Welcome to another episode of the Dr. Friday Show! In this episode, Dr. Friday talks all about filing taxes, tax updates, and the following topics:
- PPP Loan Is Forgivable
- Should I Pay The IRS Electronically Or Through Mail?
- Why You Need Help With Tax Representation
- PPP Money: Forgiveness Or Pay Loan Back?
- Will There Be A Second Stimulus Check Coming?
- Help If You Haven’t Filed Your Taxes
- Does My Filing Status Change Immediately If I Just Got Divorced?
and so much more!
No, no, no, she’s not a medical doctor, but she can share cure your problems or your 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 at 615-737-9986. So here’s your host financial counselor and tax consultant, Dr. Friday.
Dr. Friday 0:30
Good day, I’m Dr. Friday and the doctor is in the house at least the new house the way we’re doing it nowadays. So if you’d like to join the show you can at 615-737-9986, which is the number here in the studio. You can join the show if you got questions concerning taxes or money issues, maybe you’ve received one of those love letters. We have gotten quite a few phone calls this week about people getting love letters as I like to refer them letters from the Internal Revenue Service. Showing additional penalties due. In some cases, they’re not even showing the money that was paid at the time of filing. So they’re showing how much was paid throughout the year. Most of these are for equal payments. They’re talking about estimated taxes a large number of my listeners and people I do taxes are self-employed. The IRS has definitely jumped on it this year. Keep in mind all that money that has gone out the door to help people survive the COVID situation. I think the IRS is definitely on top of their collections. Now we have seen several letters, little things I mean, $200-300 ones, I have one as low as $15.
Dr. Friday 1:40
They are definitely I think it’s computer-generated so it’s not like an individual sitting there but they’re basically looking at your prior-year tax payments. So if you are an entrepreneur, self-employed person, someone that receives 1099 you are required to make four equal payments. So even though you might have by the end of the year had no money do in fact, you may have had refunds in several cases we have had refunds, they are still charging you the failure to pay quarterly estimates and failure to pay in penalties on those. It’s not necessarily a high penalty. I believe it’s .5%. But it’s still a percentage and it’s still a penalty. So if you got one of those love loaders, and you’re not too sure what it’s saying because you’re like, “Wait for a second, I paid on my taxes by July 15. Why do I owe taxes.” You might want to read the fine print a bit and find out that you may have paid it all on time as far as by the July 15 deadline, but you didn’t pay it in the way the IRS is expecting it which is in four equal payments. When you prepared your taxes, for example, your 2019, you should have also received four estimated vouchers, depending on what time of the year you prepared them. If you provided them before the April the July 15 deadline. You may have seen where it said 415 615 915 and 115 Now ours all showed 715 for the first two, and then 915 and 115. But either way, you had to make your first two quarterly. So if you have not paid your first two quarterlies for the year 2020, and you are receiving 1099’s, that will be something you might want to consider. It is supposed to be paid, and therefore there’s a penalty. So that hopefully answers many of the questions that we had come in.
Dr. Friday 3:26
Also, the IRS does do matches. I had a letter this morning from someone I prepared taxes for the year of 2018, and the IRS has done some match, and they have changed his tax return, you will see it says, “We’ve changed your tax return. We think this is what you owe.” And it’s a large dollar amount around $10,000. In his case, I don’t believe it’s going to happen but we did not receive all the tax documents. He had some stock sales, he had changed financial advisors. We only had one of the two statements in his tax return. So if he did have a gain of $30,000, potentially, he could actually owe $9,000 and some change to the IRS plus some penalties. So hopefully that will not be the situation. But we’ll have to wait and see on that one. But if you do have that letter, you do need to respond, do not throw that letter in the drawer thinking, “Oh, they’ll figure it out. I didn’t do anything wrong.” You know, sometimes it’s just simple oversight. I’ve had it many times with gambling and stock. In most cases, they only show the gross in some cases nowadays, since the basis is reported, they are showing the gains. So you know, we just have to wait and see what’s going to work but you don’t want to leave it on the table like that.
