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 To Do If You Don’t Have an Open Tax Bill
- Does a Casualty Loss Have to Be From a Federally Declared Disaster Area?
- Does an Inheritance Have to Be Reported to the IRS?
- What Are the New Rules for Inherited IRAs?
- Why Is It Important to File Your Taxes Early?
- The Best Way To Do Taxes as a Self-Employed
- What’s the Tax Impact of Disasters on Rental Property Owners?
- Selling Parents Home After They Pass Away
- The Importance of Paying Quarterly Taxes
- How To Do Tax Preparation and Financial Planning The Right Way
And much more!
No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or 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. 615-737-9986. So here’s your host, financial counselor, and tax consultant, Dr. Friday.
Dr. Friday 0:29
Today, this is Dr. Friday and the doctor is in the house. We are here live in studio. And it is that time of the year when we’re talking about taxes, and everything that we love about taxes, mostly getting them done before the deadline, which is 4/18. And you know, heads up to all of you that may not have all your tax documents, because we don’t have the ability to go with that if because someone has a que one or they’re missing some sort of statement from other areas, then, you know, you basically need to make sure that you’re filing an extension, you want to make sure that you file an extension so that way, then you can make sure you file your taxes on time, filing extension doesn’t extend the money that you owe.
Dr. Friday 1:16
So it’s very, very important that you understand that if you don’t have just because you don’t have the money to pay does not mean that you’re going to have to not file your taxes, file the extension, you can start making payments, you cannot set up a payment plan for that year until you’ve actually filed the tax return. So that’s kind of important as well. So if you need to deal with that question or anything else that we’re dealing with, I also want to put a big shout out we have a organization I’ve worked very closely with. And they are hosting a pretty amazing thing.
Dr. Friday 1:53
It’s support for women in recovery, it’s the wild goose chase event is hosted at the Bake Off events supported by the sweet addictions, which is the ones that we help out a lot with ladies in recovery will be squaring off against a form of Food Network cookie challenger, to see whose sweets reign supreme coming, you can come to enjoy the night of delicious cinnamon rolls, cupcakes and all kinds of other hors d’oeuvres Music provided by special guest, Doug Mathis and the flat River Band. Also there going to be all kinds of other sweets and music as provided.
Dr. Friday 2:32
If you’re at all interest, all you need to do is you can call 615-580-8001 I’ll be there that night. I love kickoffs or I should say bake offs. I’m one of those people that enjoy that again, 615-580-8001, or just google thesweetaddiction.com that will help you with that one as well. And it hopefully will give you something that to enjoy yourself. I don’t know about some of you guys, but we do often go with a love watching the reality shows and all of that. So I just like to make sure that that, you know that has the advantage of doing so, you know, if you’re interested in doing it, it’d be a fun evening, great way to give back. And to help people that may have had a rough thought, or has had some stumbling blocks in life.
Dr. Friday 3:23
And it’s a way for them to move forward on that. So that’d be something to consider as well. So if you want to join the show, you can 615-737-9986. I can see the screen now. So at least if somebody calls, I can see it and, and they’ll forget, again, taxes we’ve got if you’ve already if you have a 1065 and 1120 s you’re late those were due back on 315 unless you filed an extension then you’re good till 915 That’s why some people have to file extensions on their personal tax returns. Because if you haven’t finished the business, you can’t file your personal. So that way you’d have the ability to do that.
Dr. Friday 4:09
So you can go ahead and file your personal on that and then we’d be able to move forward on dealing with you know, things that are happening with with your own personnel you don’t you don’t want to rush to do that and then find out later that you miss something because we don’t want to do that at all. And we want to make sure that all of that is working perfect. And that you’re able to go through and do your your situation. Are we going to switch over to zoom? I think we are I’m gonna do it. I’m gonna do it.
Dr. Friday 4:49
All right, I’m on Zoom now so hopefully you guys are still hearing me. And that was my my por la vie the Atticus is having to do telephone. He’s seven To deal with me hanging up the line if he wasn’t ready, he’s got all kinds of things. That boy is absolutely amazing. Just because he’s no, I could not do this radio show without him. And so we’re going to be able to move towards the phones. Let’s go ahead and go is it Coulson? In? Yes, that’s it. Hey, Coulson.
