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This episode opens with timely news for Tennessee taxpayers in counties affected by the recent ice storm: the IRS has extended certain filing and payment deadlines to May 22, 2026. Dr. Friday also fields caller questions about when Social Security income triggers a filing requirement and whether people living only on benefits need to notify the government each year. Along the way, she covers inherited-home appraisals, donation documentation, IRS identity-verification letters, and the long-term cost of mishandling payroll taxes or S-corp wages.
Summary Points
- IRS disaster extension: Dr. Friday says taxpayers in the covered Tennessee counties may have certain filing and payment deadlines pushed to May 22, 2026, with eligibility tied to the address on the return.
- Social Security filing thresholds: A caller example showed that when most income is Social Security and the remaining income is low enough, a federal return may not be required under the provisional income rules she discussed.
- Inherited home sales: Selling inherited property can still create capital gains above the stepped-up basis, which is why she stresses getting a real appraisal at the date of inheritance.
- Donation records and sales tax: Non-cash charitable donations need stronger substantiation than a rough estimate, and detailed Tennessee sales tax receipts can add up for taxpayers who itemize.
- Identity letters and refunds: She warns that IRS identity-verification letters can be legitimate and says some taxpayers may need to use ID.me and direct deposit details before a refund is released.
- Extensions, payroll taxes, and S-corp pay: Filing an extension can reduce the failure-to-file problem, but payroll taxes should be paid promptly and artificially low S-corp wages can reduce future Social Security and retirement contribution room.
Episode FAQ
Q: Who gets the May 22, 2026 IRS extension discussed in this episode?
A: Dr. Friday says the relief applies based on the return address for taxpayers in the covered Tennessee disaster counties, with certain filing and payment deadlines moved to May 22, 2026.
Q: If my income is only Social Security, do I usually need to file a federal return?
A: As discussed on the show, Social Security by itself is generally not taxed; filing becomes an issue when enough other income pushes provisional income over the threshold she described.
Q: Why does she stress appraisals for inherited homes and major donations?
A: Because the appraisal helps support basis or value if the IRS later questions the number used on the return.
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
All right, Dr. Friday is here. We’re live in studio. We’ve got some great news for at least many of us that are in Williamson, Davidson, Robertson, Wilson, um counties, Murray counties. The IRS has at the last minute again yesterday on 4-3, they passed an extension due to the ice storm till May 22nd. So um it does say that it is anyone anyone in those addresses that will be in those areas and we can cover all of the counties here.
Dr. Friday
It’s gonna be Cheatham, Chester, Clay, Davidson, Decatur, Dixon, Hardy. Hardman, sorry, Harden, Henderson, Hickman, uh Hendersonville, Lawson, Lewis, Macon, Murray, McNair, Perry, Robertson, Robert, uh, Rutherford, Sumpner Charlesdale, Wayne, Rob uh Williamson and Wilson. And I know that’s a lot to take in. And you can go to the IRS website, irs.gov, look it up under impacted by winter storm in Tennessee, ice storm uh that will affect us in January.
Dr. Friday
So I will uh go right to the phones. We got Adam in Antioch and see if we can get a question in here. Hey Adam.
Caller
Oh that was quick, thank you. Let me give you a lot of things. Uh my total income thirty-one thousand four hundred. Well I have to file a federal income tax.
Dr. Friday
Are you on social security?
Caller
Yes ma’am.
Dr. Friday
Um how much of that is social security that you just gave me? How much a month do you get from that?
Caller
The total is twenty-nine four
Dr. Friday
Okay. So out of the thirty-one four, twenty-nine four is Social Security?
Caller
That’s correct.
Dr. Friday
Then you do not need to file.
Caller
Oh good newsweek.
Dr. Friday
Wow, well thank you for that.
Caller
Thank you, ma’am.
Dr. Friday
Thanks, sweetheart. Uh It’s always nice not to have to file. Most of us will never have, but sometimes we get lucky enough here or there to have a at least a year or something that may come into that situation. So um There is some waivers back to the IRS’s um natural disaster that they’ve they’ve put here in uh federal disaster, I should say, for the state of Tennessee You can go again to www. tn.
Dr. Friday
gov. You can look up the disaster, and that way you can make sure you’re in the right county. It is going to be based on the address that you file your tax return on. The IRS is going to be using that as a forum of who and who does not qualify. I did have someone contact me um this week because they were filing and I guess a penalty was coming up when she put in her estimated taxes for last year because she waited until 11. 3 Um and what you want to do is you want to put in um I have had only a couple of them because most of the people I have uh
Dr. Friday
Made it, but my system, anyways, all you want to do is let them know that you were covered by the natural disaster. And you can actually look up a disaster code on the IRS website for the disaster that you’re you’re covered under. And then that way you can include that. So that way your address should automatically correct 2025 if there is said penalty and also now Another one for um I should say 2024, which made it all the way in, and then some of the 2025 estimated payments and things that were extended until 11.
