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This episode stays focused on last-minute tax-season decisions, especially for Tennessee listeners affected by the IRS winter storm extension to May 22, 2026. Dr. Friday explains why filing still matters even when payment is difficult, and she answers caller questions on capital gains, missing forms, debt cancellation after a spouse’s death, inherited funds, and gift tax rules. She also shares practical reminders about quarterly payments, qualified charitable distributions, and setting up IRS online access before a problem shows up.
Summary Points
- Tennessee disaster extension: Dr. Friday opens by reviewing the IRS relief for affected Tennessee counties and explains who still needs to file by April 15, 2026.
- Paying as you go matters: She stresses that filing late or skipping estimated payments can turn manageable tax bills into much larger balances once penalties and interest compound.
- Capital gains and payment plans: A caller asks about deferring brokerage-account capital gains, leading to a discussion of why stock sales generally are not deferred and why taxpayers should still file before requesting a payment plan.
- Common return follow-up issues: The show covers missing W-2 attachments, late-arriving 1099 forms, amended-return situations, and how IRS account errors can take a long time to fix.
- Death, inheritance, and canceled debt questions: Caller topics include a 1099-C issued under a deceased spouse’s Social Security number, inherited CD proceeds, and the documentation needed when stepped-up basis or donated property values are involved.
- Year-round planning ideas: She highlights bunching deductions, qualified charitable distributions after age 70 1/2, IRS PINs, and ID.me access as practical tools for avoiding future problems.
Episode FAQ
Q: Can brokerage-account capital gains usually be deferred? A: Not in the general way the caller described. Dr. Friday says stock sales usually trigger tax when sold, unlike certain real-estate deferral situations she mentions.
Q: Should I amend a return over a very small missed 1099 amount? A: Her answer in this episode was generally no for a tiny amount that would not materially change the return, especially if the IRS can correct it on its own.
Q: Do I owe tax on money inherited from a relative’s CD? A: Dr. Friday says the inherited principal itself is generally not taxable, though related interest may need separate tax treatment depending on how it was handled.
Transcript
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 Doctor 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 gorgeous Saturday and the last one before the April 15th deadline. Let’s clarify for anyone again because I know there’s a lot of misconceptions back on April 3rd. You know how the government likes to keep us on our toes. They passed a um uh impact winter storm extension for everybody that lives in cheatham chester clay davidson decatur dixon harmon harden henderson Hickman, Lawrence, Lewis, Macon, Murray, McNair, Perry, Robertson, Rutherford, Sumpner, Trousdale, Wayne, Williamson, and Wilson. If you’re not sure, you can go right to the IRS website, take a look at the impact storm or the disaster extension for Tennessee, and they will have all of those out there for you because You have until May 22nd, which gives a couple of us a little bit of breathing room.
Dr. Friday
Not everybody. Some people don’t fall into those counties and therefore. You are still required, people out in uh Knox County and things I do, and they will be filing as of the 15th. So this is the final um weekend before we get to do anything on that. But if you have any questions, you can join the show, 615 367, I’m sorry, 615-737-9986. 615-737-9986. You’d think I’d have that memorized by now. And if you want to have any questions, I know many of you are probably just out there enjoying this weekend, and maybe many of you have already filed your taxes There hasn’t been a huge change. I mean, many people over the age of 65, I will say, a large number of my clients. that do meet that criteria are getting some discount. If you have $150,000 or more in income as a married couple, you’re not getting 100%.
Dr. Friday
If you have seventy-five thousand dollars or more as a single person, you’re not getting a hundred percent, but it does seem like we’re getting a little bit um in that little bit, especially if you’re in the 150 or or more income, you’re and you’re at the 22%. So if you save a thousand dollars, you’re saving two hundred and twenty dollars. which is more than they normally save. So it does help. But there is still that misconception out there that says that sales, I’m sorry, that Social Security is not taxed. It is taxed, people. It is taxed. It’s going to continue to stay taxed. There really isn’t something that we can do about that. It is going to the best that they did was give some sort of extension to individuals that are um you know older over the age of 65 to be able to get some break. But other than that, not so much a deal that’s going to happen. All right, we got the phone lines. That always makes me excited. Hey Robin Hendersonville, what can I do for you Oops, I lost him.
Dr. Friday
I scared him away. All right, well Rob, if you want to come back on, you can. That was uh probably me jumping it before They had you ready. But anyway, so um it’s sales tax. We do have um some people are starting to add up their sales tax again and that’s good because we have $40,000 that you get for your salt tax which would include your sales tax state income tax in our case is sales tax And then your property taxes. And remember, some people have multiple properties and they only use them as a basic setup, right? So multiple properties, you can still write off the sales tax on those properties. Now, if you can’t itemize, you won’t get to do that. But if we’re looking for ways of maximizing, sometimes doing the um The deal where you are basically every other year maximizing your sales tax, every other year maximizing your charitable contributions um because you can’t really do much about mortgage interest, but you can on sales tax and things.