Hey, Dr. Friday. Hello? I got a question I got off schedule, are off track of paying my taxes quarterly. I’m 1099. self employed, I just worked myself. And I got off track probably eight or 10 years ago. And it’s not that I’m delinquent on taxes. My taxes are always paid on time on the due date. But what happened was, was I had to use it on a credit card. And this was either 10 years ago. So because I’m fighting, paying the credit card before interest hits, which is 12 months, I can’t get back on track aside from my quarterly money. So I’ve typed the penalty every year. This year was 377. And I’m okay with that penalty. My question is, am I okay, continuing down this track?
Dr. Friday 6:25
You are fine. I mean, you are, you’re taking the penalty. You know, like a trooper, you’re basically saying, “Hey, this is the price I have to pay to do what I have to do until I can get everything back.” I mean, eventually, hopefully, here, you’ll have everything back paid. And you’ll be able to go back to paying quarterly. But it’s difficult. It’s the same problem we often have with people that are trying to get, you know, haven’t filed for five or six years. And they’re like, Well, I can’t pay the back and move forward at the same time.
Dr. Friday 6:53
Because there’s only so much money in my life. I can spend, you know, I mean, so what you’re doing is fine, because at least at the end of every year, you’re paying the penalty plus the taxes. So you don’t have an open tax bill, which is the next thing you’d really want to do is, you know, is if you had to, I mean, I’m just saying you could set up a payment plan, but I’d rather have that payment plan with a credit card any day than a payment plan with the IRS. Okay. Does that make sense to you? There’s not much you can do. Yeah, no, you’re doing a great job, at least you’re making your payments and you’re staying current. It’s just costing you a little bit more, because you can’t, you can’t pay the credit card every month and make the estimates on time. But somehow you’re coming up with the money at the end of the year. So it may just be a managed way you’re managing it a little bit. I don’t know.
Well, yeah, I mean, you know, I want to get back at least Calvin, but now we’ll get back home. Yeah. Want to get there?
Dr. Friday 8:02
Okay, I don’t don’t hear him right this second. So try it. Okay, there we go. Hey, Robert, let’s go to Robert. What can I do for you, buddy? Robert, can you hear me from Lawrenceburg?
Yes, I can.
Dr. Friday 8:25
What can I do for you?
Yes, ma’am. I paid my taxes using TurboTax. And for the first time in my life, I actually had to pay taxes at the end of the year. Well, I paid it through TurboTax using a credit card. And when I look on the irs.gov site, it says that I know that I’ve paid the money and I have a zero balance. But yet, it’s not showing up on my it was a debit card. It’s not showing up on my debit card at all. And that’s been well over a month ago. And I’m wondering, Well, is it paid? Or do I have to worry about them coming back and saying okay, and now I owe late fees or something else?
Dr. Friday 9:08
Yeah, that I mean, the IRS sounds like the IRS received the money. And I’ll be honest, I didn’t know you could actually pay with a credit card through? Well, I mean, like my tech service, we don’t take credit card, because there’s always a fee involved with that. So you have to pay it, maybe they charge you a fee on it. But when it comes down to it, I would say you need to call TurboTax or go on to TurboTax and get something in writing because you know you didn’t pay it because it hasn’t come out of your bank yet. And if it’s a debit card, it should have happened within 24 hours.
Well, it was a debit card. Yeah.
Dr. Friday 9:43
So I mean, if you put something on your debit card today, you usually see it by latest Monday. If it’s on the weekend. Normally, it happens almost instantaneous. It seems like it’s so it’s pending on mine if I were to go spend it now. At least it would be out there showing pending even if for some reason there was some alert or something else. And in 30 days, that seems like an awful long time.
Dr. Friday 10:05
So my concern would be is that they’re going to come back to you, and either somehow bounce this thing or and then you’ll have penalties and interest to the IRS, or they’re going to come back to you saying, you know that your car didn’t clear. And now they’re charging you a penalty for that as well. So I think I would double check with first the tax program and just make sure that they’re showing everything is good, and confirm the number that they use, because obviously, you haven’t paid it.
Dr. Friday 10:33
So if it hasn’t come out of your bank, I would be this as you are, I would be concerned that somewhere somebody’s made a mistake. And eventually, when it’s found you’re going to have 30 or 60, or more days of some sort of late fee, because they didn’t do their job.