Dr. Friday 4:42
If you’ve got questions, you’ve received a love letter, or you haven’t filed taxes in a number of years and you’re like, “Oh my gosh, I need to get started. I really would love to buy a house, or get married.” You know, just maybe even without tax returns, you can help your kids go to college, right? So if you haven’t filed and you’re looking to maybe get back onto the right track, you can call the show or you can call our office and we’ll be giving that number out soon. But the show number here is 615-737-9986. Okay, so I’ve had about eight people in the last couple of weeks come in, and we’re talking offer and compromise. Of course, we start by the conversation of talking because, in most of these cases, the first thing we have to do is get the taxpayers in compliance. So maybe they haven’t filed taxes in the last 10 years, last six years, last 20 years. It doesn’t make a difference what that number really is. The first important thing is we need to pull transcripts, find out what years you need to file, and get those years filed, at least up to the last 10 years of filing taxes unless the IRS has already filed taxes on your behalf past that window. So maybe they file one in 2002 just in 2012 and it hasn’t fallen off. We may need to address that one because especially for entrepreneurs, the only thing the IRS knows about is your 1099, right? They don’t have any idea what you spent the money on, they don’t know how many miles you put on your truck or if you’re an over the road driver, they don’t know what your premiums and they don’t have any idea about the wear and tear if you’re an owner-operator, you know, on that vehicle, so you need to make sure that you file your taxes. No one likes to do it, guys, it’s just a fact of life.
Dr. Friday 6:18
The second thing we have to do is we have to start pre-empting 2020. I started with the conversation about making estimated payments. Part of that was because if you ever want to make a deal with the IRS if you ever want to get in a payment plan if you ever want to just get your life back, because the IRS may have kind of put a little damping in it really when it comes down to it because you can’t do all the things you want to do. Then the first thing you need to do is start paying quarterly. In all honesty, it really doesn’t make a difference how much money you owe in the past. I mean, besides the fact that we have to file the return so we know how much the government can then get together. Put all your penalties and interest and voila, this Is what you owe. The government can only get so much money over a certain period of time. The time clock then starts right you have 10 years from the date they received the tax return for them to collect. That’s the first thing. Second thing, we need to show that we’re not going to continue the same process into the future, which means we need to pay quarterly estimates. And without those, the revenue officers’ hands are somewhat tied, they’re required to make sure you stay in compliance and compliance means filing quarterly estimates. So we try to get on a schedule of having to make that money.
Dr. Friday 7:35
I will be quite honest, I have a lot of my client not only filing it on in the quarter but actually monthly because it’s simpler for a lot of people. I get my check every four weeks or whatever, and then we set aside a certain dollar amount, and then every quarter we send that to Uncle Sam so that you’re used to getting rid of that. Come on, if you were employees, guys, you would have the money automatically coming out of your paycheck. In fact right now, if you were in an employ a W two truck driver over the road, you can’t write off anything, no per diems, no wear and tear, nothing, nothing. Now in most cases, you don’t have any wear and tear because someone else is in charge of that vehicle. But all I’m saying is a self-employed person, we have the ability to write off a lot of expenses. And that’s not just for over the road drivers. I mean, any self-employed person from home office to real estate fees, whatever it might be, whatever your profession is, we have those as long as we’re tracking those expenses. So once we get you caught up, we file the years we get you paying quarterly, then we can start talking offering compromise. And that is basically coming to the ability to pay, what kind of income what’re your expenses and most importantly, what kind of assets do you have? Because if you own a house, and in the last 20 years, all you’ve done is work really really hard to pay that house off, and you kind of forgot about your partner in business and so you never paid him, his share or her share, however, you want to look at the IRS, then what’s next?
Dr. Friday 9:01
Well next is they’re going to say, “Since you paid off the house, we’re part owner of this house, right? Because you didn’t pay us but you paid off your mortgage.” So we really don’t want them to be partners in our house. So we have to start figuring out a way to pay them now that would either refinance the house, take the money out, which I know I’ve had more than one person sit at the desk in my office, and actually start crying because they have worked so hard to get that house almost paid off. They’re at a point in life where their earnings aren’t going up, they’re going down we all get to that point. Now you know, they’re trying to the IRS has got a lien and everything else now, the liens on your home is going to happen. No matter what. Okay, if you owe them more than $25,000 most likely, if you own any property, there is a lien. That’s just something that we can deal with once we know we’re going but at first, we have to move forward, which again, getting in compliance showing that we’re making payments, if you have a smaller amount due, and we can get it below the 25,000, after about four or five payments electronically, and through a payment plan, we may be able to get that lien removed. But in other cases, it’s gonna come off when we finish the offer and compromise or you get into a payment plan in which you then can deal with the IRS.
