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:
- Application for Automatic Extension of Time: Form 4868
- What Happens If I Don’t Take My Minimum Required Distribution?
- How to Find Out the Status of Your Tax Return
- The Two Reasons Why Some People Get Tax Changes
- Do I Need to Report Inheritance Money to IRS?
- What Can I Expect from Tax Court?
- What Happens If You Put Wrong Information on 1099?
- What to Do If You Haven’t Filed a Tax Return in a Number of Years
- The Best Way To Do Taxes as a Self-Employed
- The Importance of Paying Quarterly Taxes
- How To Do Tax Preparation and Financial Planning The Right Way
And much more!
Dr. Friday 0:01
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 0:31
This is Dr. Friday, and this is the Dr. Friday show we are live on this beautiful Saturday before the end of tax season for all of you that thought today was tax day. Well, you’re wrong today is not tax day Tax Day is Tuesday, that is the day that we’re going to have it that’s the 18th that is when your taxes are due that you must pay in file not only your taxes, but your first extension, or your first estimated or file your extension due date for individuals. T
Dr. Friday 1:02
hose are when you need to make. And remember, if you’re filing an extension, an extension is only as good as the amount of money you’re paying, in some ways to be quite honest. A lot of times people are sitting there going, oh, wait a second, I you know, I filed an extension. I don’t have to worry about this. But if you filed an extension, did you actually file it with money? Or did you just file the extension? Do you owe any money? Because that’s also another huge question.
Dr. Friday 1:30
If we don’t owe any money, then we don’t have to worry about what you owe or what you don’t owe. But if you do owe money, then you need to make sure that you’ve paid that money in and that you’re doing what you need to do to make the situation you know work for you. So again, just making sure that if you owe money that you have taken care of the situation so that way, you don’t actually filing an extension. It’s just extending the time that we have to file the paperwork. All right, why don’t we go ahead and head right to the phones because I got lucky enough. And it looks like we’ve got our first caller on there. See if I can move this a little bit. This is Dr. Friday.
Hi, this is Jay from Murfreesboro. How are you Dr. Friday?
Dr. Friday 2:15
Hey, Jay, I’m doing awesome. What can I do for you?
Yes, ma’am. My father in law passed away in January of 2022. So he had about one month of income, combination of Social Security, a military pension, and then a pension from another job. So we have this basically this one month of income in 2022. And I’m not sure how to file that or how to take care that I will say that when we did his 2021 taxes, we let the IRS know that he had passed away. And my wife was like the beneficiary of his refund check. But I’ve got this one month of income for 2022. And I’m not sure what to do about that in terms of filing.
Dr. Friday 2:59
So did he have any IRAs or, or anything where you had to take RMDs even though he may not have taken it before he can distribute his RMD would have to distribute for that year?
Yes, ma’am. He did have IRAs with IDs.
Dr. Friday 3:15
Okay. So they want to make sure Yeah, exactly. I’m not saying that, you know, but you would want to make sure that you report his final RMDs. Because even though he a lot of times my clients, many of them wait till the end of the year to take them because they really don’t need the money. They’re just taking what’s mandated.
Dr. Friday 3:32
But you want to make sure that the RMD came out before and that you’ve got the 1099 are for those along with the pensions and the Social Security. Even if he doesn’t owe money, I would actually file a return just as his final. Even though I know the year before, theoretically, you’d already marked it, I’d still mark it as final because there should be no more documents at this point, because it’s already been a year past his passing. So anything that came in his social security number now should be finished as of the end of 2022.
But you wouldn’t just go ahead and…
Dr. Friday 4:08
I would. Yes, I would. I would file one more. Again, just to confirm and it will have to be mailed. You will not be able to email e-file it because he’s deceased. But your wife can sign it again. And if there’s no money due at least it would then you know, show the release of his tax responsibility after his death because 2021 was prior theoretically to his death.
Yes, man. Well, I sure appreciate your help. Thank you so much.
Dr. Friday 4:35
Thanks, Jay. Appreciate you call him. All right. Why don’t we go ahead and go to Jason. Hey, Jason my boy, Franklin, what can I do for you?
I did not file my mom’s taxes last year or 2021. And filing this year is 2022. Should I wait till I file 2021’s before I filed 2022’s?
Dr. Friday 5:00
That’s not necessary, you don’t actually have to file taxes in. In coordination of yours. The only time that really becomes more of a situation is if there’s any type of loss carry forward or Nol. In her case, I don’t know her. So if if there was a stock loss that she wasn’t able to take in 2021, and it would roll to 2022, then you need to do that one first.