Dr. Friday
3, those will all be covered under your address. So as long as your address, well, the first one, the first disaster covered all, what, 93 counties or something. This one is only covering probably about 15 or 20. This the ones that were hard pit by the ice storm, which Most of my clients, Rutherford, Williamson, Davidson, Murray, those are the big, big ones, Mini and Wilson and Hendersonville, but they’re all listed there. So again, we have uh an ice storm extension
Dr. Friday
And I can’t tell you guys how many people had asked, do you think the IRS is going to give us an extension? And I kept saying, I have no idea. And then uh and then they did it yesterday. So um extension is on the books, which gives some people a little bit extra breathing room. If uh if you’ve already filed, if you’ve already scheduled your payment, like I have for some of my clients, there’s no way of going backwards. I will let you know that. Had someone email me this morning saying, hey, I um if you haven’t filed my taxes, don’t file them. But I had filed them because they’re due, guys, in less than 10 days almost.
Dr. Friday
So So for all of you that want to procrastinate, wait. Now many of us would file, I would suggest If you if this is all to do with the payment, that’s fine, but filing an extension if you plan to go past this window. If if for some reason I had a number of people listening to this right now. I’m sure there’s people that had eight, nine, even one client was 11 days without power or internet. um situation. So there was some that were very badly hit.
Dr. Friday
Some of us only had hours of of something or or nothing at all. But um they’re t they’re including us in the entire um county. So All that are affected on that, you have an extension deadline applies to individuals, income tax, and payments normally due on or before January 22nd. of uh twenty sixth that will extend and as long as the payment had been made before February sixth. So some of this It’s funny, they just put this out yesterday, but their deadlines or their deposits are still saying that some of them needed to have done
Dr. Friday
quarterlies and things. They’re going to give you a small waiver from January 22nd to February 6th. But if you still haven’t made those payments, there will be some penalties and interest involved. But I will try to keep this out there for everyone to know. A lot of my clients, I’m going to probably try to send out a mass email just so they can make sure that if it applies to them and they have a situation, um, it may be something that they can use to get, you know, hey, if you normally would have filed an extension and couldn’t pay and that’s a
Dr. Friday
that you know remember guys an extension never ever extends the money that you can’t pay a lot of times people file extensions for many reasons and many reasons is because they don’t have all their tax forms They have K-1s usually that are delayed, so they don’t have the ability to file their own taxes. But payment is due on four equal payments and or with your extension on April 15th. Now this will extend those people to May 22nd, but um you know you’re not going to have until October 15th to make your payment without penalties and interest
Dr. Friday
Just saying. It’s big news, but I just want to make sure everyone’s on the same page. All right. So if you want to join the show, you can. 615-737-9986-615. 737-9986 taking your calls, talking about my favorite subject. Um, met a lot of new people this uh this last week. I was uh pleasantly surprised. Uh we we really hadn’t taken on a lot new ones, trying not to, uh, but this last couple days met some really nice people, most of them probably referrals from my own clients, but that’s awesome
Dr. Friday
because a referral is probably the best compliment anyone can give you. And so um but yeah we have some interesting situations, different type tech situations, things like that. So we’re working very hard to uh meet all of those. That’s why I’m working the weekends and I had had to do last Saturday live uh I I was not able to do a radio show because we were actually seeing clients on a Saturday which never happens in 33 years or thereabouts. So um yeah good good tax season. So if you’ve got questions, maybe you filed your taxes or you’ve got a question if you’ve uh filed and maybe you found that there’s a mistake
Dr. Friday
Um there are ways of fixing those. If you have received a letter, we’re seeing a lot of people getting letters saying that the IRS is asking them to identify or to prove their identity I’m assuming it’s a big part of where they said that they are working or trying to break down on identity theft. So they are sending out a lot of letters saying um that they don’t have uh they don’t they need you to call or contact them. I ideally you just go in, you set up an ID.
Dr. Friday
me account You can verify your name and your filing and then they’ll release your refund or whatever. Also, um the IRS is not refunding Um with checks. I’ve gotten probably six people that we’ve uh I have a number of people that just don’t want to give the IRS their bank account. And so if they make quarterlies, a lot of them will just roll over whatever refund they have into the next year, and that’s fine. You don’t have to give the IRS a bank account.
Dr. Friday
But keep in mind if you’re mailing checks to the IRS, they have your bank account, right? So you’re not really hiding, maybe in plain sight Um, but the IRS is sending out letters to individuals where no bank account was provided and now they’re having to call and again Your best bet if you get one of these letters is to go to ID.me. It’s the same one many of you, if you have Social Security. Even if you’re not on Social Security, you might go in and look at your Social Security. That’s the same account you would have.