Dr. Friday 10:52
Concern. Yeah, thank you, buddy. Appreciate the call. All right, this is the doctor for Auto Show. And we are live here in studio. So if you want to join the show, you can at 615-737-9986, I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. That means that if you haven’t filed taxes, or you’re having tax issues, or you know, somebody that having tax issues, or you know, haven’t filed taxes for a number of years, because sometimes you know, you go along just perfectly fine, but then you have a child that’s get ready to go to college, or you want to purchase a house, or you want to get a line of credit, there are all kinds of things that they use a tax return to prove that you can have income, and then you get to that wall, and then you’re like, oh, I need it.
Dr. Friday 11:44
And I will let you know, I don’t care what these other organizations been doing this for 25 years plus, and it doesn’t happen overnight, you’re not going to walk in, make a deal with the IRS and be done with it in 30 days, you’re looking at eight months to a year to make a deal with the IRS if you qualify to do a deal with the IRS. And there aren’t many options within that deal mean you can just do an offer and compromise non collectible. You know you can do a full payment plan, any all of those are going to be viable. But it’s important that you understand what it’s going to cost.
Dr. Friday 12:17
And do you qualify those organizations I often hear on my radio station and on television. Many of them talk about how they can make these deals for you. And I’ve had people call those numbers, and then they end up in my office with no resolution. And that they find out that they were basically not going to get resolution because they couldn’t make a deal. But when someone owns a house and has enough equity in that home, most likely to pay the IRS where they have money in the bank, or they have assets in other formats. The IRS isn’t just going to make a deal with you because you can’t pay in your mind. You have to prove you can’t pay. We can talk more about that. We’re gonna take our first break here on the Dr. Friday show again, you can join us at 615-737-9986.
Dr. Friday 13:13
We are back here live in studio. This is the Dr. Friday show. And we are here on Saturday, April 1. And I didn’t even think about that until he just said it’s April Fool’s Day that explains a lot of things happening today. I’m just saying it really does. Alright, so if you want to join the show, you can at 615-737-9986 and we’re taking calls and our first one is going to be an in Mount Juliet. Hey, and what’s happening?
Hi there. I had a rental home that was destroyed in the tornado. And I’m trying to do the depreciation for my Schedule II. And I’m trying to find out how to do it correctly.
Dr. Friday 14:00
Okay, so it was a rental. So you’re just doing a recapture of depreciation at this point or was it rebuilt and it’s back being a rental again?
Rebuilt rental again.
Dr. Friday 14:11
Okay, so what you’re going to be doing is taking was that was it a complete teardown and a brand new one or is it an add on and fix?
Nope, complete teardown. Okay, now, I did get reimbursed by my insurance for what it for the top that they had it on. And I added about 150,000 to it.
Dr. Friday 14:37
Right so basically you’re going to the first part of the house, you’re going to basically continue and then whatever you added to it above the insurance because their money was replacement value. So theoretically they replaced the one that we were already depreciating. So you’re going to add to that the 150 that you put in to add additional room sir, whatever, you know, whatever space you did, so now it’ll be whatever the original and then I would just do addition, and then do that over the was 29 years basically, that we have whatever the stipple and then just add that in.
Dr. Friday 15:15
But you will just continue depreciating the home that you had, you’re not going to add or improve because it’s basically was a replacement for the home that you already started. We don’t recapture any depreciation because you didn’t sell it. So you’re just going to continue with that plus the additional income or improvements that you did above the replacement of the home that was there first.
Okay, because I got confused about cascading loss. I thought, no, that’s not right. Because I was reimbursed so.
Dr. Friday 15:48
Right, you won’t really have I mean, you there. I shouldn’t say there could have been some casualty loss that you may have been able to go back and recapture on that. But it sounds like you, you actually had a good insurance company that reimbursed the basic value of the home you had. Now I don’t know about the stuff inside, there could still be cash, the loss of furniture and things like that, that you may still be looking at. But as far as the house itself, it sounds like it was replaced basically to its original, then you added to it. So now it’s obviously nicer and bigger.
Correct? Yeah. Okay.
Dr. Friday 16:26
Yeah. Does that make sense?
A little bit. Yeah. So just added on, right?
Dr. Friday 16:30
You got it added on, and I keep going. And then when you get ready to sell it, you’ll do the recapture at that time.
If and when you do, okay. Hey, thank you so much.