She’s owed money both years, she’s sold her home in 2021. But she didn’t make enough money for it to be an exclusion.
Dr. Friday 5:36
For it to be an exclusion to met the 250,000 or 500, depending if it’s a husband wife. Yeah, that’s fine. Again, nothing stopping you. But if they’ve done any type, I mean, again, it doesn’t sound like in her case, but just for people listening. If you if for some reason, the IRS think you did owe money for a prior year they could hold your refund from this year is all I’m gonna say, I don’t believe that jet. Jason, this is your case, but just other people listening. Okay?
Okay, thank you.
Dr. Friday 6:04
Perfect. Thanks, buddy. I appreciate it. All right, let’s go to Scott in the town. I’m sitting in Spring Hill. Hi, Scott.
Hey, how you doing Dr. Friday. I’m Scott, your client out in Spring Hill here. And I was driving and I caught your show for the first time. And I just wanted to tell everybody who’s listening that does not have tax representation. You have got to call Dr. Friday, because I’ll tell you, I moved out here from California. And I was looking for the best. Somebody who really understood taxes and could understand my situation, which is kind of difficult to understand. But she helped me and she helped me quickly and reasonably with the price and I just wanted to give you the highest recommendation.
Dr. Friday 6:47
Oh my gosh, I’m turning bright red. But thank you, sweetheart. I truly appreciate that recommendation. Thanks a lot. Drive safely and don’t do anything crazy.
Thank you, bye bye.
Dr. Friday 6:59
Okay, well, it’s always appreciated when clients do step up. But if anyone could see me right now, that’s why don’t have the camera on. Because you’d see I was bright red. I never take it to those kinds of things. But I’m glad we were able to help. And that is what we do try to do guys, he opened the door for me to be able to be bragged on but as an enrolled agent, it is what I love doing. Helping people try to get their resolution. This tax year has went so fast and so crazy.
Dr. Friday 7:25
We are probably running further behind that I haven’t this is our 25th year of doing taxes here in Tennessee. And it’s just been a bit crazy. So hopefully, everyone has again, just really pushing that extension, I will say that anyone that we did taxes for in 2021. And it’s kind of funny because I know a lot of times people will say, hey, looks like someone filed, we file extensions by the time middle of March has come and if they haven’t come in yet, we usually try to make our very best effort to make sure all of our past clients have had extensions filed on them just in case because that extension can save you 25% penalty for not filing on time.
Dr. Friday 8:08
It’s a huge savings by just making sure you have filed the extension even if you owe money, the penalty for not paying on time is point five per month, the penalty for not filing on time is 5% per month, huge difference up to 25%. So it’s really important that you file that extension even if you don’t know how you’re gonna get your tax records or life is just gonna look crazy.
Dr. Friday 8:35
Trust me, I know and life is never perfect. So you know just putting that shield of that extra step up there to help make sure that you have some form of resolution is really all I’m hoping to achieve and want people to do because business owners also do not forget that you have your gross business receipt and franchise excise also do now. So just make sure you have filed all of that information.
Dr. Friday 9:02
So you have your gross business receipts, you have your excise franchise and excise either an extension done, or you need to make sure you have filed that return. I know our office is trying to get confirmation on all of those to make sure that again that those have been filed and paid in many cases. So she would the franchise excise and the business gross business Tennessee Department of Revenue does not really take checks. In fact, I think there’s a fine or a penalty if you actually mail a check in to them. They want everything done through 10 tap through their online app.
Dr. Friday 9:40
And now we do probably I don’t know 12 states they use pretty much it looks like the same software that’s been sold to all the different states. But it’s a good software and you want to make sure you have a login if you’re a business owner you should definitely have a login because your business license is also in there when they renew it and print it it’s actually put in there and you and then you can printed out once it’s been accepted.
Dr. Friday 10:02
So if you have counties and cities in different areas, very important that you actually have access to 10 Tap, I will say that the irs.gov site is a great site, it’s a good place for you to be able to go in. And if you haven’t seen your refund yet, or if, if you have an issue, you might want to check as far as the status of if you have a refund, you can go right on to irs.gov, pull up the Where’s My Refund app and go through there, if you filed an amended return, you have the ability to do that as well, to go in and see if you have a prior year amended and if it’s at least been processed, as far as them receiving it.
Dr. Friday 10:41
I will say we’ve had a little bit of a rough run for 2020 and 2021 on amended, we seem to still have quite a few of them out there. And at some point, one of them I know kind of dropped off. And they said that they basically didn’t have it yet we had proof that it had been received and then it just kind of fell off their system. So it’s really important that you move forward and make sure you have that information as well, on what you’re what you’re going to do.
