Welcome to the Dr. Friday Radio Show! In this episode, Dr. Friday takes on the latest tax updates, answers the caller’s questions, and talks over the following topics:
- Dr. Friday’s Tax Tips For the Tax Season
- Did I Receive the Child Tax Credit?
- File A 4868 Tax Extension
- Remember Short Term Capital Gains is Also Ordinary Income Tax Rates
- Payments or File Taxes Extended Until May 17th
- You Cannot Get Earned Income Credit on Someone Else’s Children
- What If I Sell My Primary Property?
- The Importance of Reporting Everything On Your Taxes
- How To Report Your Capital Loss on Taxes
- The Changes in Tax Laws
- How To Get Your Tax Details In Order
- How To Get Back on Track With the IRS
- Taxes For Individuals Are Due April 18
and much more!
Transcript
Announcer 0:01
No, no, no, she’s not a medical doctor, but she can sure cure your tax problems or 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 0:30
I’m Dr. Friday and the doctor is in the house, and yes, it is crazy busy for all of you that tried to reach us on Friday thinking that that was the last day to file an extension or make a payment. Hopefully you got through to realize that isn’t the case, kids. We have until Monday, it was actually Emancipation Day for tax people. Of course, it was Good Friday for a lot of us.
Dr. Friday 0:55
But we did have until that time. So Monday is our last day to file for an extension or in those situations. I say that but we also have in some counties, tornadoes, straight winds, basically federal disaster situations that came about and many of you will actually have if you’re in one of the counties that actually have that. And I would double check to make sure you have that ruling.
Dr. Friday 1:26
You have until . So in some cases, some people get a little extra window there of time, just want to make sure that you don’t miss the window of filing your tax deadline. federal disaster areas do give us a little extra time again, it’s May 16 2022. There are certain counties, and that is because of severe weather. So if you have a question you want to join the show, you can do that easy enough 615-367-0819.
Dr. Friday 2:06
I also want to remind all of you that our LLC S corporations, single member LLC, as many of you may have filed federal tax extensions. But remember, the state of Tennessee does have what’s called franchise excise many of you need to go in, we’ve always done you can do it by paper. It’s an FAE 173 form. But you can also they said this form is not required to be filed that the taxpayer has already paid the required payment to receive the extension. The payment is required depends on the dollar amount, obviously, required payment would be equal to 100% of the prior year, or 90% of the current year liability.
Dr. Friday 2:50
So that’s the only way you’re going to basically get an extension in the state of Tennessee anyway. So if you’re not sure the minimum is $100. After that, if you know what you paid the year before ideally making that payment on or before Monday would be an ideal situation for you. So that way you can make sure that you’re going to have what you need. If you want to join the show you can 615-737-9986. We are taking your calls, dealing with what we need to deal with when we’re going in there.
Dr. Friday 3:28
And then we also talked a little bit about the May 16, 2022. individuals affected by severe storms, straight line winds, tornadoes that recited or have businesses in Cheatham, Davidson Decatur, Dixon, Dyer, Gibson, Henderson, Henry Lake, Stewart, summer weekly Wilson, those are the counties that have an automatic extention. So if if you live in any of those counties, in theory, you have a postponement till May 16, 2022. So you have another month to extend out you will not be late if you live in the main counties that are minor Cheatham and Davidson will be probably the main Wilson will be the main counties but there is about eight counties that are covered under that and therefore you can also claim losses or disaster situations on there.
Dr. Friday 4:24
Just whatever works for you on on that situation. But it’s kind of important to make sure you file and again file an extension even if you can’t get everything together even if you can’t deal with the issues file and extension so that way then you have the ability to make sure you have what you need and where you need it. So I just want to say it’s important to file the extension to make work for you some I’ll resign on to this one because I seem to have lost my connection.
Dr. Friday 5:02
Alright, so if you’ve got questions you can join us 615-737-9986. We’re taking your calls live here in studio, making sure you have what you need. I’m not seeing the screen on the stream yard thing just to let you know. It says, “browser’s blocking your mic and camera,” which is perfect, but I don’t see ah, there’s a little thing. Look at my boy, he always takes care of me. All right. And you know what? We’ve got a caller on there. We’ve got Lisa from Nashville. Let’s go ahead and hit Lisa.
Caller 5:41
Hi, Dr. Friday.
Caller 5:43
Yes, ma’am.
Caller 5:43
I am. I’m trying to sort out our taxes between mine and my son’s. And we received 1099 Q’s and 1098 T. Something his name some in our name.
Dr. Friday 6:00
How old is your son?
Caller 6:02
He is 19.
Dr. Friday 6:04
And is he? I mean, is he on his own theoretically? I’m making a guess he’s your dependent.