Dr. Friday 16:39
No problem, sweetheart. Thank you. All right. If you want to join the show, again, you can 615-737-9986 and add debri up a really good wasn’t necessarily directly with her, but she was talking about casualty and loss. And for anyone that may have had the natural storms, we’ve had several of them. I think there may be people that would be facing that this morning from what came through last night. But if you are in a federal disaster area, and that is very important to understand, it has to be a federal disaster to be able to claim a casualty loss.
Dr. Friday 17:23
If your home burns down. And it wasn’t a federal disaster, you cannot put casualty loss on your tax return only if it’s under the federal disaster. So if you are part of several different storms that’s come through here in the last number of years, and you have losses, and you can go back up to three years, and amend those returns and reclaim them. But also like and pointed out many insurance companies cover most of your losses, when it comes to that if you have good insurance.
Dr. Friday 17:57
Now, some people may not have had insurance that actually lived up to that expectation. But if you did, then you really aren’t looking at a loss, there are some things they may not replace. And and I will say you have to have the documentation. I had a case a number of years ago, where the person had lost a lot of gold guns, all kinds of items that they said they had. But when it the reason one of the reasons the insurance company didn’t replace it, and one of the reasons we could claim it as casualty loss is the documentation, you have to be able to prove that you physically lost something that you actually own.
Dr. Friday 18:37
So this is a great time maybe for people to think about, if you have a household of knickknacks or things like that, that either it’s been gifted to you. Keep in mind, if it’s been gifted to you, it’s not something that you’re easily going to be able to prove the value of it unless they gave you the receipt when they gifted it to you which is not the norm. So you want to make sure that you have proper documentation showing that you own it, that if there’s a registration or a license or something that you can use that you can prove that you have done that also pictures tell a million things don’t you know pictures may be sending those over to your insurance carrier so they know that you have this collection of something.
Dr. Friday 19:20
So that you know if something goes for happens then they know in advance that this is now they turned this in years ago showing they had this collection that was something that was out there, not something that looks like you just, you know, kind of creating and saying, “Oh wait, I lost all this money or I lost all these things.” It can be shoes, it can be clothes, it can be a lot of different things.
Dr. Friday 19:41
But most insurance policies will only replace a certain dollar amount to certain things and I’m far from an insurance expert, but I would talk to your insurance especially if you have something a house full of valuables then you might want to make sure you’re carrying some extra valuable insurance on those and also have the proper documentation because even if the insurance says it’s going to cover so much of household items, and you report a proper reporting, and they turn around, say, well prove you have this and you can’t, well, then you could be in a little bit of trouble.
Dr. Friday 20:14
So documentation, guys, it’s the same thing as dealing with the IRS. Right? If you’re gonna put numbers on a tax return, you need to have the documentation to back it up. Otherwise, you know, most of us are thinking, How did you come to that number? If you can’t document it? How did you come to that number, and we can get more onto miles and different things like that, when it comes to because I still tell you a lot of times when I review tax returns that individuals have done, especially on a schedule E or A Schedule C, and all the numbers happen to be 101, 150, 125, 300, 350.
Dr. Friday 20:50
I mean, I don’t know about you, but normally when I go do something in I’ve got three or four different bills, it’s $148.92, it’s $132. You know, it’s not even numbers it so it makes you wonder where someone rounding up, rounding down, just getting to those even numbers, especially with all the numbers. So you know, when you’re going to be making up numbers, it’d be best if you can back them up with the receipts. That’s all I’m gonna say, hey, let’s see to Rene in Spring Hill, which is where I’m sitting right now. Hey, Rene, what can I do for you?
Hi, there, I was thinking to the gentleman, and I told him that I had a personal residence. And I had it for 12 years, I lived in it for five, I rented it for seven, I sold it last year, do I have to report the sale to the Internal Revenue Service for last year? Or do I have some time to do that.
Dr. Friday 21:47
You have to report the sale in the year that it happened. So if we sold it last year in 2022, that would be reported in 2022. And then you also have the recapture of depreciation because even though it was a primary home, seven years ago, you’re outside of the primary home exclusion. So you will be picking that up as capital gains, you won’t have any exclusion for primary use.
Okay, that’s what I needed to know. Thank you so much.
Dr. Friday 22:18
No problem. Thank you. So again, great question. And I know some people that would have moved back into their rentals to live in there for two to three years, so that they can try to recapture that exclusion. And I guess it just really depends on how much time or how much capital gains you’re looking at, and what you’re willing to live and where to do it.