Dr. Friday
But anyways, you would need to log in and update your banking information so that they will then electronically pay you your refund So if you’ve gotten one of these two letters and a lot of times I had one person show up at the office on Friday, she got the letter about uh proving her identity And she’s like, I want to make sure this is not a scam. I want to make sure that I’m not going to be walking into something where this is going to turn into you know, someone’s stealing my identity. And I get that. There’s so many scams out there, and we’re teaching people do not give people your legal name.
Dr. Friday
Do not give them your social security number. And on these questionnaires, they’re going to ask that information So, you know, again, if you’re not sure, certainly double check. But there is a legitimate letter going around requesting normally after you’ve already filed, making sure that you did not have a fraudulent return go to you. All right, so if you need help, if you need to ask a question, what you want to do is pick up the phone, 615-737-9986-615.
Dr. Friday
737 9986 taking your calls. Talking about my favorite subject, which is taxes We may get into talking about bees or chickens because all the people that come into my office know that that’s my second favorite subject. But today if you have questions on on uh filing, maybe you still haven’t filed, maybe you got a question about what you need to file how you’re gonna file maybe you don’t have all your tax documents what should you do maybe you’ve inherited something and you’re not sure if you’re supposed to report this on your tax return someone gave you a uh what they called a gift but was it a gift or was it really
Dr. Friday
taxable income or you gave someone a gift and did you try to write that off your tax return because the gift word doesn’t always mean tax deductible But we’ll talk about those or anything else. Again, 615-737-9986 is the number here in the studio. And we’ll take your calls in just a few minutes. We’re going to take our first break for the afternoon. Hopefully you guys are enjoying this Saturday, and we’re going to be right back with the Dr. Friday show.
Dr. Friday
Live in studio. If you have a question, you can certainly join the show 615-737-9986-615-737 9986 taking calls, talking about my absolute favorite subject. Taxes. Why is it my favorite subject? Because it’s always changing. Right? I mean just like now yesterday, boom, another change. We now have an extension. What does that mean? How’s that going to be advantage? Uh what advantages and disadvantages are we going to be looking at for my people? And what can we do to make
Dr. Friday
things work better. So um if you’ve got uh uh a situation where I had someone that their um mother passed away ended up selling a house uh for more than what the appraisal was. And but it was only a few months after mom died. And they’re like, well, we shouldn’t have to pay tax because um It’s uh it’s not taxable, right? Because she only died three months ago and this is what the appraisal was. The problem we’re running into, to be quite honest with you
Dr. Friday
is that it sold under a unusual situation and to an unusual person and therefore I think it may have been Potentially, um, I’ve had many cases where people have sold homes for more than the appraisals, um, and sometimes it’s because they put put money into it But sometimes um and sometimes the appraisals may not be properly done to account for the way the house was when they had it. Someone underscored it thinking it was going to be a low ball And they didn’t highball it and they end up getting the high higher amount.
Dr. Friday
And you if you can justify that the amount that you sold it for was the true appraised amount, then you have no problem. But remember, you have to pay capital gains on anything that’s above whatever the original appraisal is that you get on a home. So it’s so important not to just lowball it and you know, go after the exact true amount and what you need to have with it versus sometimes, again, people just have a tendency to to just take the the amount that fits the best, what they think’s gonna fit the best, and then you know, not really understand the whole purpose of why we’re asking for the appraisal in the first place.
Dr. Friday
Um there is losses on appraisal. I have one where I think it was like I don’t know, petty cash basically, but there was like eight members of the family. And so it wasn’t going to be valuable to, you know, to worry about the loss. Um, especially since everyone had already filed mostly their taxes. But um sometimes it is valuable. I mean if you you basically have a house that comes out appraised and I’ve had a couple that they praised them and they were completely wrong So, but they what when I refer to the word appraisal, I I should say in some of these cases, it’s more like comps, right?
Dr. Friday
Someone’s going in and saying these are very similar to the house we just sold Let’s use these. If it’s an actual appraisal, then the number will match exactly, right? Because they’re going to take and pull five of like kind. They’re going to disallow it for not having a new AC or or having you know a lot of in inside repairs needed, a new roof, whatever it is, and that’s going to come back and and be evaluated on an actual appraisal. So I haven’t seen enough people, I think, sometimes get appraisals because, well, they’re often more expensive.