Dr. Friday
So that way you have the ability to really do what you need to do to make it put more money in your pocket. So the only way to do that is sometimes every other year you can pay your property taxes in December instead of waiting till February. Um you can uh buy your larger purchases in that year as well. Maybe you’re thinking about buying a car or a boat or something that would be exceptional on that and we’ll be able to move from there and go into so Keep in mind there is still some ways and charity because if you’re gonna do charity and you maybe always put $5,000 a year, well if you can do it every other year and really maximize your charities in the years that you’re doing your property taxes and everything else, you’ll find that it is actually a really good idea because you may be able to itemize every other year versus not being able to itemize at all if you’re not playing the game. All right, if Rob is ready, we can try to go back to him. Hey Rob, are you there?
Caller
I’m here. Can you hear me?
Dr. Friday
I can hear you this time, my love. Thanks for calling back. What can we do for ya?
Caller
I don’t know if it was last week on your show or if it was a commercial that you did. but it was referring to having to defer taxes on um capital gains through uh that you get through um like a brokerage account. It did I hear that correctly?
Dr. Friday
I don’t think so. Um and hopefully I did not say that, because it’s possible, Rob, maybe you heard something, but uh I mean there is no way of being really deferring the tax because once it’s through a brokerage account, it’s It’s usually managed or you handle your own account, but once you’ve sold something, you can’t defer it. If that makes sense what I’m saying. Sorry.
Caller
That’s okay. Answer my question.
Dr. Friday
I’m glad you called. Thanks, Rob. I appreciate it. The only kind of uh deferrals on I’m trying to think really quick. We can let him go. I’m just trying to think if there you sometimes you can take losses against gains, but that’s not really a deferral. Um but You know, there really isn’t a lot of ways of deferring capital gains that I can think of. But I’ll I will try to go back and listen to my Uh he might have been talking about my one minute moments that are out there and see if we can’t figure out um which one that was during one of the breaks just to see if I can come up with a better answer than no. Never really liked that answer in my life. So I’ll I’ll see Rob if I can come up and if I can I’ll I will uh bring it back on in a during the next break. But um anyway, so we’re talking about anyone that doesn’t live in the counties that are extended, you need to file. Um if you can’t afford to pay, um You you can still file and then make a payment plan.
Dr. Friday
Sometimes I have people that says, well, I didn’t file a tax return because I didn’t I was afraid to file because I didn’t want to um in a sense have the IRS trying to collect. But you know, the IRS in many cases will actually prepare taxes on behalf of that person, and they’re never going to be as good as what you have Prepared yourself most likely unless you have absolutely no deductions because they’re going to claim you single and zero, even if you’re married with children And they’re going to do the standard deduction, even if you have a mortgage. They’re not going to do anything that they can write off or do, you know, as far as that kind of situation. So just it’s always better. Prepare your own taxes. Make sure that you are thinking about your situation when you’re preparing, you know, if you can’t afford. Also look at why you owe money. I can’t tell you how many times I do this kind of um consulting when we’re doing taxes, right?
Dr. Friday
So we look at the last year, the last two years sometimes, and they still owe money. Sometimes we’re on the right track, but if we didn’t file the t taxes the year before until June, July, or August, you know, they only had like six months of making the adjustment. We’re closer, but we’re not there, but we don’t need to really adjust after the first year Then sometimes it goes the opposite. For some reason we could go in there and we say, hey, you need to have the you need a change, you need to go single and zero. Even if you’re married, sometimes having to go single and zero is the way it is because you need a higher deduction or just go to box four and say, hey, I need $200 of paycheck coming out because you have income coming from other sources In many cases, you have capital gains, you have interest and dividends, you have a small business, or your wife or spouse has a small business and they’re not making estimated tax payments. So everything’s coming out of your check to balance it out. It is so much easier to pay every paycheck than it is to have a bill that says you owe $6,000, $10,000, $25,000 And even if you’re prepared for it, sometimes you don’t prepare as well.