Dr. Friday 22:40
Okay, so if you want to join the show, 615-737-9986 taking your calls, talking about taxes, it’s time now guys, if you haven’t already filed your taxes, then you need to seriously consider we don’t have any openings, I know that I don’t know very many tax people that would have the ability to take on a new client at this point, because it’s obviously one of those situations where, you know, it’s, it’s a busy season, you, you can contact our office to get extensions, and we’ll get that information out later.
Dr. Friday 23:18
But other than that, you can file an extension for free on irs.gov and get the extension filed and if you owe money, you can make a payment through irs.gov. And therefore then you’re waiting just to get the tax papers and to make sure everything has been done properly or you’re waiting for tax documents to make sure you have that information. And employers you do want to make sure if you haven’t already, you might want to look into the ERTC credits it is a taxable credit. So if you get it back you do have to go back re amend the tax years that they give it to you. But it is still money that can help you restore your business. So in that time clock is running out. So if you haven’t already looked into it, you might want to so we’re gonna take our next break and we get back you’re gonna be getting to your phone calls at 615-737-9986.
Dr. Friday 24:18
All righty, we are back at him in a good time. Enjoying this wild Saturday. I don’t know if you guys are where you’re at, but we’re getting some serious gust of wind. Every once in a while here in the Spring Hill area. At least I’m not sure where everyone else is listening. But if you hopefully are staying safe and sound. If you would like to talk more about taxes, you can join the show 615-737-9986.
Dr. Friday 24:50
I started the show talking about the sweet addictions. It’s a woman’s recovery program, that they’re having this really cool who’ll get together? It’s a bake off event. And you know anyone that watched reality shows I’m sure you guys have seen the different bake offs. And this one is going to be the ladies from the recovery baking off against a Food Network challenger. So that’s going to be pretty neat. Yeah, you got someone that’s already been on the challenging going against the the women that are baking for the sweet addictions. They actually have a food truck they they’re very ambitious and the organization is wonderful.
Dr. Friday 25:30
You can go to borobakeoff.com Easiest way probably guys is just pick up the phone and call 615-580-8001. Tell them Dr. Friday sent you. We’re gonna be all there and we can get to enjoy. The evening is April the 13th at 6pm. The event is held Thursday, April the 13th at 6pm in Murfreesboro, again, the number is 615-580-8001. It’s a wonderful organization, really trying to help and change the lives of women that have had maybe a rougher start than some of us have had to deal with.
Dr. Friday 26:08
Or maybe some of you guys know people that are having to go through recovery and different situations. So this is a way to to help them and also have a little fun that night. So we’re going to take your calls again. It’s tax time. I have been here all weekend, and I will continue to be working through this time. It’s April Fool’s Day. So it’s not really any kind of April Fool’s kind of jokes.
Dr. Friday 26:31
My mom was awesome at that some of you guys have been my clients long enough to know, but she would have some of the most bizarre April Fool’s situations that you’d ever think of. So always reminds me of my mom on April Fool’s. All right. Let’s go to Greg on line one and see if I can help him out. Hey, Greg, what’s happening? Not hearing him.
Well, we sold my mother and father’s estate last year, they passed away in 20. And we sold it so we got a check for it between fatherless children. How do we can you in bed bed? Or do you just have to get followed on your taxes? I’m out alone.
Dr. Friday 27:16
Right? Well, Greg, I think I already heard part of it. But I heard you say that your family your parents had passed away in 2020. And the estate settled, and you gotta check. Is that what I heard? Right. Okay. My question on that is two sided. One is, when you was this a home that you passed? I mean, they sold in 2022? Or was it? Like, okay, so you guys would have gotten a step up and basis in 2020 at the time of their passing.
Dr. Friday 27:45
So whatever the house was worth in 2020, which was a pretty good year in Nashville. And whatever you sold it for would be the only capital gains you’re paying it for. So for example, let’s say you sold mom and dad’s house. At the time of their passing, it was worth 200,000. And if you sold it for 250, then you guys would only divided by five, each of you guys would pay tax on $10,000. Not on the total check.
Right? Okay. What each individual will do.
Dr. Friday 28:21
Right, but someone needs to probably make sure that they have comps, and the person that sold the home recently, will probably the real estate agent could help you with this, to go back at the date of the passing of the last parent that passed away, find out what the house was worth at that time, because that is our basis. And then you would take whatever your percentage of the inheritance against what you have. And that’s really important, because if you don’t have that, then all you have is property tax and property tax in the last couple years hadn’t been keeping up with actual market value. Okay. Okay, so see if they can do that. And then all of you guys would have the same information to go do what you wanted to do.
