Welcome to the Dr. Friday Radio Show! In this episode, tax expert Dr. Friday discusses the latest tax updates, answers callers’ questions, and covers the following topics:
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 0:29
Good day. I’m Dr. Friday and the doctor is in the house at least I’m here somewhere at the moment. So if you want to join the show, you can 615-737-9986. And then we want to talk a little bit about you know, tax season. Christmas is upon us and then guess what happens? Then we start having a lot of fun, due date will be April the 17th this year. So a little later than some other years. Sometimes it’s April 15, as we all know, but when it comes down to getting the the important things in life, we want to make sure that we are covering all of that. And you have all the information.
Dr. Friday 1:18
So if you’re thinking about your taxes, keep in mind, anything you do in your taxes is on a calendar year with the exception of a few small things like making your IRA contribution or doing something along those lines. But other than that most of the time, your other stuff is all going to be on the calendar year. So if you want to give to charity, you need to you need to give to charity now before December 31. And remember up to cash up to $600, a married couple or $300 a single individual, you get to claim above the standard deduction that does not include giving clothing to Goodwill or any of those other situations, this has to be cash, if you’re going to do it that way. So again, if you’re going to want to take that as a tax deduction, you need to do it in the calendar year.
Dr. Friday 2:16
So if you have questions on that, or if you want to, maybe you’ve sold some real estate inheritance is usually a very confusing or a very subject that many of us aren’t always sure is it going to be taxable? Is it not going to be taxable? Whatever the situation might be, it’s still going to come in. So if you’re you know, now’s the time, because again, January 15, you should be taking and making your first or your fourth if you’re self employed, and you have to do quarterly is your fourth quarter contribution. If you are a single I mean if you are have a single entity or a single situation like you sold some land or something like that, my suggestion is always to make at least by January 15, a quarterly estimate, so they don’t get you for not paying proper quarterly. And keep in mind the quarterly law doesn’t it? People are always thinking, “Well, I can send something in.” The way the IRS looks at it for packs a penalty is pretty straightforward to be quite honest. Whatever your taxes do in the year before, then you basically have…
Dr. Friday 3:29
Let’s say you owe $10,000, then you would pay you know what $2,500 every quarter equally, even if your income is lower. Now you can make an adjustment as long as you’ve paid in enough. But how do we always know what enough is? Because sometimes I have people that come in and they didn’t remember that they were going to have this stock sale or they were going to have this situation. And so then they ended up with a situation where they ended up with this having to owe more money. But not only that, but the penalties of things happening. So that’s really, really important. Lavinia so I have it up, but it’s black screen. So I don’t know if I’m not seeing it correctly, he doesn’t normally usually has the phone lines on it.
Dr. Friday 4:11
So anyways, let’s talk a little bit about what’s going to happen in 2023. We already know April the 17th. Let’s talk about the new rules for a 10 99k taxpayers should be receiving 299 Cake payment cards and third party network transactions by January 31 2023. If they receive third party payments in taxes for 2022 for goods and service that exceeded $600. There is no change to the taxability of income, all income including those part time jobs, side jobs, sales of goods is still taxable. So this is where it gets a different situation because some people are like wait, I sold my grandmother’s furniture or I sold this. I sold my used clothes on Poshmark or whatever and so you.
Dr. Friday 5:00
But the IRS has now come down with if you do not have documentation showing that you purchased it being your cost basis, and you get audited, they are going to consider a taxable income. It doesn’t make a difference, if you can’t prove that you purchased it, or it was gifted to you and you received it, and that person purchased it, then it’s going to become if you’re selling a lot there think considering over $600 A lot, then it’s going to come down to where you’re going to have taxable income.
Dr. Friday 5:32
So a lot of you guys that have been on eBay the last number of years, and selling a lot of stuff from your house, the IRS is coming down and they’re saying, You know what, there’s a lot of people that seem to be continuously selling, they get it. Hey, I have a sofa, I put it on, you know, Facebook or something and in the marketplace, and I sell it. And you know that once a year, but there are people that are continuously selling things on eBay and different sites. And so they have changed the tax law. I mean, what do you expect? The government is broke people, they’re going to find ways to tax people, and this is one of them, they’re going to start taxing you. So if you’re a person that likes to resell clothes, then my suggestion would be is to start saving all your receipts, start taking pictures of them, many, many people, I know a lot of them actually have programs where if they buy so much through something, they get credit.