Dr. Friday 11:07
So if you need to join the show, you can 615-737-9986. We are taking phone calls about taxes. Again, the tax day is going to be Tuesday, the 18th. So we need to make sure that we are dealing with your tax issue. If you have issues prior to 2022. And you need help with prior years. Obviously, as soon as we get through that deadline, we could be more than glad to help you make sure that you are dealing with your situation.
Dr. Friday 11:39
I did have a case when that’s why the young man that or I don’t know his age, but the gentleman had called and said that his father in law had passed away in January. I did just want to I had a case where they did not take the requirement on distribution out before distributing the funds or rolling those funds over to the other and then there was a penalty on that and so it’s it’s something really you hope that the person that’s handling the custodial is handling that we’ll we’ll do that all correctly.
Dr. Friday 12:08
But sometimes the IRS does not necessarily. Well, they don’t they don’t go back at them. I guess it’s almost say sometimes it seems like they expect us to know everything. Even though you’re counting on that custodial, just like myself to do taxes. You’re expecting them to handle that as well. All right, well, you can join the show 615-737-9986. We’re going to take our first break when we come back. We’ll get some more of your calls. Also a couple emails I’ve had come in this week that I thought might be interesting. This is the Dr. Friday show and we’ll be right back
Dr. Friday 12:47
righty we are back here live in studio. If you’ve got a question, you can certainly join the show at 615-737-9986. We are taking your calls talking about my favorite subject and we’ve got Lisa in Nashville that we’re going to have joined the show. Thanks for calling Lisa.
Yes, my son received a 1099 Q from his 529 plan. Right and he also got a 1098 T from the college but I mean I’m the one paying for everything so does he have to do anything with those as far as filing a return he also had a 1099 NEC for a small job he had but it’s only $96.
Dr. Friday 13:44
Well is he your dependent?
Dr. Friday 13:47
Sounds like he is okay. So you would be picking those up on your tax return you would put the 1098 T in you would put the 1099 Q. Not his 1099 nec that’s not high enough to actually generate any taxes anyways even as a 1099 so but those two other forms would be ones because you may qualify for educational credit. Also I’m assuming who who set up the fun form is it your name set up in the fun for your son or did someone else set it up for him?
No it’s my like I’m the owner of the phone/
Dr. Friday 14:21
Right so yeah, so you’re gonna need to set that up where I mean it because it’s going to show they’re gonna send you a sweet little love letter saying they’ve changed your tax return if you don’t put that 1099 Q in there offset it against the money that was paid to the school which is in box one of the 1098 T and then there may have been other expenses room board whatever you may have had to pay out of pocket that you’ll need to add in there and then you may also depending on your income and certain situations qualify for an additional up to $2,500 educational credit.
I put a put all that like I did my stuff on h&r block like online or whatever and it and it did show that I qualified for the 2500.
Dr. Friday 15:02
Okay, but did you put the queue in? Because if you took the money out of the queue, as you know, it grows tax free, so the growth has to be offset against what was paid to the school. Okay, so you have to have that queued in there to make the difference.
Okay. All right. Well I’ll go back and look at it.
Dr. Friday 15:22
Got it. Cool. Thank you so much. Good question. Thanks. All right. So again, those 1099 Q’s I had a client or I should say, I have a client, he is probably one of my I mean, I know I did his father. And then he came anyways, he’s been with me a long time. And I suppose, I suppose probably for the 2, 3, 4 years in a row, every year, they would come back and request him to show proof of payment to the school for the 1099 Q.
Dr. Friday 15:53
And we hear that every time this gentleman is very organized, but those 1099 Q’s can be a bit complicated, because the money is taken out tax, you put it in with after tax dollars, it grows tax free for the child that’s in or children, you can roll one for the 529. And then you use it for the school and you never have to pay tax on the growth. That’s the theory, it’s a great plan. I’m not disagreeing with that theory. All I’m saying is though, when you put that 1099 Q in, sometimes it will turn into taxable income, because it’s not applied properly to the 1098 T.
Dr. Friday 16:32
So it’s very important that you actually take that process all the way through. And if you took the money out, in some cases, in the case of this gentleman, they would pay the bill, and then they would take the money out of the 1090 the 529 plan and reimburse him, there’s nothing wrong with that. But you must have good documentation to show that the school was paid this much money out of your pocket so that you can reimburse yourself.
