s handling the estate, if it’s your brother’s, or whatever, you know, that everything is running through that disability trust, and then you know, obviously writing your care your expenses for life and taking that to go directly through that trust. But at this point, it sounds like and it’s difficult in this scenario, but it sounds like you’ve done the right steps, but you’re just going to need to make sure that trust is filed on every year, that it’s just another standalone entity. In essence, if there’s activity at least, then and then pay those taxes and move on from there.

Dr. Friday 43:19But you know, Willie, it sounds like you’ve done the right thing by setting up the disability trust. So that will put you a shield between you and the disability. Again, if there are disabled, I know there are disability attorneys, and you may be asked one of them or something. But I will be honest with you. I mean, you do need to make sure you’re talking to someone that really understands the type of disability that you’re getting through Social Security or through it, maybe through an employer, I don’t know which but you need to make sure that you don’t cross over that line, right. Because last thing after all the hard work and everything you’ve done, you do not want to lose the disability, because the money from the estate isn’t enough to last for the rest of your life.

Dr. Friday 44:01So I’m assuming, you know, I’m making that assumption. So but anyway, so yeah, just you know, I would say at this moment, you’ve done the right thing from the tech standpoint, but definitely probably consider calling or talking to somebody that has a an attorney for disability or someone that works in that field, just to make sure there’s nothing more you can be doing to make sure you’re not messing up that benefit. Okay?

Caller 44:27Gotcha. Thank you so much.

Dr. Friday 44:29Thanks. All right. Let’s see what you can get. Is it Melanie, really quick? Hey, Melanie. I got about a minute and a half. What can I do for you?

Caller 44:39My mother passed away and left me 40 acres and her home. And I was listening to show and I don’t know if it’s mine to deal with if I please or what?

Dr. Friday 44:53Well, I mean, if you were the only beneficiary that she left it to, then the answer is yes. And you would have received a step up in basis. So you know, if you want to sell it or move into it or a rent it or you have all kinds of options there.

Caller 45:08I’m not living in it. I would like to sell it.

Dr. Friday 45:12Yeah, you could sell it as long as you’re the only beneficiary and the state has closed. I mean, you know, again, not knowing you personally, or at least in that situation, I would just say you want to make sure that the title has been put in your name, you can do anything you want.

Caller 45:27Thank you very much.

Dr. Friday 45:28I appreciate it. All right. So we are at the end of the Dr. Friday show. So if you have questions, all you have to do is call us Monday morning at 615-367-0819. Again, 615-367-0819. Or you can email friday@drfriday.com. Again, friday@drfriday.com. And if you’re not too sure who I am, or if you want to just send a message right through our website. It’s drfriday.com. Again, drfriday.com.

Dr. Friday 46:05I hope that this show has helped and if you’ve got questions about taxes, keep in mind I’m not an attorney, not a financial planner. So any questions or answers I’m giving you is more based on taxes. So I would definitely suggest going and talking to an attorney if you have issues just like the young lady wanting to sell the house if she inherited, it’s closed the estate, go to the attorney and then you can make sure you have that properly settled. I hope you guys are having a wonderful cloudy rainy Saturday and I’m gonna be on next Saturday. Call you later.

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Welcome to another episode of the Dr. Friday Radio Show! In this episode, tax expert Dr. Friday answers callers' tax questions and covers the following topics: * If You’re 70 and Older, You Can Make a Qualified Charitable Deduction * Does Tennessee Charge Sales Tax on Construction Projects? * Retirement Accounts, IRAs, and Traditional IRAs * How To Use Qualified Charitable Deduction to Save Money * When Is the Perfect Time to Get Your Tax Issues Resolved? * How Much of a Charitable Donation Can Be Written Off? * How Do You Protect Yourself From Financial Issues? * When Are Appraisals Required for Donations * What To Do If You Inherit Property * How To Do Tax Preparation and Financial Planning The Right Way

And much more! Transcript Dr. Friday 0:00 No, no, no, she's not a medical doctor, but she can sure cure your tax problems or your financial woes. She's the how-to girl. It's the Dr. Friday Show. If you have a question for Dr. Friday, call her now. 737-WWTN. That's 737-9986. So here's your host, financial counselor and tax consultant, Dr. Friday.

Dr. Friday 0:32 Good day, I'm Dr. Friday and the doctor is in the house is a wonderful Saturday out here just got back from a few days of doing tax seminars. And I have a lot of interesting things to share with you, for many of this is going to be for my small business owners. But some of them will apply to actually individuals energy credits, or things that are available out there that maybe you didn't know about. We had two wonderful speakers once a local girl here that works at Belmont, Professor over at Belmont Marilyn Young, Ph.D, CPA, she has it all.

Dr. Friday 1:06 And in one of the best speakers that I've seen in a long time, I've seen her before I enjoy having her at our seminars. But she is a wonder and what a few things she brought up just to get you guys on track because many of you have already filed your 2022. So I'm not I'm well I'm here working on on individuals that are still working on 2022 taxes, many of you are working towards 2023. And one of the new tax things, we did get a couple extra energy credits. And a couple of them are odd ones, at least I found that I one of the most the unusual ones that came out that I heard of was that if you wanted to have a certified company come into your home and evaluate your energy efficiency, then you can get a $150 credit against that bill.

Dr. Friday 1:55 Now, I don't know what the maximum for something like that is, but the IRS will give you up to $150 on your tax return as a credit for doing this evaluation. So I thought that was kind of an interesting off the unusual because I've always many of you guys know that if you do windows, in some cases, if you are a contractor and 2023, they do have some contractor credits, 2500 for kind of semi grain and then like 5000 for being over the top green building. And again, there's definitions in there. But if you're in the industry of building homes, you might want to look and see if any of these credits apply.

Dr. Friday 2:35 These are new credits that are going to be out there for you and I in the year of 2023 through 3033. Is the expectation probably one of the more important conversations that I had with many of the people that attended that also do exactly what I do some I should say exactly some do. Only offering compromise or IRS negotiating. Many of us do taxes as well as that. And we're all being bombarded. And I'm sure many of you are I know I've been talking to my sister the other day and she said she was getting phone calls and she's never been self employed about the ERTC up to $26,000 per an employer for their tax number comes from a maximum credit of 2100 per employee and 2020 and 5000 in addition for employees and 2021.

Dr. Friday 3:26 Okay, so what people aren't telling you is that right now that some of the changes the consolidated appropriation to x change this, that even businesses that got PPP can qualify, but the ER TC is basically extended through third quarter of 2021. For most businesses, that was the end right, so no further than third quarter 2021. And so if you closed your business, keep in mind now I am going to say this, I don't know if this is the direct rule or law but if you closed your business in 2021, you would only qualify for 2020 and there would be a possibility of decline in some of the rules in 2020 was you didn't qualify if you took PPP you didn't qualify for it.

Dr. Friday 4:17 So there are a lot and I'm going to tell you my firm does not handle ERTCs, I think there are specialty for companies out there but more importantly there is a huge according to the IRS. There is a huge scam going on out there where people are getting ERTC money put through the IRS, you're getting a check thinking that you've done everything correct. And then the IRS is sending back notices and they're starting to do this for the people that got the early ERTCs that you weren't qualified for any of it. So guess what? The company that you went through that might be a scam that said, "Oh, you qualify for all of this." Now you're going to have to pay back not only the money money that you receive, but all of the money the IRS sent you, in some cases 15-20% paid to the company that that got the money in the first place.

Dr. Friday 5:09 So let's not play around and say, "Oh, wait, I'm just gonna go after. And if I can get it, it's free money." It is not free, you have to pay tax on it, you have to go back to the tax year in which so if if you're getting ERTC for 2020, and you get it for 2021 quarters, you will be amending 2020 and 2021. I don't care what anyone else is telling you out there, there seems to be a lot of false information. The truth of this is, according to the IRS is that the year that it affected, you have to go back and you have to file that against that year, there are some penalty waivers that are available out there possibly doesn't mean everyone's going to qualify.

Dr. Friday 5:49 But theoretically, you could pay penalty, interest and taxes on the money in the year it happened. So keep in mind, if you are a pass through company like an LLC, or Sub S Corporation, or C, a Schedule C, then you are Mindy not only the business return, but your personal tax return. And most cases, the the tax is usually falls on to the personal tax return anyways, very, very important information, don't just get on the phone, give person a bunch of your information, they go out get a bunch of this stuff, there's, you know, up to three years of of getting you these tax credits, and then they disappear. They're not here to recommend you or to do anything, and you are now stuck having to pay back money that you didn't even get all of so again, if you want to join the show, maybe you have a story or situation that something similar has happened this weekend, again, Thursday and Friday.