Dr. Friday 6:26
So hopefully you’ll have some of that. So again, that doesn’t change also, that any single transaction exceeding $600 to a third party will also be issued. So if it’s a one time transactions, or multiple, it does say that in 20, prior to 2022, of course, we all know was 200 transactions per year up to 20,000. That’s changed. So $600. If you’ve got more than that do not be surprised that you receive a 10 99k. And that the 10 99k turns into a situation where you have a taxable income if you cannot justify the items that you sold.
Dr. Friday 7:07
Again, I want to reiterate, there was a number of audits done by the IRS, they saw this information out there. On eBay, they saw a lot of sites, they went and audited a number of them. And in almost 90% of the cases, they found out that these individuals were actually selling things that they were actually that weren’t theirs in some cases, or that they were buying things or cleaning people’s garages, but they weren’t their own personal items. Therefore, this is basically your business. Because you are selling continuously. Most people have a garage sale once a year, you sell it one day a year you don’t sell for 365. So that is something you’re going to have to be very, very careful of. I want to reiterate, the IRS is still looking at people that have rentals, small businesses. Remember a 1099 NEC is required. If you have a plumber that comes out and does repairs for your rentals. If you have a lawn person, you need to be 1099 repairs, anything like that rentals are considered businesses.
Dr. Friday 8:14
Therefore the people that do repairs and work on those properties need to be 1099. So that is again, something we want to definitely hit on and make sure this is the time because December 31 final payment January 31, you have to have 1099 NEC’s, 1099 ks will be out there 1099, miscellaneous 1099, rentals, etc interest, all of the 1099 have to be in the mail by January 31. So if for some of you that like to get an early start, the IRS actually sent out a memo to a lot of us that prepare taxes. And they basically said be careful about preparing taxes early. Because I guess last year there was a lot of amended returns because people forgot about certain things that happened be that that they got a W 2 they had unemployment in the earlier part of 2021, they forgot, whatever it might have been, they had to go back amend or the government amended on your own behalf that situation and that obviously creates a whole new can of wax.
Dr. Friday 9:22
So you want to make sure that you have all of those informations in order gather your tax documents, remember a lot of people send the information electronically. So keeping that in one place, I’m always going to suggest also if you’re a person that do you keep a lot of your documents electronically. You know, think about an off site backup something like Carbonite or any I’m sure there’s a lot of different ones, but something like that, that you would have copies of your W twos because I know even us we send everything electronically out then the people have to print it or they have to keep it someplace safe so that they have it. So again, an employer is not responsible for keeping track of your W 2, as long as they have sent it to you, theoretically, the law allows them to charge for a second copy, charge for changes.
Dr. Friday 10:14
That’s another thing. If your employer has an online app, take the weekend, when you’re out here doing a little Christmas shopping and you’re waiting in line, take a look, make sure your name is spelled correctly, if you married or your last name has changed, make sure or maybe it didn’t change and just make sure it’s spelled correctly, take a look at the actual social security numbers. Because what’s amazing is so many people get electronic deposits, they’re not looking at any of that information unless you do a refi or you’ve done something and you’ve actually shown someone your pay stubs and then that might come up, make sure your address is correct. Because again, if that information has not been updated with the employer, by the last day of this year, they’re not responsible for actually correcting that information, they can charge you a fee.
Dr. Friday 11:02
So and I’m gonna be honest with you, most employers aren’t going to probably do that. But it is your responsibility to make sure the information is correct. They’ve put it in, you get the stubs, you should be making sure and nowadays with many of them, I know we’ve switched most of ours over to ADP, and they have an online app for all of us. And you can go in there and you can look at that some of the information like address and things you can update in the app itself. So make sure so if you’ve relocated, you know, making sure that you have that updated and corrected, so you get that or at least make sure your emails, right, because otherwise, you may not get a copy of it at all. And then you file your taxes and you forget completely what’s going on. So again, just want to make sure that you are not caught with that issue going on. Because when tax season gets busy, it’s harder and harder to make sure that you’ve taken care of everything else.