Dr. Friday 10:26
So there are steps we have to take is what I’m saying, and they are possible. But be careful. If you are seriously a person that has IRS issues, don’t just pick up the phone and call an 800 number and say, “Oh, I need help.” The first thing they’re going to tell you, I guarantee you, “Oh, we can help you. This is going to be $500 a month as much money that you can put down and we’re going to be doing this for a long time.” How do they know? I mean, how do they know they can do an offer and compromise how they know they can prepare your taxes? How do they know anything and they start the payment plan before they even know you and your true tax situation. When we come back after this break. I’m gonna tell you about a situation where somebody actually thought they had a tax situation, they contacted these companies and you might be a little surprised them what kind of happened after they got ahold of me. If you want to join the show you can. It’s 615-737-9986. We’ll be right back with the Dr. Friday show.
Dr. Friday 11:46
We are back, you can call at 615-737-9986. As promised, we had a gentleman that came into our office. This is probably a year or two ago, and at the time there was a lot of calls coming from fraud lip companies that basically said, hey, we’ve got IRS debt, we’re going to come in, we’re going to do a lien levy, bring the police to your house if you don’t pay us. So he called one of those companies, 1-800 numbers, and they set him up on a payment plan because they were going to deal with his IRS issues. He had heard my show or whatever, and called me after the show. And I said, Well, do you have issues and he’s like, what I don’t really know. I didn’t think I did. They call that I’m like, “You know, this is a big scam.” Long story short, this poor gentleman did not owe anything to the IRS. He was current in good standing. Meanwhile, this other company was going to start billing him $500 a month for whoever knows how long before they told him, “Well, you don’t have any issues.” So I’m not saying that’s the norm, it is not the norm. But I am saying that it’s important that you make sure that if you have issues that you at least get a second opinion.
Dr. Friday 13:12
I hate mentioning this guy on the radio, Dr. Electric, you know how it is? No, but he does have one good slogan at least, always get a second opinion. There’s no difference in any industry, and that would include, especially when you’re talking about dealing with the Internal Revenue Service. You want someone you can go into their office, you want someone that’s going to be there, talk to you face to face, hopefully, walk you through. Keep in mind, an offer and compromise a lot of people come in. I’ve had situations where people come in two months, they’re getting married. Not necessarily the best plan if you’re doing an offer and compromise because now you just brought in your new spouse, which may legally not be responsible for your tax bill, but if they’re earning money, now your income can be 100% used towards paying off the taxes. Even though that may not be the deal you kind of made with the loved one. So it is very important to know what the situation is and you want to make sure you understand, you know this, the IRS physically has about two years to settle your situation. I will tell you on the average I think we are just dealing with normally six months to a year in between that time, I’m just going to say is the situation but if that doesn’t happen, make sure that we’re dealing with something that we’re dealing you know with that situation, but be prepared. Don’t come in and think “Oh, tomorrow I’m going to have this all fixed,” because it’s not going to happen. Hey, we’ve got John in the Boro. What do you get happening, John?
Dr. Friday. Yes, I’ve got my 2018 transfer from the IRS the other day, it said that I had not filed, there’s no file, nothing on file. But I have a credit card receipt It says that I did file in early April 15, 2019. What do I need to do?
Dr. Friday 15:19
Do you have a copy of the return? Or do you know who you used? Was it my service?
No, I did the E-file. Yeah, I forget the name. I did it online.
Dr. Friday 15:30
You did one of the online ones like into it or h&r? Right? One of those that they offer the free or do the online one. Well, if you have a copy of the return, my suggestion is made another copy mail this put at the top “copy of return” filed electronically 4/15/2019 and then just submit it with that letter to the address that’s in the top left corner of that letter, or there’s an address up there I know for a fact. Then maybe it out, I would actually send a priority or something that you can track, right? So that you know that they’ve at least received it. Then within another six to eight weeks, you probably will see the letter. If you owed money, then it will say you owed money. If you don’t owe any money and you’re waiting for a refund, and they’ll give you a refund plus interest because the tax return was sitting there and they hadn’t processed.
Well, I need to send them a copy of my credit card receipt showing that it was paid.
Dr. Friday 16:28
Is that what you use to pay whatever you owe the IRS?
Dr. Friday 16:34
Okay. How about the tax return itself?
I can print it out? Yes, I’ve got print Soviet too.
Dr. Friday 16:42
Okay. So you want to make sure I would send them both. But you want to make sure you send them the fiscal tax return? They’re not saying they didn’t receive your money necessarily. They’re saying they don’t know how to apply it because they didn’t receive the tax return. So we just need to make sure that they get a second copy. And I would put “copy” on the top and I would say “filed on time” or whatever, file them for 4/15/19. But they may have received the money, they’re just not too sure if you paid in the right amount. So if they can get a copy of the return, it may just zero everything out and life will be perfect. Or, or they’ll send you a love letter saying that you owe them more. Who knows. We’ll wait and see.
