/
RSS Feed
G’day! In this episode of the Dr. Friday Show, the Doctor is in the house to help you navigate the end of the year and prepare for the 2025 tax season. Dr. Friday breaks down the major changes introduced by the “One Big Beautiful Bill” (OBBB), including shifting tax brackets, new credits for families, and substantial changes for service industry workers. Whether you are looking to maximize your retirement contributions before December 31st or trying to understand the new rules regarding auto loan interest, this episode is packed with essential financial advice.
Episode Summary Points:
- Year-End Retirement Planning: Reminders to maximize 401(k) contributions before the final paycheck of the year and utilizing Spousal IRAs.
- The “SALT” Cap Increase: The State and Local Tax (SALT) deduction cap has increased from $10,000 to $40,000 for the 2025 tax year.
- Social Security Taxation: Clarification that Social Security is not tax-free, but seniors (65+) now receive a qualified deduction ($6,000 for individuals, $12,000 for couples).
- Service Industry Tax Breaks: New exemptions for federal withholding on tips (up to $25k) and overtime pay (up to 250 hours).
- Auto Loan Interest Deduction: A new ability to deduct up to $10,000 in interest for new, U.S.-assembled vehicles purchased for personal use after Dec 31, 2024.
- Student Loan Updates: Warning regarding the expiration of forgiveness programs in July 2026 and hardship deferments in 2027.
- Estate & Gift Tax: The annual gift exclusion rises to $19,000 per person for 2025.
- The “Trump Account” for Children: Details on the $1,000 government contribution for U.S.-born children starting in 2025.
Episode FAQ:
Q: Is Social Security income tax-free in 2025?A: No. Social Security can still be taxed up to 85%. However, under the new bill, there is an additional standard deduction for those age 65 and older ($6,000 for singles, $12,000 for married couples) which may reduce your overall tax liability.
Q: Can I deduct the interest on my car loan on my 2025 taxes?A: Yes, but there are strict requirements. The vehicle must be new, assembled in the U.S. (VIN starting with 1, 4, or 5), purchased after Dec 31, 2024, and used solely for personal reasons. The deduction is capped at $10,000 in interest and phases out for high-income earners.
Q: I have a teenager who is working. Can I put money into an IRA for them?A: Absolutely. As long as the child has earned income, you (or a grandparent) can contribute to a Roth IRA in their name. You can contribute up to the amount they earned or the annual limit ($7,000), whichever is lower.
Q: Are there stimulus checks coming for seniors in 2026?A: There are discussions about a potential payment (rumored around $1,390) for low and middle-income individuals in 2026, but this is not yet confirmed. If it happens, Social Security recipients likely won’t need to file extra paperwork to receive it.
Transcript:
No, no, no, she’s not a medical doctor, but she can sure cure your tax
problems or your financial woes.
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.
G’day, I’m Dr. Friday, and the doctor is in the house.
We are here live in studio and we are going to be talking about planning for
2025.
2025.
some of the things that came in with the one big beautiful bill, making sure
that we understand maybe some of these uh child tax credits that are coming up
that we understand maybe some of these uh child tax credits that are coming up
When they expire, when they change.
If you’ve got questions, you can certainly join our show at
615-737-9986-615-737.
615-737-9986-615-737.
9986 taking your calls talking about my favorite subject, which is taxes and
what’s going to qualify and what’s not going to qualify.
what’s going to qualify and what’s not going to qualify.
Hopefully gets the bottom of a couple of the questions I’ve been asked uh
during this last week or so, just simple questions about IRAs converting them,
what the um
during this last week or so, just simple questions about IRAs converting them,
what the um
marginal tax rates are, things like that.
So we can actually make some good decisions on capital gains.
If you sold something, if it’s over.
um you know 139,000 under 139 if you’re married filing separately the you know
119 or single
119 or single
what that means, how that works, and what that’s going to do for all of us.
So if you want to join the show, you can 615-737-9986, 615-737.
9986 taking your calls, talking about, like I said, all the things that have
to do with taxes and uh trying to get to explain what we should be preparing
for, what we need to know as far as Social Security rates, what’s our max.
to do with taxes and uh trying to get to explain what we should be preparing
for, what we need to know as far as Social Security rates, what’s our max.
In 2025, of course, for Social Security was 176,000.
What’s going to be expected in 2026 after 2025?
I don’t think there’s anyone on caller one, right?
Because there’s no name in there.
So I’m just assuming that’s not for me.
All right, so let’s get to it.
Let’s talk about my favorite subjects.
and see what we can do to make this all work out for us.
And um if again if you have questions 615-737
9986, 615-737-9986.
And you know, if you have questions, just give us a call.
Let’s see what we can do as far as getting through some of the um
information we’re going to share here.
So first thing I guess is if you’re in 2020, well we’re all in 2025, but if
you’re still trying to maximize
you’re still trying to maximize
your 401ks, which is ones that you usually have to contribute to prior to the
end of the year because it usually comes out of your paycheck.
end of the year because it usually comes out of your paycheck.
You want to make sure that you
Do that in the next few you may only have one paycheck left, to be quite
honest.
honest.
Um, and so you want to make sure you’ve maximized that.
If you qualify, you may still be able to put the $7,000
into a traditional or Roth IRA if you are age 50 and older, that would be
$8,000 the maximum.
$8,000 the maximum.
And also remember that
If you if your spouse cannot contribute, but you’re a and you’ve earned enough
for both of you, you can contribute for your spouse into a traditional and or
Roth IRA, depending on
for both of you, you can contribute for your spouse into a traditional and or
Roth IRA, depending on
your taxable situation and you know there is limitations to what’s available
and what’s not.
and what’s not.