Dr. Friday
And then there’s penalties and interest. Yes, having to pay quarterlies is not a choice. It is a requirement Why do you think they love everybody on payroll? Because every time they take a paycheck, the taxes are all paid. They want people that are self-employed doing that exact thing. And maybe you’re not even getting, maybe you don’t have to make quarterlies because of self-employment, but because of other sources of income. Again, capital gains, interest, dividends, rentals. that don’t have any way of having taxes come out. You are responsible based on whatever you owed in 2024. You should have made estimates for 2025. Again, now whatever you owe in 2025, the estimates are based on that for the next year. Now, if you know for a fact that you sold something that was going to actually change those numbers You need to make sure you’re you’re thinking about that. Maybe you don’t have to make the payment until the end, but you need to know that, hey, I’m gonna have a $25,000 bill Because the loan officer you’re thinking about, the IRS, is not a good loan officer.
Dr. Friday
They have 25% interest. I have a guy that from 2015 he owed $15,000, now owes $28,000. In 2018, he owed like a hundred and twenty-one and now owes two hundred and ten So you can see that is not a good loan officer. There are so many better ways you could spend your money than letting the IRS deal with you on that element. So Adjusting your paycheck, adjusting your quarterlies, adjusting the way you do life. Because no matter what, the IRS looks at it, if you’re making your mortgage payment and you’re not paying them, guess what? They really do own that house. If you’re investing in something else and not paying them, that investment theoretically they can come after. So you want to make sure you’re doing all those things after you have paid them Not before. And I know a lot of people like, well, I have to have a roof over my head. I have to feed my children. I can’t afford to do it all. But you know, the IRS has uh as rules and i’m not i don’t i’ve never worked for the irs i am not saying this as an employee or something like that i am an advocate for taxpayers As an EA, that’s what I do.
Dr. Friday
But you also have to be logical. If you’re going to be self-employed, you need to pay your taxes. If you’re going to have investments, you need to pay your Your taxes. It’s not just well, I’ll get to it when I can, because what happens is just like that gentleman 2015 and 2018 now owes almost three hundred and some thousand dollars That started out at like 150 if he had been making those payments. But at the time it wasn’t possible. And now he’s going to end up paying a lot more for a lot less. All right, we’re going to take our first break. When we’ll get back, we’ll talk more about taxes and making sure that we’re paying our fees. We’ll be right back with the Doctor Friday show. Alrighty, we are back here live in studio. We’ve got Tom on the line. Let’s see if I can get Tom on. Hey Tom Hey, Dr.
Caller
Friday. Good day.
Dr. Friday
Good day. What can I do for you, sweetie?
Caller
I just turned in my taxes, mailed them out on Thursday. And uh I realized when I was putting my records away for uh for storage that I had forgotten to attach my W two to my return You you don’t have to touch them any longer.
Dr. Friday
The IRS has them electronically. Now I know back in the beginning you were fine, but I think you’ll be okay. I could You know, we don’t attach them any longer, but we do file everything electronically versus by mail. But I would think they’d be pretty good because almost always they’re in there.
Caller
Okay. That’s what I thought, because all the papers seem to say now this information is being furnished to the IRS. And so that was the part that made me forget to attach it Yeah, I can remember actually don’t staple, only use paper clips um and making sure that they were always attached and you know making that situation but um yeah i think i think you’ll be all fine if not you’ll get a sweet little love letter saying can you please justify normally when i see it it’s more justifying the withholding that we reported than anything else but Um yeah, I I really don’t think you’ll have a problem.
Dr. Friday
Good job. You got him in time. That’s the important part. You got ’em in time.
Caller
Thanks. Thanks very much. Have a great day.
Dr. Friday
You too, buddy. Bye. Um and you know I would say in most cases nowadays most people do not um mail any longer Tom just to say we are mostly electronically filing in fact The IRS will not mail a refund check back to you now. They want a bank account. They will call you, make you sign up online for ID. me Um I’m sure there are some exceptions if you have uh certain um disabilities or something, but So far, all my clients haven’t met that exception. And uh I’ll be honest, several of my clients were not happy about having to provide a bank account to get it. And my understanding is next year they will not, they’re not wanting to accept checks For payment, they want them made electronically. We’ll see. We’ll see how that feeds out and what we have going on in there. All right. So uh Rob had called about deferrals, and I’m not sure I couldn’t find the exact one, but I might have been talking. Um, about one of two things.
Dr. Friday
I’m thinking a 1031 exchange, which Rob, you probably already know about, and that’s not usually done with stock and uh and an installment sale, but all of those To be quite honest, they are more deferrals on like real estate. Um, if you sell something and you want to do a like kind, or if you again sell something and you tote the note You can defer some of the cat uh capital gains based on that, but actual stock sales, I could not and don’t see anything that would help us defer on stock. Most again, most of the people I deal with when it comes to 1031s at least are usually people that are selling dirt, you know, real estate of some sort um that turns into a like kind situation. Uh but hopefully I know that wasn’t a lot of help, but that’s the best I had on the short notice that we got going. So um again, if you haven’t filed your taxes, we are under in this Little area we’re in, Davidson, Rutherford, Sumpner, Murray County.