Dr. Friday 11:57
So let’s see. So we talked about the tax credits, return to the 2019 level. So again, in 2021, you guys had 3600 per dependent in 2021, and 2022, that’s going to go right back down to $2,000 and eicc eligible children no longer if you don’t have children 150,000 in 2021 now back down to 500,00 in 2022. Child dependent care credit returns to its maximum of 210,000 in 22 instead of the 8000 you had in 2021. So if you if you are counting on the same if you worked your taxes out, and you didn’t know that the law had changed, a lot of those expired at the end of 2021. There has been no renewal so they reverted those back to the 2021 tax rates. So if you have children or anything, you might want to check those out. All right, we’re gonna take our first break now that seems like everything is up and beautiful over here living Yes, I can see it all. So if you’d like to join the show you can 615-737-9986. We’ll be right back with the Dr. Friday show.
Dr. Friday 13:21
Righty we are back here live in studio. I’m Dr. Friday. And if you want to join the show, you can add 615-737-9986. Hopefully, some of you guys might just be waiting in line listening to the radio because I know I was out earlier today. If you live in the Franklin area, Cool Springs is a madhouse. I’m just letting you know it’s gonna be time and you just want to sit back and chill because I don’t know it took about 30 minutes to check out one of my stores. So it was a bit of a time constraint there. But all that being said it was well worth it and I enjoyed it. So we were talking about some things that you guys need to know about when it comes to your 2022 tax return. We’ve talked about obviously the charitable contribution, many of the changes that happen if you have children and the eligibility as well as the dollar amount that’s going to go with it.
Dr. Friday 14:17
Also getting you know speeding up your refund, make sure you use the direct deposit and the E file very important. Just don’t rush to get something done. As far as filing your taxes, make sure that you could make sure that you’re you know you have all your tax documents, make sure you have everything together when it comes due and I guess it’s January 17 is when we have to make our final fourth quarter estimate. So we got all of that covered. But again, if you want to join the show, you can 615-737-9986 talking about our favorite subjects which is tax taxes and accounting. And you know what the next couple of weeks being Christmas in the New Years, it’s going to be, now’s the time to really start thinking if you have something that you really want to, you know, estimate, or do, you need to think about doing that. Now, don’t put it off because even your financial planners, a lot of them are going to be going in many directions and you know, trying to get something accomplished prior prior to doing that it’s going to be difficult to do. So you are going to want to make sure that you are taking and tracking that information.
Dr. Friday 15:34
We do want to cover a lot on them a lot. We want to cover the mileage rates because you know, petrol prices totally out the roof. Right. And so we have a split year again, we had this back in 2017. If some of you remember. So January through June 58.5. July through December 62.5, is the mileage rate. So we had a big jump in July, it will go up a little bit in medical from 18 to 22. Nothing changed and charitable. So if you have questions again, this is the show 615-737-9986. Let’s get Ricky on the line. Hey, Ricky, thanks for calling. You there, Ricky?
Caller 16:16
Yes, yes, yes. I’m sorry. I was looking at [inaudible]. Is there actual age, you have to withdraw all your money out of a Roth IRA. I know it used to be bank 73. And I read or heard somewhere that they had it now you didn’t have no way.
Dr. Friday 16:36
You are correct. When it comes to a Roth IRA, you don’t have what’s called required minimum distributions. That’s one of the beautiful things, your children inherit tax free. There’s a lot of good things about Roth. But Reiki, if you have your money there, you can take it whenever you want, not when it’s mandated to do.
Caller 16:56
Very good. You made my evening.
Dr. Friday 16:59
Well, that’s great. I appreciate you listening. Thank you. All right, thank you. Okay, talk to you later, buddy. All right. So if you do have a question and you want to join the show, you can add 615-737-9986 and we can take your next call looks like we got Eddie on the line. Eddie, what’s happening?
Caller 17:27
Yeah, I was curious on the, on the 1090 Nan’s, whether for every $600 Are you going to be required to take their social security and turn that in because 1099 user has all that information, address name, social security number and everything on it, and what is the penalty for not filing a 1099?
Dr. Friday 17:54
so the penalty is $500 if they if they choose to charge you, I can’t say I’ve always seen it charged but if they find out and do it, they can charge you up to $500 and on a 1099, assuming it’s an individual or sole proprietor you’re going to have a name, address and a social security number.
Caller 18:15
So if I sell my old boat in the shed for $800 I’m required to get information from that buyer and his social security number to file a 1099?