Caller 6:11
Yes. I’m claiming him as a dependent. So when I was doing his return, when I got to one portion of the question, it said, you know, as far as entering, though, that says you can’t even do this because you’re claimed as a dependent on somebody else.
Dr. Friday 6:26
So I mean, bottom line is, if he’s your dependent, all of that falls on your tax return, nothing to do with his, you’re going to use the 1098 T to help balance out the 1099 Q’s, you’re also going to need to have any additional money that you paid out, possibly if it’s needed, you know, for room board computers tutoring, because the 1099 Q’s cover all educational expenses, where the 1098 T really only tells you how much was paid in tuition. So you’re need to have all that put it all in there. And then that should hopefully in the perfect world, unless he’s on a full ride and can’t write I mean, doesn’t have any expenses that are deductible. Otherwise, I’m assuming with the 1098 Q, or 1099. Q excuse me, um, you know, but yes, that will all fall on you lease.
Caller 7:15
Okay. And as far as this AQ II, this adjusted qualified education expense, and then it’s supposed to be reduced by tax free scholarships.
Dr. Friday 7:26
Right, which is in box two or three and the 10 9080? There’s something that says grants and scholarships.
Caller 7:33
Yes.
Dr. Friday 7:34
That’s the amount you’re looking at.
Caller 7:36
Okay. Yeah, so like, the payment amounts was like, say, over 32,000. And then the scholarships and grants were 19,000.
Dr. Friday 7:48
And then, depending on I mean, the 19,000. And then if he took another 30, or 40, out and then throwing a number around, I’m just saying the difference between that one and the other, hopefully, is what the 1099 Q is.
Caller 8:02
Yeah, it is, except for like, I had I drew money out of the 529 to pay for what wasn’t covered. Right. And the only difference is like the fee that they charge me to withdraw the money is like $10 a fee.
Dr. Friday 8:16
Yes. And that may be what you have. But other than that, you’ve zeroed it out is what you’re saying?
Caller 8:22
Basically, yes, I mean, I didn’t draw any more. I mean, I did draw, like, some of the money went directly to the college. And then I made a personal draw, because I had paid I bought him a computer. And I had had to pay for some extra books that wasn’t built.
Dr. Friday 8:39
So you list that under the educational expenses, where it says room and board tuition, there’s one that says computers and equipment, one that says books and, and other things like that. I think it says books and something. And you’ll put all of that because all you were paying yourself back for those receipts that you actually have to prove those deductions.
Caller 8:58
Exactly, yeah, didn’t grow anything extra. It’s all covered.
Dr. Friday 9:02
So just make sure you that you put it all in there. Because the the trick is, obviously we want to we want the 1099 Q to be zero. You know, so you’re not paying tax on it, because sometimes it isn’t. I had a case just recently where the kid was on a full ride. And some of the money was pulled out for a car. I’m just saying, you know, so it became taxable income to the parents. I mean, it was great that you know, they had it, but it was a taxable situation. We’re not able to write a car off for college.
Caller 9:34
Exactly. Yeah. Yeah. Everything I’ve withdrawn his college related and I got receipts for everything.
Dr. Friday 9:41
Perfect. And then you just save those with your yearly paperwork. For the next three or four years. Usually the IRS won’t go back more than three years. But take a look at that. And then that should get you but that’s you sounds like you’re handling it perfect.
Caller 9:55
Okay, good deal. Thank you so much.
Dr. Friday 9:57
No problem, sweetheart. Thank you. All right. that. All right. Well, it looks like let’s just go to Gerald real quick. Hey, Gerald in Colombia, what’s happening?
Caller 10:08
Hey, Dr. Friday. How you doing today?
Dr. Friday 10:11
I am pretty good. No complaints.
Caller 10:13
Well, good. Got a question about an an account. My wife recently retired. Yes, my wife recently retired in January. And of course, we had a mount in the SHA through her employer. The question is now since she’s no longer an employee of the company, they no longer pick up the administration fees for this account. Should I just go ahead and withdraw all that money out?
Dr. Friday 10:42
No, no, no, no, no, I mean, that administration fee is minimal, you are going to want to keep that because that is tax deferred income that you can use for medical and you’re going to have it we’re all getting older, sooner or later, you’re going to have so use the money out of there, because the administration fee is minimal compared to the tax savings you’re going to have. Because you’re never I mean, unless you have major medical issues, itemizing medical on your tax return is almost impossible. Right now, under the current tax law, she can use that money and pay for any procedure for the rest of her life. I mean, my goal is before I hit 65, because unless you have a work situation, whatever, once you go on Medicare, you can’t contribute, usually. So the ideal situation is, is put as much in there, it’s almost like a second IRA. But the nice thing is it can be used solely for medical, but the need for medical is still going to be there. If for some reason, I die before I empty, it will become an IRA and it will be inherited by the people that supposed to inherit anyway. So I would definitely not take the money out, leave it in there and start using it for whatever medical she might have over the next few years.