So federal tax brackets for the single
Still single, married filing jointly, single, married filing separately,
jointly, and head of household.
jointly, and head of household.
Um we still have the same code.
The basic, you know
12 to 2 37% that really hasn’t changed.
Um, it basically means the the first twelve thousand will go.
I mean, you have zero or ten percent.
um for in single people making less than 12,000 after the standard deduction
for married people making less than 24,000.
for married people making less than 24,000.
And then it goes to the 12% from the $12,000 to $50,000
And then for married people, that would go from 24 to 88.
Remember, these numbers are after you’ve taken your standard deduction or your
itemized deduction, depending on what it is.
itemized deduction, depending on what it is.
you have or where you’re at.
So in for the 2026 filings, those standard deductions will be 16100.
uh 3224150.
But for 2025, remember we’re going in right now, we’re getting ready to file
our 2025
our 2025
Taxes, which are single people 15,000, marry couple 30,000, and head of
household 22,5
household 22,5
So we keep those numbers going so we know.
And then if you’re over the age of 65, remember if you are deducting as a um
blind or single person, married person, you have sixteen hundred dollars, two
thousand dollars for single or head of household, and married couples, you
would be able to double that
thousand dollars for single or head of household, and married couples, you
would be able to double that
So it’d be 15 and 16 and 16.
So additional $3,200 would be deductible for you on what you’re going to have
coming in on your taxes.
coming in on your taxes.
The OBBB did bring in the um uh charitable contributions for scholarship
grants, all of that.
grants, all of that.
Um
And they come in effect, but most of those are not coming into effect until
2026 for individuals.
2026 for individuals.
So
If you have something like that and you’re trying to figure out what you have
coming this year versus the next year or whatever, the $6,000 for anybody over
the age of 65
coming this year versus the next year or whatever, the $6,000 for anybody over
the age of 65
From 2025 through 2028, the designated dollar amount comes through.
And then qualified deduction for married couple is $12,000.
So that one is in effect for 2025.
I saw a lot of videos out there saying that it didn’t come in effect until
2026.
2026.
But according to the IRS website, it’s starting in 25.
So again, that’s for individuals that are 65 and older
You do not have to be claiming Social Security.
People used it or they they’re marketing it somewhat as a way of helping you
deal with Social Security tax.
And I had several people this week calling and saying, well social security is
free now.
free now.
I don’t have to worry about filing taxes because now Social Security is free.
Mm no, not really.
Social Security is not free, still can be taxed up to 85%.
All they’ve done is give people age 65 and older an additional deduction.
Which may or may not um make a huge difference in your situation.
Obviously, it won’t if you’re already in a tax-free situation, then it makes
no difference at all.
no difference at all.
Um, but in
normal situations or tax situations we have, then you will have some situation
where you might have uh the ability to uh
where you might have uh the ability to uh
Um save some money or or whatever.
But in most cases, if you’re making 22 if you’re in the 22 or 24% tax bracket
You will definitely be able to save some money by doing this.
But if you’re in the 12% tax bracket, it’s not going to save you much money.
I mean, 12% is $6,000.
What, $700?
So um it’s not going, I mean, it’s better than nothing.
We’ll take it.
It’s not going to be zero, but it’s better than nothing.
Um, so we need to make sure that we know when the tax years um, I believe if
you did solar, you have to dump by December of this year.
you did solar, you have to dump by December of this year.
Um
So that you get the credit.
There isn’t, I don’t believe it’s been renewed as far as additional credits
for the solar.
for the solar.
Um and a lot of the cars, if you are into the
Um electric cars, a lot of that has not been yet um moved on.
And then
You also have there is a a new child credit if a child is born from January of
2025.
2025.
And getting a uh a savings um from the IRS or from the government.
Um
I mean we’re gonna get to some of that information because that that one’s a
sort of an interesting uh situation where it’s basically only American-born
children, US citizens must be born to the United States.
sort of an interesting uh situation where it’s basically only American-born
children, US citizens must be born to the United States.
You can have a Trump account is what it’s called.
And it’s eligible.
You receive $1,000 contribution into the federal government, into from the
federal government, into an account
federal government, into an account
Parents contribute, can contribute up to $5,000 annually to this account.
The funds will be invested in certain mutual funds or exchange tracking funds,
major U.
major U.
S.
stock exchange.
Access contributions cannot be made before July 4th, 2026.
The accounts will turn into IRAs once the children turn 18.
Which means they can’t really touch them until they’re over the age of 15 on
and a half, or there would be penalty.
and a half, or there would be penalty.
The infusion aims to provide stronger financials for children uh in the US for
their financial needs.
their financial needs.
So if you have given birth to a child, um, this is an account and it is part
of the one BBB.
of the one BBB.
or the you know one big beautiful bill allowing parents to have uh additional
savings and the government’s giving you additional thousand to start that
account so that is an interesting um you know
savings and the government’s giving you additional thousand to start that
account so that is an interesting um you know
guidance for for people that may be young enough and or just having a child.
Now it does not say adopting.
I know someone had asked me that.
It does not say you qualify if you’ve adopted.
It basically says if the child was born.
So if the child was born, even if you’ve adopted that child, I’m assuming as
long as the child was a U.
long as the child was a U.
S.
child.
U.
S.
citizen born to this case.
So if this is a child born in the United States and you later adopted that
child during that same time, it would be something that you would probably
qualify for.
child during that same time, it would be something that you would probably
qualify for.
But if you’re adopting from overseas,
Then to be quite honest, not going to be quite the same situation.