Dr. Friday 18:27
It would actually be the opposite way in theory because you’re the seller so you’re getting the money it’s when you pay somebody $600 that they have to give it. So the other person could theoretically 1099 You $800 For that boat in which you would then turn around and write off the cost of the boat from originally hopefully you have the original receipt and you pay zero tax it’s going to open up a lot of can of worms but you would not be. Only if you receive money do you tend what you expect to get the 1099
Caller 19:00
I see. So even if it’s not in a business to work neither neither charged or received you’re still going to be required to pay taxes?
Dr. Friday 19:09
In theory that’s what they’re pushing towards Eddie mo be quite honest with you because they’re eliminating and a part of it is I think is a lot of people have went to the internet to sell their boats and their cars because they get a better price than sit in the front yard and help their neighbors come by and buy it you know. So you know that’s But by doing that you’ve opened up the door to the IRS knowing because let’s be honest when there was a garage sale and people sold their household stuff, the IRS basically considered it non income. It wasn’t taxable. Now if you’re having garage sales every weekend they might come by and say that’s a business now right but but you know normally you know that situation so in your situation normally selling it for a lot less than you made a purchase that for it would not have ever really went on the books but if you sell it online and it goes out there and then somebody You know, buys it, they could theoretically turn around and 1099 you because they’re going to I mean, I don’t know if they would, because it’s personal use and personal use, but the theory is out there now.
Caller 20:12
Pretty muddy isn’t it?
Dr. Friday 20:13
It is it is. And I think it’s going to be a really hard year this year, because I think there’s a large number of individuals that have been doing eBay and all those things for a number of years as secondary income is just, you know, going through friends houses and everything and, and selling it. And I think we’re going to have a lot of interesting tax returns coming up. Because just like you said, if you sell it and that person turns around, or you know, whatever and buys it, I think part of it also most like if you sell a boat, it’s not good, it’s gonna be cash, someone’s gonna come give you cash, it’s not going to be most people were using like eBay and they had PayPal and Venmo and all this digital currency. And that also triggered the IRS because now they know about it. And no one really knew about the cash. So you know, that’s where it comes in. But thanks for the phone call. I appreciate it. Thank you. Let’s hit Ronnie in looks like McMinnville. Hey, Ronnie. You there, Ronnie? Bonnie,
Caller 21:11
This is Bonnie.
Dr. Friday 21:14
It I think it does say Bonnie, it’s probably my eyesight. Hey, Bonnie.
Caller 21:20
My question is, I’ve just retired about a year ago and the money is still in my 401k. What? What do you think about when I get ready to roll it over? To go ahead and pay the tax and roll it over into two Roth IRA?
Dr. Friday 21:38
Well, let me put a little caveat out there. I’m not a financial planner. I’m a tax person. Give me a ballpark of how much you think is in there. I don’t need exactly. Give me a ballpark.
Caller 21:49
200,000.
Dr. Friday 21:50
Okay. So if we’ve got something like 200,000 and Bonnie, are you single or married.
Caller 21:55
Married.
Dr. Friday 21:56
Okay. So the trick to, in my opinion to converting or doing things into. And again, I know there’s a bill out there right now, where they’re considering the possibility of taxing retirement accounts, which for some of us that are probably older than 50 might remember, there was an excise account out there or excise tax at one point. And I know that’s one of the things that they’re considering as a way to pay their spending habits. But here’s my thing. I’d rather use spend 12% than 22%. So might be something instead of I would probably convert it into an IRA and maybe do two or three years worth a conversion to keep it as low as possible in taxation. I’m a fan of converting into Roth, I just don’t want to see you go and do 200,000 plus all your other now you’re paying 26 or 27% tax, that might be too much.
Dr. Friday 22:49
You know what I mean? We don’t want to give the government more money just so you can have the money out of their control, I want to do both. I want to keep control of my money, but also not pay them a penny more than I have to. So I would probably sit down with a financial person, if you don’t have one, give me a call Monday, I’ll be more than glad to share a couple of them with you and have a workable plan, you know, and say, “Okay, this is how much we can convert, we can get it all converted before this” and that way, it’s in a Roth, but maybe not paying them like I said 25-30%.
Caller 23:21
Okay, well, thank you so much.
Dr. Friday 23:24
No problem, Bonnie, I appreciate you. Merry Christmas. Thank you. Okay, one more call. Let’s hit David real quick before I hit the break. Hey, David.
Caller 23:33
Hey, good afternoon.