Caller 11:52
Okay, now, is there any there’s there’s no tax situation? I mean, like I said, if there’s only like a couple $1,000 in there something is there any tax?
Dr. Friday 12:02
The tax advantage is she can spend it tax free. If you take it out, there’s a 20% penalty for taking it out. So again, not something I would even jump into. There’s no logical reason. I mean, unless it’s something you really need money, but the penalty is high for using it unless you use it for medical.
Caller 12:22
Okay, I understand. All right. All right. Okay. Well, thank you.
Dr. Friday 12:27
All right, boss. Bye. Bye. Have a good one. All right. Alan, really quick. Hey, Alan, what’s happening?
Caller 12:33
Yeah, how you doing? Thanks for taking my call. I was wondering about we build in our return. But at the same time at the bottom, I put your pauses directly into your bank account? What made you go quicker?
Dr. Friday 12:46
Well, definitely direct deposits are always faster than mail snail mail checks.
Caller 12:54
I thought maybe would have been that others would have been in the paper system or would as well,
Dr. Friday 13:01
You know, again, even when it’s processed, if you have it on there, it should process faster than someone processing a paper return and then waiting for a check to be cut out of that department. So it should go faster with electronic even though it’s going to be slow no matter what.
Caller 13:17
I thank you for your time.
Dr. Friday 13:18
Thank you. Thank you. Appreciate the phone call Alan. Thank you. All right, guys, we’re gonna take our first break. This is the doctor Friday show. I’m an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. It is almost tax day but it’s also Easter. So I hope all of you guys are having a great time. We’re going to be taking phone calls at 615-737-9986. and we’re gonna be right back with the doctor Friday show.
Dr. Friday 13:55
Alright. We are back here live in studio and looks like my phone lines are lighting up, which is so awesome because you never know. So let’s go to Marsha in Manchester first. Let’s hit Marcia. Hey, Marcia.
Caller 14:09
Hey, how are you?
Dr. Friday 14:11
I am good.
Caller 14:12
Yes, ma’am. Okay, I’ve talked to you before about my daughter and I own the house together and it’s in both of our names. And we revert to the other one if one died and passed away. And you told me to get a comparative quote on the price of a house at the time of death. And when do I use that?
Dr. Friday 14:34
Well, that’s going to when you sell that home, it’s going to help you create your new basis. So 50% of the house was your daughter’s 50% was yours therefore hers will step up in basis of her share so your bases will now increase you know, instead of being just what you guys paid for back when you did it. You will actually get a step up and basis so you would use it when you sell that house.
Caller 14:57
Only when I sell it I didn’t know if I supposed to do something else. One more question was, should I put the house Mike I’m willing to alarm and I was gonna have the house put in my name. And he said he’d be glad to do it and charge me $100 If a woman to, but there was no point to it that automatically revert to me when she done and I knew that but it’s still not completely in my name is in both our names. You know, my taxes come in both are named.
Dr. Friday 15:30
Even if you change the name with a quick claim, it won’t change that because you probably have a mortgage on the property?
Caller 15:36
No, it’s payed off.
Dr. Friday 15:38
Oh, it’s paid off. Okay. So I don’t you know, I’m with him. I don’t know if there’s any real I’m not an attorney, obviously. But I don’t I don’t know if there’s any real reason to actually pay someone to. I mean, if you were gonna move it in trust or something like that, I might say yes. But just to have it in your name. I mean, it’s automatically in your name for that purpose.
Caller 15:57
That’s what he said. Okay. Alrighty, then. Thank you so much.
Dr. Friday 16:02
Thank you. All right, let’s hit Wayne and Nashville. Hey, Wayne, what’s happening?
Caller 16:08
Hello, this kind of unusual call and I’ll make it break. I know you’re busy. I just want to encourage people, if they’re worried about money, for them to give you a call. Cause you taught me how not to live on my knees, but to stand on my feet and fight. And when the men and black came at my business, I basically took them on and with your encouragement, that settled, and now I’m debt free, and don’t have to worry about anything in the future.
Caller 16:36
So I want to thank you for what you did and your encouragement. And I encourage anybody to call you because you have a princess that they’re looking for. And if they’re going through a storm, you all the rainbow.
Dr. Friday 16:48
Thank you. I’m turning bright red. I appreciate that very much. I do seriously. Happy Easter. Wayne, thanks.
Caller 16:55
Thank you. Bye. Bye.
Dr. Friday 16:56
Bye. All right, you liked me turn bright red? Okay, we’re going to be going on here. So if you’ve got a question, you can certainly join the show at 615-737-9986. I really can’t say enough how if you, you know, having troubles with taxes, you need help with doing taxes, you know, right, this second, the best thing you can do is file an extension. Now, the reason I say that is if you don’t file an extension, and you are filing late, the penalties are so much higher than if you file an extension.