Wonderful thing, and there is still adoption credits out there, but this you
wouldn’t be able to have this
wouldn’t be able to have this
additional fund put in here um under this situation.
But it is still one of the one time, you know, thousand dollar pilot.
I mean
Government’s given a thousand dollars and then you can com contribute up to
five thousand in addition ’cause usually you can’t really do that.
five thousand in addition ’cause usually you can’t really do that.
um unless the child’s working or earning money.
G
And so you can’t, you know, there’s 529 plans and things like that.
But there will be um potentially some
Penalties if you take the money out early.
It’s all about trying to contribute more money for retirement, I think, is
really the the big picture
really the the big picture
of that conversation.
But we will continue to follow that to if anyone’s got any questions about
that or any of the other up-and-coming tax changes.
that or any of the other up-and-coming tax changes.
when um when or what you’re doing is coming up to play because again some of
the tax laws in obb came out in 2025 and some didn’t start until 2026
the tax laws in obb came out in 2025 and some didn’t start until 2026
So we just need to make sure if you’re making these tax changes, when when
they uh when do everything come into effect and when it’s going to
they uh when do everything come into effect and when it’s going to
um affects you individually.
So again, just making sure it’s all there.
We’re gonna get ready to take our first break.
If you have questions, you can join the show.
615
737-9986-615.
737-9986 will be right back.
Alrighty, we are back here live.
in studio.
It looks like we have Linda from Franklin on the line.
So let’s see if we can get her so she was nice enough to wait through the
call.
call.
Hey Linda, what can I do for ya?
Hi, um I I have a daughter who just started working, um she’s seventeen, and
my father
my father
gives her a you know, a good chunk of money every year.
And I was just wondering at this point, would be we be allowed to put some
money in an IRA for her instead of just a savings account?
money in an IRA for her instead of just a savings account?
Absolutely.
So theoretically, whatever she earns, less social, I mean, so let’s say she
earns $7,000 just as a number.
earns $7,000 just as a number.
You could take $7,000 of dad’s money.
And put it into a Roth IRA, which is where I would put it.
I’m not a financial planner, but why not?
Because it grows tax free the rest of her life.
And then let it grow tax free for the rest of her life or until she needs it
at a later point.
at a later point.
Um, and then that way it, you know, she doesn’t have to worry about paying
taxes.
taxes.
So yes, now that she is actually working, um, she would qualify for pe putting
up to
up to
7,000 a year into a Roth IRA.
And depending on how lower income, theoretically, uh I have heard some
financial planners say you can put a Roth and a traditional, you know, there’s
room for both of them sometimes at the lower income brackets.
financial planners say you can put a Roth and a traditional, you know, there’s
room for both of them sometimes at the lower income brackets.
Okay, so it let’s for example say she made five.
Can we still put seven?
No.
Has to be whatever she’s earned.
She has to invest earned income.
Right.
Okay, and uh up to what she’s earned, but no more than seven.
Yes, exactly, a hundred percent.
Okay.
Okay, perfect.
Thank you so much.
Thanks for listening, appreciate it.
Okay, that was a great question.
And I think a lot of times people forget that.
I mean, she brought up a great point because um I have a number of people that
sometimes
sometimes
the grandparents or um another family relative will will do gifting, right?
And they can do what, 17,000, 18,000, I think it might even be 19,000 a year
that they can gift.
that they can gift.
to a family member or pretty much anyone.
And so if this child’s getting that and you’re trying to invest it for the
future, one place to put it and keep it safe
future, one place to put it and keep it safe
One of the places you could put with especially if they’re working is taking
the money that they’ve earned and putting that back in.
the money that they’ve earned and putting that back in.
So $19,000 is the current gifting exclusion limit.
Which doesn’t mean you can’t give more.
So a lot of times people get confused.
They’re like, if I give more than nineteen thousand or my wife and I give more
than thirty-eight thousand.
than thirty-eight thousand.
then I’m gonna end up having to pay tax or the person I give it to has to pay
tax.
tax.
And that’s not the way it works.
The person giving the money, in this case we were just talking about a very
nice grandfather giving money
nice grandfather giving money
um to the the grandchild.
So the grandfather has to pay all the taxes.
He gives it to the granddaughter and she does what she wants.
Parents invest it, whatever.
Then but if for some reason let’s say um let’s say grandpa wants to buy her
her first house
her first house
And I mean I’ve I’ve had it happen.
That can still be done, but the difference is grandpa would have to pay all
the taxes in this scenario.
the taxes in this scenario.
But it would also come out of his 13, almost 14 million, $13.
99 million per an individual exemption for lifetime.
So there’s a gift tax return that would be required to file.
You would list the person receiving that gift, and then they would then, you
know, it would just go on the record that this
know, it would just go on the record that this
300,000 was given to this person, and now they have 300,000 of their lifetime
of 13.
of 13.
99 million to be given away to go.
So it is not
Um, it’s not that complicated.
I have a number of parents that help on putting down payments on people’s
houses or help them especially after divorce or something, a lot of times that
will change.
will change.
Um and it makes a big difference.
And if you’re you know, it it does help in reducing your estate value as well.
to to maximize those gifts as they come through.
Now again, I would check any of this out with a financial planner because
Um the annual exclusion in 25 rise to 19 per person in 2025.
But it it’s not telling me if in 2026, typically it hasn’t been announced, I
guess, at this point.
guess, at this point.
It’s not saying on the IRS what the
new rate would be.
Um, you know, but you can still do that and in 2020
Six, let’s see, it says an additional lifetime increase from 13.
99 in 25 up from 13.
61.