Okay. All right. Sounds good. Thanks, Dr. Bye.
Dr. Friday 17:27
All right, that is a fairly typical situation, guys, we have that even in my office. There are times when the IRS just tells us they haven’t received your return. Even though we may have e-file tracking, we may have some sort of documentation. I will say if they charge you a late filing after you and you do have some sort of proof that the return was filed. Usually, you can send a letter and request a waiver of those. Now, I will tell you if it’s $15 I’m not going to waste my waiver on a $15 fee, but if it’s, you know, $200 it’s well worth the situation of doing that. So just keep in mind that you are able to request a waiver if that is something that is part of this conversation. As I said, we have had probably 10 letters in the last couple of weeks of people, most of almost all of them were because they didn’t pay timely payments. But they all paid their bill basically on time. And then these letters, unfortunately, they’re scaring people to a point because they’re not showing the payments that were actually made like on 7/15. So when they file the tax returns electronically through us, they’re showing all the credits that we showed, they’re showing everything but the final payments. So in some cases it says you owe $20,000 but wait for a second, we paid you $19,640 at the time. So now we’re talking you know $350, and it shows that they charge the late filing for not paying quarterly payments and interest. But it’s a bit confusing because everyone’s like, “Wait for a second, I paid it on time I paid it by the 7/15. Why am I getting this?”
Dr. Friday 19:08
Also, we’ve had a couple of situations where clients have contacted us and said that the money hasn’t left the bank yet, or we sent a check and the check hasn’t been cashed yet. What should we do? And, you know, at this point, I’m suggesting people go to irs.gov and actually pay electronically. If we get hit with a penalty, we can go back and have a conversation with the IRS because the longer you wait, it doesn’t make a difference, even if in most of these cases, they don’t have proof that they put the check in the mail. They just know they mailed it and there’s no reason to think they didn’t. But they don’t have any kind of tracking saying okay, we know the IRS received this on this date. They just put the check in a regular envelope, mailed it by July 15 and it never made it. So if that’s the case, then you want to make sure that you go on, let’s do electronically this time, let’s go to irs.gov. Click on pay, make a payment. And then if and they’re going to charge a late fee at this point because they don’t know about the other payment but at that time, now the clock stops IRS received full payment. Now we can talk about penalties and interest if there are some that will come in later. Also, just got an email or text actually from someone that asked about PPP. PPP forgiveness is on the table. Now, guys, it is out there. Most of the banks are getting apps open. We’ve filed several of them. Many people were still waiting for the heels act to find out if that was going to pass because part of it part of the original conversation was if people had received PPP for less than 100,000. All of that was just going to be automatically forgiven. I think they were trying to find a way to help the SBA. Can you imagine trying to process every single one of these? I will tell you if you’re looking for work Go to the SBA website. They say they are looking for applicants. So there is maybe something there, they’re creating jobs.
Dr. Friday 21:09
So if you received PPP money, and anyone that received it knows what I’m talking about. If you did receive it, it’s time to go ahead and look for and start working on forgiveness. Again, you do want to talk to your tax person, make sure forgiveness is the best route to go. You know, make sure that you are on the same page as what the tax implications can be one way or the other so that you don’t create a bigger tax bill at the end of the year because you got $100,000 in PPP, you earn the same amount of money as pretty much you were earning the year before maybe a little less. But now that hundred thousand that you had in payroll the year before is gone because you paid it through PPP. So now you have income tax basically due to maybe an $80,000 more income. Now, this is for people that didn’t get hit as hard as others. Many of my small restaurants, even though they lost their whole inside situation, managed to do deliveries. I mean, these guys found ways to keep their doors open and the same employees employed during this hard time. So, kudos to all small business owners, because I think most of them are always thinking two steps ahead of most of us to find out if they could find a way of just keeping things going and keeping the lights on. Then, of course, PPP came along, and it’s actually really given them some relief, but it may be causing tax problems to come January of next year, on some of these cases. So we just want to make sure that you’re making the right choice. Don’t just jump to the conclusion of, “Yes, I want free money. I want free money.” You know, like anything else, there can be recourses to anything that is free. So we don’t want to have a tax issue later. For something that could be possibly controlled at a 1% interest now and you would have to pay it back so what’s that really mean? So if you have questions and you don’t have a tax person you need to give us a call. Our number will be coming up in a minute. We’re going to take a break and we get back we get to your phone calls at 615-737-9986. We’ll be right back.