Dr. Friday
And uh they don’t want to put the money into it. But keep in mind tax law does say that if you inherit a home at the time of inheritance, um, you are supposed to get an appraisal So that way you have proof that whatever you’re using as your basis is the correct number. That’s, you know, that’s pretty straightforward. That doesn’t seem like they’re asking. Also, I need to bring up the fact of donations. A lot of people go to goodwill or like-kind organizations. They bring in sofas and chairs and
Dr. Friday
and you know hundreds of items sometimes of clothes, t-shirts, shock shoes, you name it. IRS has basically come down the line from lawsuits and things or or court cases and If you’re going to be a person that’s giving that kind of item way, you don’t just need to take a picture and then, you know, write it down and say, this is what I did. And, you know, most people, in fact, nobody really has the original receipts. Most of us don’t save the receipts from the clothes that we’ve purchased.
Dr. Friday
Even though nowadays it may be beneficial if you’re actually going to use sales tax in Tennessee because Obviously, we can now itemize the sales tax in Tennessee again because we’re up to $40,000 in our salt tax. So we now have the ability to go back and I mean, I think a lot of people are surprised. I have people, ordinary people, but when you add up all the sales tax you have in the year from all the things you purchased that had sales tax It uh it can be four, five, six, eight thousand dollars. And that’s not just something specially purchased like they went out and purchased a car and had a couple thousand dollars.
Dr. Friday
This is just eating out clothes, um, you know, buying or paying for anything and everything that had sales tax attached to it. And I have people that save every single receipt One that was audited a few years back and no problem with that audit, I’ll tell you that, because they were able to justify every single receipt. There was, I don’t know, 5,000 receipts and they were able to give them all those. So it’s always impressive when that happens. Um, but you know, a bottom line is if you don’t have that ability, you need to either get an appraisal.
Dr. Friday
of everything you’re going to give, and you actually have to pay for that appraisal or, you know, well, if you can get someone to do it for free, that would be great. But an actual appraisal, then if you ever audit it, it will come back at you and you’ll be able to fix you know, argue the point that it have it because that was a a lesson learned on someone that uh we saw that was audited and they were not able to do that. All right, hey, let’s hit Alex in Nashville and see if we can help. Hey Alex
Caller
Yeah uh y you got can you hear me?
Dr. Friday
Yes sir.
Caller
Uh yeah, you was talking about uh your You don’t have to do taxes when you turn a certain age when you you’re with social security?
Dr. Friday
Well, I was saying that you have if your income is low enough, you don’t have to do taxes. I have people in the nineties that had to file taxes
Caller
Okay, what’s uh what’s the uh the uh yeah.
Dr. Friday
So they take the provisional t uh income is they take half of your social security And then uh to come up to 25,000. So if you have 25,000, including half your social security. So if you have $20,000 in Social Security, you would take $10 and you could earn $15. The gentleman had called in had only earned like $3,400 and 29, I’m sorry, 34,000 and 29 of it was was Social Security. So he he was fine. He did not meet the $25,000 situation for provisional tax code.
Caller
If you’re just solely on Social Security, do you have to follow on that?
Dr. Friday
No, not at all. If you’re only on Social Security, Social Security itself is not taxed. It only becomes taxable with other income
Caller
Now one more question here. Uh do you need to re do you need to let ’em know where you’re at every year by sending something in
Dr. Friday
No. I mean if you’re on social security, keep in mind they know where you’re at, right? Because you receive a benefit every year. Or month.
Caller
So I mean yeah, so you don’t have to worry about that. I just kind of curious. I thought maybe you need to keep an uh record with them every year. What about if they have a uh a stimulus check or something like that?
Dr. Friday
Right. Well even even back in twenty twenty and twenty twenty one, people that hadn’t filed because of just social security, they actually received the checks faster. So, you know, people on Social Security sort of have a different attachment to the government than most of us that have W-2s or 1099s. Uh but yeah, you you don’t even have to worry about if you’re only on Social Security, you will receive any stimulus. There was one or two years where they were giving a uh a percentage back. I want to say it was like 17 or 18 where there was like $100.
Dr. Friday
And in those years you could file if there was some sort of money being given to people to file, but uh we don’t have that on the code right now.
Caller
All right. Well thanks for attending my call and I appreciate it. Enjoy your show.
Dr. Friday
Thank you, Alex. I appreciate you. All right. That was a uh It’s a good question because I know um a large number I have I have a client that comes in and every year she’s now 90 she is now 93 years old and um she comes in she does her own accounting or uh her own tax records or whatever and she brings them in every year and she goes, Do I have to file this year? And of course every year she has to file. Um and she’s she just does not think it’s fair. There should be an age limit And I’m not disagreeing.
Dr. Friday
I think if I made it to 93, especially as mentally sharp that she is and and doing, I think there should be some sort of reward. Um, but uh again, there is absolutely no age tied to taxes. I mean, there are kids that are two and three years old due to the fact that they have investment in the name of a minor child that have to be added back to parents’ tax returns and taxed at higher rates. I mean, there’s there’s ways of taxing everybody. And so um even people on Social Security don’t, you know, I mean you have Irma that comes into play.