So so far
It and this remember that’s individually.
So a married couple would be like 27.
98 million.
So I don’t think we most of us would never have to worry about exceeding that,
but it is a great estate planning tool
but it is a great estate planning tool
And you can also, I mean, you can gift homes, but remember if you’re going to
gift a home, you have to gift it at the value you have in that home, not the
value that the home may be worth.
gift a home, you have to gift it at the value you have in that home, not the
value that the home may be worth.
And so that, in my opinion, from the tax standpoint, is not a win-win because
if you left that home as an inheritance to the same person.
if you left that home as an inheritance to the same person.
They would get a step up in basis and then the home would be worth what it was
at the time of your passing versus what it’s worth.
at the time of your passing versus what it’s worth.
So if you paid, I have a gentleman that just paid
40 years ago, he paid $33,000 for this home.
And he doesn’t really have any way of documenting anything else.
And it’s worth like $1.
2 million because it’s on like 40 acres in Williamson County or something.
Um, or four acres.
Um, but
If he were to gift this house to his son, he only has 33,000 that’s trackable.
That’s what he would be able to prove.
The other side of that would be if he leaves this property to his son, and
this gentleman is in his late 80s.
this gentleman is in his late 80s.
Um, he would then inherit this property at the current value.
So if his son wanted to sell it or just move into it, whatever he wanted to
do,
do,
It would be a huge savings, right?
I mean, if if he gives it to his son and says, hey, you can do what you want,
but you’ve only got a basis of 33,000 and it’s worth 1.
but you’ve only got a basis of 33,000 and it’s worth 1.
5 million, that does not seem like a very good idea
Now, in theory, the sun could do a 1031 exchange and, you know, push the
bucket down the line.
bucket down the line.
Doesn’t mean it would be, but the best strategy in that, especially when it
comes to dirt or stock
comes to dirt or stock
Personally speaking, I think it would be better to um put the money into a um
a an estate or a trust.
a an estate or a trust.
And then at that point, and again, this is really when you want to speak to
and a financial planner as well as
and a financial planner as well as
a great estate attorney.
Russ Cook’s mine, known him for 30 years.
He does a great job.
And uh, but these are the kinds of questions like there’s a big team between
revocable or irrevocable, Grantor Trust.
revocable or irrevocable, Grantor Trust.
And there are different vehicles in which could fit better for you where
someone like myself, all I’m looking at is what’s going to save my clients’
taxes.
someone like myself, all I’m looking at is what’s going to save my clients’
taxes.
But maybe paying taxes today could save you taxes later.
I know a lot of financial planners get into that.
And then you can always get into like the
the 529 plans where you can gift 19,000 per a recipient without those
contributions counting towards your lifetime tax credit, which of course we
know it’s the same thing.
contributions counting towards your lifetime tax credit, which of course we
know it’s the same thing.
And then
17 per year benefits can be made out filing a gift tax return.
So it you know you don’t have to give cash.
You can do a 529, which would go to a college plan, which would help a child
go that direction.
go that direction.
You just need to understand.
And also I need to put out someone just text.
No, these are not charitable contributions.
Therefore, they are not taxed.
deductible.
This is solely a way of transferring your money to someone else tax-free, but
you are not going to get the tax benefits.
you are not going to get the tax benefits.
of putting this money in unless it’s a 501c3 or some sort of um
Well, some sort of of charity and that’s registered with the IRS that’s very
important because sometimes I have people that are giving money to places like
Hades and all that
important because sometimes I have people that are giving money to places like
Hades and all that
But if it’s not a United States nonprofit, it is not a taxable deduction.
So it is very important that you can
track that information and make sure it’s going through what you need and how
you need it and you know that you you have a trail.
you need it and you know that you you have a trail.
A lot of times they have um
a lot of Venmos and things like that.
You people ask you to give money to their organizations.
Um and again.
If this is not a 501c3, it is not a tax deduction.
You helping out a family because somebody has cancer and they need the money
to pay the rent is an awesome thing to do.
to pay the rent is an awesome thing to do.
It is not going to go on your tax return unless it goes through an
organization that does that kind of thing.
organization that does that kind of thing.
Just giving it to the family to help them out.
Um GoFundMe accounts are huge.
Now there have been some people that have been able to go, and I’m not an
expert on this, but I I have been able to track
expert on this, but I I have been able to track
So you can go some GoFundMe accounts can be set up as a nonprofit.
Most of them are not.
Most of them is a good friend of the family or family member that is out there
and they’re setting up a GoFundMe because this family has.
and they’re setting up a GoFundMe because this family has.
a need and uh you know Americans are great givers and a lot of people would
give a few dollars to help somebody else not to suffer.
give a few dollars to help somebody else not to suffer.
Um and so
That you know you give money to that.
Just remember, unless it’s a trackable 501c3, that is not going to be a tax
deduction.
deduction.
on your tax return.
It may be a wonderful thing to have done.
It is not likely going to be something that you’re going to be able to do or
move into your taxable
move into your taxable
situation for for all that.
We’re going to come back in just a minute here and we’re going to talk a
little bit about um the
little bit about um the
No tax on service workers for overtime tips, up to 250 hours of overtime or
exemption from taxes, taxpayers over the age of 65, and car owners being able
to deduct.
exemption from taxes, taxpayers over the age of 65, and car owners being able
to deduct.
interest on auto loans that normally you don’t get to do.
When we come back, we’re going to cover some of these.
And if you’ve got questions on these or anything else, all you have to do is
pick up the phone 615
pick up the phone 615
737-9986.
615-737-9986.
We are gearing up.
for the 2025 tax season.