Dr. Friday 16:55
So anyone that has a 529 plan or will have one in the future, keep in mind, this is something that will be coming up. It’s a great plan. It’s not something that, again, I’m not opposed to 520 nines. In fact, I’m a fan of them, I think they’re good for education, that the hardest part is if you have only one child, and that child decides not to go to college, then you can end up taking it out at a penalty. But that’s the worst that would happen. So it’s it’s not a bad thing.
Dr. Friday 17:24
So if you have questions, you want to join the show 615-737-9986 number here in studio and just making sure I mean, we are working on taxes ourselves, it seems like this year, we just had a lot of late forms, changes in forms. So we’re having to go back and making sure everything has been corrected and filed, right. And that, you know, it’s going through correctly. But anyways, it is it is a good year.
Dr. Friday 17:55
So, if you haven’t filed your taxes yet, or maybe I should say maybe you have filed your taxes and you haven’t received your refund, go to irs.gov, click on Where’s My Refund, and you will be able to find out the status of them. I have had several people I had a gentleman we filed boy early first week of February maybe. And he has not received it yet. And I think then they changed it saying that he I haven’t seen the letter yet. But based on his emails, they they won’t explain why but they won’t give him the full refund, something to do with the way something was and I’m waiting because once I get the letter, I can see if we have resolution to go for it.
Dr. Friday 18:38
But it took them a while to match up his tax records. And I think you have to remember that the IRS does do that. So if you get a 1099, you get w twos you get interest, you get 1099 B’s, you get w twos to you know, whatever, all the documents, and the IRS is going to match those documents up within their system. So if you have a W two that doesn’t show up in their system, they’re going to have to hold your account because they’re trying to figure out why it’s not if you have a W two that isn’t in the system, that I mean that they have in the system that you did not report, you’re gonna get a letter that says we have changed your return.
Dr. Friday 19:19
Because and I find the main reason that usually happens is one of two reasons. One is stocks. A lot of times people think, well, if I have a loss on stocks, I don’t have to report it. The second is Social Security. There’s a lot. I seem to have a number of people that have gotten changes because they didn’t think Social Security was taxable. So they didn’t think they had to report it. That is a huge misconception. Social Security is taxable and for many people 85% of it or if you have if you get $10,000 8500 of it can become income to you in which whatever your tax bracket is, it will be taxed at that bracket.
Dr. Friday 20:00
So again, Social Security is only not taxable when your income is below the basic standard deduction. Or, you know, so if you have earnings, I believe it’s $25,000 with half of your Social Security, it’s called the provisional tax code, they take half of your Social Security, any interest in dividends that may not be taxable at the federal level, add that along with what other income, if you add up to that being less than 25,000, you’re likely not to have to pay any taxes. And if you’re married, it’s 35,000.
Dr. Friday 20:36
And if you’re married, obviously, if you’re both on Social Security if take both of yours and turn in half, and then add back in. So that’s important to have that information because sometimes people forget that Social Security is a part of your income. So, you know, again, makes for interesting conversation. Why do we report Social Security, but we don’t have to report you know, other incomes that are just as non should should be just as non taxable, but some are more non taxable, for example, child support is not taxable income.
Dr. Friday 21:11
And in nowadays, for many of you, alimony is not taxable. But I had a person that had gotten their taxes, and they had heard what they thought they heard the tax, I wasn’t there. So they thought the tax person had said, Oh, you have alimony. It’s not taxable, which made this person’s day because they’ve been paying taxes for the last 28 years on alimony. And so, the one person calls me and says, “Oh, I shouldn’t have been paying tax.”
Dr. Friday 21:38
And I’m like, “No, no, no, that law just came into play.” When Trump’s tax law comes in, so I thought it was like 2019. So anything prior to that, you’re still paying taxes, guys, it’s only a new divorces, 2021 22, something like that, I’d have to look up the exact date if you need it. But in that time, you basically have alimony became taxable only under that new tax law, or non taxable only under that new tax law. Because before that, it was taxable.
Dr. Friday 22:11
And it is definitely something that you want to make sure if you’re not paying, trust me, in this particular case, she had also been audited. And, you know, it became a situation where she did not want to pay taxes anymore on it. So if you have a situation like that you’re not sure if your income is taxable or not. Or if it’s a situation where you do not have to pay taxes, then that’s great. So anyone that was divorced prior to December 31, 2018, I thought it went in effect. So as of 2019, you do not have to pay tax on your alimony. Anyone that was divorced prior to that time, you are paying tax on your alimony.