Okay. All right. Thank you.
Dr. Friday 29:06
No problem. Thanks. All righty, that was a great question. And that happens a lot. So if you ever have a situation, if you have inherited money, or if your parents are getting you know, older first, do not let them quick claim the house to you, it deletes the whole wonderful step up in basis. And that’s huge, because I have people that have purchased properties for 20 and $30,000 that are now selling them for $809,,000.
Dr. Friday 29:35
And if you have to take their basis, and then what they sold it for when they after they passed away and now you’ve got capital gains of you know, six, seven, or eight hundred thousand dollars versus if you can document it properly, and they passed away. Let’s just say they passed away in 2020. Like this gentleman and the house instead of the 20,000 they paid for back in 1950 It’d be whatever was worth in that in 2020 See, that’s a huge difference. And then we only have to worry about the capital potential capital gains between 2020 and 2022. Big difference in that. All right, let’s see if we can get Scott in the boro. Hey, Scott, what can I do for you?
Hello, thank you so much for taking my call. So we’ve my father went to assisted living in 2022. And in that same year, before he went, he wanted to go ahead instead of letting it pass through a will later, hopefully, many years later. He wanted to go ahead and give his real estate away. So he gave us some property via quitclaim deed, I think it I think he had in there somewhere for $10. But anyway, it wasn’t asked him to gift. So my question is, do we need to file his power of attorney? Do we need to file for him? A gift tax return? I’ve heard mixed reviews I’ve heard? Yes, you got to do that. And I’ve heard other people say it’s optional.
Dr. Friday 31:03
No, no option involved. I mean, unless the property gave away with $17,000 or less. That’s what we can give to each person. So it feels valued more, you want to do that. And you also want to preserve that, so that he can move it now he can’t give it to you? Well, he can’t gift it to you at the value it is today, unless he wants to show it as being sold because then he’d have to pay the capital gains.
Dr. Friday 31:27
So the big misconception is what did he pay for that land, that is what he can gift to you, without paying any taxes. If he does something different, like says like today, it’s worth $100,000, but he only paid $1,000.50 years ago, I’m just guessing, but whatever he has to transfer to you at the value he paid. Or he has to show it as a capital gain and report that he’s basically selling it to you for the current value. Best thing to do is obviously at this point, in my personal opinion, is not to do either, and just let you inherit it, because then you get the step up in basis that we were talking about on property. But if that’s not an option, then you have to do a gift tax, but he has to do a gift for his his value in it not for what it’s worth today.
Okay. Okay. But that’s not optional. That is something that must be filed.
Dr. Friday 32:20
Yeah. Again, if it’s over seven, I mean, if it’s over $17,000, his value in it, then it is not optional. And a lot of people figure, well, what no one knows won’t hurt them. But again, we really want to be able to back it up if the next person decides to sell it. Now you’ve got documentation showing it was actually transferred to you. It’s not without question, it’s your property. Right.
Okay. Okay. Well, why would people be saying that’s optional? Because more than one person has said that?
Dr. Friday 32:47
Well, because I mean, I have a lot of people that tell me, it’s optional, because basically, you giving something to your son, they don’t think the government should have to be involved in it. Well, what do you think and what is true is two different conversations. It’s not option again, you know, but But again, it’s a choice. I mean, for me, it’s, it’s a clean transfer as well. But if the IRS finds out that it was transferred to you, and then you sell it, and you sell it as a step up in basis, which is what happens a lot of time, then they can come back to you and say, well, your basis was zero, because you can’t prove that you ever actually received it at the time of death. And the father transferred it to you as a gift earlier. Right. So it’s, it’s just documentation. And I think it’s important that you do what you’re doing, which is right, you want to do the gift tax return. So that way it comes out of his estate goes into whoever’s name he wants it to go to, and that’s the way it’s supposed to be.
Okay, thank you. Thank you for clarifying that.
Dr. Friday 33:46
No worries, mate. All right, let’s see. Well, you hit Logan before the break. lobia What can I do for you?