If you are an existing tax client or looking for a tax person, you need to
call our office.
call our office.
Our schedule is booking up very fast
If you’re a returning client, we always have calendar time for you.
New clients, we really do need to get you in and on a calendar, otherwise.
I love to say it, but you know there’s only so much time.
So we need to get you scheduled.
So if you need help with any of that, you can certainly call our office.
Monday morning or just go to the website at drfriday.
I
com and send us over a message and we’ll do our best to get back to that.
But we’re going to take our second break.
When we come back, we’ll cover a few more things that are happening and just
how we can prepare and maybe things you need to bring this year that you
haven’t had to bring in the past.
how we can prepare and maybe things you need to bring this year that you
haven’t had to bring in the past.
So again, if you want to join the show, 615-737-9986, we’ll be right back.
All righty, we are back here live in studio.
And we have let’s talk about a few of the things we just kind of closed up on
before the break.
before the break.
So what we basically have is service workers will
Not have to pay a federal withholding tax.
Now they’ll still Social Security and Medicare up to $25,000 of TIP paid.
That has to be on your W-2 and or
1099 workers do qualify, but you have to have record.
This will stop in 2028, but it is in effect in 2025.
Up to 250 hours of overtime pay will be exempt from federal taxing.
Again, those hours.
And this is only the overtime paid, not the regular pay.
So if you usually get time and a half, it’s only that half that we’re talking
about.
about.
Taxpayers over the age of 65 can deduct an additional six or can um add an
additional deduction of six thousand dollars and car owners who can expect
additional deduction of six thousand dollars and car owners who can expect
Car owners can deduct interest on auto loans that came into effect in 2025.
And there’s more details on that we’re going to follow in a second.
The other thing that changed is the salt tax.
You guys have heard me talk about that for years.
That’s where you take off your
Sales tax in Tennessee, our property tax in Tennessee, that’s the two big
ones.
ones.
We don’t have personal tea tax really in Tennessee because
We don’t pay a state income tax on them.
But those add up to right now, if it’s over $10,000,
then you don’t get it, which really has hurt my people more in other states
that have a state income tax.
that have a state income tax.
We have a lot of people that pay decent sales tax, but anyway you look at it,
10 grand, it stops
10 grand, it stops
Now it’s gone to 40,000 in 2025.
So this might be a time for a lot of you guys used to add up all your sales
tax receipts.
tax receipts.
And then we stopped because we couldn’t exceed that number anyway.
So what good was it to actually have to track it?
Get back on it.
Yeah, you’ve got a week or two here.
And then you need to add up all of them.
And I have found that credit card statements, if you do a lot with credit
cards at least.
cards at least.
Um, they have a lot of that information in their system that you can you can
export out.
export out.
But um you might want to for the next few years, it will start reducing and in
by 2030, so in the next
by 2030, so in the next
five years or so, it will go back to the $10,000.
So if you’ve got any large purchases that you might want to consider if you’re
wanting to redo the house
wanting to redo the house
um buy furniture, whatever, this next five years, maybe the plan that we do
something with that.
something with that.
Again, if you’re in another state, California, New York, my brother loses, you
know.
know.
He well, he’s a single guy, but he was basically losing fifteen thousand
dollars in deductions easily a year between the state income tax and property
taxes because he wasn’t able to claim 100% of them.
dollars in deductions easily a year between the state income tax and property
taxes because he wasn’t able to claim 100% of them.
So this will be very helpful.
for people out of state.
It will still help people in state.
But again, now’s the time to think about things you can do to help reduce your
taxes because now we have more room for the sales tax deduction
taxes because now we have more room for the sales tax deduction
property tax doubling up like we used to do even odds, right?
Every even year we would take and double our sales to our property taxes and
then
then
buy our larger purchases.
If you buy a new car, you pay sales tax.
That would go on as an additional purchase.
So you have 25 through 30 to make it happen, but if it’s anything large, you
want to do it in 20
want to do it in 20
five well twenty-five is almost over twenty-six because after that we’re gonna
it’s slowly going to drop back every year it’s going to reduce down and it’s
gonna become
it’s slowly going to drop back every year it’s going to reduce down and it’s
gonna become
less and less back to 10, which makes it very difficult.
Um in 20 um in September of 2025, the bill cut existing tax credits for
purchasing new and used electric vehicles.
purchasing new and used electric vehicles.
So
If you have purchased the vehicle after September of 2025, we’re probably not
going to see any energy credits on that.
going to see any energy credits on that.
In 2026, two more.
Um changes came force, a limit on itemized deductions for people above a
certain income level.
certain income level.
And
an increase to estate and gift tax limits to 15 million, the amount of a
person’s estate can give away before being taxed.
person’s estate can give away before being taxed.
So we were just talking about how that number was um
I think it was 20, 16,000 or something.
It’s down to 15 million.
And I think they’re gonna keep dropping that.
So that gifting, and again, that’s probably not going to affect a ton of
people, uh, especially married couples, because it’s would be like 30,000.
people, uh, especially married couples, because it’s would be like 30,000.
But um it can affect some.
And so, you know, again, I don’t know why we we don’t just keep that where it
is, but no one’s asking.
is, but no one’s asking.
There has been talk that bringing it back down to like a million, then that
would affect a lot of people because
would affect a lot of people because
Even in Tennessee, our homes have values have gone up big time.
In June of 26th, the bill cuts credits for taxpayers who have energy efficient
home improvements.
home improvements.
Again, if you have something you need done in your house and you’re thinking I
need a new AC, but well, it’s not broke down yet.
need a new AC, but well, it’s not broke down yet.