Dr. Friday 23:38
I am Dr. Friday, and we are back live in the studio. We are here talking about my favorite subject taxes and believe it or not guys, September 15, for corporations LLCs and all other entities that are not singly owned, have a due date. September 15. That is less than 30 days away and the big date October 15. For everyone that has procrastinated including me to file our personal tax returns. So if you have business returns on September 15, personal returns October 15. That’s going to be here before you know it. Time flies. Trust me, it is already August end of August almost. So you know, time to start thinking about the more important things like taxes and then comes the holidays and guess what, then taxes.
Dr. Friday 24:25
So we don’t want to have any major surprises. Another thing you really need to think about right now it is quieter and we haven’t had the window of opportunity that maybe we’ve had prior in other years, because normally we have the April 15, and then a big window until September 15, and then October, and we haven’t had that but you know if something major has happened this year, I get people all the time they’re selling real estate, they’re cashing out stocks. Right now the stock market is doing pretty darn good. And many people are afraid so they’re like, “Oh, I’m going to go ahead and cash out while in my head.” But what does that mean to you for taxes? Maybe divorce has happened. And you’ve always been claiming married with two children and now you’re going to be theoretically their head of household or even single and not able to claim the children. What is that going to mean on your tax return? Now is the time to think about it. I had a gentleman just yesterday, Friday, yes. And in his situation, he is single, but he was married and he was trying to figure out a situation and he’s been claiming though, married with two, but in all honesty, he’s really married and zero but he is now divorced. So now he is single and zeroes, but he wasn’t claiming all the way up from January to today, married and tow. Now the divorce happened in January. He didn’t think you’d have to worry about it because it will tell the date of divorce. But there’s a little trivia for you. And since I can’t really see you, we’re gonna play Little virtual game, how many of you think that the divorce would happen It’s just as of the date and from anything that happens after that date? So in his case, he got divorced in January, let’s just say January 21, of 2020. So the first 20, some days of January is going to be as a married couple, the rest of the year would be as a single person.
Dr. Friday 26:22
If you have your hand up right now, in our little virtual world, you’re wrong. What you will have is no matter what I had a couple that physically divorced December 30, of 2018, I think it was, and he thought, well, we were married the entire year, but the last couple days, we’re going to be claim married, right? And I’m like, “No, you’re divorced. As of that date, you’re divorced for the whole year.” Now the wonderful thing and this actually works the other way too. If you got married on December 30, you would be considered married for the entire year, even though you might have been claiming a single man that doesn’t have the same effect. So going up is a lot easier. So you claim single all year and then you got married, it might not have a huge effect. But if you are claiming married all year, and then at the end of the year, you get divorced and now you are single, you had too much taxes come out and not enough people to offset it. So, you know, now’s the time revisit the W 4 form, you might need to think about and I will tell you, I am not a big fan of the current w four, it may be a combination of 20 plus years of filling out a W four form for clients that we kind of knew what we want to put on there. And this new one doesn’t really ask the same questions as far as I’m concerned. Maybe it’s just different and I’m not taking it well. But anyway, you want to make sure that you have the right dependents. And the easiest way to do that part is once you’ve filled out the W form the next payroll look at the withholding tax. In fact, I would challenge every single person listening to me right now to at least look at your current pay stub and look at the withholding, not just this period, but for the year to date.
Dr. Friday 28:00
If you are single, you should be getting somewhere in the ballpark of almost 10%. So if you’ve made 70,000, you should have in the ballpark of 65 to $7,000. In federal withholding. If you are married, it’ll be about half that probably about 4000. And these are rough numbers, people not something you’re going to mark, and you can go to irs.gov and look up the table to get the exact number. It may be something you need to do, especially if every year your taxes are being prepared either by yourself or by prepare and you’re sitting there going, “Why in the Good Book, do I owe money every single year?” And the reason will be is because you don’t have enough coming out. It’s simple math people, you don’t have to be a genius to figure this out. And normally, you’re married in most of these cases, or you’re a single person working two jobs. Now, you know, you can make adjustments and that’s the best way to do it. I have no problem with most people as long as you have the money always owing $500 or less fact, I kind of like it because that means the IRS gave you a loan for $500. And you didn’t have to pay for it. But a lot of people prefer a small refund. So if you get a couple of hundred dollars back, that’s awesome getting thousands of dollars back in my opinion, you just wasted a lot of money because the IRS also doesn’t pay you interest. So giving an interest-free loan to the Internal Revenue Service? No, not really the best plan as far as I’m concerned, I think you can do a lot better with the money, especially if you have any kind of debts, even if it’s just the mortgage, you know, you set aside enough of that you can make an extra mortgage payment and something like I heard once that if you make an extra mortgage, one or two extra mortgages can take years off of your payments. So that’s awesome. Anytime you can save interest at the same time, that would be wonderful.