Dr. Friday
Um we are in um an ext of a federal extension for disaster until May 20 2022 of 2026. So about another 30 days out. Um, I have in most cases filed extensions for my people, anyways. If we have not filed the return. Um, we would have already tried to file extensions because there’s always that fear. I mean, especially after COVID and, you know, uh people get sick, right? Um, we’re not the biggest office in the world, even though it may seem like sometimes, but You know, um, if we lose one or two people due to something, you know, just even for a week of being out of the office or something, we could delay uh other people’s taxes and we would hate for that to be on our shoulders. So very important to be able to just make sure that we’re doing our best to to make it work for everybody and and and all that. So if you are in a point where you’re not sure you haven’t done something, if you’re my client and you haven’t heard or you’d like to hear back as far as has an ex extension being filed, you know, please give us a call or email or text and we will respond as fast as possible and let you know that we have taken care of that and we are Working through the weekend and all next week.
Dr. Friday
So we’re not stopping just because we have this uh disaster extension. We will get everybody out that would like to be out. Some of us have to file extensions because we’re waiting for K1s or other things to make it work for everybody else. But that being said, right now we are just working on making sure everything is complete um and we’re moving forward on um on that situation um so we’re sending that rather than the other so if you need some help With filing your taxes, we would be able to help you with an extension. We would not be able to take on any new clients for this tax season, not till after the uh May 22nd deadline. But we could help you with getting an extension filed so that way you are not late. Now my understanding is and you know take this as, but I think you need to file your extension If you’re not going to make it by May 22nd, you need to file it by April 15th. So now you’re under the other extension instead of the natural disaster one.
Dr. Friday
There may be exceptions to that, but I think it’s a lot easier just to file an extension now, put it out till October. If you file your taxes tomorrow, who cares? It is still an extension. It doesn’t hurt anybody, and things move on very, very nicely. So if you want to join the show, you can. Sorry, 615-737-9986-615 737-9986, talking about taxes, talking about all the wonderful things that we like to do as far as what we need to pay taxes, when we need to pay taxes, how we need to pay taxes. They are all part of this. And if you’ve got a unique tax question or maybe you’re just working still on your taxes Or maybe you’ve even filed your taxes and you’re not too sure what the next step is if you have a balance due. Keep in mind you cannot set up a payment plan until you have filed your taxes. The IRS has no idea how much money you owe, so they are not going to be able to help you until that tax return is actually filed.
Dr. Friday
Once it’s filed, then we’re in good shape. We can move on. The IRS will then. take care of getting everything they need from you know from the information and then move it from there to do how or what you want uh handled. So if you have um uh back taxes like multiple years uh you know come come May June July that’s a great time to get caught up on taxes from Most accounting offices, I’m sure some county offices are different, but in our office we can you know put a lot of time and effort in. And then obviously if there’s an offer and compromise or something that has to be done to try to make that work for you as well. Hey, this is all you need to do. I mean, seriously, it’s not that difficult. You can, you know, get your taxes in order, do what you need to do And then you from there you basically turn around and you start being the person you really want to do. You know what I mean? As far as if if you don’t You can’t you can’t change the past.
Dr. Friday
Maybe this is the easiest way to put it. You can’t change the past when it comes to whatever happened in your taxes, whatever happened, why you didn’t You only can move forward, right? I mean that just makes sense. So if we’re moving forward, we can only look at 2026 Let’s make that the year that you start making quarterly payments, that you start making or you have enough money come out of your uh W-2s or You know, basically there’s only two major ways, but maybe uh out of uh 1099 Rs, whatever source of income you have, 2026 is the year you you get caught up Because you want to basically start first with paying it forward. You want to make sure that 2026 is the year you don’t owe any taxes or that you can afford to pay whatever is left when you file it. Then we can deal with whatever has happened in the past. Because if you don’t stop the the system of always paying backwards, because I have people every year they pay like 2023, even though it’s 2025, and they finally pay this You need to get a year without all the penalties.
Dr. Friday
You need to get straight. So you’re now living off of what it really is that you’re earning. Then we can go and say, okay, here’s what the IRS, you’re making your payments, you’re on track, you’re doing everything right. And the IRS says you can afford a partial payment plan, or you can afford a full payment plan. But whatever that comes down to It’s only based on what is left after you’re doing what you’re supposed to be doing for the year you’re living in. And that’s so very, very important. Because to be quite honest with you, if you don’t do that, you’re going to always be paying ketchup, paying a ton of penalties, and those penalties are enough to really, really knock you out. I mean, let me be honest with you. Those penalties can be huge, massively huge. Um, and you do not want to um be paying them if you don’t have to. And you know, it There’s sometimes you can, if there has been a situation, you may be able to get some assistance with it.