Maybe I’ll wait a little bit
Maybe not.
Maybe you should stop waiting and think about doing because we have a very
small window to take advantage of some of these credits that have been out
there and now they’re going to start disappearing.
small window to take advantage of some of these credits that have been out
there and now they’re going to start disappearing.
and we’ll try to keep s that going.
But you know, it’s it’s one of these things.
The new legislation research certain government assistant program like SNAP,
Medicaid.
Medicaid.
Um, I’ve had a number of clients call this week
Saying they have received some sort of letter, and maybe if there’s a listener
out there that has received this, it may be imp interesting that they had to
justify their earned income
out there that has received this, it may be imp interesting that they had to
justify their earned income
Now, I’m assuming some of this has to do with the fact that they’re trying to
uh and this would be so this particular one person with social security
disability, the other person was on Medicaid
uh and this would be so this particular one person with social security
disability, the other person was on Medicaid
Um, but both of them got something similar.
So uh they’re trying to spend time to exploit and change.
So they’re as early as 2025, beginning in 20 states will be required to cover
up to 15% of the SNAP cost under this new bill.
up to 15% of the SNAP cost under this new bill.
That’s one of the ways they’re paying for some of these deductions they’re
giving us.
giving us.
And so that will be interesting to see how that feeds out because some of the
states probably don’t have as much money as others.
states probably don’t have as much money as others.
The bill also introduced changes to the student loans.
Well, we
uh will be repaid beginning on July of 2026.
That year an existing federal student loan forgivings plan including Save,
IRC, and PAVE will stop operating.
IRC, and PAVE will stop operating.
So the forgiveness program plan will stop operating in July of 2026.
Those loans offered before July 26 will be honored.
Borrowers will have two options under the new law.
A standard payment plan, fixed amount over 10 to 25 years.
An extended income repayment plan, the payment between 1% and 10% per monthly
income up to 30 years.
income up to 30 years.
That’s gonna be interesting to see how that all feeds out.
I have a number of people that have found that, you know, if you file marry
filing separately, they can only base it on your income, therefore they don’t
qualify
filing separately, they can only base it on your income, therefore they don’t
qualify
for certain things.
Now again, if you have a student loan and you’re trying to get forgiveness,
now would be the time because July of 26th, those programs all stop working
now would be the time because July of 26th, those programs all stop working
And then you’re into a two-part, either standard payment or extended payment,
but that’s all they’re going to give you.
but that’s all they’re going to give you.
So it also sets a $100,000 cap for graduate students borrowing and $200,000
for professional student borrowing.
for professional student borrowing.
Eliminated graduate plus options, parent plus loans starting in 26 or later
will have a cap of 65 and 60 up to 65,000 and a 20,000 annual cap.
will have a cap of 65 and 60 up to 65,000 and a 20,000 annual cap.
So they’re basically going to push the schools potentially into having to lose
reduce their fees because if people can’t borrow to pay
reduce their fees because if people can’t borrow to pay
kids don’t go to school, schools are going to have to reduce.
And they’ve got a lot of money in redown uh in endowments and things.
So there’s a number of schools
Maybe not TSU.
They seem to have some financial issues, but others will be um very
interesting.
interesting.
In 2027, the bill gets rid of payment deferred options for economic hardship
or unemployment.
or unemployment.
This is on student loans.
So walking away from this conversation, what are you going to walk away with?
If you have a student loan and you may qualify for the ability to get a
forgiveness or a reduction.
forgiveness or a reduction.
Don’t just push it down the line because it’s going to stop operating that
way.
way.
They’re not going to give hardships.
They’re not going to give you unemployment breaks as of 2027
They’re not going to um even give you a forgiveness situation after July of
26.
26.
Now there could be some extensions put on this, but
Are you really wanting to count that as a possible situation?
So, you know, again, we’re not going to get into some of the other situation.
I’m looking at tax
Tax situations.
Those are the big ones.
So we’re going to come back after this next break.
We’ll talk about if you’ve purchased a car in 2025
What kind of interest can you write off?
How much can you write off?
And what kind of documents do you need to provide that to your tax person or
have it there for you?
have it there for you?
If you’ve got questions or
If you know idea who I am, I am Dr.
Friday, an enrolled agent licensed by the Internal Revenue Service to do taxes
and representation.
Friday, an enrolled agent licensed by the Internal Revenue Service to do taxes
and representation.
I’ve been doing taxes for over
30 years here in the Nashville area.
And we’re we’re located in Brentwood, but we cover the entire state because I
have some pretty awesome clients that will either drive all the way to see me
or they will just
have some pretty awesome clients that will either drive all the way to see me
or they will just
use our lockbox.
But if you have questions or you need assistance with doing taxes, the easiest
way to get a hold of us is going through our email friday at drfriday.
way to get a hold of us is going through our email friday at drfriday.
com
Or just going through the website, which is drfriday.
com, which will also tell you who I am a little bit.
Because if you’ve just tuned in and you’re like, oh wow, who is this pussy and
why is she talking about taxes?
why is she talking about taxes?
And it’s not tax season yet, well
Anyone that’s been listening to my show for the last 11, 12 years knows that
it’s always tax season here, right?
it’s always tax season here, right?
We always have something.
Um
to go to do to to talk about when it comes to taxes.
And you know, every every few years at least we end up with some sort of major
tax changes.
tax changes.
And the one big beautiful bill is a fairly major tax change.
So
We’re talking about some of those and how they’re going to basically um help
or reduce some of it.
or reduce some of it.
And a lot of it, many of these things will affect certain groups like people
over the age of 65
over the age of 65
kids under the age of 18.