Dr. Friday 29:48
So I just got an email for someone and they asked, How do I know what my filing status is?” Now, that’s a great question. Because you sit there and you think, “Well, that’s called a simple right? Are you Married?” No, then you’re single. If you’re married, yes, then you’re married. But that’s not quite the way it works. Is it? Because if you’re single, Do you have children? Or are you watching your parent? Or is your parent lives with you or some other individual that is a dependent of yours that could make you head of household, right? If you’re married, but doesn’t mean you have to file a tax return with that person, so you can be married or married filing separately. So nothing in taxes are necessarily totally black and white. So, you know, a single person is just a non-married person that is not being claimed by anyone else. This became quite a challenge in 2019 because there are a lot of parents. They’re under the misimpression apparently, that because their children live in their home and that their children are now over the age of 18. That they are still dependents because they seem like they’re eating out their refrigerator. They’re paying their child’s health insurance and they’re paying for their car insurance. And they’re paying their room and board. Sounds like support to me. But because of the stimulus, everything changed, right? So many 18-year-olds, even 17-year-olds that worked, became their own individual and parents lost out. And I get it because parents were only getting $500. The stimulus check was $1200. Again, doesn’t take a genius to figure out which number you’d like to have. But, we may be revisiting that number again, come 2020. Who knows, we’ll have to see what the situation is, it’d not going to change as far as how much you get for the child. But in many cases, parents truly are providing more than 50% of these children’s care. So what is married? Married is two people as long as you are married by December 31 of that year, you are considered married.
Dr. Friday 31:52
Married filing separately is just two people that are married but choose to file separately and you have to be very careful on the itemized deduction. A big mistake that married filing separately people do because they each file their own tax return. They don’t really pay any attention is that if one person itemizes the other has two, which means that if one person pays the mortgage interest, property taxes gives a lot of money to charity, and they exceed $12,200 this year, the other person has to itemize and maybe all they have was sales tax. They didn’t pay the mortgage interest. They don’t have property taxes didn’t give anything. So instead of them qualifying for the $12,200 that is standard deduction, they can only claim the sales tax whatever that number is, it may be $100. Whatever that is. So that is the tricky part of married filing separately that I often find to be not correct on returns whenever I’m reviewing that information. So again, if you’re married filing separately, you do either have to itemize or both take the standard deduction. And if both are itemizing, it doesn’t mean your difference if you meet the standard deduction or not, you are forced into itemizing if your spouse exceeds itemization, so kind of important thing. Then the last, just as a final thing to the email person, head of household is anyone that has one qualifying child or dependent.
Dr. Friday 33:22
One of the big areas that again, 2019 kind of changed. But in most situations, sometimes you have a parent that lives solely off Social Security, they live in the home with you. They are usually considered dependent if they are only receiving Social Security that is considered non-earnings and therefore that person can be a dependent 2019. Again, that changed things to a point because everybody on Social Security apparently was entitled to the stimulus check as well. So by opening up that door, you actually ended up possibly taking some people off as dependent again. It’s a simple dependent was $500. That’s what that person would have gotten. The stimulus check was $1200 dollars. So it was simple math who was going to get it? And if somebody did claim you as a dependent in 18 did not claim it in 19, but you did not see your stimulus check, you probably will still receive it. I don’t know, there’s a lot of stuff going on in the IRS. Of course, there’s still talk about a second stimulus that’s on the Heals Act. I don’t know if that’s going to happen yet. We’re all standing around trying to wait and find out what’s going to happen with the new passing of some of these laws and other things. So as soon as I know, you will know. Alright, we’re gonna take our last break. If you want to join the show now would be the time you pretty much have to ask the questions if you want to know the answers. There really is absolutely no silly questions seriously. If people come in and say, Oh, you’re thinking I’m so stupid. No, I think anyone that doesn’t ask questions is going to be the person that’s going to try to or probably end up in trouble. So feel free to ask the questions when you get a chance. The phone number here is 615-737-9986. We’ll be right back with the Dr. Friday show.