Dr. Friday
It’s not a tax per se, but they do base it on income. So you can be, if you happen to sell something with a large capital gains, even if it’s a one-time event. And I don’t care what Social Security tells you that they have this waiver. Maybe someone listening could call in and say they did get it. I have not yet seen, and I’ve got some tenacious clients, uh, but I’ve not yet seen where somebody has been able to get the Irma dropped because of selling a piece of real estate um like throughout time or whatever.
Dr. Friday
Now maybe if it’s a part year where they are working and then the next, you know, but they they have a two-year look back on on Irma, which Irma’s for your Medicare, just for people that might not know who I’m talking about. But it is one of those things where you you get penalized. I have every year we do taxes for a number of people that end up getting hit and then they’re just waiting for Irma to come because it’s almost like the the devil in the dock, you know? Next thing they get a little love letter from s uh from Social Security administration saying or in some cases they just get a reduced
Dr. Friday
amount deposited in their bank because they feel like they’re losing their social security. They’re not, but it still feels like it because they pay your uh Medicare out of your Social Security, therefore your Medicare goes up. And I have people that pay twelve thousand dollars easily a year. in uh in Medicare because of the income penalties. So not too sure why we have a penalty, but you know again, all I can tell you is what the tax law is. I cannot tell you why We have an income limitation on how much people can make just because, I mean, it’s not like they use more medical than somebody else.
Dr. Friday
You know, medical is used when people need it, not based on income and and that’s just crazy. Okay, so we’re gonna um come back after this break and we’ll get to some of your phone calls 615 737-9986-615-737-9986. This is the Dr. Friday Show. I’m an enrolled agent licensed by the internal revenue service to do taxes and representation. We’ll be right back.
Dr. Friday
All righty we are back here live in studio. If you want to join the show you can 15737-9986. For some of you that just joined the show, two things. One, I am Dr. Friday. I’m an enrolled agent, licensed by the Internal Revenue Service to do taxes and representation. I have never worked for the IRS. I have taken their exams, I have passed their courses, and I am an enrolled agent, which means that basically all I do guys is taxes. as what I enjoy doing, that is what I do. The second part of the good news is for anyone that’s living in the nearby counties, and that would be for me, the closest is Williamson, Rutherford, Murray, Wilson.
Dr. Friday
All of you that are in those basic areas. We have an extension now till May 22nd, 2026 for filing this tax year. They say we do not have to have an extension Because there’s no penalty and that you need to make sure you make your payments and all the original things that were due. on or due before February 2nd and April 30th. This deadline uh it applies to both those dates. So anything that was due by the end of April you have until May 22nd.
Dr. Friday
And so that would include filing of your tax returns could be something. But now I want to also point out the state of Tennessee may give May give you an extension one-on-one individually that were they they want someone truly affected. The IRS kind of just lumps everybody in a county. They use your home address They they trigger those and then the system basically just gives all of them the same thing. In Tennessee, if you have franchise XOS or you have anything else that you need to go with on that, uh sales tax, uh business license.
Dr. Friday
All of them are due before the end of the month. Many of them I think were, I think your annual report was due April 1st, franchise excise April 15th. So all of that needs to be done on time. So either an extension would need to be filed and done so you have it finished or you would need to make sure that you have at least paid the money and filed the extension. Because I mean Tennessee, they’re really more about making a payment than anything else, as far as I can see.
Dr. Friday
I mean If they have your money, they’re less likely to charge penalties, but they will charge for failure to file. No matter what, they will do it. So uh just making sure that you have All of your ducks in a row, everything is done correctly, and then you’re able to move forward and and do that. But again, making sure that everything is set up the way you need it to. And you know, my girl’s here. She’s uh wanting to go outside and play So um let’s see, what else? We are actually still working, obviously, on all of our taxes, even though we received this information yesterday.
Dr. Friday
Many of my clients are still wanting to be filed on or before April 15th. So we will have all of those that we can get done will be completed and then people have the ability to make better decisions with that information and you can, you know, file or or do. Many, many of my clients, to be quite honest, are not able. to file their final tax returns because they need to actually have um the um the the K1s or something from another organization before they can before they can send it.
Dr. Friday
So they need to make sure that’s all done and we are good to go. But we will um if you do have Maybe you filed your taxes already. Keep in mind, 2026 is on us. We’re almost through the, well, theoretically, we are through the first quarter of 2026. So if that’s the case and we are now moving on past that, then we need to figure out what can we be doing this year that might be able to make things better for all of us, right? So maybe better bookkeeping, maybe tracking your expenses a little better. Sometimes people um have to wait to that last minute.