Dr. Friday
But otherwise, yeah, not really. To be honest, sometimes they basically say, sorry, you know, we’ve given you the opportunity. You have not done what you need to do. And so you need to now just Go and, you know, start making payments, make it work, because this is all we have. And you’re like, wait a second, I can’t afford this. How am I supposed to do this? You know, and the only way you can make your taxes and your life and and hopefully thrive is to basically get a handle on, and sometimes you know what? It is really For some individuals, it’s getting out of being self-employed. And that’s a hard thing. They is giving up on the entrepreneurship side because they really cannot um handle all of it. It’s not e it’s not for everyone. I mean no job is for everybody. Don’t ask me to fix your car, that’s for sure You know, I mean, I I wouldn’t know the difference between anything and that motor where, you know, obviously I hopefully know what to do with the taxes, right?
Dr. Friday
So not everybody is made to be entrepreneurs Some people thrive in it, some people don’t, and sometimes you you don’t know when to give up, and that can drag down an entire financial tree. It really can. I’ve seen it happen so many times You know, you get so invested in the business that you don’t look from the outside and realize you’re kind of drowning. And that is a hard thing to come to, but once you think about it, once you’re actually able to look at it and do what you need, you’d be amazed at how that decision can lift and move you forward and then you go back into the the profession that you used to love and maybe working for somebody else. doing something else and maybe later you you go back into it but you have a whole different train of thought. All right we’re all take a quick break. The show uh the phone number here is 615 737-9986-615-737-9986. We’ll be right back.
Dr. Friday
We’re back! All right. If you want to join the show, you can. 615-737-9986. 615-737 9986 taking your calls, talking about my favorite subject, taxes. You may have a couple different issues going on, trying to figure out what it is that you really need um or wants to have going on. So if you need help with anything, you can certainly give us a call here at the studio, 615-367 0819 615 367 08 I’m sorry that is my direct office number goodness gracious 615-737-9986. I did not mean to confuse everybody 615-737-9986 is the number here in the studio. Today we’re just kind of talking about what um Oh, we’re going to start talking about what we could be doing to prepare for 2026. 2025 for most people is over.
Dr. Friday
The only people that can actually still do something would be people with CEPS. you can still contribute money to them. And it is my understanding, you need to check this with a financial advisor. I am not one, but we’re When you’re under a federal uh disaster extension, it is my understanding you also have an extension for your HSA and your IRA contributions that would normally be due April the 15th You do need to confirm that guys. That’s what I’m being told, but I do not do that for a living. So I want to make sure all of you guys have that covered and double check. So if some people sometimes did not or have not done anything in their thing, then you want to make sure that you are able to make it work, right? I mean that’s just the way you want to do it. You want to make it work, you want to put the money where you need to put it, you want to do everything you can uh and and move forward with it. So if you have questions or you need assistance with Trying to figure out that kind of stuff.
Dr. Friday
We do work straight with uh several great financial advisors, probably Hank Parrot being the number one that I have been working for 30 plus years with. Also Um, what I have found kind of interesting when we do people’s taxes, of course we talk about ways to save tax dollars, what can we do? And again Not a financial planner. We talk more about in tax dollars, right? So one of the biggest things, if you are 70 and a half or older, a qualified charitable deduction is wonderful. And it always surprises me. how many people do not have not actually done just that they don’t do and their financial person isn’t really talking to them about how that could save them quite a bit in tax dollars. I had a couple that came in just last week um and we were doing their taxes and they were both uh in their 70s and I said hey you guys haven’t really started doing your qualified charitable deductions yet and they’re like what is that and then I’m like wow I mean they have a uh financial person you know there’s there’s no reason they wouldn’t know this Um, and I started explaining to them, you know, hey, you can start giving money directly out of your IRA to your charity.
Dr. Friday
They pay the money directly to the charity, and therefore we can write it off Directly off of the 1099R. We do not have to itemize, right? So this is great. We don’t have to itemize. We got this covered. And then they’re like, oh, well, how much does it really make a difference? And this person, they give about $9,000 a year to their church. And at their income bracket, we were going to save almost $1,300 which meant that they could even give more if they wanted to. So I thought that was really kind of cool. And it really was no change. All right, let’s hit Lisa who’s been good enough to give us a call. Lisa, what can I do for you, sweetie Hey, while I was preparing for my twenty twenty-five return, I discovered a 1099 a dividend from 2024 that I did not include in my twenty twenty-four return.