Dr. Friday 35:22
All righty, we are back. This is the final part. So if you had any questions this week, you probably need to call 615-737-9986. Otherwise, you’re gonna be holding your breath until next week, I will be back. You can’t get rid of me that easily. Alright. So, again, I’m going through some of my emails from this week. Another one was they use an online service just like the gentleman that did call. You know, if you make $69,000 or less, there are some free tax services and there’s absolutely nothing wrong with getting something done for free. Here’s the issue I have with this is that the few people that have come into my office are that don’t have access to the returns later, they either have to print them out and unfortunately in some cases, so my clients do not do that. So they don’t really have proof and if you make more than $69,000 a year, you can actually deal with it or pay for the more there is so, it can become not free, but you do have the availability of using it. I will say that I use Intuit products, which is part of the TurboTax family and TurboTax they do offer for free for some people and I have been known to send more than one person to let them do their own taxes. I don’t think every single person in the world needs to have a tax person prepare their taxes. I do believe there’s a large number of people that probably should not be preparing their own taxes. It is a matter of, my opinion is if you’re self-employed, you need a second opinion. Sometimes you may think something is a tax deduction or not take deductions that you’re entitled to. I think if you have rental properties properly depreciating and putting the information in what is repairs and maintenance and what is actually capital improvements is important to know. And things like that, if you have a farm, a Schedule C, LLC, those, are the kinds of things that you probably need to have someone work up depreciation schedules and things like that. So if for some reason you are doing your own taxes, and it’s a W2 or you and your wife have w twos and that’s all nowadays, it’s all it is more difficult to itemize. So many of you are not itemizing. I mean come on, I think you can probably handle putting two W2’s in and dealing with if you end up showing a balance do that’s when we get back to someone needs to go in and adjust their W 4’s.
Dr. Friday 37:44
Again, doesn’t take a math genius here to figure out someone didn’t pay enough. If you’re not too sure which person or maybe you know the husband or the wife doesn’t make a difference. One person has a larger breadwinner than the other. The other one maybe works part-time maybe even takes care of the kids or Or whatever has a hobby, then you might want to just change that person if it’s $3,000 or less, one more dependent. So if you’re married and three go down to married into, and if it’s been a whole year I might tell you to go to marry and zero for the rest of this year and then January 1, jump back up to married and two because we have to wait to overcompensate for the fact that you have been underpaid for almost nine months on your taxes. So you need to make sure that you’re compensating the last thing anybody wants to do is put their tax dollars in, and then their tax return and they come back with “Oh, you owe money.” And now especially for any of you who are like me, filed extensions, paid my quarterly fees, but to be quite honest, did an estimate based on the best of my things, but I have a lot of moving parts. I’m waiting for other companies to turn into me things like that. And so I don’t always know if I’m going to have enough in and then there’s going to be penalties for either not paying enough now. I do always try to overcompensate and figure I can roll it over into the next year. But, it doesn’t always work to be quite honest. So you know you do your best you file an extension that way at least you don’t get a failure to file penalties. And then you’re able to go in and make the things but sooner you can calculate your taxes to make sure you do not owe money even if you don’t want to send them until October 15. My suggestion is to make the tax appointment if you want to make a tax appointment at my office, all you have to do is go to Drfriday.com and click on the calendar we are opening up more and more dates as we get closer to the new deadlines that are coming up. But again, all you want to do is go to Drfriday.com and you can go into that. Alright, let’s hit Steve real quick as our clock is ticking down. Hey, Steve.
Yes, ma’am. How are you today?
Dr. Friday 39:49
I am awesome.
Okay, complicated question. My mother in law passed away and she had filed bankruptcy and was involved in a class-action lawsuit. Long story short, my wife is getting about $14,000 back from that money, what percentage of it is tax? How much taxes would she have to pay?
Dr. Friday 40:12
Well, if it’s classic, do you know if it’s for loss of earnings or class action?
It was not a loss of earnings, It was medical.
Dr. Friday 40:21
Okay, so medical, there’s no income tax. If it’s like she got cancer because she worked with this kind of deal, and she’s and she’s living with that kind of situation. That should not be taxable income to her only one loss of wages come into play.
Okay, she’s passed away my mother in law, my wife’s a beneficiary. So the money is coming to her.