Dr. Friday 17:37
Even if you don’t pay the money, the ideal perfect world, you file an extension and you’re sending enough money to cover your taxes. All we are is delaying the paperwork, right? But I get it, life is not perfect all the time. And so sometimes you got to do what you have to do. But the ideal situation filed that extension, start making payments on what you’re going to owe.
Dr. Friday 18:01
If you can’t afford the payments, delaying it isn’t going to change a whole bunch, but you need to at least get together and start working on what you need done. So again, file that extension, I can’t send a 4868 file an extension. So that way, then. And if you’re going to do it by mail, please certify that extension. So we have proof that the IRS received it that it was posted on Monday at the latest same thing with any check that you’re going to mail to the IRS, please make sure that that you have a tracking on that check.
Dr. Friday 18:35
Because right now we’ve had more than one situation where we’re trying to prove to the IRS that you don’t you know that we made this payment or we filed this paper. And we had a lot of situations, even with E files. I’m a bit confused on some of it. But even with the E file, we have a situation where you know they’re coming back and asking us for forms are asking us for proof and you’re sitting there going, “Hello, we e-filed it.”
Dr. Friday 18:59
So that being said, we just need to make sure that everything is in order I can understand this year has been hard. I mean, I usually end up filing an extension every year, because my business is a little busy at the time that everyone’s filing taxes. But it’s also good because I can sit back and really look and talk and get everything done properly instead of waiting, or rushing through.
Dr. Friday 19:20
So there’s no reason to rush through getting your taxes done unless you’re just a simple W2 or anything like that. But business owners, people that get into buying and selling flippers and real estate or even if you’ve just sold a couple rentals done 1031 exchanges, some of those take a little extra time. And you might want to make sure that you need to send in the estimate trying to figure out to the best of your ability. It might be just you know what, I think I made this much money. I’m taking 15% and I’m sending it into Uncle Sam, because that’s the capital gain rate for long term.
Dr. Friday 19:54
But remember, if you own that real estate because we’ve had a ton of real estate sales this year and If you did not live in that home, or if you did not own it for more than a year, if you had people that purchased the home, and two months later they put it back on the market, it was their primary, but they you know, because the price of homes and went up so much that they actually use selling more, if you are one of those people remember short term capital gains is also ordinary income tax rates. So you know, it’s 12, it’s 22, it’s 24, it’s 32.
Dr. Friday 20:27
You know, there’s some big jumps in those numbers, make sure that you’re setting aside enough money to account for those situations, you don’t want to end up doing yourself a favor thinking, “Oh, I did this, I made this $70,000 more than I paid for.” Just two months ago, I had one that this happened. And then I had to break it to him and his income bracket, he said to pay 30. Now 30% of 70,000 is still a good chunk of money for two months of investing into something, not a bad turnaround.
Dr. Friday 20:56
But people are often shocked when that kind of thing comes up. So just want to make sure that you’re dealing with those things. So you know, this year, you had quite a few changes. Sometimes people will take money out of a retirement account had a situation a few weeks ago where the person had filed their own tax return. And then they got a love letter from the IRS. And the letter says, Hey, we’re changing your taxes, because you didn’t report all of your income.
Dr. Friday 21:20
And that person thought, “Wait, I filed everything. I took money out. But I thought because they took money out, I didn’t have to report it.” Remember, everything reports. If you took money out of an IRA, even if you took money taxes out, it’s no different than your W two, right? You take money out every paycheck. But at the end of the year, you reconcile your bill to the IRS. And that reconciliation is that kind of situation. So you want to make sure that you’re taking that information you put it through and that you’re making sure everything is on there, if you had a home and even if you lived it over two out of five years, you still need to report the home sale a lot of times there’s 1099 S’s on it.
Dr. Friday 22:00
So you need to account if you’ve sold other pieces of real estate, if you sold stock if you sold Bitcoin or other virtual currencies. Those are Stock Exchange’s, as far as the tax code is concerned, that is a reportable income situation, you need to make sure that any and all things that you are doing throughout the year is recapped, on the tax return, and then obviously, you know, hopefully, good news would be if you have a little refund, that’s always sweet to be able to tell this year, I will tell you, it’s not been as good.
Dr. Friday 22:33
We’ve had quite a few people that we’ve had to tell that weren’t expecting, but because of additional income or, you know, mostly investment accounts, people had some pretty good gains at the end of 2021. And they’re having to pay tax on it. And of course, many of them were a little upset because they’re like, Wait, I’ve already lost all those gains, and I’m still paying tax on it, which of course you have to explain next year, maybe you won’t have to pay as much in gains, but that’s the way the game is right. So if you’ve got interest, dividend stock sales, and you sell something and you make money, but then the next year you lose money.