Dr. Friday 22:57
Just as it it won’t confuse people, because I’ll get a bunch of phone call saying, “Oh, I’ve been paying tax all these years, and I shouldn’t have had to.” Not the case. All right. So if you have a question on taxes, if you have a situation, you’re not too sure exactly how to handle it. Now that we’re getting through the worst of the worst here. As far as taxes, it’s going to be easier to get back in and try to get our situation squared away and make sure we have everything, you know, going the way we want doing what we want, and making sure we have a way of doing our taxes. If you need to file an extension, you can go right email@example.com Just as a point of interest, go to irs.gov. It’s a 4868.
Dr. Friday 23:41
And you should be able to file an extension so that you can make sure and make sure you have documentation to show that you’re doing your extension because just if you’re mailing it, make sure you mail it priority or something like that. So that way, you don’t have to worry about them coming back and saying oh no, no, no, you did not file an extension. Yes, I did. Here’s my proof. Here’s a copy of the transcript of the paperwork that was sent and you don’t have to worry about them coming back because again, the fees are really quite ridiculous when it comes down to it.
Dr. Friday 24:18
So just want to make sure you have it’s an automatic extension so you just have to send it in and you can do that via mail. Some of the online organizations will do it but it’s it’s something you want to definitely do. Okay, we’re gonna take our second break you can join us here live if you’re working on your taxes or you have a question or something you found out you think might be interesting to my listeners. 615-737-9986 is the number here in the studio. We’ll be right back.
Dr. Friday 24:55
We are back here live in studio if you’ve got a question I have Videos pick up the phone 615-737-9986. Taking your phone calls talking about my favorite subject may not be everyone else’s, but it is mine about taxes. So let’s go ahead and hit Denise in Lebanon and see if I can help. Hey, sweetie. Hello. Hello, Denise. Can I help? .
Yes. So my father passed last year and my mom cashed out some stock this year for 50,000. In 2023. Her total income will be are right around 76,000 with her Social Security, retirement and they stopped this year, will I have to file taxes for her? Yes. Okay
Dr. Friday 25:46
Yes, because she made more than 20. I mean, either way, they made a married couple making more than 35. You said she made 76, right?
Yes, single, but they have not been filing taxes. So I didn’t know the bump was a stock sale? Is that what’s gonna bump her to that next level?
Dr. Friday 26:03
Most likely. I mean, hopefully it’s long term. And if When did your father, was it your father?
Father passed in 2022.
Dr. Friday 26:13
So you are filing 2022. So they’ll still be filing married. So you need to file but it may be a zero tax situation, if the capital gains is long term.
I am not filing 22 Because he told me he had not filed for years. So I said, okay, so he passed in February last year, but he said they have not been filing taxes.
Dr. Friday 26:37
Okay, well, I mean, if their income is now maybe how much was the capital gains again?
Well, I honestly don’t know.
Dr. Friday 26:45
Okay, well, no, I’m not trying to bring it. But bottom line is the news put this way. If you if you’re on social security, and you take half of that social security, and the total income for a married couple is over 35, including half of their Social Security, they are going to file taxes. Sounds like in their case, they should have been filing taxes. I don’t know if they did or didn’t that’s a different conversation. Maybe no one’s caught it.
Dr. Friday 27:09
But all I’m saying is, you know, the show I’m on here, you know, the answer is mom might want to start filing taxes. I mean, you know, maybe dad didn’t file and maybe they they don’t have any issue, maybe they’ve never been caught, they can only go back six years. But that being said, it doesn’t sound like they’ve actually been one of those people that really weren’t required to file taxes. He may have said, I’m not filing I’ve got many people that say that to me. And many people, they get away with it to be quite honest, until they don’t. But you know, in answer to the question you’re asking me is yes, your mother is required to file taxes.
Thank you so much. I appreciate you and your show.
Dr. Friday 27:54
Thanks, appreciate you. And I will say again, not nothing to Denise. But there are a number of people I’ve met. I’ve even had people call me asking what time what age do I stop filing taxes. And I really, truly wish I could give you an age that says you no longer need to file taxes because you’ve hit this age. Unfortunately, there is no age to taxes. It’s all based on income.
Dr. Friday 28:20
And so if your income I’ve got people in their late 80s, that are still paying very healthy taxes, because of the fact that they actually have a tax problem or a tax income, which turns into a tax problem when it comes a taxable situation. So, so many parents, a lot of older, I have some that should not file taxes, and every year they come into my office, and they insist upon filing their tax return, because they have filed taxes for the last 60 years and they’re not going to stop filing taxes even when I tell them, they don’t need to. So that’s a two way situation.