Dr. Friday 6:45 At the seminar, we heard lots of stories about different situations that have been happening with the IRS good bad. You know, obviously, in many cases, bad. But if you have a situation where you're dealing with the IRS, or maybe you're dealing with this employee retention tax credit, ERTC, give us a call on the station 615-737-9986 is my number here in the studio. And we can talk about that. Or if you've got something where you've maybe you haven't filed taxes for a number of years, I will tell you now is the time to get that because they are going to be making they did get some funding in the last bill that just got passed. So the IRS will be getting some money towards collection, most of its going to be going towards advancement. But those advancements is also on how they're going to collect better.

Dr. Friday 7:40 So, you know, if you have not filed and you're really wanting to get your taxes in line, you're really wanting to get straightened out with the IRS. Well, guess what, now's the perfect time. Now when tax season is not here, and we've got the ability, and these kinds of things don't happen quickly, I always try to tell people because so often people will come in and they're like, well, I need to get this done, I'm gonna go buy a house, right? I want to I want to get married, and you have all these tax issues, you best plan that's going to take you 12 months, maybe even 18 months before you will have true resolution, be that through either an offer and compromise payment plan, combination thereof, a partial payment plan, or even bankruptcy, these are all options out there for you. But you really do need to understand what you have.

Dr. Friday 8:27 And that's one of the things that my firm does versus so many. And once you hear him on the radio, the first thing you do is you call those companies and I know they put a lot of money into marketing and most of us smaller companies do not. But the fact is, you're going to meet me you're going to be dealing with me, you're not going to be dealing with someone that buys the lead from the company that advertises on the radio, they're not going to ask for our company's not going to come out and say, well, we need $5,000 And then $500 a month, that's not going to happen unless we have some serious resolution and problems that we're solving.

Dr. Friday 8:59 If we're on the right track and we're moving, then you'll know exactly what it's going to cost and how you're going to pay again, we're going to be partners in this for at least 12 months if you're doing any kind of serious resolution. So you have the ability to get your life back in order. And we want to stay with you because it you know, once we get that resolution, guess what? You have to stay current for five years. So do I want you to fall off the wagon once I get you back in there? No, I want to keep you going in the right direction. I want to make sure that you're moving in that right direction so that we don't ever have to deal with the IRS again, that we're actually filing and paying and dealing with whatever tax issue comes up on the normal basis than having to go back 5, 6, 7, 8 years.

Dr. Friday 9:43 Because in most cases we only have to go back six years. That is what the tax law says. But that being said, if there has been any kind of of the government filing tax returns on your behalf statutory tax returns, sorry. Or if you have had some other tax issue that's come up, even though it's outside those six years, we need to deal with all of it, you don't want to be waiting, there are time clocks. But keep in mind, some of the things that people do to try to avoid paying tax also delays the time clock. So I mean, I have people that may be filing something just now for something in 2007.

Dr. Friday 10:26 Because they filed that eight years late. And now they're, you know, they haven't hit the 10 year clock. And so it doesn't mean that you are going to just be able to 10 cents on the dollar I don't like people to I mean, I know they always advertise, oh, I save somebody and everybody I know everybody that was at our thing could tell somebody about how they saved someone, they owed $100,000. And they only had to pay 15,000 or 5,000, or $25.

Dr. Friday 10:54 But that's not the normal everyday situation. If you have assets, if you have a good job, if you're working and trying to just keep your head above ground, you're going to have to make some adjustments. And most of the time, it's individuals like myself, which are self employed, that run into issues with the IRS. Not always, I mean, sometimes people take money out of retirement accounts or they get divorced. And those kinds of things can lead to tax resolution issues. But the most important thing is we can fix it. I mean, we can help you get out of that. So you can start moving forward and build a future without having the IRS necessarily dragging you ball and chain behind.

Dr. Friday 11:32 So if you need questions on that, you can keep listening, you'll get my phone number. But what we're going to do is we're going to talk a little bit more about some of the tax things that are coming up in 2023, how you might be able to start preparing, because if you have a situation or story to share with you when we get back about how somebody inherited a house full of furniture and clothing, and maybe how he could have saved himself because it was almost $40,000 with the charitable donations that got disallowed by the IRS, and how that could have maybe been stopped. Have we been able to do it from the front instead of trying to play catch up on the backside.

Dr. Friday 11:32 So we're gonna get ready to take a quick break on our first break, you can join the show at 615-737-9986. We'll be right back with the Dr. Friday show.

Dr. Friday 12:30 All righty, we are back here Lloyd in Studio, you can join us if you want it 615-737-9986 taking your calls talking about taxes and other issues. So if you happen to inherit a house full of maybe your mother's or your grandparents or somebody's furniture and clothing and the best thing to do, or many times, the easiest thing to do is to have someone like Goodwill come by and pick up before you do that. Especially if you if you do a quick walk through and you're like oh my gosh, there are hundreds of items. They are all over the place, you know and in they're in good shape there.

Dr. Friday 13:14 It's not like you're you know, we're not talking old rundown, we're talking very nice are really good furniture and clothing. So what you have to do, according to the IRS, is you have to get an appraisal by a licensed appraiser to come in and do the the charitable or the outline so that way when because the gentleman I represented, did everything as far as I was concerned, correct. He went to the goodwill, he went online, he took pictures of everything, he documented every item, but because it exceeded plus the $5,000 He had to have an appraisal. So I was told that this one and I'm not. I'm gonna put this as a caveat. But the fact is, if you have furniture that you can show was worth $5,000. And then you had clothing that was worth $5,000. Those were completely different types of categories. You may be able to do something slightly different, but it's all about the proper documentation, especially if you're over in a state.

Dr. Friday 14:17 I mean, unfortunately it happens. And when something like that does happen, your best bet is if you're going to be trying to write off the charitable deductions that you have one of two things sometimes one person suggested heavy one of those organizations that come in and does the whole auctions. Another person said they wouldn't touch it unless there was antiques. I don't know that's not my expertise. But I will tell you that I'm sure you could have somebody come in and give you a basic appraisal in writing that has something that you can use that would then be able to justify your tax deduction versus just doing what you know what's those things?

Dr. Friday 14:54 Okay, I went online use the goodwill I said I had 20 sweaters I had 50 These I had 10 pair of shoes took pictures of all those things. So that way you knew that they weren't just being made up. The IRS says no, no, it has to be a full appraisal. So anytime you're dealing with something like that, where you might have a larger number than normal of anything that you may have inherited or had a situation with, again, let me reiterate, your best bet is to hire a company that is licensed, they can come in and give you an appraisal, I know you're saying it's going to cost me You know, I don't know, $500. But you're gonna get a larger tax deduction.

Dr. Friday 15:30 If you have the proper documentation, if you don't, you end up getting yourself in trouble with some of the things that come along with the IRS and the in the situation that goes with that. So again, just you know, if you if you have that now, same thing goes with land or property or anything else, you know, if you have a situation where you have inherited a piece of land, or you've inherited a home, you need an appraisal, or you need somebody that can at least give you proper comps, at the time of passing, that will give you the availability and the proper way, the easiest way to protect yourself is to get an appraisal, no question.

Dr. Friday 16:11 That would be the number one way to make sure so that way, when you file your taxes, and you sell this property for 500,000, and it appraised for 450, you're only paying tax on 50. If the IRS comes back and audits, will you be able to justify that if the situation changes and you don't have any documents, because then the IRS can come back and say zero, there was a story that Marilyn young shared, that I thought was interesting, because the court cases that she had represented, both of them were attorneys, which obviously they can take things to the tax court a little differently than you and I will make second guess ourselves.

Dr. Friday 16:49 One attorney basically when it's tax court, and he had sold some art, and he was, you know, on the side, he loved to buy and sell art and just collect it. And so he gave to a charity. And we all know that if I buy something for $100, but its value is $1,000. If I give it to charity, I get to write off the $1,000 the value of that object, not so much what I paid for it. So obviously, this is a big area in which the IRS wants to audit. And so they came back and said, Well, what's the value? He said it was 450. They said it was 250. But because he took it to tax court, they gave him zero, because he lost in tax court because he didn't have a proper appraisal. So anything over $5,000, guys, you really do want to make sure you have an appraisal to justify anything that you're doing on those kinds of situations. But you know, it's better. And sometimes I know it's not always easy, and sometimes situations aren't always as simple as just saying, oh, right, get appraisal. But, you know, you have to take in and deal with some of those situations. It looks like we might actually have a caller coming in. Tony from Nashville. Hey, Tony. There you are. Hey, Tony.

Caller 18:12 Hi.

Dr. Friday 18:13 What can I do for you?

Caller 18:15 Yes, ma'am, I I keep hearing about you mentioning about having an appraiser done for the donation items. And, you know, I know appraisers that does how's it you know, when you buy a house to do appraisal but I don't know about some companies that will do the appraisal for the donation item. Do you know any few companies that you can give some name for just not just for me for the audience?