Dr. Friday 23:08
Well, you know, you can only take up to $3,000 loss, the rest of it will roll forward onto the next year. But those are the kinds of things you want to make sure you have your Robin Hood crypto as well as your Robin Hood and your bitcoins and, you know, coin base and, you know, all the different formats. I know a lot of people are like, Well, how’s the government going to know, I’ll be honest, guys, I really just like to sleep well at nights.
Dr. Friday 23:33
You know, I’d rather put the money on the table again, like I always say if I have to give the government 35% And I don’t have to worry about the other side of it. I mean, you don’t want to pay taxes, you don’t have to pay don’t get me wrong, you know, what is what is what you need to pay, but you don’t need to think that oil the government doesn’t know about I’m not going to tell them. We’re gonna actually you know what, I’m gonna share a quick story with you only a few minutes when I come back from this break.
Dr. Friday 24:00
What I’m going to do is tell you who the number one person is audited right now, and the reason why they’re auditing them. You might be a little bit surprised we got Tim on the line. So I’m gonna let him I’m gonna take him right after the break. And that way the videos can take me into break. All right, so we’ll take a quick break. We’ll be right back with the doctor Friday show
Dr. Friday 24:27
All righty, g’day This is Dr. Friday and we are back here live in studio if you want to join the show. It’s really easy pick up the phone 615-737-9986. Taking your call. Okay, let’s hit Tim. Hello Tim. What can I do for you my friend?
Caller 24:50
Hey, just got a quick question. I installed a handicap ramp on a residential rental property. Okay, Does it qualify for the deduction the in the same amount in the same year? The full amount?
Dr. Friday 25:07
It does.
Caller 25:09
Okay, I guess the real question is, where does it where should I know it’s not considered an improvement, but when I showed on Schedule E as miscellaneous or other?
Dr. Friday 25:19
You’re going to want to run it through, you’re going to run through the depreciation and you are going to run it as a leasehold improvements. Not sure your software J five and ours, and then it should ask if it was put in service in the same year, you should get that and then that way you should be able to qualify for the automatic deduction theoretically, on the on the ramp.
Caller 25:45
Okay. All right. And then there’s a limit of 2500?
Dr. Friday 25:50
Yes, exactly. I was going to go there. And also, I was just looking up because it might qualify for the disability tax credit, which is on a different form. So I was trying to look that up. Sorry. Yes, you have to make sure it’s under $2,500 per a situation.
Caller 26:09
Okay. And that is that what part of it Safe Harbor?
Dr. Friday 26:14
That’s 100% the safe harbor? Yes, you’re good. You’re you’re actually helping explain this better than me. This is what happens when I multitask. But yes, that is part and you want to make sure that you put that form in explaining that you did take the safe harbor.
Caller 26:30
Okay, is that a separate form?
Dr. Friday 26:34
It is a separate if you’re looking at tax software, you might want to look under Rs has actually different safe harbors you can choose. But yes, there is a form you want to pull up out of there.
Caller 26:48
Okay. All righty. Hey, I appreciate it.
Dr. Friday 26:51
No problem. If you want to keep listening, I’m I’ll try to pull up if I don’t get before the break, there is another form that it might qualify for for a disability credit is an ADA 26 disability access credit. You might want to look at that because you might actually generate some additional credit on that.
Caller 27:11
Okay, all right. Thank you.
Dr. Friday 27:13
All right. Thanks, buddy. Appreciate it. All righty. We are moving right along. Let’s see what I have here. Sorry. I had to switch screens to make that happen. There we go. Let’s go to Dan. Let’s go to Dan. Hey, Dan, what’s happening? Danny boy in Franklin, can you hear me? Oh, Dean. Oh, sorry. It’s all of it is his fault. Everything’s always live videos as far as dean, and frankly, what can I do for you?
Caller 27:42
Well, I heard you saw on on your programs on Saturday back that if I made a direct donation to a scholarship, or this happens to be at the University of Tennessee, it’s a Nursing Scholarship Fund that I donated to that if I did, if I took it out of my RMD tracks directly to UT scholarship funded, be deductible in that.
Caller 28:10
So I did that and University of Tennessee sent me back this state and said they they acknowledged they received the fund and they’re going to apply to the Nursing Scholarship, then they go on down, they say as such gift that as such this gift is not tax deductible for federal income tax purposes. And some competent Pa said that I assumed that this donation was under Section 408.
Dr. Friday 28:42
Let me just for people listening, what Dean is talking about is what’s called the qualified charitable deduction. And I would have thought that whoever was handling your IRA, or your 401 K at this point is probably an IRA for the minimum distribution required minimum distribution that they would have checked to make sure that this was a 501 C three, some colleges do have them. It sounds like I’m sorry, Dean, I didn’t pacifically say which college or anything, but it doesn’t mean.