Dr. Friday 28:56
But if you are helping an older parent or someone that you know that, you know, you’d last thing you want to do is have a tax issue that starts coming back, especially when you’re on a fixed income situation. It’s never a pretty situation. So if we can help with resolution on that earlier versus later, it’s always a good, good suggestion.
Dr. Friday 29:18
All right. So if you have some other questions, you can certainly contact the show 615-737-9986. Taking your phone calls. I do want to bring up a lot of a number of people have called or text or when I’m in a meeting with them. You know, the first question is whether you think the 85,000 people are going to come and do something like you know, 85,000 tax officers or revenue officers.
Dr. Friday 29:53
And last I had heard guys, the funding for all 85,000 did fall through doesn’t mean that they’re not going to be hiring. In fact, I may be one of the few people in the world that wants them to hire. Sorry, but I mean, we need people. I mean, I know that they’re really going to want to hire more auditors because the way they’ve been spending money, they’re going to need an auditor to basically start finding places and revenue. But what we do need is more people in the resolution side, people being able to take phone calls, instead of waiting two or three or four hours.
Dr. Friday 30:29
And then the most frustrating part oh, I’m sorry, I don’t have the ability to answer that question. This is the wrong department, let me reconnect you and then you never get reconnected. So you know, again, really just one of those situations where you really wish there was a few people. And again, I know I talk a lot about the tax advocate office here in Nashville, Tennessee. I mean, they they have saved the sanity of more than one of my clients by stepping up and helping with resolution problems. I will even say the tax courts have helped a lot. Because if you assign if you choose to want to go to tax court, most of the time, you will not go to tax court, you will deal directly with an attorney from the IRS.
Dr. Friday 31:12
And in many cases, you can get full resolution through that process. And I know not everyone’s going to want to do that. And that’s not the point. The point is it, you should be able to pick up the phone, talk to a revenue person and find out other than how we’re going to collect your money. Apparently I had one she was calling to fix something. And all they want to know is her bank account number and where you know where she worked and all the collecting information, because they didn’t want to deal with the resolution, all they wanted to do was try to collect money from this individual.
Dr. Friday 31:43
So again, not the way we want things to go, it’s never a good thing, to have that kind of situation. But I do want to say as an enrolled agent, that’s what I am guys, I’m an EA, licensed by the Internal Revenue Service did your taxes and representation we are there’s a number of us a lot like unlike CPAs, which are certified public accountants, most or all EAS are licensed in taxes, that’s all we do is really taxes.
Dr. Friday 32:13
So if you need help dealing with the IRS, you need help dealing with just filing or getting resolution through tax preparation, then you need to contact an enrolled agents and let them help you they can be a shield, they’ve got the power to shield you again. So you don’t have to deal with the IRS on your own. They can take over audits or anything like that. So if you need help dealing with an IRS issue, or if you’re not too sure what your issue is, maybe you’re just like I’m, I’m afraid to ask, but I know I haven’t done this.
Dr. Friday 32:44
So I needed to get resolution I need to get this off, then you might want to you know, set up an appointment, go ahead and get that initial consultation, they can then usually get power of attorney and they be able to move forward and get things going the way you want it done. So you don’t have to sit there and say, oh my gosh, I’ve got somebody you know, the revenue officer sitting here and they’re going to come take my house, it’s a little humorous, because in 99% of the cases, may I point out, they cannot take your house, your house can be leaned or levied, but they cannot take your house in a basic audit or in a basic situation.
Dr. Friday 33:22
Now if they find fraud, they find that you are breaking the law then the home you always see that when they’ve done seizures, for drugs and different things like that. But basic tax resolution, that is not something you’re going to run into. All right, let’s hit Sharon, and then you get the next line there, buddy. Sharon, this is Dr. Friday.
Hey, so I had a HSA account cuts to my employer. And I filed incorrectly and it ended up having to pay $883 out of my account. I was a good file a 104 Xx. I just not sure what to expect after this.
Dr. Friday 34:06
Well, I think you mean an HSA whereas a health savings account? Yeah, okay. I’ve had that happen myself. There are many times people forget they have them and then the IRS comes back and changes the return or they ended up putting it on the tax return and they forget to check the box that was used for medical ended up paying tax on it, which it sounds like what you kind of maybe did. So yes, you can certainly do a 1040 X, amend it, make sure you attach the documentation. There’s a form that usually goes with that, that basically just shows that it was used for medical and that you were under the age of 65 or even if you’re over the age of 65 just there’s no penalty if you’re over.