Dr. Friday 18:42 It is and everything, I'm not going to do it there is ones that come back up under you know, I mean, obviously I'm googling probably like anyone else does on that. But there are some but they're basically considered estate appraisals. So they basically look at it from what I'm seeing here on on them. They're looking at people that have inventory or assets, you know, and again, would that really work for you know, jewelry firms silver paint paintings, you know, I get it, you know, if they're antiques, I'm sure we can find good appraisals. And I guess if anyone is listening, that actually knows somebody that does appraisals like this, this is great, Tony. That's a great question.

Dr. Friday 19:27 In in our area and the Nashville area to actually call or give us some information on it because if the IRS is asking us to have values and anything excess of $3,000 and then you know moving from there then we need to be able to at least lead people in the right direction because everything I'm reading about on here are more the people that are offering the appraisals are truly more looking for the household and item. Not someone's T shirts and shoes you know which is what the IRS is coming back to my clients saying, "Wait, you know, there was you had 40 pair of shoes, and he took pictures of all 40 pair of shoes. And he said they were valued at $5 based on goodwill."

Dr. Friday 20:10 But because all clothing and everything got lumped together and it exceeded past that $5,000 mark, they want an appraisal. But that's a great question to ask. And I'm gonna see if I can get us a better answer than I'm giving you right now, Tony, but thank you, I will see what I can do about finding some people that we might be able to use for those circumstances.

Caller 20:29 All right, thank you.

Dr. Friday 20:30 Thanks, Tony. All right, let's see if Mike in Portland can help us out a little bit or maybe think it's a different direction. Hey, Mike, what do you got going?

Caller 20:39 So with the Trump tax situation we have now you could buy a piece of equipment, just write it off, you know.

Dr. Friday 20:47 Yes, section 179. Yes.

Caller 20:51 And so you have that equipment, and then you get another one next year, you get another one. Next, you get another one, eventually, you got to start selling them.

Dr. Friday 20:58 You do, and that's when the problem becomes. Because what happens is, if if let's just say I have a 3500 Ram, right. And so when I purchased it, because it was a vehicle, I could depreciate, I took a section 179 and I took it all off in the first year. And so I wrote off those expenses. And now let's say I want to sell it five years later. And then you know, let's say it's worth less, let's say, I paid 50, and it's worth 25, I'm going to pay tax on that 25,000, because I've already taken all 50 off of my taxes.

Dr. Friday 21:38 So when I sell that vehicle, I'm going to have to pay tax on whatever I sell it for. So that's the same way with anybody with construction equipment or, or trucks, you know, obviously. So whenever you sell one you kind of want to go and that's why I always tell people it works great in the first year. So So you go and buy yourself a nice big over 6000 pound vehicle, and you're in the construction industry, good reason to have a truck, and you go use it and then a year later you upgrade it. But now you're not going to get the full value, right?

Dr. Friday 22:10 Because you have to trade him for 30 grand and maybe you paid 50 So maybe now it's 20,000 Eventually you're going to probably not have a need for the big truck and you're going to end up recapturing was what we call it recapturing that depreciation in pieces. So you are correct. A lot of people never think about the back side, all they're looking at is that instant gratification.

Dr. Friday 22:10 Oh, I get to go buy a dozer, I went and bought this. But when you're no longer using that piece of equipment, and there is especially right now with trucks and stuff, the value is actually fairly decent, then you're going to actually have to pay tax on the recapture if and only people that can do this just for Mike and my purpose is business owners individuals cannot write off a vehicle for for personal use.

Caller 22:59 Yeah, like a C Corp.

Dr. Friday 23:01 Yep, C Corp can do it. Yep. And I want to put out there a lot of times, especially come November and December, I'll get all these people saying hey, I'm gonna run out and buy myself this or that, or I'm gonna go by myself and F 250 or something. And the person basically has, the person isn't an accountant, what is the person in the county need an F 254. And if it's your only vehicle, again, if you're running it through your corporation, Mike, you are outside this conversation.

Dr. Friday 23:30 But there are people that tried to do it with their own vehicle. And that's a problem as well. Because if you don't have a second car, then you can't do a section 179 Because it's not 100% business use. So again, if you're running a C Corp, and you're in the construction or something and you've got a couple of different a lot of plumbers and electricians, you know, have number of trucks then then at that point, the only way you don't usually have to pay the reCAPTCHA in most cases is if it gets totaled. Not something I want you to have happen, but I'm just saying.

Caller 24:05 Thank you very much.

Dr. Friday 24:07 Thanks, Mike. I appreciate you. All right, we got mark in the burrow. Yes, we'll grab them real quick and then we'll take our break. Hey Mark, what's happening?

Caller 24:16 Hey, how are you?

Dr. Friday 24:17 I am good sir.

Caller 24:20 Got a quick question. I've got a great aunt that turned 100 in February and we are trying to sell her sell her house before she passes. The power of attorney is active as long as she's alive. And we're trying to keep the house from falling into probate. If we sell the house after she passes but the house appraised at 270 The way it sits we've got an upstairs that is not counted as living space because I see only height but the house would have appraised at the ceiling height was over seven feet at the 320, but they appraised the downstairs at 270. So we were asking about 285, because the upstairs is finished out, and it's worth something. But if we were to just buy the house, would we pay your taxes on the appraisal? If we sold it later for 285?

Dr. Friday 25:21 So if you purchase the house, I mean, if you sold? Are you thinking about buying it from your great aunt? Yeah. Or is this, okay? So if you buy the house from your great aunt, you'd have to make sure because it's a family connection, you'd have to make sure that you're paying the fair market value. Okay, so 275 is the fair market value, theoretically, because that's what it appraises for. And I might suggest having more than one appraisal, just because it is a family exchange, right, you don't want to just take the the lowest, but if it's possible, pull out the best of the best than average it, then when you buy it for 285, she's not going to likely have any taxes because she gets the 250 exclusion. So as soon as she's single, so she had to pay something for the house or inherited from her husband at some point in the thing. So she would actually be able to have tax free money, and then you would buy the house for the value it is and then if you sold it, you would you know, pay tax only on the gain above the 275 or 85. You paid. So that makes sense on the capital gains on the on the capital gains above it.

Caller 26:31 Would the year of the House have any effect on that house was built in 1925. And she pretty much wrote a check for it back then I think she paid 45 or $48,000 for it.

Dr. Friday 26:44 Right. Which I mean, again, she's only I mean, if you're paying 285 And she gets to 50, there's only $35,000 difference, you know that she would have a potential capital gain, she had to pay something for it, even if it was only four or $5,000 in those days. And she most likely is their central heating and air conditioning. Is there any I mean, some point someone had to come in there and upgrade it if there's any heating, air conditioning, or anything like that somebody put some money in the house at some point.

Caller 27:11 Correct? Yeah. And it needs some update. It hadn't been shouted since about 1980.

Dr. Friday 27:16 Right. So all I'm saying is as long as her investment in the house is 35 and she gets 250. You could she could sell for 285 and pay zero tax on her side, then then you know, then you would treat it like any investment property or whatever you want it to do on your side.

Caller 27:36 Okay, all right. Very good. Well, I appreciate you taking my call.

Dr. Friday 27:39 No problem. Thanks, bud. All right, we're gonna take a quick break. When we get back, we'll get some more of your phone calls. 61573799866157379986. All righty, we are back here live in studio. It's a wonderful Saturday. And hopefully you guys want to wish all you fathers Happy Father's Day tomorrow, I know many of you are going to have a wonderful day, hopefully the the rain in the weather will hold off. And we'll get to enjoy a little time with your kids, or, or at least maybe a zoom call, who knows nowadays with the technology.

Dr. Friday 28:19 And so if you want. But meanwhile, let's talk a little bit about if you inherit property. Now the gentleman called actually had a unique approach because he was going to go ahead and kind of buy the property out of the estate. And there's nothing as far as from the accounting standpoint, there's nothing wrong with it, make sure that if I would probably consult with an attorney just to make sure that you have all the documents in line so that if there's more than one person that could inherit, they could claim that you didn't pay a right amount or something like that.

Dr. Friday 28:51 And that can become a sticky situation. So just make sure that you actually have everything in line so that they don't think that somehow you're getting away with something. But it would certainly probably help your great aunt to sell that house and have it out of the way. For that situation. I will say if if she when she passes away, whatever the house appraises for at the time of her death would be tax free money to all of you. But it would have to go through probate which might be something that might not be worth, again, not an attorney.

Dr. Friday 29:26 So I don't understand exactly how all that works. And I do know in the last year or two there has been some changes in probate as far as what used to be a small probate which is what this would have been. Now they don't really have that and so they have changed that to be more like everybody has to go through some sort of probate situation all right. So if you inherited property or if you are a custodial and other thing, qualified charitable deduction, still don't hear a lot about it. Even though I think if you have an older parents, anyone that is 70. And above taking qualified charity, you can qualify for qualified if they have RMD. Now, again, I know you love you're sitting there going wait, I don't have to take required minimum distributions till I'm 73. But the Tax Law never changed the 74 qualified chair.