Caller
Um, it resulted from my husband passing away and me transferring his account over in my name. And I just I just didn’t get it included. It was only sixteen dollars. And my accountant that did my taxes said not to worry about it, that they would not come after me over that $16. But I just wanted to confirm that with you Yeah, I agree with your accountant.
Dr. Friday
For $16, probably even for almost, you know, $30, I wouldn’t have made the change. And to be quite honest Um, unless you sign unless they were sent in very late, you know, they would have already sent you a sweet little love letter saying we’ve changed your return. But for sixteen dollars, it wouldn’t have changed the tax bracket or anything. So um likely not to have. So yes, I agree with whoever prepared your taxes, they are correct. I would not do anything. Worst scenario is they send a love letter saying you owe them $4, which is ridiculous. They should shouldn’t do it for under five, but I’m just saying, and any penalties could be waived because of the situation. But I do not expect that to to actually even happen.
Caller
Okay, good. Well that’s so that’s what he said, but I wanted to confirm with you, so I appreciate it.
Dr. Friday
No problem. Thanks for the call, please. All right.
Caller
Bye.
Dr. Friday
Bye. All right, that was a good question. And sometimes, you know, she brings up a good point because I can’t tell you how many times we’re going through people’s tax documents and because of the timing documents come in Sometimes they come in late, right? So most of my people are very good about they start an envelope or a folder and they just start putting all the documents that come on through the year into this folder so that way they’re ready for taxis and when it comes. Um, and then something comes in late. Maybe it comes in in May, June, July instead of before April 15th. And so they put it into the next year because they don’t, you know, we don’t look at every little thing expertise. Um and so when I get ready to prepare their taxes, we’re looking at the dates, just making sure, and then we realize, oh wait, this was an amended form that actually affected us back in 20 2025, um, or you know, something like that. And you’re like, hmm, what do I need to do about that?
Dr. Friday
You know? Um, and sometimes we need to do nothing. Sometimes the IRS has already done the job for us You know, we have to figure out what’s next on that situation so we can move forward. But, you know, don’t don’t stress yourself. Easiest way to put it, my opinion, don’t stress yourself over it. The IRS is pretty good. And if you don’t catch it yourself, it could just as easily be something where you’re like Okay, you know I missed it. That’s fine. Life moves on. And the IRS sent you a love letter and says they’ve corrected your tax return, not something we want. to have happen. But, you know, we were able to get everything done and move forward and, you know, have it corrected one way or the other. And sometimes, you know, you file a corrected tax return and the IRS doesn’t correct it because they haven’t apparently received it, even though we have e-file confirmation that they have I know it’s frustrating sometimes and especially when you have to deal with the IRS, I would love to tell you that it has gotten better. sometimes feels like it.
Dr. Friday
Sometimes you get really, really lucky and you get people on the phone that are just awesome and you’re able to do something. And then sometimes you kind of bounce back and you’re like, okay, we’re back to the same thing. I’ve been talking to this person for how long? And what am I, you know, getting on this? And yeah, it doesn’t really work as well as I like it to, but um Yeah, it’s it’s just one of those deals where you really do want to make sure that you have everything correct as best of your ability. That’s what it exactly says in tax law to the best of your ability. And sometimes things come up where you’re not able to really um do that. And so if you’re if you’re having those problems, maybe you’re having to deal with some of this stuff, then you can give us a call. We’ll certainly help you. We are um I am an enrolled agent licensed by the Internal Revenue Service to do taxes and representation, which just basically means I’m able to help you get Maybe work your way through some of the red tape, deal directly with the IRS if it’s necessary, and be able to finish up or mark everything else that we have to move forward.
Dr. Friday
So if you have questions or you need something to help you with that we’d be more than glad to help you. We are working on um potentially working on some uh self videos and things that might help some of my clients work their way better uh through the system but It, you know, every case is so different, to be quite honest with you. That’s one of the problems I have, is that every case is so different and needing to address each of those issues with that is not as simple as you might think. So being able to move forward, do what you want to do, um, and you know, take care of all those, then we are in perfect shape, right? But sometimes um you feel like you’re you’re not moving forward with your tax situation. Sometimes you feel like okay you talk to one person, they say okay, um and move on to that and And you know, the next person says, oh, but they you haven’t paid this, you haven’t done this, but yet you have proof that you paid it. But now sometimes uh it it may come down to where the uh IRS has applied it to the wrong place.