What happens with the money that was taken out of my account?
Dr. Friday 35:01
Now they’ll refund it if they amend your taxes.
Okay. And we’ll send me a check, I guess.
Dr. Friday 35:08
Most likely, yes, they won’t probably put it back in the bank, but they will give you the money back.
Dr. Friday 35:16
All right. Appreciate you. Thanks. Hey, Judy, what can I do for you? Judy there? Yes. Ah, there’s my girl. What can I do for you?
I have a question about the qualified charitable distributions that Lucy taken from an Mrd. I understand that the 1099 that are that we receive will not indicate that. And I’m just wondering exactly how we prove that to the IRS that that part portion of our MRD was qualified?
Dr. Friday 35:55
What a great question, Judy, because I had a situation where she most, most, what they call directors or fiduciary is over those accounts. And most of the companies I deal with, they actually send a list behind the 1099 R that has the name of the charity, and the dollar amount, and in some cases, even the address and ein numbers, so that you have that documentation right behind it, which also makes it easier for me, because, as you mentioned, I’ve had a couple people come in because the person preparing their taxes forgot to ask them, “Did you have an RMD?” And then, “Why did you do a qualified charitable deduction against your RMD?”
Dr. Friday 36:39
They didn’t ask the question, the person forgot not to mention it, right? Because you’re thinking it should be on there. So I shouldn’t have to say something to the person. So the answer your question is, you either need to go to the charity and ask them, you know, but I would go right back to the fiduciary, the person handling your 401 k or IRA that did it, they should have a copy of the check as well as the information they can provide to you for your tax records.
Oh, okay. When I’ve new work life, annuity is what my RMD is coming out of. And when I talked to them, they seem to indicate that all they send us the 1099 R. And it doesn’t show me anything.
Dr. Friday 37:26
And you’re right. But they also are the ones preparing those checks, as you know, they prepare the checks, and in most cases, they’ll mail them to you, for example, and then you would actually give them to the nonprofit. But the sorry, go no, go ahead, Judy.
I was just gonna say so when I filled out the form, I had it being sent directly my church is what I had put down, okay, and I had it being sent directly to the churches that dress for the address, should I really have put down my address so that I had to check to provide to the church.
Dr. Friday 38:02
It kind of makes it a little easier, because then you have the check, theoretically, you could even make a copy. And then you could give it to the church, but there’s nothing the alternative would be is to go back to the church, because they would then be able to show that you made those charitable contributions. Now, you may make some prior, you know, theoretically, you could put some money in your pocket and some out of your qualify charitable, but they probably would mark those as QCD.
Dr. Friday 38:28
Because normally on that’s the one thing you actually have is on some again, I don’t know in New York Life off the top, but some of them will actually put they don’t tell you. I mean, like I said they usually put it behind. But a lot of times they’ll actually have on the 1099 R near box to QC D in there. But I can tell you I’m looking at one right now that I know there’s a QCD and there’s nothing marked on the 1099 R at all. So you ideally we’d like a list from New York Life saying this is where you sent them. And if it was more than one transfer or multiple transfers or whatever.
I had us go to your secretary when she receives the check, and gives us the statement of our giving at the end of the year if she could put via New York Life. For those contributions. I didn’t get it started until April. But well, because I wasn’t aware of it before. But do you think that would be sufficient?
Dr. Friday 39:25
It would be and again, it would be I mean, as long as the QCD adds up and no matter what New York Life says to you, the fact is those checks have to clear their bank it’s not clearing our personal checking account. So they would have record of that going through your your your IRA whatever annuity showing it cashing. I mean, it’s a check register like anything else when it comes down to it and they would have that documentation even if they’re not willing to share it. Okay, okay, but I think we’ll be fine.
Okay. Thank you.
Dr. Friday 40:00
No problem. That was a great question. Thanks. All right, we’re gonna take another break. When we get back. We’ll have a few minutes left to take any phone calls at 615-737-9986. We’ll be right back with the Dr. Friday show.
Dr. Friday 40:14
All righty, we are back here live in studio. And we’ve got a window on the line. So let’s hit window real quick. And then we’ll see what we’ve got. Hey there, sweetheart. What can I do for you?
Last year I cashed in some Series E saving bond. I did not receive a 1099. How do I report this?
Dr. Friday 40:53
For some reason I’m thinking that they…are they free? Did you do them through a bank?
Yes, I did. Okay,
Dr. Friday 41:09
Let’s see series, double E or just one E? Sorry. I know that sounds silly. But I was just double
I don’t know.