Dr. Friday 30:21 So if you want, let's say, every year, your, your parents give money or you give money to your church, and you are seven year older, and even if you're not required to do RMDs, or requirement on distributions from your 401 K or your IRA, you can make a qualified charitable deduction, actually up to like $100,000. But I mean, let's say you give two or 3000. This is $1. For dollar deduction, right now you give to charity, because you're an awesome person, and you want to still give to the charities that you believe in.

Dr. Friday 30:56 But no one says that you can't win twice, give to the charity and pay zero tax on that money. Especially if you have money in a in a 401 K or an IRA anyways, right now, if you take that money out, you put it in your bank, you have to pay tax, then you go and give the money to the charity. Well, if you're 70 and older, and you do have the ability to take RMD, then you could take the money directly from the IRA or 401 K, send it they'll write the check and send it to you, but basically directly to the nonprofit, then you don't have to pay tax on it. Now, we will still report it on your tax return, we will still report it as a charitable deduction.

Dr. Friday 31:37 But it's a qualified charitable deduction, which means that you now give your three or $4,000 You don't have to worry about itemizing, you don't have to worry about it being part of that standard deduction. And you get to give it over. So I mean, in some cases, I have some clients that have me calculate every year, how much money did they save, and I then tell them, okay, you saved, you know, 200 $300, whatever it is, and then they say, "Okay, we're gonna give that much next year to the charity, they're using it as a way of giving more to the people in the organization."

Dr. Friday 32:09 So you don't have to do that. But my point is, if you're helping parents, or if you are a person that is 70 and older, and no one's talked to you about qualified charitable deduction, you need to go talk to your custodial custodian over your IRA or a 401 K. Because they're the ones that know or have that and they, if they say, Well, you don't have to do require minimum distributions, you can tell them that's correct. But I can do a RMD for charitable deduction.

Dr. Friday 32:41 Because I am 70 and older, 70 and a half and older. So talk to them, make sure that's a good, I'm not a financial planner, guys, I'm not going to tell you, it's a good thing. But if you're taking the money from your checking account and giving it to the nonprofit, then it's much better, it seemed like if you take it directly from your 401k, and give it to the nonprofit, why not just skip the whole tax situation and give it makes perfect sense to me. So if you have no idea what I'm talking about, and you have access to the internet, you can certainly look up qualified charitable deductions better yet talk to your tax person, and or your financial planner, because they will definitely know about it.

Dr. Friday 33:22 They I mean, if you have a financial planner, I'm assuming many of them have probably already talked to you about this. But again, 70 and a half was the law before that's when you actually can start doing your RMDs theoretically, for qualified charity, you do not have to take your qualified or your quote, your RMD sorry, get my QCD and my RMD. To me letters go in here, guys. Taking your required minimum distribution until you're 73 now, but if we can save money, put more money in your pocket or give more money to the charities. Why not do it, it doesn't seem like that should be a very difficult decision.

Dr. Friday 34:03 But I do want you to double check that with your financial advisor as well as your custodial over your retirement account if you have a Roth that's not this is more for traditional IRAs and traditional 401k situation steps, all those that have tax money growing in them. This is a way to get the money out without paying taxes and why not? Just seems like a smart way. Alright guys, we're gonna be getting ready to take our last break before the end of the show. So if you've been holding your breath, you're like, "Oh my gosh, I really have a question for Dr. Friday. I just don't know if I want to call."

Dr. Friday 28:51 Well now's the time to call 615-737-9986 is the number and we will take your call talk about taxes or if you've got a parent that maybe has a question about their situation or maybe your inheritance that's usually a big one or maybe you know For someone that hasn't filed taxes in a number of years, and you just have a question like, they don't even know where the first document is, guess what I can help you with that I can help you recreate the last number of years that we need to recreate to get back on track. That is something we're really, really good at. But again, right now we're gonna get ready to take a quick break here, get back, we'll talk more about some of the different advantages to different tax breaks that might be available, also give you some information and how you can get an appointment with us at our office, as an enrolled agent licensed by the Internal Revenue Service to do taxes and representation.

Dr. Friday 28:51 That's really all I do, guys, it's really a very small window of information that I'm going to offer you. But if you want to join the show, 615-737-9986 this is the Dr. Friday show and we'll be right back.

Dr. Friday 36:03 All righty, we are back here live in studio for the next so say 10 minutes. So if you've got a call you'd like to make, you can 615-737-9986 taking your calls talking about my favorite subjects, mostly taxes and money, obviously. But how that affects us and how we can keep more of it in our pocket is really the purpose and how to make sure that when we do make decisions or do things that we're actually protecting ourselves.

Dr. Friday 36:37 So I just want to make sure that when you're making decisions for yourself or for an estate or if you're an executor, or executor x of an estate that you do want to make sure that you're documenting and making sure all that information is coming through properly. And that you don't end up with having to deal with other issues. Unfortunately, we've seen especially I hate to say it but if you don't, all my best, and we put this way, my best advice and again, not an estate planner, not a financial planner, not an attorney.

Dr. Friday 37:09 But if you have a choice people plan everything you can to the best of your ability, leave your wishes, in my opinion, in a trust, because then you don't really have to go through probate you do the poor overwhelmed does get probated. But basically, it just says everything in the trust will be distributed. So there's really no distribution or information in a in a trust that has to be disclosed, which is one of the things I like about a trust. But more importantly, you know, it's it's easier for the people that are left behind. Because when you have someone left behind, it just seems like money can make things very uncomfortable for a large number of people.

Dr. Friday 37:50 So, so often when something happens, there's always someone that feels they didn't quite get as much as the other person or they don't feel like they're being treated the same as someone else. And I mean, the advantage of coming from the size family that I always talk about yours no, I have a very big family was the fact is, let's be honest, our parents took care of us great when they were living. But when they passed away, we didn't have to worry about having hundreds of 1000s of dollars being split between age children, siblings, grandchildren, great grandchildren, it would have been a nightmare. So maybe not having quite so much as a good thing. But if you do if you're blessed enough to have a good distribution, Itami repassing.

Dr. Friday 38:34 Make sure that's documented. Well make sure your wishes and the only way that really happens, in my opinion is through a trust. Again, not an attorney, not telling people to go out there and get trust. I am just saying that make sure that whatever you have, make sure that setup well because we've had too many come in this last week or two where there's been just situations that could have been controlled better had the person that passed away, actually really known what was going to come and we never do, right. I mean, it's not like we have a book that says oh yeah, this is what's going to happen on this day. That would be so awesome. In some ways.

Dr. Friday 39:09 So if you have tax issues, if you know someone, and if you're thinking about getting married, one of the first things we have a couple cases and we've had a couple in the past first thing before you decide to get married, and I'm always shocked when it comes to this. But you know what, you should really have a conversation. What's your finances? Like? Do you owe a bunch of money on credit cards? Oh, yeah. Have you filed your taxes? Or do you owe the IRS because even though you marry someone that owes the IRS, it's not like the IRS can come against you. You didn't owe it when you before you married them. But guess what?

Dr. Friday 39:47 They can take the money you bring into that house and say well, you know what? Now you're 5050 on all utilities even if the person you married is paying all the bills and you get to use your money the way You want, the IRS doesn't care about that your money becomes part of the household deduction. Therefore, you are, in essence going to help pay for those IRS tax debt. So if there's any section of the conversation before you decide to just go and get married, or if you're planning your future, having those financial conversations, guys, it's so important. I'll be shocked, seriously shocked how many times people come in, and they find out, you know, years later that they married someone that had not filed taxes for a number of years.

Dr. Friday 40:36 And boom, guess what surprise, the Uncle Sam has finally decided to come back and have a conversation. And now of course, they own a house together, they're married. I mean, it's, it is so much easier, so much cleaner, to be able to resolve any of those issues before you decided to get married. Because now we would have only that person's income only that person situation. And we wouldn't have to worry about the person that you are marrying and bringing in nails, same thing if you're dealing with credit card debt, or anything else. So that's one of the my my big advice for individuals out there is to make sure you have that conversation.

Dr. Friday 41:16 And just because, you know, it doesn't seem like they could be I mean, there's no certain type of person that gets in trouble with the IRS. Okay, it's not like, well, only, you know, bad people or self employed people or anything, there's every walk of life, every type of person has IRS issues. And so it's not so much a type of person or a situation that happens. I will say, I guess sometimes it is a situation, Sometimes life happens, and it becomes hard to pay the IRS. And since the IRS isn't at your door every single day with their handout, like your landlord and your utilities and your car payments, that it's easy to kind of let that one slide in, you always had the best intention to try to go back at it. But now before we start getting too much information from the IRS too much additional, they're really working on electronic ways of doing things.