There is, you know, some really nice additional deductions for those
particular individuals between the salt, because a lot of them also give a lot
of money, but you know, they haven’t been able to itemize like they used to.
particular individuals between the salt, because a lot of them also give a lot
of money, but you know, they haven’t been able to itemize like they used to.
So they are going to end up with even a harder situation with that additional
potentially $6,000 to $12,000.
potentially $6,000 to $12,000.
But if you’ve got questions, join the show.
615-737-9986.
We’ll take a quick break here.
We get back.
We’ll get to your phone calls andor your emails, 615-737-9986.
Or just email Friday at drfriday.
com.
If you don’t do that while you’re driving.
But if you want to join the show, or you can do it afterwards.
We’ll be right back with the Dr. Friday show.
All right, we’re back here live in studio.
So if you want to join us, oh it looks like we got Pete in Nashville.
So let’s see what he can.
If I can help him out at least.
Hey Pete, what can I do for ya?
Hey, how you doing, Dr. Friday?
I’m doing great.
Thanks for calling
I think I missed already you probably already talked about the no tax and
social security.
social security.
Uh how does it basically work?
Are you still gonna do these
the uh eighty five percent and then you add it to your uh total tax and then
the only difference is that they’re gonna increase the standard deduction by
six thousand.
the only difference is that they’re gonna increase the standard deduction by
six thousand.
Is that how it works
Yeah, I think you’ve just said it correctly, but let me repeat it just to make
sure.
sure.
Yes.
So basically you’re gonna still report up to 85% of it on your tax your, you
know, they can tax up to 85.
know, they can tax up to 85.
And then your standard deduction is increased by 6,000, assuming that you’re
65 and older, but obviously if you’re on Social Security, you are.
65 and older, but obviously if you’re on Social Security, you are.
And then you, I mean, theoretically, depending on your tax bracket and other
incomes, because if you are getting taxed at 85%, then there, you know, in
theory, you’ve already made other incomes to do that, right?
incomes, because if you are getting taxed at 85%, then there, you know, in
theory, you’ve already made other incomes to do that, right?
So at that point your other income is still taxed.
So you’re basically gonna save around seven or eight hundred dollars maybe um
in actual taxes, but it’s still better than nothing.
in actual taxes, but it’s still better than nothing.
But yes, you’re going to still report everything if you have, and then the
standard deduction is just going to be six or twelve, depending if you’re
single or married.
standard deduction is just going to be six or twelve, depending if you’re
single or married.
Okay, this is gonna be increased, that’s where you de deduct it from, right?
It’ll be built in to that uh sixty-five node, right?
Yes.
Oh, okay.
All right.
Well thank you, Dean.
No problem.
Thanks, Pete.
I appreciate it.
Um so yeah, that was a great question and we’re gonna um keep talking about
that because it it’s kind of a major one that we have going on and makes
everything work a little better.
that because it it’s kind of a major one that we have going on and makes
everything work a little better.
So back to the car interest deduction.
This is new, goes in effect in 25.
New car benefits allows tax reductive up
To ten thousand dollars per year in interest on a loan for a new US assembled
vehicle from twenty-five through twenty-eight.
vehicle from twenty-five through twenty-eight.
This provision part
of One Big Bell uh came into effect in 25, aims to support American
manufacturers and finding six savings for vehicle owners, but also includes
comprehend a list of what we need to know
manufacturers and finding six savings for vehicle owners, but also includes
comprehend a list of what we need to know
The question comes in and I actually send it out to a friend of mine because
it keeps saying a new vehicle.
it keeps saying a new vehicle.
But what I read from the IRS website said a new vehicle to you.
But it does have to be a first lien vehicle.
Okay, so you can’t have another lien on it.
It cannot be a lease.
Um, it can only be used for personal.
You cannot be using any of it for business or any other reason.
Um it uh
must have been, you know, must have been assembled here in the US and the
ground weight needs to be under 14,000 pounds, which isn’t really a big
problem because most vehicles are unless you’re into the bigger ones.
ground weight needs to be under 14,000 pounds, which isn’t really a big
problem because most vehicles are unless you’re into the bigger ones.
And then it says deduction reduces 200 per 1,000 of MGI over 100,000 or 200
filing jointly, fully phases out if you’re at 150 or 250 filing jointly.
filing jointly, fully phases out if you’re at 150 or 250 filing jointly.
Another wonderful marriage pencil.
penalty in fact there.
Allow only to original principal and must remain secure by the same vehicle.
Lender must provide required information for both IRS and borrowers.
And it applies to your 25 through 2028 taxed years.
So you will need
To have a FIN number, right?
You have to have the vehicle FIN number.
Um, and it must start with one, four, or five.
That means it was assembled here in the IRS, in the United States.
So if you have a FIN number and it doesn’t start with one, four, or five.
It’s already off the table.
Must slowly be used for birth uh personal use, no miles.
So if you’re a real estate agent or you do an Uber or anything else, you will
not be able to qualify for this
not be able to qualify for this
Must be a first lease, can’t can’t be on your personal mortgage or anything
else.
else.
It’s just got to be on that first one.
It does meet an above-the-line donation uh qualification, which means you do
not have to itemize.
not have to itemize.
Um, it has to have been purchased after December 31st, 2024.
So if you brought a new one this year, you’d be fine.
And it is temporary, 25 through 28.
We only have a few minutes here, so let’s get Howard on the line as soon as
you’re ready.
you’re ready.
That way we have it.
Hey Howard, what’s happening?
Can you hear me, Howard?
Yeah.
Okay, sorry.
What can I do for you, boss?