Dr. Friday 41:19
It looks like everyone thinks coming in here. But says if you have Series E savings bonds, they are interest regular for blah, blah, blah, 30 years, calculate your Pinterest. And those should be being reported. Let’s see what is a series that’s gonna go onto your schedule. Exclusion interest for E There you go. It is excluded interest, but you will want to file an 8815. But you don’t actually have to pay tax on it.
Wow. Really? Okay.
Dr. Friday 41:48
So check and make sure it’s a Series EE just to make sure I’m not giving you bad advice. But if it is a Series EE, you may, you should you should be able to maybe get them without any interest or any tax. It looks like there’s a form we should file but it’s easy paperwork.
Okay, but the Series E is handled differently. Is that correct?
Dr. Friday 42:08
Yes, Series EE, it’d be honest, when I was just trying to look quickly up in my little cheat sheet here. And it didn’t give me a Series E. I’m not saying there isn’t one, just saying in the my cheat sheet here. If it is just a Series E then it probably goes on to your Schedule B top section where it says interest, put it in there. But make sure it’s taxable. I don’t want you to pay tax on money you don’t need to.
That’s right. Okay. Well, thank you very much, Dr. Friday.
Dr. Friday 42:35
Hey, thanks for the phone call. I appreciate it. All right, guys, it’s getting towards the end of the show. So here’s the usual details. If you haven’t filed a tax return now or in the last number of years, this will be your first year go onto the IRS, the IRS website, click in under those search for 868. That is the extension you need to file file one, then give us a call and let us get you back on track.
Dr. Friday 43:02
We can help you file your taxes, get everything organized, make sure you are within the numbers and doing everything proper and doing a good job. And then we can get you filing every year. And you don’t even have to worry about it. It’s really quite simple guys, taxes does not need to be a panic situation.
Dr. Friday 43:20
Also, if you are an entrepreneur, even even if you haven’t filed taxes in a number of years, you haven’t done much, I want you to go back to that same website irs.gov, I want you to click in 1040 E as in Edward S as in statement or estimated statements. And I want you to go ahead and make a estimated payment for the year of 2023. You’re never going to get out of resolution or problems with the government unless you start paying them.
Dr. Friday 43:49
I hate to tell you, but if you’re an entrepreneur, or you do multiple things, maybe even have two or three jobs, the likeliness is you’re probably going to owe the IRS as I tell most people I’m in business with 25 to 35% of my business is going to go to Uncle Sam, I’m going to still be able to keep my share. But that is what it’s going to take for me to get myself self employed and taking care of you need to figure out what is your percentage so you have that you give it to Uncle Sam, you’re able to live your life and you’re able to do what you want to do.
Dr. Friday 44:21
Otherwise, you’re gonna be sitting here whining, and then you can’t go buy a house when you want to go buy a house, or you’re paying interest rates like they are now but couple of years a year or so ago, you know, people were getting home mortgages for three 4%. Now, yes, it’s going to be back up to seven, seven and a half eight possibly. If you’re in your 50s as I am you’ll find out that this isn’t the first time we’ve seen those interest rates and it won’t be the last time but having your taxes in order so you can move forward and not have to worry about filing or you know what if I file my taxes in October, as long as I’ve made my payments up until this day, I am fine then That’s what we need to make sure we do for everything.
Dr. Friday 45:02
And if you have a state income tax, don’t forget there’s extensions required for those as well. You can help out or if you need help with them, I should say all you have to do is pick up the phone, my number is 615-367-0819. I will say probably wait till after the 18th. That phone has not stopped ringing 615-367-0819 You can also email firstname.lastname@example.org. That’s email@example.com. If you don’t know who I am, maybe this first time you’ve heard about me or you know, you’re trying to figure out if I’m the right person to help you do what you need to do with taxes.
Dr. Friday 45:42
Go to the website. That’s drfriday.com, drfriday.com I have been working here in the Nashville Brentwood area for the last 25 years. So if you need help, and you’re looking for someone that’s going to be here now and has been here, all you have to do again, phone number one more time 615-367-0819 I hope you guys file your taxes. Don’t stress on them if you need help you know who to call and make sure that you’re moving in the right direction.
Dr. Friday 46:12
Also enjoy today because I understand the weather’s gonna turn a bit nasty and you might not be able to enjoy it the way you want. I hope that you guys enjoyed today and we always say in Australia, and again 615-367-0819 I know my phone’s already ringing so if you need to reach us that’s the number or firstname.lastname@example.org. As we say in Australia, call you later.