Dr. Friday 42:07 And that's going to be able to speed up some of the communications and some of the things that they do. So best thing you could do. Go ahead, sit down, let's have this conversation, let's find out what the IRS knows. Let's find out if there's even a tax issue two cases last week, two and just the last week, both of them had filed in years, figured they had big IRS issues they'd been moving around to didn't know each other just two completely different situations. And we get the power of attorney we pull the power of attorney, no problems, no issues, IRS has done no assessments, they don't have any.

Dr. Friday 42:44 And in fact, the one gentleman ended up losing some money for a refund. That was in 2019, I believe, and then he ended up getting his 2022. But that was it. I mean, the other gentleman is gonna probably because he hasn't filed in six years, we might have a few dollars due. But we only have to do the six years. And then that will make it up that will be all they have to deal with. And there won't be any huge collections, there's not going to be any huge drama, it's going to be okay, you know what, we are compliant, we don't have to worry about the IRS coming back about a 2012 stock sale that never got filed.

Dr. Friday 43:21 Possibly we don't need to open that the IRS has said just get your act together. You know, let's let's find out what we have and do what we need to do. That's what we want to do, guys, we want to take the time, go through all of your information. Let's say you did have a 2012 issue that you didn't file it on or you filed on it. But you know, it's been out there and you did it late. Well, you know, that's why they have what's called an offer and compromise and offering compromise.

Dr. Friday 43:51 A lot of people here the fresh start. I'll be honest, I will be honest with you, will you? Will you qualify or not? I don't know. But there are many ways for us to find out the easiest way people is to either get you to complete a 433 or to contact us so we can actually go through all that information. See if you apply if you have equity in a home, do you have a 401 K? Do you own five cars? Do you have collectibles, there's many things we have to address before something comes down the line. So when it you know when it comes into these situations, your best bet is not to pretend that you're the ostrich with your head in the sand. If you're getting the love letters from the IRS, sell them maybe that you're a non collectible and maybe you should just stay in non collectible.

Dr. Friday 44:38 Maybe you've got a collection agency that's calling you now because the IRS has hired collection agencies to contact you. Is that a good thing or a bad thing? That's the kind of things we can help you with we can help you understand what you have going now how that we can resolve the issue. And then what's the way to move forward because let's be honest, you can't move backwards. You can't change into the past, that is what it is it happened. Let's clean it up. Let's move on.

Dr. Friday 45:05 And then that way you can move forward building a better future and not worry about liens or levies or seizures or any other nasty word that we can come up with. All right, so if you're interested in doing that, get in with me. 615-367-0819 is my direct number 615-367-0819, again, is my direct number. You can also go to friday@drfriday.com. Again, friday@drfriday.com is my email. And of course, if you have no idea who I am what, you know, who's this person I just turned on the radio.

Dr. Friday 45:49 She's talking about offering compromises and she's talking about IRS issues and taxes and you know, I just needed to get a good tax person, then you need to check out the web. drfriday.com. Again, drfriday.com. I am a licensed Enrolled Agent, which is the only person that the IRS has ever licensed to be able to do taxes and representation. So if you have questions, all you have to do is pick up the phone guys. I'll be there. 615-367-0819 Monday morning 615-367-0819 or friday@drfriday.com. I really hope you guys are enjoying. Again, Happy Father's Day. Call you later.

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Welcome to another episode of the Dr. Friday Radio Show! In this episode, tax expert Dr. Friday answers callers' tax questions and covers the following topics: * Changes To Tax Laws for The 2023 Tax Year * How To Audit-Proof Your Tax Returns * Is My Cell Phone A Write-Off? * The Effective Tax Rate If You Don’t Pay Taxes On Your Pension? * The Trump Tax Cuts Expire At The End of 2025 * Can I Still Get Medicare If I Retire Early? * How Much Will the US Debt Interest Payments Be in 2023? * How To Get an Extension to Pay Your Taxes * How To Do Tax Preparation and Financial Planning The Right Way

And much more! Transcript Announcer 0:01 No, no, no, she's not a medical doctor, but she can sure cure your tax problems or your financial woes. She's the how-to girl. It's the Dr. Friday Show. If you have a question for Dr. Friday, call her now. 737-WWTN. That's 737-9986. So here's your host, financial counselor and tax consultant, Dr. Friday.

Dr. Friday 0:31 Good day, I'm Dr. Friday, and the doctor is in the house on this beautiful, fairly warm outside Saturday. And it's not the midst of taxes. But we do have some interesting conversation that's going to go on about the new debt ceiling bill that the House and Biden have put through, I don't think we're going to find huge changes today.

Dr. Friday 0:56 But just looking at the numbers, when you think about the budget act of 2011, which was about $1.3 trillion, that they were supposed to spend over the next 10 years. And that went up to 1.6 and 2025 $1.61 trillion, roughly in 2025. And then every year after that it's up about now our debt for the United States, just the dollar amount that we have to bring in just to pay the debt is 15.6% of our GDP. So it's really, really important to understand that, you know, yes, we managed to keep everybody getting paid. But no resolution has actually come out of any of this. So we know when the GDP averaging is going to be up by the time this bill is supposedly it's a 10 year bill, theoretically.

Dr. Friday 1:50 So we're in 2023. So 2033, they're saying that the it's going to be 24.2% of the GDP, is what our debt is going to be 25% of the income brought into the United States, or what they bring from all of us is going to be close to what we're just paying in debt. Yeah, that's it. I mean, if we don't catch what's going on, guys, if we can't change what we want to spend, and instead of encouraging people to use the systems that's out there, instead of wanting the government to pay for everything that's happening.

Dr. Friday 2:28 We're going to become a point it's going to happen, that your children or your grandchildren are going to have so much debt on them, that they're no longer going to be in a capitalize situation, they're not going to get out there and be able to work because it's not going to be beneficial for them to go and make a living on their own because the government's going to take all of their money.

Dr. Friday 2:51 Because there's already what 50 to 60% of the United States right now receive some sort of benefits from the government. That's ridiculous. I'm sorry. I mean, we can I come from a very big family, eight kids, 10 people in our family with our parents. And at no point in my life did I ever see anyone in my family take any coin, and it wasn't that we didn't have rough times I can remember my mom just taking fruit and vegetables and putting them on the table when there wasn't a you know, Dad didn't get paycheck for a few days, there was cereal for dinner, whatever it took to keep us fed.

Dr. Friday 3:29 We were always fed, don't get me wrong, but it wasn't going to be, you know, a perfect meal every single time. And there was a roof over our head. But we lived in a duplex with one restroom. Come on people, two bedrooms, one restroom 10 people, you can imagine how busy that was. But we didn't know the differences, kids, they just thought it was a great place to live. So I think sometimes we expect too much from the outside world instead of fighting for what you need as a family as an individual.

Dr. Friday 3:59 So that's all I'm gonna say the bill itself isn't going to make huge changes to our lifestyle, besides the fact that we're going to have a lot more debt that we're going to be coming on by 3033 2033. Excuse me. And then, of course, we still have security medicare issues that that we haven't fixed, you know, at this point. So according to this information, so Security and Medicare are due for a shock that the trust fund supporting these programs are depleting over the next decade. So they're saying in the next decade, we could be looking at having less in the Social Security and Medicare or even heavy at zero out they could have been saying that.

Dr. Friday 4:38 And I think they're going to fix that problem by means testing so people that make more than $30,000 a year in retirement or something will get less and less social security even though you paid it in so we'll find out that's the way it kind of works sometimes, but I do do think that many people should plan for retirement a little bit Letter. I'm not a financial planner in any sense of the world. But I will tell you that if if you plan to take care of yourself in retirement, you probably need to plan for that retirement to make sure it's happening.

Dr. Friday 5:11 And that you have Alright, so we have a big event coming up here in, in my world, we meaning all tax professionals or even just interested in taxes. We have two of the nation's best speakers coming to Nashville, mark the bumps II, he is I've seen him speak multiple times mark is awesome. And he is an NTP program. He's at level two, he has been doing this for probably 20 or 30 years. And Marilyn is Marilyn Young is a PhD that works at Belmont. She is also a wonderful speaker.

Dr. Friday 5:51 So you might want to if you're interested in coming to something, and the next, it's the 15th and 16th, I believe 14th and 15th, we will get that information directly out. In fact, if you're interested in give me a call 615-367-0819. That's my direct line 615-367-0819. And I will get you hooked up to come to this event. And if you want to if you want to hear from the best of the best, then you need to come to this event and find out more about what's happening in taxes and also how we're going to be dealing with some of the tax changes coming down the line. All right, let's go to Rosie in Nashville. Hey, Rosie, what's happening?

Caller 6:30 Hey, amen. Sister. I mean, we were raised six girls and eight years to parents families a very similar upbringing. And 900 square foot house, one bathroom. Yep. You know, three bedrooms. You know, we slept on a couch bed. And it's like, my, my mother, would you say? Yeah, I'm feeding my kids, my family hamburger. And the people on food stamps are getting sirloin steaks and T-bone. You know?