Dr. Friday 23:35
Thanks for calling. What can I do for you?
Caller 23:38
Well, I was wanting to know about the tax liability for a senior citizen that is has no other income other than the Social Security that is drawn from the government plus a interest on savings accounts. Or interest from an annuity.
Dr. Friday 24:03
How much would how much would the interest and all that maybe add up to David just give me a ballpark? I don’t need exact pennies.
Caller 24:10
So less than 1000 or 1500.
Dr. Friday 24:14
Okay. So that individual does not require to file tax return at all, their income unless unless they have stock or something that gets sold. But you mentioned interest. So interest in itself is straight reporting and it’s ordinary income and you can earn up to as a person over the age of 65, like 14, eight and under is almost like 13,000. So they’re way under and they haven’t triggered Social Security being taxed either. So, you know, that person would be perfect. I mean, if they have any money in an IRA, I would say do a conversion because they’re leaving monies for free money on the table theoretically, but other than that, that person is finally hit a point in life where they don’t need The IRS or the tax situation?
Caller 25:03
Well, what about a if their spouse spouse passed away, and they are withdrawing money from their spouses 401 K, or IRA.
Dr. Friday 25:16
So it may be required because they probably rolled it into a spousal IRA, you know, that’s the advantage at least. And then they’re taking money out now that person could take out, including the interest up to the minimum deduction, that standard deduction. So like I said, almost 14,000, easily, they could take out before it would affect social security or anything else and still be at a zero tax.
Caller 25:44
Okay. All right. You’re good. They would not have to file a tax return.
Dr. Friday 25:52
Right. Now, if they were doing conversions, there would be an 8606 require just to show the money being rolled from an IRA to a Roth, if they don’t need the money, I would still take the money out and convert it into a Roth so that way, whoever is going to inherit after them would definitely be at a higher tax bracket, this person could put free money into an account or at two or 3%, you might want to maximize some of those lower rates, you know, I’m just saying if that is on the table, it may be worth having a conversation to say, you know, we can convert $15,000 a year for $200 or something where if that individual has children that are working, you know, at a higher pay rate, they will end up in a much higher tax bracket. So there may be some tax planning that can be done to help both generations if possible.
Caller 26:42
Yes, man. Well, thank you very much.
Dr. Friday 26:44
Hey, no problem. I really appreciate the call. Merry Christmas. Merry Christmas. All right, we’re gonna take another break here, we get back, we’ll come to more of your phone calls. Those are great calls. So we reach us at 615-737-9986. We’ll be right back with the doctor Friday show.
Dr. Friday 27:01
All righty, we are back here live in studio and you can join us 615-737-9986. Taking your calls. If you’ve got questions concerning, maybe have a friend that hasn’t filed taxes for a number of years, I will tell you, now’s the time to start thinking about getting straight with the IRS, you no longer you wait harder it’s going to be and they’re going to have a lot more people to help try to collect and more people means more phone calls the ability to take more and more cases, which means even if they haven’t bugged you yet, you may still be on the list of places and things that people are going to be looking for.
Dr. Friday 27:51
So if you’ve got questions, 615-737-9986, taking your calls, talking about my favorite subject, Texas, and what we need to know. And we need to know a lot because you know what, they’re changing the tax laws, there’s a lot of talk out there, I’m not one that really jumps too far ahead. I’d much rather know what’s going to be the tax and the law, not what somebody thinks or hopes or what they they’re changing. I know that they’re trying to extend possibly making some of these decisions until January when the the new people come in. So we’re gonna have to wait and find out but things we do know, 2022 tax year, we know what these numbers are going to be, we know that your miles are going to be 58.5, up through the the date of 6/30/2022.
Dr. Friday 28:45
And then six 2.5 62.5 for the rest of the year from July through December. So those are important numbers, because that’s a huge jump, guys. I mean, that’s four cents a mile and mean doesn’t sound like a lot. But when you actually start adding it up when you’ve done especially like real estate agents and construction people when you’re on your car a lot. This is definitely one of those situations where you really do want to know how much you have, because that’s gonna put and we all spent a lot of money on Petro this year. So very important to have that information and to know what we have going. And then of course, again, we need to make sure if you’re an individual that has children, and you were kind of counting on the same amount of money that you had in 2021 coming to you in 2022 You’re gonna see some big drops 36 3600 per dependent in 2021.