Okay, back when the coal COVID thing was going on, I was doing contract work, unemployment. I filed the thing with them. No one would I do home improvement, so no one would let me in their home, you know, as the key thing. And so basically, they’re saying that I owe them 20 something $1,000. And I, all because of my wife misfiled our taxes, she’s amended it, but they won’t, they won’t hear anything about it.
They’re just acting like whatever. So I’ve set up a repayment plan. And in the meantime, until I couldn’t get a lawyer to handle that. But so we filed our taxes for this year. And I heard of something called a spice. I’m sorry, an injured spouse form. And I’m just wondering, and we’re just basically trying to get the money back for our children so that we have the money for them this year, and like I said, we’re in limbo right now waiting to hear their decision. I’m just wondering if this is the correct form I need to fill out? And do I need to wait for their decision to do it? Or do I need to do it?
Dr. Friday 35:08
Here’s the question, an injured spouse means that the spouse, your your wife in this situation, was not liable for the tax debt on that tax return. In some cases, because, you know, you did something, but I mean, theoretically, she filed the taxes. So it’s going to be hard for her to really qualify herself as injured spouse, because she actually put the numbers on the tax return. So you know, innocent or injured isn’t really going to apply in your guyses case, in my personal opinion.
Dr. Friday 35:41
But, you know, again, you really need to get the amended tax return in play, you might not want to file this year’s taxes, file an extension, you’re not gonna get the refund anyways, wait till you get the resolution on the year that you’re dealing with, which may take a few more months, then file it once the resolution is done, and you’ll get the money, assuming you don’t owe it in the first place. So don’t rush to file 2022, if all you’re going to be doing is chasing that refund on top of other tax debt. Okay. You know, I mean, it’s not going to help.
They’ve told me that they don’t know whether they’re going to take it or not. And I was told that it’s less of a possibility, since I’m paying the the recruitment fees every month, and I’m doing it.
Dr. Friday 36:29
I don’t agree with that. I mean, I will say that, you know, one of the reasons you’re doing that is to stop them from living and leaning or seizing any property, because you haven’t gotten resolution. The question is that, I mean, are they have have they received the amended return? And is the amended return done correctly? To account for the difference? Was it you know, Was there enough documentation for them to be able to a judgment that it was in error? Not that, you know, you’re, you’re changing something, and then, and then you do need to get to an enrolled agent or somebody to possibly represent you in this situation? But you’ve already started the conversation. So at this point, do you have a local agent? Are you guys just using the 800 number?
I’m not sure I’ll have to get with my wife on that. Really?
Dr. Friday 37:16
No problem. I’m just just asking. But you’re gonna need to you might want representation, I guess, is all I’m going to say? Because it’s something that you’re really going to want to make sure. It goes through, because sometimes people do. Did you guys do your own amended return? Did you go to somebody?
We did our own amended return. Okay. And it was a missing piece of paper that was was not filed the numbers of what I made, basically. And it it all adds up correctly. And so basically, the unemployment office is trying to give us a hard time and they there’s there’s no reason for it. Because every all the paperwork is is in order. It’s correct. And so it’s just because they don’t want, they don’t want to hear anything about it. And so I’m just wondering, you know.
Dr. Friday 38:10
So did you get, I mean, again, not to get too deep, but did you get unemployment?
I did I did. They they allowed it, they pushed it through and it was deserved. Right? And so I’m just, you know.
Dr. Friday 38:25
Okay. Well, if you want, you can call our office on Monday, and we can help you, you know, I don’t want to get too personal on here. But it sounds like you may be working your way but I would honestly file an extension for 2022. If you think you’re getting a refund, it’s not going to benefit you to rush to get it filed. In my opinion, it’s something you’re going to want to you know, file it once you know you’re going to get the refund or at least know what kind of resolution you have going versus the other way. Personally speaking.
Okay. All right. Thank you so much, Dr. Friday.
Dr. Friday 38:59
No problem. Thanks. All right. We’re gonna take our last break. When we get back we’ll hit the phone line 615-737-9986. My goodness 615-737-9986. We’ll be right back.
Dr. Friday 39:24
All righty, we are back with the last part of the show. So if you’ve been holding your question, you might want to jump on 615-737-9986 you can join us right now we’re going to go right to the phone lines. And we are going to go to is it Aerial? Aerial are Arielle, this is Dr. Friday.
Dr. Friday 39:57
I’m so far off I’m so sorry sweetheart. What can I do for you?