Dr. Friday 7:03 It was pride. Our parents weren't going to, I mean, they had the children, they were going to raise the children and they were going to make sure we had the important things in life. And we did. I mean, to be quite honest, we are good education's, we we always had something in our stomach. And like you said, Yes. You know, I mean, my I got fortunate because I had six brothers before me.

Dr. Friday 7:24 So are six of them usually end up in multiple bunk beds. And, and my sister and I ended up in a separate room usually, but it was still, you know, one bathroom. And nowadays you can't find if you go on vacation with my family, every family at least has to have one or two. So it's ridiculous. Yeah. Nowadays.

Caller 7:42 Exactly. So it was, you know, I mean, they were there. Well, through two of us were surprises. And so that's where they had a three bedroom house. And, you know, my dad built the house. He's an auto mechanic. But yeah, he built the house. And he no two of us slept on a couch bed. And we put our clothes in my parents bedroom, because we didn't have a bedroom. You know.

Announcer 8:01 And I mean it. In some ways, it never hurt you. It may have wanted you to be to grow up and have more to make sure you you know that you would have your own things or whatever. But it didn't hurt you. If nothing else, it gave us the drive to want to get out there. And I mean, I guess the pride of my parents, they never did. And I don't even know. I'm in my 50s I don't know if there really was food stamps and things available but certainly was never brought up in my family.

Caller 8:27 Yeah, there were definitely food stamps because I was raised in Gary, Indiana, or close to Gary, Indiana. So very similar demographics to Nashville. And so yeah, there were definitely food stamps and definitely, you know, abused and, you know, generations.

Dr. Friday 8:43 That's hilarious. I was born in Munster, Indiana, which is neighboring by Highland and Griffin. Yes, small town. But thanks for calling. You're right.

Caller 8:59 Yeah, we were actually raised in Maryville. So, but yeah, Gary. So you know, you know, the demographics of Gary.

Dr. Friday 9:05 Absolutely. Gary was a definitely and probably still is, you know, that kind of demographic. Yeah, I mean, but you know, what, you know, you turned out fine, you fought, you're probably better than your parents had, but they gave you the, you know, like I said, my faith to work ethics. We have everything all my brothers all my sister, you know, my sister, I mean, we all have the same ethics that my father and mother had, when it came to, you know, if we want something, there's nothing stopping us from getting it besides hard work.

Caller 9:37 Yeah, exactly.

Dr. Friday 9:38 So that's the way it works. But you know what, I'm not too sure if the next generation has that, and I don't want I don't like lumping anyone because I can tell you I have kids, their friends that have 20 and 30 year olds, I have one that she wrote essays to go through college, she got 20 and 30 grants every single year so she can have a free college, you know, I mean, she found a unique way I have, you know, getting in and getting what she needed. So I've always found that to be unique compared to all these people that say, Well, someone else should pay for my, my education, no one paid for us. You know, we get student loans.

Caller 10:14 But we have to break the cycle of food stamps and handouts. I mean, yeah, it's like, it's not, you know, it's all grown up. And, you know, three generations later, it's still happening. You know?

Dr. Friday 10:27 I mean, they encourage it. I mean, let's be honest, that, you know, the Democrats, especially, they want more people on the line, so they can actually have, you know, more people that will vote that direction just for that it's not anything to do with their core belief of these people believing in their politics or not, it's just keeping the people dependent. And that's what's scary. Alright, girl, I'm gonna go to the next person. But thank you so much. Appreciate you.

Caller 10:55 You're welcome. Take care. Thanks, bye.

Announcer 10:57 All right. Let's get Jimmy before the break. Hey, Jimmy.

Caller 11:01 Hey, how you doing?

Dr. Friday 11:02 I'm good. What do you have for me?

Caller 11:04 Yes, I was wanting to retire in September of this year. And I'll be 65 in September. So I was wondering, will I be penalized for the money I make from January to September?

Dr. Friday 11:20 No, you will not be because you if you start your Social Security, that would be considered early retirement. you'll qualify for Medicare, but so secure, but in the year you retire, you will not be penalized?

Caller 11:33 Okay, just call this my first year. I've been in a lot, right.

Dr. Friday 11:37 So basically, since you're going to start drawing your Social Security, let's say you draw it in September, you've earned the money prior to drawing it. Now if you make $20,000 or thereabout over in from September to December, for example, like you're still working, then the penalty could happen. But if it's earned before you start drawing the Social Security, you won't have a penalty.

Caller 11:58 Okay? So totally don't matter the amount.

Dr. Friday 12:03 Does not make a difference.

Caller 12:05 Okay. All right. You've been very helpful. I appreciate it.

Dr. Friday 12:08 Thanks for listening. All right, we're gonna head towards our first break here and we'll get back we'll get to more of your phone calls. 615-737-9986. Taking your calls, talking about taxes, and how they may affect you. We'll be right back with the Dr. Friday show.

Dr. Friday 12:34 Okay, we're back here live in studio. I'm Dr. Friday. And if you have to join or like to join the show, you can at 615-737-9986. Again want to talk a little bit about our Tennessee associates of enrolled agent, Tennessee associations of enrolled agents with a tongue twister there for me conference. It's in Mount Juliet this year, residence in we've got to have nation's national nationally recognized speakers coming. We have Mark, dumb Roski. Yay, awesome guy, Mark is one of the best speakers you ever going to have. And then we have Dr. Marilyn Young, she is a professor here at Belmont.

Dr. Friday 13:19 I have been to many of her seminars and where she has spoke. And if you ever have any questions on accounting taxes, even if you're a small business owner, she runs the accounting division or department for graduate accounting program at Belmont. Mark can talk to you about if you're if you're a tax person if you prepare taxes if you want to do a few.

Dr. Friday 13:43 And you really want to understand what some of the things that maybe you could be doing on taxes that you're not, or maybe you've even got a case that you're not too sure about. And you need some help with dealing with the IRS. This is a conference you're going to want to attend. Again, this is the 15th and 16th of June right here in Mount Juliet.

Dr. Friday 14:00 And you can contact me at 615-367-0819 we will get you on board you can also come unregistered to the events and pay when you come in. But if you want to register early, and we will have all the documents and everything from both of the speakers. It's going to be a lot of fun guys, I will tell you every time I listen to Miss Young, Dr. Young and Mark Dobrowski I learned something I've been doing it for 25 years, there's always something you can learn about taxes.

Dr. Friday 14:30 So if you have any interest in knowing more about if especially if you're a tax person, this would be a great conference, to get to know some people that are and learn a lot about because we've had changes every year, right 19, 20, 21, 22, 23 We're going to have more changes. And we need to know what those changes are going to be. What's going to be falling out what's going to be staying in all kinds of interesting conversation we're going to be having just to be able to keep things going Then the government, they're going to have to I mean, we keep hearing, they're going to want to change the capital gains, they're going to have some changes in, they tried to overturn, obviously, the Trump tax cuts, those expire at the end of 2025.

Dr. Friday 15:15 Anyways, so we only have a few more years of those one way or the other, unless the next party that comes into office extends them, it's going to be very important to be able to make sure that we have all the information every year, so that we can do the best we can either preparing your own personal tax returns, or even making decisions, I have some people that have held off on doing things because they're not sure exactly how it's going to affect their taxes, always better to make sure you know, don't just go sell something, turn around, and worry about the taxes much better if you can preempt that information to the best of your ability.

Dr. Friday 15:15 Many times I'll have people that will sell or do something. And then And then afterwards, we talk about what the taxes are. And they're always shocked. So if you inherit property, if you've sold some real estate, especially investment properties, how is that going to affect should have you done a 1031 is a 1031 even a great idea. And if you don't even know what I'm talking about, when I say a 1031, and you have investment properties, you should probably talk to a tax person before you agree to go sell something, just because sometimes some of that information that you have some of the things that you need.

Dr. Friday 16:25 It could be more beneficial to know what your choices are. That's almost say it's not for everyone. And I don't think any decision when it comes to taxes is ever going to be a straight across the board and say, "Well, everyone should do this, because it's going to be great forever," never going to happen in taxes. That's why I love taxes, because what might work for me might work for one, someone else but won't work for this person because their tax situation is totally different than me or someone else. So just if you have questions, and you're not sure you want to go ahead and ask the question first, there's no dumb questions. Come on.

Dr. Friday 17:00 As I were working on my car, I'll probably have to ask so many silly questions, because I would have no idea what I was looking at other than how to open the hood, probably. That's the same way with taxes. If you have something you want to know if there's a question out there that you'd like to have, and you're just not sure, it's not going to be to be honest, we don't take names or numbers or anything down anyways.