Dr. Friday 29:42
Now $2,000 people had no children, roughly 15 120 21 down to 500. Children with the dependent child dependent care is maximum $2,100 in 2022 in 2021, that was $8,000 Big, big, big changes people, and you need to make sure you know what those are. Otherwise, when you go prepare your taxes and you’re sitting there going, oh, there must be something wrong because I didn’t get my refund. No, there’s nothing wrong, your refund is fine, you just don’t have the ability to get as much money back. So you need to be able to take and do that, when you have your situation.
Dr. Friday 30:23
So if you’ve got questions, you can reach me here at 615-737-9986, taking your calls, talking about my favorite subject. And again, maybe you’ve sold something, maybe you have some something going on, where you might be getting ready to sell some real estate if either inherited or otherwise, then you need to be able to make sure you’re doing what you need to do when you need to do it and get it straight. Because otherwise, when you get ready to go file your taxes, you might find out, I don’t have the money that I thought I didn’t think it was gonna cost I had someone come in they, they sold a property for 800,000, they originally paid 200,000 for it, and I’m telling them the different taxes that they’re going to have. And that’s going to be close to, you know, 75 to $85,000 in taxes do and they’re like, “Well, I thought it was only going to be you know, 10 or 15.” I’m like, Where were you getting these numbers? Who were you talking to? You know, and honestly, it wasn’t a very good conversation, because when it came down to it, they really didn’t want to hear what I was saying. But you know, you got to know the truth. Otherwise, Uncle Sam is going to come back and he’s gonna say, Wait a second, this is what you owe. That’s what I need to know, oh, that’s and then penalties and interest, because now you’ve told them something that’s not quite true. And it will make a big difference when it comes to dealing with your taxes.
Dr. Friday 31:53
We also have to talk a little bit about electric cars only because if you’re leasing an electric car next year, well, you get the credits, this is an email that came in unfortunately, no, the newly named clean car credit is up to 7500 only applies to EVs that are acquired by the taxpayer. So leasing or renting in any format, you will not get those credits. And many of those, you have to be very, very careful, guys. Because these cars have to be assembled or made here in the United States, they have to be dealt with. I mean, in manufacturers have to be dealing with those situations. And you want to make sure whoever selling you the car, make sure that they understand the tax law and make sure you get the proper documentation.
Dr. Friday 32:41
Because you have to put in your VIN number, all that that you know that that goes into make sure because that is required on the tax return, you’re not just that I purchased the car, but where the amount, the dollar, the fin, and then all the information that goes with it. That’s how they track the credits for electric or Eevee credits. So if you are an individual that is yet has one, you might want to make sure that your car did qualify because many of them fell off last year. So again, want to make sure you have that.
Dr. Friday 33:14
So you also qualify charitable deductions, I can’t tell you how many times I do speaking, or I do the radio, almost every time I bring it up, people are like, Oh, I didn’t hear about that. Okay, so this is for individuals that are 70 and a half and taking required minimum distributions. You can be older, you can give up to $100,000 each year, from your traditional IRA directly to a charity. It’s called a qualified charitable deduction. And what’s beautiful about it is it’s $1 for dollar. It’s not like if you if if you give $300 to a charity and you would only if you’re in the 10% tax bracket, you would save $30 in taxes, this is $1.
Dr. Friday 33:56
So if you give $10,000 to charity, you’re not going to pay any tax, you’re going to save I mean totally on that dollar for dollar, it’s going to reduce your income by whatever you give to charity and this has to be out of a qualified charitable deduction has to be out of an IRA. You know, it takes a little planning sometimes I do have clients that you know, I’m used to putting the money every every week or every month into the church, tithing and things and I get it it’s not something that you can do that easily but you know what, I’m pretty sure your church would love it just as well. If you could give it directly to them and a check once a year and then you have the cheque issued and then that way you you can get the taxes and they also benefit I mean you can actually give more if if you wanted to do it that way versus giving another some other direction.
Dr. Friday 34:48
So put some thought to make sure it’s what you want to do and how you’re going to do it but there’s no reason that a qualified again you have to be 70 and a half or older before you can do a qualify. charitable deduction. That’s the one caveat we have to know about. Because sometimes people are like, well, I take, you know, I took money out of my IRA. Well, that’s a good thing, I guess, or bad depending on if you needed to or not, but it isn’t going to help you for qualified charitable deduction, that is the important part of this conversation. But if you have parents that give money, and maybe you help manage their funds, you know, instead of them writing a check for every little charity, maybe they could sit down and have socially some, you know, especially if you’re giving, you know, think about it give $50 a week to the church or $20 a week.