Dr. Friday
To be able to do something, and that’s never a good thing. Last minute entries often make people think about, well, what can I do if it’s last minute? Should I be doing this? Should I be doing that Um, but you know, you don’t you don’t want to wait to the last minute and then have your, you know, ideally the tax person, because I’m making phone calls saying, hey, did you do this? Do you have that receipt? You know, you sold a piece of property, was there any cost basis? Did you have closing cost fees? You know, um getting all that together, we actually have now implemented where we’re using um Smart Vault.
Dr. Friday
I know a lot of CPA firms have probably been doing it a lot longer than me. But, you know, no one ever said that I was uh fastest on these kind of situations, but I will eventually get there. And so If you need help and you need an extension or something, you can call our office. And you can also go to irs.gov And you can file an extension right there on the website. They do have some free extension filings just for individuals that may need that extra time sometimes because things are going, you know
Dr. Friday
crazy in your life and you’re not able at least if you file the extension, you’ve eliminated the failure to file penalty, which is even worse than failure to pay, to be quite honest. Failure to file is is uh I believe six percent um per per time and failure to pay is 0. 6. So big difference. So if you have the ability to make sure you have everything done And you can do your taxes right then, that’s awesome. But if you don’t have that ability, if you’re not able to do some of the things that you, you know, the numbers are not right where you
Dr. Friday
want them to be, then guess what? File that extension. Maybe this is the first time in years that you haven’t file. I mean, you you know, I have people right now that haven’t filed for six, seven, eight years. Sometimes only one or two. But Make this the year you filed the extension, so then you can turn around and get caught up. Getting caught up, I mean, it’s just gonna take a huge weight off your shoulders It also is going to make it a lot easier for you to be able to um uh get a house
Dr. Friday
Help your kid go through FASFA. If you have children, they can’t get their loans because mom and dad haven’t filed taxes or maybe you know whatever. So you need to be able to Do what you need to do as an adult, which part of that is, and then also when you’re doing this, after you’ve done that year, and let’s say you do owe money Make the adjustment. Make an adjustment so that you have the money coming out. So you eventually stop the bleeding. I know some people say, well, I can’t live off of this.
Dr. Friday
Well Sooner or later, if you’re short every year on taxes and you’re not able to pay it, yet you’re making your mortgage payment and your car payment, and in some cases sending your kid to private school and all these different things The IRS is going to say you’re making choices that is not the choice that we would make for you, right? I mean the bottom line is if you’re paying your home, then they’re saying that home is ours Because you’re making a choice. You’re saying, hey, I have to have someplace to live, so I’m going to pay my mortgage, but I’m not going to pay the IRS.
Dr. Friday
They’ve come right out and basically said, we’ll take your home if you don’t pay us And it used to be that you somewhat protected under bankruptcy and things like that, but it isn’t um it’s not like a completely guarantee that the IRS will not touch your home Okay? So play it smart. Get on track. Figure out what you need to do to make everything work, but don’t just assume that you’re going to you know never have to pay Because that’s kind of crazy. I mean, to be quite honest with you, I mean, you need to make life changes.
Dr. Friday
You need to figure out how to do it. Sometimes life happens. Divorce is a big reason people end up with tax issues. I’ll be honest Divorce does not make for a good person to, you know, you’re you’re trying to re-establish yourself, trying to get back on your seat, and then you’ve got to split all this income and all your equity and sometimes half your retirement. All of that happens. Totally agree. Happens, happens, happens. But if it does happen and you need to make a deal, then you, you know, you need to get current because the IRS can’t do anything until you have all of your tax filings done.
Dr. Friday
They need to know how much money do you owe them. And then once that’s done, there are tools out there. There is ways. But I mean again, I know people listen and a lot of times even on this radio show, you’ll hear or this radio station, you’ll hear people say, for ten cents on the dollar, we settled You shouldn’t have to pay all of your taxes. We will help you. Um, you know, there’s rules. And again, one of the biggest things that when people come in my office, they have, you know, $500,000 worth of equity in a house.
Dr. Friday
But they don’t want to have a mortgage because they’ve worked their whole life to pay off this house, but yet they owe the IRS $100,000. So, you know doesn’t doesn’t really make sense. You need to go get a second or a first or reconsolidate and get the IRS off your back so they don’t take that house. And then finish paying off the IRS, finish paying off your house by making extra payments or whatever you need to do, because the IRS is going to most likely have some issue with not being paid
Dr. Friday
And they do have collection companies out there. They’re out there, people, and all of that. So you just have to figure out. What’s going to be the best way to have all of this working for you? That’s all I want. I don’t want you to be afraid of the IRS. I mean it’s a collection company. That’s what the RRS is. It’s not anything more or less. It’s a collection company But that being said, you know, even if it’s a collection company, it’s still they need to be able to figure out how or what they’re going to do with some of this information, and they will
Dr. Friday
make sure that they have the best way to collect. So communication is the second thing. Make sure you have all your ducks in a row and then communication. Let’s make sure that they understand your financial situation. Maybe you can do a partial payment plan for a year or two. Maybe you can reestablish or even get a loan. But all of these are questions or options that are out there. They’re not For everyone. I mean, I have settled IRS cases for as low as $25. Um, and they owed like $110 or something like that.