Dr. Friday 17:21 But the question isn't going to be silly, it's going to be a good question. Because when people are, I always say people are some people are made to be able to call a radio station and ask a question. Other people, not so much. I can't say I was ready for that kind of situation. But until I started talking about 15 years ago on the radio, I know I never call the radio show in my life. I think what he called a handful of times normally to bug Dr. Electric when it came to something on his show. But other than that, I never really did. But I know that when people walk in my office, they Oh, yeah, that person called and they asked this question. That's why I wanted to ask you this question. All right, let's go to Randy in Tennessee. Well, that's good. I'm in Tennessee suit. Randy, what do you have going buddy?

Caller 18:06 Hey, I've got a question. I keep getting calls about this. 20 this possibly $26,000 that I'm into this COVID money. And I have a I have a job that I get into from but also maintain, and through that time, and I was the only employee. So I do follow schedule. Is that something good? I need to check into or I've always kind of thought it was just me. I mean, I know certain businesses, or people that have been and it was beneficial.

Dr. Friday 18:47 Right. And that's great. Thanks for calling about that question, because I even get a lot of them. And you would think if I could qualify, I would have done it. But they don't know. I think it's robo calls Randy then answer your question, you would not qualify, you have to have had employees and it can't be family or related employees to you. So in your case, you were the only person working it there was another W2's working under you. So you would not qualify for what's called employee retention tax credit or ERTC. That doesn't stop them from calling you but that's a great question.

Dr. Friday 19:21 Because I have a lot of people that asked to say I mean, you know, they're, they're like, oh, and then when we go in what people don't understand is if you did qualify for some of the PPP, and you would have possibly, you know, gotten some of that may or may not have apply but can't go backwards now. But they back that out of those numbers.

Announcer 19:41 So even though you might qualify for $22,000 in employee you might only get 5000 because of other benefits you took through the time through the year maybe you didn't have as much hardship could prove as much loss of income. So all of that comes into play, but in your case ready just like mine. I did have employees but three of the five employees in my office are related to me in some way. So we didn't really have, and I didn't really have the hardship that's qualified for forgetting ERTC. But it's a great question. I'm sure a lot of other people listening, myself included, have been getting, I think a phone call a day, telling me that I've lost money, I need to be doing this. And there's nothing more irritating than having someone call me and leave that information. But they don't listen to me. This is a great call. Thank you, Randy, I appreciate that.

Caller 20:31 Thank you very much.

Dr. Friday 20:32 No problem. So again, if you're gonna need those phone calls, like Randy and I that just basically say you could qualify for are you worry, you're leaving money on the table, I have one that said, I've already been qualified for the funds, which is hilarious, because to be honest, yet to be qualified, you have to have, I don't know 2019, 2020 and 2021, 9941, do you have to have income reports by by quarter for 1920 and 21, you have to have proof of loss of income, PPP, records, all kinds of things to get qualified.

Dr. Friday 21:05 So anytime they say that you you know that you qualify or anything else, it's just, it's a scam as far as I'm concerned. But if if you're not sure, you can certainly give our office a call. And we'll be more than glad to at least give you some rough numbers to figure it out. And then see if it's something you should pursue. But again, you only qualify is if there was W2's produced by your business.

Dr. Friday 21:28 And if those W2's were young people that were not your employees, not your family members. And then obviously if you did get PPP one or PPP to some of that's going to reduce the amount of money you you are see from the ERTC, so just information out there. But if you I mean, you still have time to get some of that it's the time clock is coming down, I want to say we only have until I think the end of July, or it may be as late as September, I'll have to look that up.

Dr. Friday 21:58 It's coming up though you only have a couple of years to make that correction. And that's coming up on the on the time clock. So you will if you think you can or you might qualify, then you need to go ahead and pursue that. And if you have a payroll company, most of them are running those numbers for you. So again, if you use a payroll company be that QuickBooks ADP paycheck, any of them, they all run the ERTC for you.

Dr. Friday 22:23 So if you need help. So if you have a question and something else, that was a great one, you can reach us here at the studio at 615-737-9986. Taking your calls talking about all things taxes. That's what I do. I'm an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. So when it comes to if you have tax issues, you're getting the love letters, you haven't filed taxes in the last 10 years.

Dr. Friday 22:53 Do you even need to file 10 years worth of taxes? And what would it take to get you caught up? Can you make a deal? You know, I have people that say, Well, I just want to pay them I have this much money, can I just pay them offering compromises aren't always based on exactly what you think you should pay them but based on a system of what you can afford to pay.

Dr. Friday 23:10 So there is a system, if you want to find out what it would cost to pay off the IRS what you may or may not be liable for and if any of it has fallen off the time clock. If your see said dates have passed, then you may not owe as much as you want. But if you need help understanding that and first thing you have to do no matter what guys is we have to get quality get you up to date, so that you're in compliance, compliance compliance that is so important for the IRS and also for anyone that's going to help you deal with your tax issues.

Dr. Friday 23:42 So if you want to join the show, if you got a question about either maybe you've sold something or you've gotten some love letters, you can reach us here at the studio 615-737-9986. We'll take another break here. When we get back we'll get to your phone calls, talk a little bit more about other tax issues that might be coming down the line and how you might be able to repair or make yourself a little bit more audit proof by just making sure that your documentation and the numbers that you put on your tax return match.

Dr. Friday 24:14 We'll be right back with the Dr. Friday show. Friday we are back here live with the Dr. Friday show talking about my favorite subjects at least taxes, money issues, mainly taxes, because when it comes down to it taxes lead most things when we were talking a little bit about some ways you can make yourself audit proof and one of the business ways to do that people to be quite honest with you in when we go in and a lot of times you get the love letter from the IRS, you prepared your own taxes.

Dr. Friday 24:48 The IRS comes back question some of your deductions and then you come in and you're like, "Well, I don't know why they're questioning how am I supposed to prove it?" Well, it really comes down to plain and simple. How did you put the information on the tax return and the first place. Now I don't want to certainly lump a lot of people into this category, because I have some people that they are probably more meticulous than even most accountants are, when it comes to their entries on their tax return.

Dr. Friday 25:13 They have everything scanned in everything documented everything coming through to the best of their abilities. Keep in mind, though, sometimes the IRS can question even when something that you think is a tax deduction, probably some of the more gray areas is 100%. Use of your cell phone, if you are a self employed individual, I have seen people just write off their cell phone.

Dr. Friday 25:34 And in that case, sometimes that cell phone isn't for just them, but their entire family. So you know, be careful. I mean, obviously, if it's a cell phone, and it's the only phone line you have, then you are going to take personal phone calls, it's just going to happen, you're going to have personal phone calls, you're going to be able to take them and you're going to make sure that with those personal phone calls, that is not a tax deduction. So 100% of your your cell phone, if it's the only phone you have, is not logical. I know one of the biggest things people come in and they say, "Well, I brought a truck, it's over 6000 pounds. So I took a 179 on this truck."

Dr. Friday 26:17 And then the first question on my mind is or out of my mouth is, "Well, is this your only vehicle?" "Yes, it is. But I do have another car." Is the other car running? Because when I asked that one time, then well, "No, it doesn't, run." Well, how can you have a vehicle section 179, which means that it's 100% use for business. And you don't have another vehicle that's going to go and pick up the kids or go to the grocery store or just day to day life that you're using that vehicle for?

Dr. Friday 26:52 Because again, tax law says if you're taking a section 179 on a big vehicle that that vehicle is being used for business only business and I know people will turn around to me more than once and they'll say, Well, I do I only do business, I never have a personal life. Well, for one, the government is not going to buy off, IRS auditor is not going to sit there and say you've never went to the dinner by your you know, went to dinner, you've never went shopping for clothes, you've never picked up your kids from school, you've never grocery shopped, you only work and all of that.

Dr. Friday 27:25 So the fact is, you would have a very difficult time proving that necessity is you had to eat. So therefore you had to abuse the vehicle most likely to go do it. But if you could justify it, that's fine. But if you're going to have a vehicle that's over 6000 pounds, that you're going to claim as a business vehicle only, you need to have a fully operating second vehicle that justifies your personal use, because personal use is going to happen.

Dr. Friday 27:50 And therefore they could disallow that section 179. And even though a section 179 is great, for an individual, it's a one time situation because then you go and sell that car, two years, three years down the line, you have to recapture some of that depreciation, whatever the value of the car is, and then you have to go buy something big again, to go and offset that.

Dr. Friday 28:10 Otherwise, you just picked up income and you have no offset. It is awesome to have a section 179 If you are, I don't know electrician that has you know, trucks and and vans on the road continuously, and you're buying one or two every single year, then you you have some advantages to doing it. So it's very important to understand how tax law works. And even though it sounds good when people say, "Oh, I went and brought a $60,000 vehicle, I was able to write that off my taxes." Let's hope they can justify it if the IRS comes back at him. All right, let's see what we have from Bill in Nashville. Hey, Bill.

Caller 28:44 Good morning. My wife died just before the end of the year. And she had been taking a withdrawal from her investment accounts. I couldn't get the January payment shut off in time. So, I'll get a 1099 I'll get that. Yes, for this year. So I guess the question then is.