Dr. Friday 29:17
But bottom line is it does have to be a qualified charitable deduction, it has to fall under the 501 C threes. And it sounds like to me that this this particular don’t where you gave it or whatever doesn’t have that type of qualification. But it’s, you know, you might want to call someone and find out if there was a way of doing it to age qualified charitable deduction that would have allowed for that. But that would have been my answer on that one, Dean is that anyone that gives to these I maybe I should be very clear. A qualified chair deduction has to be a qualified charity and therefore you can check on the irs.gov to see who qualifies as well as maybe calling Before you give them the money just to make sure it falls under what we’re talking about.
Caller 30:05
So I got on the UT website and it says, you can give any amount up to 100,000 directly from your IRA, then it goes on to say that. Let’s see here. The proper gift option is commonly called an IRA, Charitable Rollover, but you may also see it referred to as a qualified charitable distribution, and this came from UT.
Dr. Friday 30:34
Okay, well, it sounds very confusing. So it sounds like you may need to contact them directly. Because what that article you’re reading is exactly what you and I are what I’m referring to I should put on there. So I would say you need to call them and just find out before you do your taxes, you know, did did you give it under the right pretense? I mean, you gave it with the right idea in your head. But is the contribution made? Is it a qualified or is it not?
Dr. Friday 31:02
Because I’d hate to, you know, file a tax return thinking I was qualified and the IRS coming back and changing us, right? I mean, that’s the worst of the worst. So it sounds like you and I are on the right page. But then they sent you this letter that’s kind of confusing saying that this doesn’t qualify or something. So I’m actually not positive. But I would definitely call somebody over there and see if you can get something that confirms that what you gave is a qualified charitable deduction.
Caller 31:28
Well, I just assumed that the funds came out of my RMD. So I figured that they would, my tax person should be tucked deduct the amount of life donated to UT, out of my RMD.
Dr. Friday 31:52
When you put it in your tax return, there is actually a place where you would enter how much you gave to who the charitable deduction. So your RMD is going to look like it always does on the 1099 R, it’s going to have box one in box two with the total amount that you distributed, including what you gave to charity, then there’s a place on that form on the electronic side, that then will reduce it based on the charitable qualified charitable deduction. So again, do you know if I would just make sure because I would just hate for you to have something come back two years later them saying that doesn’t qualify?
Caller 32:29
Well, so I need to contact the University of Tennessee then.
Dr. Friday 32:33
Yes, yes, sir. That’s who I would contact. Yes, sir.
Caller 32:36
Yeah, this thing’s gonna be a pain in the neck.
Dr. Friday 32:39
Sorry, buddy. It doesn’t usually seem to be that complicated. But yours has went into that world. So I would say yes, you’re definitely going to want to make sure you have it done.
Caller 32:48
Okay. Well thank you.
Dr. Friday 32:49
Thanks for letting me know, Dean. Appreciate it. Okay. All right. So we’re gonna take one more break here in a few minutes. If you want to join the show, now’s the time to be thinking about it. Because you know, once we get through here, you know, it’s going to be tax day before I’m gonna be talking to you. It’s gonna be after tax day, I might be on vacation now, next Saturday, the following Saturday, then I’ll be on vacation.
Dr. Friday 33:12
But anyways, if you want to join the show, you can at 615-737-9986 I guess I want to put that little caveat out there just explaining to individuals that we want to make sure that any advice that we put out on this show does need to be checked back either with your personal tax person or call our office because everyone’s situation is slightly different. And we want to make sure that the advice we’re giving, I really just want the purpose of the show is to make people think right to try to get to the best of your ability, the information but it’s not like I have a copy of your return and all of your personal information in front of me.
Dr. Friday 33:55
So I’m not always able to give the exact information just for you. So want to put out there you want to make sure that you are getting advice on that situation for you some of the information we can send out there and it’d be spot on but every once in a while if incomes come in, there’s there is certain things that the tax code abbreviates Alright, so before the last break, I just remembered I told you, I was going to tell you who the number one person audited by the IRS is, and as people in lower incomes, the reason the IRS is doing these audits, and I saw this thing on news, newsy news or something it was called, anyways.
Dr. Friday 34:31
And I thought it was interesting because the woman was quite outraged. She used that word quite often outraged. And the reason I think it’s interesting is because they did a spec. They go basically and they pull a handful of returns and they say, Okay, we’re gonna look at this type of car, you’re gonna look at that kind of category, and we’re looking at all these people.
Dr. Friday 34:51
Now keep in mind that the average person is likely to get audited in any of these situations is about point 3%. Now if you make over For a million dollars you’re likely to be making. At that point, it’s 10%. So there’s a big difference, right? So the wealthy are more apt to be because let’s be honest, the government knows where they get money if they need it. So these are individuals that were audited. All of them made less than 40,000. for married couples, or less than 28,000.