Dr. Friday 35:37
I mean, that adds up when you have 52 weeks, you know, I mean, now you could have taken dollar for dollar out of an RMD, put the check in there and do it, it does take some change. Again, I’m not making light of it, but it does change. But it’s, it’s a win win for everyone. So if you again, if you have a parent that is taking qualified minimum distributions, and they have the ability to, to give to these charities that they always give to have the administrator of the 401 k or IRA, it’s usually an IRA, Administrator, write the checks. And usually those will come directly to you. And then you put them or give them to the charities that you’re doing. All right, so we’re gonna take our last break here. When we get back, we’ll take a few more phone calls.
Dr. Friday 36:23
And then we’ll be winding up, my goodness, time flies when you’re having fun. So again, the number here in the studio, if you’ve been waiting to make that phone call 615-737-9986. We’ll be right back to make a phone call now would be the time 615-737-9986. And during the break, we had a question come in. The question for the caller is I’m a disabled military vet wants to know if he needs to pay taxes from the checks he receives from military or disability checks if his government military, the VA benefits? No, that is one of the few benefits, I would say you paid your price, you don’t need to pay the taxes too. But bottom line is that is not going to become taxable income. So if you’re on disability with the VA, that is not taxable income, so you don’t have to worry about filing taxes on that income.
Dr. Friday 37:25
Hopefully, that will help you when it gets time to making those decisions or filing what you need to file. So if you have questions, again, we have a few minutes 615-737-9986. But I also wanted to touch base on a couple of little things. One is who I am, I’m Doctor Friday, an enrolled agent licensed by the Internal Revenue Service, the new taxes and representation which basically just means guys, I do a lot of taxes, I deal with the IRS a lot now doesn’t always mean the same problems you do sometimes with dealing with the IRS. But if you have a problem with the IRS you need someone’s gonna be in your corner, I am here locally, I’m not somebody, you’re going to pick up the phone and find out that they’re in Texas or California or someplace else, even though you hear them on the local radio, doesn’t mean that they are local here. So you can’t walk right in the office and meet them. You can with us. So if you want help, you can call our office at 615-367-0819. Let’s hit bill before the time clock runs out. Bill in Hillsborough Bill, what can I do for you sweetie?
Caller 38:30
Yes, ma’am. I’ve heard you talk about if you’re on Social Security, you might kind of have a certain amount you don’t have to file a tax reform?
Dr. Friday 38:41
That is correct. Now, if you’re single, you don’t have to file I will say you don’t have to file if you’re married. I mean that person if that’s all they have is income. The other person could file married filing separately now sometimes even though it’s a catch 22 Because sometimes it puts them in a higher tax bracket therefore even if you have to pay tax on the Social Security it’s actually a lower tax bracket for the joint couple. So you you’d want to work it both ways to find out if it’s a benefit if it’s a married couple but if you’re a single person and all you have is Social Security you do not need to file.
Caller 39:19
I’m married and I’ve been filing separately but she makes about 50,000 a year so that I wouldn’t qualify for what you’re talking about I guess.
Dr. Friday 39:31
Right well I mean again I would probably, do you do her taxes?
Caller 39:37
No, I just been going to h&r block and doing my office because she’s got a couple of rental properties and
Dr. Friday 39:46
Okay, so I’m just saying you may want to at some point just have someone put in your joint just to find out if the combination of the two if you’re not leaving money on the table because it used to be pretty black and white. It was better not to do it but, you know, I’ve done it lately, and it just seems like many times we’re finding out that married filing separately, especially if it’s social security, they’re gonna tax you 100% on 85. I mean, they’re gonna take 85% of your Social Security, and it’s going to be taxed, because they don’t give you the benefit of the doubt, because they don’t know how much money your spouse made. So there’s no, there’s not as much the tax law has changed. And it’s not as conducive as it used to be.
Dr. Friday 40:25
So I’m just saying you might want to check and just see if the other way is, but now, if there’s other reasons, like, you know, you guys kind of have separate financials and you guys just leave the taxes separate. That’s that’s a different conversation. But if you’re looking to see which way is going to be better, you might find out that it might be that you’re leaving money on the table by married filing separately.