Dr. Friday 29:23 How old are you?

Caller 29:26 I'm 73.

Dr. Friday 29:28 So you're going to be in was her investment accounts? Were those like retirement like IRAs, maybe, 401 K's that were converted into IRAs, or were they after tax accounts like Roth's or something?

Caller 29:41 Well, the answer to that is yes, that was she had a Roth and she also had a traditional IRA.

Dr. Friday 29:48 Okay, so you could apply the January one to the required RMD that you would have to take in 2023.

Caller 29:58 Well, according to Mr. Vanguard. Because I inherited a spousal, and it won't have to be RMD until my wife would have turned 73. I don't know if that's true, but they gave me some IRS citations.

Dr. Friday 30:29 And you're correct and inherited a spousal inheritance will roll over to you. And then when, when, when she, well, I thought it would happen. And again, I'm not a financial planner, we put that out there bill for you. But my understanding was that it would roll into your, I mean, you would convert it basically into your own as a spouse, you don't have to meet it.

Dr. Friday 30:49 But then when you hit 73, or the age of RMDs, you have to take it from all of them. That was my honor. But they may know a lot more than I do when it comes to that. So because normally what happens is a spouse just merges the retirement all into one account, once the other spouse has passed away. And the only time you can do that, because it's not really an inherited IRA, it's a spousal, then, you know, is that time most of us inherit them? And then we have to immediately 10 years was it 10 years, you have to cash them out nowadays or something, if you inherited IRA.

Caller 31:27 That's correct. It's not a spousal.

Dr. Friday 31:31 Sponsors are only ones that that work for you. But so obviously, they will not let you put the money back in because you couldn't stop it. So I guess the answer to your question, if I'm getting it, right, is yes, you're going to have to pay tax on that one distribution from January at this point.

Caller 31:51 Yes, ma'am. So the real question is, how, how will I be filing? You here? Obviously, I filed joint. And at the top, it says spouse died whenever.

Dr. Friday 32:08 Right. In the year of 2020. So she passed away in 2022. Correct?

Caller 32:13 Yes.

Dr. Friday 32:14 So 2023, you will you will need to file as single.

Caller 32:20 Okay.

Dr. Friday 32:21 I mean, in theory, I mean, unless, I mean, there is a widow, but widows only apply to children. I mean, you know, spouses left with young children. So in your case you're going to, but if she died close to the end of the year, you may still have documents coming in her name. Or do you think you were able to close everything out? Okay, good.

Caller 32:42 No. We're doing good on that part. I don't have a lot of income. So. So a $5,000 distribution is not going to generate a huge amount of tax for me.

Announcer 32:57 Right? Well, that's good news, at least. So that way you can control whatever you have on that situation. But yeah, so you'll be you'll be back to single and have the file it at the you know, unfortunately, you'll be at a little higher tax rate than you were when you're joined.

Caller 33:14 Yes. All right. Well, thank you.

Dr. Friday 33:16 Thank you, sir. Sorry, for your loss.

Caller 33:18 I appreciate it. Bye.

Dr. Friday 33:20 Thanks. Bye. All right. So we're gonna keep going here. And if you've got questions on taxes, or you have questions on dealing with, maybe you haven't filed taxes in a while, or maybe a family member that hasn't filed taxes in a while, and you're not too sure exactly how to start.

Dr. Friday 33:39 But the first thing you're gonna want to do is call my office because this is something we do a lot of, we help individuals get back on track, help them file, and take. And it's not something that's going to happen extremely quickly, especially if we have to get power of attorney to get the tax documents from the IRS. But once we do, we can get all that then we can figure out if we're gonna be able to pay payment plans, offer and compromise make you non collectible. You have different options in different situations.

Dr. Friday 34:08 So you just want to make sure that what you have going, you understand what the options are, I wanted to say in 20, they just came out every year they come up with these dirty dozen summaries. And when Randy had called earlier he was talking about the ERTC credits. And they're saying that there is also a large number of people being scammed with those credits.

Dr. Friday 34:28 So again, if you don't think you're entitled to that money, you don't want to get pulled into something where the government comes back because somebody fraudulently filed something in you not really understanding the system, allowed them signed off on something and apparently you got the money and then they take their share of that money and then you end up owing the government back that money.

Dr. Friday 34:51 And they're also taking identities when they get that information. They're doing false documents. So very important to understand that. If you don't Know if you apply, go to somebody's rep will talk to an enrolled agent, talk to a CPA, talk to somebody that has done, you know, is in the business and understand your particular situation so that you don't get yourself caught up in something that could end up I have already two or three people that apparently, the state of Tennessee unemployment during the COVID, everybody was supposed to be able to get unemployment that was unemployed, no matter if you were self employed, or if you had been an employee of someone else's.

Dr. Friday 35:30 Or if you were partially employed, if the if your employer wasn't able to give you usual hours? Well, it seems like and again, I'm not an expert, but I have received three or four phone calls in the last week or two. So they must be actively trying to collect now, money for people that said that they weren't entitled to the unemployment that they had received. Again, these people applied, they did everything proper, and then they turned around, and now they're being told that they shouldn't have received the money in the first place. And the state is trying to collect the money back.

Dr. Friday 36:01 So if you have one of those situations, be curious to find out more about it. Because it just seems to me, especially on unemployment, I have more people saying they weren't qualifying for that should have been, then people getting in and not being able to give it back or whatever. So if you've got questions where I'll take our last break here in the show.

Dr. Friday 36:20 If you've got a question, you can join us live here in the studio at 615-737-9986. Taking your call talking about taxes, we're gonna be talking a little bit about the seminar coming up, and how exciting it's going to be to make sure we have all the right information to go into the 2023 tax season, which before you know it, it's going to be on top of us. We'll be right back with the Dr. Friday show.

Dr. Friday 36:57 We are back here live in studio for this wonderful Saturday. And if you've got any questions, now will be the time to pick up the phone and call we're gonna start with the show 615-737-9986 again, putting a shout out there to all tax preparers or CPAs. That might be looking for some good EA point or CE points. And you want to go to something that's going to be right here locally in Mount Juliet. It's a wonderful event, Mark Dombrowski EA is going to be speaking, as well as Dr. Marilyn Young, awesome, both of them.

Dr. Friday 37:39 And if you haven't heard either of them, you're going to be totally entertained. And all people are thinking, well, how can taxes be entertaining, but trust me, when these guys teach, you're going to listen and you're going to learn and it's going to be a lot of fun. You get to meet a lot of other enrolled agents, and other tax people in town you might be you'll find some other connections as well.

Dr. Friday 37:59 So very important to go if you would need to join us, you can either just Just call me at 615-367-0819 and I'll get you hooked up. All right. Let's see here. We've got Lisa getting ready to come on the phone. I'm rushing my boy here, but we'll get Lisa in before the time clocks happens. Hey, Lisa, what's happening? Lisa, are you there?

Caller 38:24 Yes, I am.

Dr. Friday 38:26 There's my girl, what can I do for you?

Caller 38:29 Okay, I'm single 62 years old. I have a pension come in from a previous employer, which is not government. It's actually a grocery store. Pensions and my pension date is age 65 That I can draw the full pension. My actual Social Security age is 67. So I was considering drawing the pension at 62. Would it benefit me to do that now or wait until I'm 65? Or do I need to wait till I'm 67 as far as the taxes?

Dr. Friday 39:07 So I'm gonna give you the tax side of it again, not a financial planner. So are you are you are you working still right now? Lisa?

Caller 39:15 Yes, ma'am. Okay.

Dr. Friday 39:18 So, at this point, you're 62 you're thinking you can start early social security. I'm just saying theoretically, you could take early social security, you can certainly draw your pension and still earn the pension would not count into earnings is just to let you know, for early social security. It's only earnings that offset that. So if you were drawing your pension, well, you said that doesn't have till 65 But if you were still working and when to take early Social Security as long as you make less than $20,000 You would not have to pay anything on the Social Security. But if you earned more than $20,000 You basically have to do for every dollar you've earned over every $2 you earn Where you get $1? You have to pay back.

Caller 40:02 Okay. It's not just the security that I'm asking the question on, it's actually the pension. I'm going to wait on my Social Security till I'm okay. Seven

Dr. Friday 40:10 years trying to figure out if you should take your pension early. I thought I guess I misunderstood that. You said the pension kicks in at 65. So if you take it at 62, how much do you lose? What's the difference in? I'm assuming there's a

Caller 40:22 point, like $29 a month? Oh, very little. Yeah, that's very little. It's tax wise, is my curious, my,

Dr. Friday 40:30 what's your income right now? Lisa?

Caller 40:33 Like Park 32,000.

Dr. Friday 40:36 Okay. And if and what if we add the pension? What would that make your total income? Or how much is the pension?

Caller 40:43 The pension is going to be about with with a penalty, it'll be about $975.