Something about a stimulus check.
Well, I’ve uh I’ve heard they’re gonna maybe send out some new uh stimulus
checks later on.
checks later on.
And if they do, if you’re on social security, do you have to have a file to to
receive one of those or do you have to
receive one of those or do you have to
Because we don’t you when you’re on social security, you don’t file.
Right.
You don’t have to because you don’t have anything taxable.
Um there is no yet confirmation of this, but there is a plan in twenty
twenty-six
twenty-six
The one I’m been last notified of is around $13.
90 payment for low and middle income people.
And answer to your question, last three stimuluses we got during
COVID, you did not if you were in Social Security, they automatically sent it
out to you guys.
out to you guys.
Um because you weren’t required to file.
So I’m going to right now I we’ll have to keep on top of it because I don’t
know yet if there is
know yet if there is
Any additional information, right?
I’m assuming it’s gonna work a little bit like COVID, but um
You know, that’s it, that’s last time we’ve had and we had three of them
during that time.
during that time.
So I don’t believe you’ll have any filing requirements.
Well I appreciate your time and enjoy your show.
Thank you, sir.
I appreciate you.
Thanks.
Um so that and I do know guys there’s been a lot of press on this.
I
I honestly hope, I mean, I know people could use the money, but I I really
hope that they put the money back into the government.
hope that they put the money back into the government.
It would be so nice to reduce
And maybe even have some extra money in there, which I know is a joke probably
for the government, but to pay down these loans, because that’s the whole
reason we’re supposedly doing these tariffs and things, so we can pay back
for the government, but to pay down these loans, because that’s the whole
reason we’re supposedly doing these tariffs and things, so we can pay back
money to the the loans that we have.
Um it wasn’t to necessarily increase uh Social Security got a bump in in
And I’m not gonna say, I mean, again, if you live solely off Social Security,
it would be very difficult with medical bills and everything else.
it would be very difficult with medical bills and everything else.
But um
You know, and it’s always nice to get a uh a free money, but I I would love to
see most of that money put back towards programs and things that could help
see most of that money put back towards programs and things that could help
people on a long run instead of just vastly sending it out.
I mean I remember during the COVID times, all I can say is my clients, um many
of them fit and and receive the stimulus check, but
of them fit and and receive the stimulus check, but
Um, they didn’t need it.
They, I mean, they were living on the same income they had been living on for
years.
years.
Just because they made less than 150,000 didn’t mean that they needed, and so
they were trying to return these checks.
they were trying to return these checks.
And of course, there was no way to return
a check.
What they were able to do is give it to charity or donate it or whatever.
But, you know, I think a lot of people love to have money come in.
It’s it’s a wonderful gift.
But is really a thousand dollars going to make a life changing event in your
life?
life?
I know that I I had callers there and that you guys, if you’re listening, had
callers saying, I need the money so I can replace the heater in my house.
callers saying, I need the money so I can replace the heater in my house.
I need to get my stimulus, you know.
But um, you know, it’d be nice to have a charity that maybe could help those
people and the money goes to those people versus just a big
people and the money goes to those people versus just a big
throw out the money to every taxpayer under a hundred and fifty thousand or
something like that.
something like that.
Just I don’t know.
I don’t see a true benefit in that.
But um I again I I’m not making light of the fact that I’m sure there’s a lot
of people that could use the money and
of people that could use the money and
would would benefit from that.
So we’ll just have to see what comes of it.
I don’t know right now it is all a myth.
I mean it’s not a myth.
Donald Trump would love to give the money out.
So let me clarify.
It is a fact to him.
Um, we’ll just have to wait and see what the facts come back with in our
reality.
reality.
All right, so the end of the show here.
So if you need uh assistance or you have tax questions and we can be of some
help
help
You can call the office Monday morning at 615-367-0819-615-367.
0819 or if you would like to um um email or or contact us that can be done as
well all you have to do is
well all you have to do is
give us um friday at drfriday.
com again friday at drfriday.
com or again if you just want to um check us on the web drfriday.
com all that’s pretty straightforward
If you don’t or haven’t filed taxes in a number of years or you’re getting so
many love letters and you’re like, I have tried, I don’t know what I’m
supposed to do, I can’t
many love letters and you’re like, I have tried, I don’t know what I’m
supposed to do, I can’t
I can’t afford to pay him, but on the other hand, I can’t deal with all of
these love letters.
these love letters.
You need to give us a shot.
You need to give us a call.
Set up a free tax appointment.
and uh free consult and let us at least see if we can’t assist you in helping
you resolve your IRS issues.
you resolve your IRS issues.
or help you get caught up because remember there’s no resolving the IRS unless
you have already got yourself back on track, meaning you’ve filed the back
taxes that you needed to file to stay in compliance.
you have already got yourself back on track, meaning you’ve filed the back
taxes that you needed to file to stay in compliance.
And if you haven’t filed in 20 years, you may not even need to file 20 years.
You may only need to file six or whatever, but file whatever is required.
Then you need to go backwards and you need to or go forward and you need to
make sure you’re paying estimates or quarterlies.
make sure you’re paying estimates or quarterlies.
That is the way you want to go.
All the bad stuff, all the back things.
You can’t change your past.
We’ve all tried, I’m sure, at some point.
Not going to happen.
What you can do is move forward, and once the IRS sees that you are moving
forward and you’re dealing with things, you’re going to have a better time.
forward and you’re dealing with things, you’re going to have a better time.
In dealing with the IRS in the big picture.
Alright, so we’re at almost the end here.
I hope you guys are staying warm.
It’s a very cold Saturday.
And again, 615-367-0819.