Dr. Friday
I had that happen very recently where the client went in and they paid it under a 1040 health care instead of the 1040 uh when they went on the IRS website. They didn’t realize there was a difference. And one of the choices says do you have a 1040, 1040 health? And they end up, which is people that it was really designed back when we had to have health care And there was a penalty if we didn’t. And so it was a way of paying your penalty right there on the IRS website. And now that penalty has gone away. But People still owe for some of those years. So it’s a place where you can do it. So he had paid it under that, not knowing that he was making this error. And it took us, oh my gosh, I think it took a year and a half to get them to just move it. You would think there’s an overpayment. They could apply that overpayment, but they had it sitting under this health care in which he did not owe any money. and his personal, which he did owe money, and you think they could have, but the system that the IRS uses does not do that. We have a a number of times when something accidentally gets paid on a 941 for a quarter prior, a quarter after And boom, now you’ve got a quarter with too much and a quarter with too little.
Dr. Friday
Why not merge those together so you balance out? Doesn’t happen. They’ll issue you a refund for one month, and then if you cash that check, then of course you end up with penalties and things that you can’t adjust. So it is just one of those things where you really do want to make sure that you have whatever it is that you that you’re trying to pay and making sure it’s been paid properly. So um, but if you need help with, you know, with doing that or just finding out what is the next step? What should I be doing? What should I be following up with um and and moving on with all that. So if you need help with some of that, that’s what we’re here for. I do know it’s been a little crazy because tax season every year, guys, is crazy. But hey You can give us a call on Monday and we’ll try to help you out. We’re going to take our last break for the show. If you need uh to join the show, 615-737-9986. We’ll be right back. Alrighty, we are back.
Dr. Friday
And it looks like Lisa has thought of something else to help entertain us and I appreciate your calls because you know, sometimes only talking to myself. All right, Lise, let’s see what you have for me.
Caller
Okay, part two. Um my husband, like I said earlier, passed away in twenty four Right. When we when I did my return or you know, had someone prepare it for twenty-four, they filed on there that he had was deceased and it would be the final return for him Okay. He had a credit card in his name only. And There was a little bit of a balance on it. Um and I settled with them and paid uh an amount to them for transactions that were uh happened after his death that they said I was responsible for. And then um they sent me and that was it, and that was in twenty twenty four is when I settled it. And I never got anything else from them Well in twenty twenty five this year I get a ten ninety-nine C for them for the difference. It was like fifteen hundred dollars, but it was only, you know, it was in my husband’s name Well my accountant also said this year not to worry about that because it was under his social security number and that I did not need to include it in my return I like your accountant.
Dr. Friday
I need to meet this person. That person is correct. Because it is uh you’re not responsible for your deceased husband’s tax issue. You know what I’m saying? Um, so you you don’t even really have the authority to file his taxes. I mean, obviously you’re married, you have the But you know what I’m saying, you don’t have the need to. So in answer to that question, I agree again. Um it it seems odd, but But the fact is you do not have the the need to worry about what would have happened if it was only under that person’s name, then you don’t have to file anything on that person. Okay. You know, especially because it’s a non-secured asset. If it was secured like to the home or something, that’s a different situation.
Caller
Yeah, because he had one that I did get a ten eighty nine C for in twenty four on another credit card, and since I our return at that time was still married filing jointly, I did include that And you probably did out better, but theoretically you would not have had to file for his, but um assuming you’ve always filed Mary Finley jointly, so why not?
Dr. Friday
Um you know To to make that one.
Caller
And then this year I did qualifying surviving spouse is what I did this year because I have a son that I take care of that’s disabled that still lives at home. So Yes.
Dr. Friday
I’m sorry about that. Yep, you’re spot on, girl.
Caller
Good deal. Thank you so much.
Dr. Friday
No problem. Thank you. All right. If you want to join the show, you can. 615-737-9986. We only have a couple more minutes. 615-737-9986 taking your calls, talking about my favorite subject, taxes. Um, you know, and it’s just it’s favorite subject for most people. Let’s be honest. How can you not love taxes? So um, oh, looks like we only have a few minutes left. If Marsha is ready, go ahead and hit her on. If okay, hey Marsha.
Caller
Hey. My question is my brother passed away and left me uh twenty two thousand dollars he sent it had it sent to me from a C V he had with several people’s names on it. Well I need to include that in my taxes this year.
Dr. Friday
Um, if it was a CD, assuming it wasn’t held in an IRA, then the answer is no, because it’s not going to be taxable. If it was held, the only thing that could have been would be some interest that may have been paid included in there that might have been based on when the CD was sitting, you know what I mean? But if if he has an estate, sound like there’s more than one person?
Caller
Right it well it was a terrible payroll.
Dr. Friday
Okay. So most likely the estate would have pulled it out, paid the tax on the interest, but um the the capital, the main part of it, assuming it was just money he had in the bank, you will not pay tax on.
Caller
All right, thank you.