Dr. Friday 35:19
For a single person, they all had children, they were claiming earned income credits, they were claiming the child tax credits. Most of them, you know, considering you make about $28,000, many of them were getting 12 $14,000 back for the number of children, they haven’t things. And the IRS was just spot checking. And out of this handful of people, two thirds failed the audit, which means in most of these cases, they either had income that wasn’t reported because it was cash, and they found out about it.
Dr. Friday 35:52
But the second was children that are not their own biological or children, they’re not allowed to claim. In some cases, it was boyfriends that the the girlfriend apparently doesn’t work, or the mother, the children maybe didn’t work. So she’s like, “Oh, I’ll take the kids.” You can have children, but you can’t get earned income credit on someone else’s children. You can get child tax credit, but not earned income, credit, or grandparent or, you know, whatever.
Dr. Friday 36:19
A lot of times people are claiming people’s children that are not their own. That was the number one reason for these audits. And I was pretty shocked. You know, I mean, if you take 10,000 returns, and you’re saying 7500 of the returns failed. You wonder why they’re auditing that Department of just saying it seems like it’s a little tricky. All right, Lavinia.
Dr. Friday 36:39
So let’s take our last break. And we come back, we’ll take any phone calls that come in 615-737-9986. We’ll be right back with the doctor Friday show.
Dr. Friday 36:58
All righty, we are back live. Good music with the doctor Friday show. If you’ve got questions, the phone lines are open 615-737-9986. Hopefully you guys are enjoying this. It looks like it’s a pretty nice day outside. I have to be honest, I haven’t really been out there since about seven o’clock this morning been doing some work.
Dr. Friday 37:22
But it doesn’t look like it’s raining, which is always a plus. So hopefully the kids are able to have their Easter egg hunts. Make it a good thing. So you can have some fun and make it happen. I did want to put a little sound out I do some work with the Salvation Army. And I just want to put if anyone has any kind of prom dresses that you might have in the back of your closet, and you don’t have a need for them. They are having a prom just drive for people or kids that want to go to prom and they need to have good dresses.
Dr. Friday 37:49
So if you’ve got some you can take them downtown or go to the Salvation Army near you. I’m sure they’ll collect them at any of those locations. Know that the one they have in downtown is the main one. So just a heads up. If you have some old dresses and you’re thinking, “What should I be doing with those?” Well, what you should be doing is letting another little girl use them to be able to have a beautiful prom. I have to be honest, I never went to prom. Just to say you know, I know. I know. It’s a little bit odd but I was I was crazy child you know, wanting to be a rebellious person in my education. I was just like, “Get through school as fast as possible.”
Dr. Friday 38:24
And yeah, I’m much more outgoing. Now just I know it’s shocking but I am more outgoing now. Alright, so if again, if you want to join the show, you can 615-737-9986 to make sure that you are again, two most important things that we have going in number one, as far as I’m concerned is the extensions. If you haven’t filed an extension, you need to make sure I know today’s show just repetitive repetitive. But there are two extensions that need to be made.
Dr. Friday 38:59
If you are a single member LLC or a multi member partnership LLC or 1120 s or an 1120. All of you have franchise excise do unless you have a selected to be a font, or one of the other exclusions that the state provides, you need to make sure that you have went in and paid a minimum of $100 or the 100% of what you owe the year before whichever is more is basically what it comes down to do you need to and you can do that on your tin tap gov.gov.
Dr. Friday 39:33
You can just go in there, make a payment, apply it towards the 2021 and it’s an automatic extension as long as the money is there, if the money’s not there, they’re gonna charge you penalties interest, etc, etc. Right now we’re not making money in the bank people. So if you’re sitting on the money thinking, “Oh, it’s growing so fast.” Well then I think someone needs to share where that many needs to go because I can’t say I have any. All right, let’s hit Lynn in Bowling Green. What’s happening?
Caller 40:02
Yes, yes. I just had a quick question I heard you mentioned earlier that you live in a disaster or there’s a claim disaster county that you have until May the 16th, or 17th. To file, right. So what does anything I have to do just file the automatic and notice I need to get all my return?
Dr. Friday 40:20
Well, when we filed the return, or when you file your return, you will actually put in the disaster that you’ve been affected by, and you may ever actually have some other credits. Now Bowling Green, I didn’t look in Kentucky, that one might actually even have a bigger extension. While we’re talking. I’m gonna see if I can tell you. Because the because that was a huge, you know, disaster.
Caller 40:48
Warren County, pretty hard.