Dr. Friday
Even uh even with the state of New York, which wasn’t easy, but I think they took 50, even 25 more. But this was somebody that really had very little. Age helped us. So it wasn’t something like they were just underemployed. They weren’t going to be able to ever make the kind of money they did back in the day that this tax issue happened. So um, you know, those do come into play, but just If sooner you get yourself on the right track, the better. Make 2025 filing that situation.
Dr. Friday
You’ve got a window here to be able to Get your documents together and move forward. All right, we’re going to take our last part of the show. Um, and the last break of this show, I should say, and we will um take any calls, 615 737-9986. You can also email Friday at drfriday.com. Again, I am Dr. Friday, an enrolled agent, licensed by the Internal Revenue Service. do taxes and representation. Hopefully you guys are enjoying the Saturday. It looks like it’s a beautiful day outside, but we’re going to be right back with our last break from the Dr.
Dr. Friday
Friday show. All right, this is the Dr. Friday show, and this is the last part of the show. So if you’ve been listening, you have a question, you’re like, oh my gosh, I don’t really want to call the radio, you can also email Friday at drfriday.com. Totally get it Probably never did that before in my life, but you never know when you might want to do it. So 615-737-9986 is the number here in studio.
Dr. Friday
Want to go over this one more time. Obviously, for anyone that is not within these counties, you need to file by 415. If you’re in the counties of Cheatham, Chester, Clay, Davidson, Decatur, Dixon, Hardaman, Hardin, Henderson, Hickman, Lawrence, Lewis, Macon, Murray, McNary, Perry, Robertson, Rutherford, Sumpner
Dr. Friday
Trousdale, Wayne, Williamson, and Wilson. They all qualified for the Federal Disaster Relief. They are qualified until May 22 of 26. So again, these are important dates for many of you because if you maybe were a little bit procrastinating or being a little worried about getting all the right information in. Take a deep breath. It’s gonna be okay.
Dr. Friday
We’re gonna get it done and we’re gonna be good. But I did have, again, I know a number of you listening right now actually did have some serious um Tax issues, right? I mean, just saying you guys, not tax issues. Um, you were f that didn’t have power for 10, 11 days. Number of my clients had 11 days. Some had six, seven, a couple only two or three. Some ended up going to hotels. Some ended up not, but um, you know, any way you look at it, it is definitely one of those situations where you want to be able to
Dr. Friday
Relax, make sure your paperwork’s together. Um, hopefully all of you were no one was hurt. I didn’t have any clients that I remember or know of. I did have a client this last week um that uh ended up uh Um having a heart attack in the parking lot at my office and was very worried, but I have good news that he is recuperating. Um apparently one of his stints failed that he just had in and uh all is good, but You know, we don’t uh really want to mess with any of that.
Dr. Friday
Thank you very much. It’s a bit scary when it comes to that kind of thing. So, you know, our prayers are with him. But If you are a person that has had the the weather or maybe maybe you just live in one of these counties. I happen to live in one of these counties. We’re in Murray. So we don’t have to really worry I’ll be honest, I file an extension on myself. Anyways, I am not going to rush to the finish line as long as I have paid my estimated taxes properly.
Dr. Friday
Um, I will pay zero penalty and I will be able to do what I need to do when I need to do it. I mean, why not? Why do I want to worry or or stress over doing something when it’s not necessary Let’s just be honest. So if you are a person that is that way, then you’re good. If not, well, then you know You’re going to be late and that will be fine. But for any of you that may have just said, you know, I’m not going to make it. There’s no way. I don’t have enough time to put the documents together. And they also are saying if you need to get your transcripts
Dr. Friday
Because some of you may have had some serious computer damage or something like that. They are allowing people to be able to get those for free. I guess there usually is a fee fine. a fee that people will have to pay, but filing and paying these taxes um after the original due may have until uh the affected people and it will have until May 22nd to file and pay the taxes that was originally due by April 15th. So again, um this is uh for individuals, payroll taxes, anything that would have fallen between some of these due dates.