Dr. Friday
Thank you. And you know, these guys are bringing up great questions, you know. It’s always a hard thing to deal with when you’re talking about um Death, I guess. Um, and the biggest problem with most of that is is that when you’re talking about death, you’re also talking about how do you handle some of the things that happen, right? We all know about step up and basis. We all know how that works. We all know that we are able to um you know get a step up and basis, but I have Or want to make sure everybody understands that when I talk about a step up and basis, there are some rules that need to be um dealt with uh because Uh you can’t just make up the number that is used for the step up and basis. You need to make sure that you understand how that is going to come out. I mean, so you need either an appraisal, which is what the IRS requirement requires is an appraisal.
Dr. Friday
And this is even on the furniture, clothing. If you’re going to give a lot of that away, they want an appraisal to show that the value that you’re you’re reporting on taxes is the actual value because I’ve had two cases now where they went and did the whole goodwill thing. And then turned around and found out that they weren’t going to be able to do the total amount because the IRS came back and said, hey, where’s your appraisal showing that you gave 13 $15,000 worth of clothing and furniture. And they think they have all the details because they’re using the Goodwill app and it doesn’t work. They want a physical appraisal. All right, let’s hit Michael really quick. Hey Mike, what can I do for you? Yes.
Caller
Uh real quick one. How much can a relative give to a relative before they have to pay tax?
Dr. Friday
Well, there’s really no tax on either, but nineteen thousand before you have to file a gift tax return.
Caller
Oh excellent. Thank you. Made my day.
Dr. Friday
No problem. Okay. Thank you, Sweet Hall. All right. Yeah, that’s a good question. Yes. And in normally the only person that pays taxes the person giving the money and if you have a hundred thousand in the bank and you want to give that to your child I’ve had a number of people that help do that with putting down payments on homes you can gift a hundred thousand dollars there is a tax return we have to show it with but the gifting is still available and you’re able to do what you need to do to make it work. So if you have any questions, um, you know, you can um contact our office Monday morning. 615-367-0819. Again, 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 33 years. So if you’ve got questions or you need help, be more than glad to at least lead you in the right direction. I am not a financial advisor. Making sure people understand that because sometimes I’ll get a lot of calls saying, can I do this with my stocks or is this a good portfolio?
Dr. Friday
Not my thing, guys. I’m always asking the same question of my financial guy who is Hank Parrot. That’s who I would send you to as well. Um, you know, however what you need for that. So um, but if you have tax issues, maybe you have a friend or someone that needs some assistance and you just need to have that initial consultation we can help you with that we can give you an idea a lot of times I have to get power of attorney so I can find out what the IRS is showing what they want to be doing so we can make sure that we have all the right answers to do what we need to do. Also many people seem to forget that they actually have the IRS PIN system. That’s the six digits that the IRS will provide to you. Normally an identity theft situation happened. If you are filing your tax And you’re not providing it, I can tell you right now I have about 12 people that have not yet been able to file their taxes because they don’t have their personal PIN number. And without that, the IRS is going to consider it a fraudulent return because that’s the whole purpose, which is great.
Dr. Friday
I have other people right on top of it. Give me their PIN numbers. It’s a great thing to do. But um You know, also I’m an advocate for the ID. me accounts. That’s the one where you can go online, look at your IRS transcripts, look at your payments being made, look to find your W-2s, um, missing 1099s. If you Sometimes we move, we relocate, we don’t tell the employer. So you’re looking to file your taxes, you can go in there and pull up the transcripts that will give you the details of those transactions. It’s a lot easier to manage your IRS account. It’s really no different than managing your bank accounts or anything else, but it is a little tricky to set up, especially for some of my clients that have senior parents And the parent needs to have it set up so that they can update bank accounts or update account information and they no longer have driver’s license. They no longer have passports.
Dr. Friday
They don’t have the ability to have an email. You don’t realize how hard it is to function in this world when you don’t have access to those things. So my suggestion is Set it up sooner versus later. It’s like when someone passes away, never turn off an email, never turn off their cell phone. You need that information to be able to handle the estate so much easier All right, so again, if you need to reach my office Monday morning, 615-367-0819. If you’re in the zone around Williamson County, that’s Davidson, Murray. Um Sumpner, Henderson, all of those remember we have until 522 26. And then if you want to check me out on the web You can just go to drfriday. com, dr-fr-i-da-y. com, or you can email drfriday, which is at friday at drfriday. com.
Dr. Friday
The email again is Friday at drfriday. com. Hopefully you guys are having a wonderful uh Saturday afternoon. It’s beautiful here. The girls and boys My children uh kept pretty quiet, so I hope you guys enjoy the Saturday, as we say in Australia, cop you later