Dr. Friday 40:51
Yeah, I have a couple of clients up there. And we were extremely blessed that no one passed away. You know, nothing major happened there. As far as that was the severe storms. Yes, they’re saying Kentucky also may 16 2022 Is your automatic extension date, you don’t have to do anything. So instead of being April 18, for all of us, yours is extended till May 16.
Dr. Friday 41:18
And then if you file an extension, because you’re still trying to get everything together, you will be able to file it either now or later. And that gives you until October 15. So depending on how bad your your paperwork, or just getting things organized and rebuilt and put together, I would suggest anyone that’s in those areas, probably to file just an extension. And if you think you owe money, great send a little money in but you know, with what much the pictures I saw, a lot of you guys will have possibly some losses or if you’re dealing with insurance.
Caller 41:49
You’re my biggest deal. We’ll get to it this week, and not next week, when I file I’ll have to do just file don’t have to put anything extra.
Dr. Friday 41:57
Yeah, yeah, you will. Yes, there is a place in there. When you get ready to file next week, you just need to tell them there’s a place in there that says for disaster, you know, relief, or whatever. And I know, you know, just for the timing that you have, and I’m looking at what the form number is, this is what it’s so much easier. In let’s see, 4868. That’s for the extension. Let’s see if I can tell you, I think it’s not going to be there. But you should be able to put it on there. And you know what, if you have my email, I can send you the form, I think the form is a 2350.
Dr. Friday 42:33
But I could be totally wrong on that one. So I can look up the form for you. So that way next week, when you get it you can have you know, when you get ready to file, you don’t want to forget it because then they might charge you late thinking that you were late because they don’t know you are part of the disaster is my concern. Yeah, so my email, I don’t know if you’re driving or not, or whatever, you can always google Dr. friday.com.
Dr. Friday 42:55
And you’ll find my email in there. And or it’s friday@drfriday.com. And I can send you the form or where you need to put that information, it may just need to be across the top of the tax return. But we need to make sure they know because that way you’re not pressured to put in your extension today or tomorrow and then you know, file late.
Caller 43:16
Okay, I’ll just email you. I appreciate that. That’s perfect.
Dr. Friday 43:19
No problem. Appreciate it. Talk to you later, buddy. All right, so we are winding down here on the Dr. Friday show. And we want to make sure that you have all the vital information. And I have to be out by 5850. Because I’m always a little off on that one. So I’m just letting you know, just making sure I’m on the right clock. So no anyway, so if you want to email me again, my email address is friday@drfriday.com. All going well by by Tuesday of next week, we will be fully caught up on any emails that we may or may not have fully responded to.
Dr. Friday 43:53
So again, if you have some questions that are moving forward, you need help with filing the IRS, IRS tax forms or, you know, just some some explanation we are there. That’s what we do all year round, we do taxes as an enrolled agent, again, I am licensed by the Internal Revenue Service to do taxes and representation. So we can help individuals, you know, make a deal with the IRS make it make it so that you don’t have to continuously feel the pain.
Dr. Friday 44:19
But you know, I’m not one of those companies. As soon as you pick up the phone, the first thing out of my mouth is oh wait, you need to give me $5,000.05 $100 a month until we get this thing resolved. I don’t know what I’m going to charge you until I actually know if I can help you. It’s kind of funny that way. So what I do is actually try to come up with a resolution charge you and then make sure that you’re you know that we can do what we provide to you.
Dr. Friday 44:42
So again, if you’ve got a question and you’re not too sure where to start, you haven’t filed in a number of years. You can’t find your paperwork because gosh knows, maybe you’ve lost the due to a storm or something else. We can help you get started and the easiest way to do that is obviously call the office at 615-367-0819. If you have no idea who I am, this is our 13th year on the radio, so I’m thinking you might need to know who that is.
Dr. Friday 45:10
But that being said, the drfriday.com. That’s drfriday.com. And that will tell you a little bit about who I am. And also on that same site, you can actually click a link to actually send me an email, or you can just send an email out at friday@drfriday.com. We’ll try our best to get back with you as quickly as possible and help you move forward with your resolution. Because I know how frustrating it is, you know, being a self employed individual. It’s not like it’s always been perfect. I know how hard it is to make the decisions you make and what you have to do.
Dr. Friday 45:47
And sometimes the IRS is playing out. If you’re paying your rent and you’re not paying us, well. You’ve made a choice not to pay us it’s an obvious thing. If you’re doing different things and you’re not paying us then you’re making those choices, but sometimes we do have to make the right choice for keeping our doors open. And what we need to do is find out how do we get both things done, and how can we make the business more successful situation
Dr. Friday 46:09
All right, so it is Easter so I hope all of you guys have a wonderful Easter and that you enjoy the weather. Hopefully it’d be a great day outside today and tomorrow sunrise service, so hopefully it won’t rain this year. And if you need to reach me 615-367-0819. And as we like to say in Australia, call you later.