Dr. Friday 40:42
And it should be tax-free money and be like life insurance in essence.
Okay, good. I was saying was that good to know. I appreciate your time. Thank you.
Dr. Friday 40:52
Thank you. Alrighty, that’s a great question actually. And we don’t get to me but you know, you always see those on TV. Sometimes, you always wonder my dad like ortho. So you wonder if he actually had anything because he died of cancer but you know, I don’t know and we’ll never know. Alright, so if you want to join, if you want to set up an appointment, go to Drfriday.com. If you have questions and you’re not too sure where to start, feel free to email me on firstname.lastname@example.org. That is actually probably one of the fastest ways you can also call or text my phone, my phone is 615-367-0819 you can text that number, as well as leave a message or call.
Dr. Friday 41:37
If you haven’t done taxes in a number of years, you’re behind, and you don’t know where to start our meetings. Our first consultation is always free. I don’t know if we’ll help you or not. But I do want to make sure that we start on the right track. If you least when we can sit down and maybe that I had to get a power of attorney you may decide that it’s too much or you don’t want to deal with it. I’m not talking about the money too much just too much to deal with going back and getting all squared away, you need to make sure that you have what you need no matter what, and you need to start in baby steps sometimes. And sometimes to be quite honest entrepreneurs attract entrepreneurs. So that means that you may be married to somebody, or maybe you married someone that has tax issues. And you just want to get behind and move forward with that. So, you know, we want to be able to do whatever we need to do and go from there. All right. Let’s see, I think we might have enough time. Let’s try. Diana? Hi, sweetheart.
Hi. My question is, I just filed my taxes last month for 2018 and 19. And I got one refund check already for 2018. But I’ve not got my direct deposit for 2019. My question is, will I get a stimulus check since I didn’t ever get it?
Dr. Friday 42:59
Yes. You started the time clock for them to issue it once you filed the 18 and or 19 is usually what I’ve been told about 90 days or so that you might see that separate to probably come in a check form, but they do have your direct deposit. So keep an eye either way. I think they’re doing through checks now. But yes, you will get the 1200 dollars or if you have children, whatever the situation might be, but the stimulus will come to Yes, ma’am.
How are you supposed to get 2019?
Dr. Friday 43:29
If it was E-file, the direct deposit should come within 21 days unless they put a hold. We’ve had several of them where they’re trying to match incomes up and so we’ve had some delays, but normally with 21 days is the statistic. If it’s past that, you can go on to the irs.gov and click on “Where’s My Refund” and see if they give you an update.
Dr. Friday 43:53
Okay, so just check it and they might tell you that’s been direct deposit. it’s on its way. It’s usually done on Wednesdays, I think I mean Usually hits banks on Wednesdays.
Okay, thank you. Okay.
Dr. Friday 44:03
No problem. Thank you. Great question. I appreciate your guys’s question. Again, let me give you my information out because the climb clock is ticking away here. If you want to reach me, you can give us a call at 615-367-0819 You can also text that number you can set up an appointment at Drfriday.com or you can also find out who this crazy person is. So you know a little bit more about who I am and my company or you can just email email@example.com. We are an enrolled agent licensed with the Internal Revenue Service due to taxes and representation. I’ve been doing this for 20 plus years. It’s something that most people know I love taxes. I love helping people trying to figure out what we need to do save as much money on our tax returns but yet always be able to justify those numbers that are on the return. The last thing we want to do is do a tax returned two years later, someone comes back and says, “Ah, prove those miles.” And then you’re sitting there scratching your head, don’t want that. We want to make sure that we can keep ourselves safe, but also not pay any more taxes than we have to. So if you’ve got questions, maybe just need a review of your tax return, make sure you’ve got the right tax person helping you do it all the time. And I will tell you many times and you’re right back to that tax person because they are doing a great job.
Dr. Friday 45:24
If you want to reach me, text at 615-367-0819 go to Drfriday.com is the website. You can get my phone number, my address, and everything off there. Or you can just email your questions. Friday@drfriday.com. I hope you guys have a wonderful Saturday. Hope you work your way through, keep the weather nice and you guys can enjoy doing all the things you like to do outside and we’ll be able to move forward. I can’t really hear the music but hopefully, I’m talking. So if you want I’ll be here again next Saturday talking taxes, making sure that we get everything we need. If you guys haven’t filed your taxes yet, remember, it’s due October 15 for individuals and September 15 for businesses, so you want to make sure you file those on time and make sure you’ve got those going in the right direction.