Caller 40:48
I got married because I thought there was a benefit to being married. But I found out its not.
Dr. Friday 40:57
On the tax law side, my friend, I think there’s more penalty than than benefit for taxes. Now, hey, I’m not saying about the rest of the benefits. I’m just talking about taxes.
Caller 41:08
I told her we need to get a divorce. And then I could save money on taxes.
Dr. Friday 41:15
All right. Merry Christmas. Have a good weekend, buddy.
Caller 41:18
Okay, thank you, Merry Chrostmas.
Dr. Friday 41:20
Thanks. All right. So if you do have questions, again, you guys can call our office on Monday. If you have someone or it’s difficult sometimes on a radio show, I realized that we get quite a few phone calls. You know, on the weekdays, just people that don’t want to call in on a radio show. And I do understand that. But if you want to call our office 615-367-0819 That is the direct line to me. So if you want to reach me 615-367-0819 If you have questions, the easiest way. And even throughout tax season, one of the simplest ways is really doing it through email, if you email Friday at Dr. friday.com. Again, friday@drfriday.com, that will be the fastest way to get a response usually, or the phone number I get the 615-367-0819 is also it takes tech.
Dr. Friday 42:15
So if you would like to text your information, somebody can get back to you on that. Again, if you’re not sure who I am, or what I really do, I do taxes, I do offering compromises, I negotiate with the IRS. I’ve been doing this for 20 plus years. And if you want to have someone that’s going to help you not just get straight, but also get the problem resolved, we work together and you know, anyone that thinks you’re going to walk into an office and the fix is going to happen fast with the IRS, you might as well take those blinders right off, because it’s not going to, you’re going to have a good relationship with whoever is helping you because it’s going to take you eight months to two years, I’ve had cases that we finally resolved almost two years later, it is not something that’s always going to happen fast.
Dr. Friday 43:00
Sometimes it requires a lot of documentation that you have to get together. So if you’re wanting to really have resolution that you need to give our office a call 615-367-0819. And again, if you want to just find out more about who I am, you can also go to my website, Dr. friday.com drfriday.com. You can also set up appointments for taxes, you can email right off of that as well. So however, is going to be the easiest way because the best thing to do is get started right because taxes are complicated. And even though on the radio, we’ve been doing this, what 12-14 years, I don’t seem to remember half the time, but for quite a while. And in all the answers we give out all the things we do are more based on a generic situation, well, hey, you know what, you’re not generic, you are unique, and each one of your situations are going to be different. And what we do to solve those situations are going to be different. So if you want to actually face and deal and get the resolution, and then even if you get resolution, remember, if you get an offer and compromise the IRS wipes out your debt, you’re happy, you have to stay in compliance for five years. If you don’t continue to make all your quarterlies you don’t continue to keep all your payments made.
Dr. Friday 44:17
You drop the ball, then guess what all of those all that hard work, all that debt comes right back onto you. They want to make sure that only if they waive those fees and penalties and dollar amounts that you’re not going to be coming back again every year after that. So you not only you’re going to have to deal with whoever is helping you get the resolution, but they also need to be there to help you stay in compliance. That’s what an enrolled agent does. That’s who you should be dealing with. Again, we are the only ones licensed by the Internal Revenue Service to do representation and taxes. You know, you have certified public accountants CPAs and you have attorney some of them are actually EAS I’ve got some Good friends that are actually attorneys.
Dr. Friday 45:01
And sometimes it’s great to have an attorney because sometimes you either have to go to tax court which I’ll be honest, I’ve never had to go that that route. We usually get resolution way before then. Or you might want to have a good bankruptcy attorney because sometimes we need to talk about bankruptcy. If you have these questions, you need help you don’t know which way to go again, one more time call 615-367-0819.
Dr. Friday 45:26
You can also email friday@drfriday.com. If you if you just not sure where to start or you’ve relocated a lot or your paperwork just isn’t where you thought it would be. We can also help you find out where the papers we can get a lot of the information directly from the IRS. That takes a power of attorney but we have those as well. So if you need help to get resolution 615-367-0819 email friday@drfriday.com or check me out on the web. That is drfriday.com. I hope you guys all have a wonderful holiday season. Enjoy the holidays. Have some fun, call you later.