Dr. Friday
You do have some extension I’m not a person that likes to play with payroll taxes. I will say that. So if you, I mean if you have payroll going on. I I will always pay my payroll taxes the moment I do payroll because it’s just so much easier. That is the one um situation you do not want to have. payroll taxes can get pretty um expensive they will charge you 25 percent penalty without even doing anything else and then interest and then failure to pay failure to file failure to
Dr. Friday
basically do anything and you know it’s it’s kinda sad. But um you know so don’t mess with your payroll taxes. Just make sure that they are done the way you need them and then get them done. Because the fiduciary responsibility on payroll taxes, it’s not your money. If you’re not paying your own tax bill, that’s one thing. If you’re not paying someone’s payroll tax bill And I get it, guys. I’ve been in self I’ve I’ve been self-employed for 30 plus years. There have been rough years and having to come up and do things with that situation. But
Dr. Friday
It’s time, it’s a good thing. You need to make sure you have all of your ducks in a row. If you haven’t done or if you have payroll issues and you need some assistance. with dealing with the IRS because they will be much more aggressive with that. In fact they usually only give you like twenty four months versus like five or six years for the personal side, 24 months if you’re dealing with payroll issues. We can help you with that. But again, you need to make sure that you’re ready to make a deal with the IRS because Um yeah, we’ve we’ve had to do those for years and it’s uh it’s a painful process and the penalties can be quite
Dr. Friday
extensive. They’re not very big on giving a whole lot of um waiver on most of those. If you can show that you were basically out of business you can do a little better than if you’re in business but um you know we can we we’ve been doing this long enough where we can give you some help and guidance And then you also want to talk to an attorney because I’ve had a number of people asking me, should they be now a sub-s corporation versus an LLC? And I’m gonna be quite honest with you.
Dr. Friday
I have um a problem because we just talking about payroll taxes, right? So everyone’s being pushed because on a sub-S corporation, the pass-through income, you don’t pay personal, you don’t pay uh self-employment tax. I get it. I understand. But I also understand that if you’re looking at all this and you’re saying that you’re going to now turn on payroll, in which you now have to pay the other 7. 65%. up to, and I believe the IRS sent something out $75,000 or $80,000 for an average business owner.
Dr. Friday
And it is supposed to be based on what you would pay someone else to do your job. So if you’re higher in an executive and you know you’re a specialist and you um if you were working in the workplace, you’re making $200,000, then you need to be paying yourself $200,000 and then anything above that would be considered. dividends or pass through. So that’s the biggest thing. I’ve seen people that try to pay themselves $20,000, pass through $100,000 so they don’t have to pay any taxes. I hear it, but it doesn’t make a lot of sense to me because it seems like to me that we are um avoiding and then at the end of the
Dr. Friday
Time when you hit 67 or whatever time you’re gonna start taking social security, you’re gonna find out, guess what? You cannot uh get any social security because you didn’t pay any in I mean, I’m just saying, you know, I mean, you paid in on $20,000, you’re going to get $2,000 or $3,000. So you avoided it throughout time. I have a sibling. He makes good money, but he paid himself always a minimal, minimal amount, and he found out that his Social Security is uh pretty much nothing um because of it.
Dr. Friday
And that’s I mean again, everyone has their own choice. And in his case it wasn’t going to be a major issue because he still had plenty of money. But Um, you know, his Medicare is high and I don’t know if that has any bearing or if that’s just because his Irma is high, but um he was pretty shocked that he hadn’t uh paid in enough to really qualify for anything or very little. um social security. So sometimes you think what sounds good now, oh we’re not paying it. But if you’re taking that money and then reinvesting it into a 401k or something, but keep in mind 401ks SEPS
Dr. Friday
Uh IRAs all of that is based on your earning, not on what you’re passing through um as uh distribution, right? So if your W-2 is $20, $20,000 You can maybe put the 8,000 in, but you’re not gonna be putting much into a SEP or 401k, especially if you’re distributing really your income is 120. Now you’d be able to put some serious money aside All right. Well, this show is winding down. We’re at the last minute. So if you want to uh give our office a call, you can Monday morning.
Dr. Friday
Six one five three six seven zero eight one nine six one five three six seven zero eight 19 or you can check us out on the web, drfriday.com. Pretty easy. If you’ve never heard of me, you’re not too sure what I do. Everything’s there on the web You can also send an email through there making sure that everything is clean. And the email is friday at drfriday.com also. Uh again, I’m an enrolled agent licensed by the Internal Revenue Service to be doing taxes and representation.
Dr. Friday
I’ve been doing taxes for 30 plus years here in the Nashville area. My office is in Brentwood. And so if you have questions, you need help. At this moment, up until April 15th, we have no more openings, but we would be able to maybe take a meeting after that to if nothing else guide you in the right direction, help you to get in the um get to the right person to help you get to the right place. So again, if you need help, 615-367-0819 or Friday at drfriday.com or just go to drfriday.com on the web. As we say in Australia, cop you later.