I had a parent pass away left us some money was two different accounts, one of them was an inherited IRA. The other one was an individual. And I’m assuming on the inherited IRA ambientale, until we have to deplete that within 10 years and whatever we take out, will be will pay tax on that correct? 100%? Yes. The only individual until will only pay tax. If it’s made any money are not.
Dr. Friday 40:38
Correct, you get a step up and basis. So those stocks removed over to you at the basis of the time of passing. So unless you sell, and if you sell that, at that time, you could even have a loss theoretically.
Okay, I just want to make sure that’s correct. Because I’m having two different tax people tell me?
Dr. Friday 40:58
Well, that’s 100% Correct. And even though you have 10 years, you don’t, you will be required to take out the RMDs each year, up to the 10th year, and then you could take it all off at one time. But you do have to take required minimum distributions each year.
Or we can take a monthly or quarterly, too.
Dr. Friday 41:18
You can do any of those different ones. Yes, sir.
Okay, yeah, she was taking her she would get a letter in December and then take that amount out each year. So, but I was more concerned about the other one. So I was gonna take it out and pay off some high interest loans and be done.
Dr. Friday 41:37
That’s actually really smart. I mean, you know, I’m just saying it will take the pressure off you right now the accounts are down per se. But keep in mind, I am not a financial planner, I’m your tax person are working with taxes. So sometimes it may be better to double check that they may have a better solution. But to me, it’s probably sounds like a good idea.
Okay, that’s what I need to know. Thank you so much.
Dr. Friday 42:01
Thanks. Talk to you later. All right, we have Pete in Nashville. Hey, Pete.
Hey, Dr. Friday. How are you?
Dr. Friday 42:11
I am doing very well. What can I do for you?
[Inaudible] tandard deduction for 65 and older. So let’s see here. I don’t have a memorize. I know. It’s like 12, seven plus another 13 or 15. So I’m going to look it up really quickly, because I don’t have that answer. But I can give it to you in two minutes. Maybe one? I don’t even have two minutes left the show probably. But it’s right around. I would guess it’s about 14.2.
Dr. Friday 43:00
Dr. Friday 43:16
Yes. Yes. Yes. If you are legally blind, you get an extra step up. Yes, sir.
Dr. Friday 43:28
No, I mean, it’s an extra fee coming in. I see. Yeah, I would say that’s a great idea, because I’m having a little difficulty understanding you. So I don’t want to give you two minutes. But yes, give me a holler on Monday, I’ll be more than glad to answer your question over the phone. Okay.?
All right. Thank you.
Dr. Friday 43:48
Thanks. And I will put my phone number out there for all of you guys that might want to still try to touch base. So let’s just start out with the phone number 615-367-0819. That’s the direct number to my office. So you can call that and also figure out I will tell you if you’re looking for someone to do your taxes for the 2022 tax season. I’m sorry to say my friends. It’s booked up here. Pretty crazy around here right this second.
Dr. Friday 44:26
So we are definitely booked all the way up. But we can help you do an extension we can help you try to get yourself organized and then be able to help you get them finished. Maybe after the 4/18 April the 18th is the final deadline. Very important to know because a lot of people think April the 15th which is on the weekend and we never have to worry about them when they’re on the weekend. Monday is Emancipation Day in Washington DC, which makes it Tuesday for 18 as the deadline.
Dr. Friday 44:58
So if you have questions maybe you have someone And you know, that needs help dealing with their taxes. It’s not a hard thing to do. Just have them call our office 615-367-0819. Maybe you’ve never heard of me and you’re like, wow, who is this person that you’re hearing on the radio? This crazy blonde, you can find out more about me very easily just go to the web. drfriday.com. Drfriday.com is the website or if you have questions, I will tell you we’re running behind and trying to get all the emails but you can email firstname.lastname@example.org. Again, email@example.com.
Dr. Friday 45:37
That’s probably the easiest way guys is to call or to text. That number of 615-367-0819 is the fastest way to get resolution in our office at least till after 4/18. And I can’t tell you enough. If you are not going to file your taxes, you’re confused. You’re not sure. Don’t just file to file. Just make sure that you know what’s on your tax return is correct. If you’re having issues with the IRS. If you’re dealing with situations, make sure you’re dealing with them directly with the IRS don’t rush to file just because you file file an extension get someone to help you and then we can get all of that dealt with. All right. This has been an awesome Saturday. Hope you guys enjoy it. Call you later.