Dr. Friday Radio Show – February 7, 2026

For tax services, planning, business, and IRS negotiation, visit drfriday.com. No, no, no. She’s not a medical doctor, but she can sure cure your tax problems or your financial woes. She’s the house. It’s the Dr. 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.

So I guess I want to start the show with talking a little bit about um some miscommunication that I see keep coming through emails and um I’m going to assume that it’s out there on the internet as well about who can claim and who cannot claim over time and tips. Now keep in mind there are some rules. It’s not like everybody’s going to get it and everybody. Everyone’s not going to get it. You do not have to itemize, which is one of the misconceptions that is not required. But if you are in a managemental position And you have the um federal sta… uh Department of Labor statistics, sorry, um, and there’s a bunch of rules that have to be applied, then that will be how and if you can get this. So if you’re a manager and you’re paid overtime, but your overtime is based on something other than the typical 40 hours, you may be at risk. If you are um um a manager that basically you’re not really a manager, they just give you that title, but you’re really just work clock in, clock out, you know, you probably will be able to qualify. But you do need to make sure because I know everyone’s just going to click the button saying they qualify. So let’s go ahead and hit the phones. It looks like we have someone on line one. Go ahead and bring them in. Sorry, I can’t read my screen right now. Hey, this is Dr. Friday. Can I help? Yeah, I have an IRA question. Okay, go for it, sweetie.

Okay, I had I had two uh last year and I combined them and they were in two different places. Well, it turns out that where I put them in the one place, uh, they didn’t add that amount of money in for my required minimum at the end of the year ’cause they said They only send that notice out in the beginning of the year and I put that money in in March. So in realizing it in January, I did go and take the rest of what I’ve my required out. But I’m wondering if there’s some way I can uh or I have to let the IRS know that I took it out for the prior year in January

So you did not take your RN, let me make sure I’m recapping really quick. You did not take your RMD or your required minimum distribution in the year Let’s just say in 2025, but you took it out in January of twenty-six or maybe different years, but the same concept?

Well, I took part of it out in the first year i in in December and the m remainder what w what I w had to take out for that extra money I took in January.

So it was and can I ask how old you are

76.

Okay. Uh I wasn’t sure if it was the first year in which you had to take your required minimum distribution. There’s a little wiggle room there. So when you do file, there is an eighty-six zero six that would require you to um document. that you um that there was a a um a miscommunication because I would have thought that your fiduci person would have giving you that information properly. Because your RMD is always based on the prior year balance, right? I mean, just for people that are listening, not so much for yours. So Whatever you have to take in a requirement of a distribution for 2026 would be based on your December 31st balance in your 401k IRA, whatever. And so then that’s what you have the whole year to take it out on Sounds like somewhere they dropped it, but yes, there is a form and how we they they they didn’t add it in.

They did not add that amount that I uh they added to the IRA. They didn’t include it in my required minimum

Yeah, so they they did not take the add in and add it back in, but you put it in that same year, in the year in which the prior year, I guess is what I’m saying.

I took what I I I took I took part of it out in December, what they already had and the additional that I added in, I I wound up taking it out on January twenty ninth

But when you put the additional in, when did the additional get added in? What what year? Last year or this year? In March of the prior year, correct? In the year that we’re talking about. Okay. Okay. Yeah. Yeah. Sorry, I know we’re going back and forth and poor people. Um you’re you’re so if you put it in March of twenty five, that doesn’t go into play until twenty twenty six RMD So 2024, whatever you had in there as of December 24, December 31st, 2024, is what you have to do for RMDs. Anything that got added in 25 will be part of your 2026 RMDs, which they do as of 1231-2025.

Except that I always took it out of the other place and I f and I d it didn’t dawn on me that I that they didn’t add it in. I I it was all I always took two two different Right.

Yeah. And so when the one company which is only responding to their percentage because that’s all they know. And the other company was and you were, I got it. So you were taking care, I mean you were basically managing both of them, but somehow one of them did not get added in Right. Okay. Well there it’s not a huge deal. I would just suggest writing a letter when you file your taxes about the innocent mistake. IRS is not so I have not found them to be extremely aggressive about this. They did reduce the penalty for failure to take it out, but you took it out as soon as you found out that the mistake had been made. It’s not like it’s a year later. Um so um I think you’ll find I file that form that you suggested 860606 and then yes you can also attach uh PDF if your system allows if you’re doing it online or if you’re doing paper filing, attach a letter explaining the situation, how it was just a mistake. As soon as you found out you resolved it and the money has been taken out.

Okay, thank you very much.

No problem. Thank you. Thank you. All right. Sorry guys. Like a little bit uh more intense than probably some of you, but that’s the problem with some of these. Um not not so much that, but it just it is When we’re dealing with taxes, everyone’s situation is slightly different. And uh what we were talking about for some of you that maybe just caught part of it was is that this listener has required minimum distribution but she also has two accounts. So each fiduciary responsibility is is independent for each one. So Well, this is one of the reasons that I personally I know some people I’m not a financial planner, so don’t come back at me. But I’m just saying as we get older, sometimes it’s nicer to have everything in one place. So that way these kind of things don’t happen as often. I mean, sounds like she’s done a great job up until now. So this is maybe just more of a simple mistake, but it is for all of us. It’s always harder and harder to track things when they’re in multiple locations. So not a bad idea to basically move them into one place where even you have two different types of accounts, move them in so that you have the ability to um you know, go for it and and see what you have. Um so anyways, if you want to join the show, 615-737-9986-615-737 379986. A lot of confusion on tips and overtime. I have found that for the people that it applies to, they are definitely getting better refunds. Um the confusion really still coming out is who’s really going to qualify, who’s not. Um, you know, a lot of people work overtime, but sometimes their overtime isn’t going to be considered qualified and remember if you’ve got double time triple time that doesn’t add more to you it’s only on um double it’s only on traditional overtime So again, making sure that you have that information in the right place, doing the things the right way, that is what we want to be able to do. And We’ll be able to, you know, move things forward. So if you’re working on your taxes this weekend, which you can be because obviously tax season is fully open. Make sure, because I’ve done a couple taxes this last week and a couple people sent me notices saying, oh wait, we did your taxes, but we just got another 1099 in the mail Or we just got another uh interest statement in the mail. So double check, triple check before you send the taxes because that’s what you don’t want to do is send off taxes and then have to amend them. Amending them can usually lead to more, but you don’t want to not file them correctly. So, you know, I mean obviously you want to amend versus that. And then the IRS will come back and give you some sweet little notification saying that we have changed your tax returns because And and also payments. I have one case where we have a gentleman, first we were dealing with 2024, now they’ve come back on 2023, and we’re still, you know You need to make sure if you owe money, you need to make sure that money has cleared your bank. Even if you’ve given the accountant the approval to auto-draft or anything else You need to be tracking. If you don’t see that money coming out of your bank, you need to stay on top of it. You don’t want the two years later the IRS saying you owe a ton more money because the money never came out. It is your responsibility to make sure that money comes out. All right, let’s hit William and Smyrna. Let’s see what we can do for William. Hey Will, what do you got going?

Uh well uh uh I got a question about the R and D’ Uh I take uh some out every year uh for for that. But uh my question is, do you have to designate it on paperwork or some kind of special paper or you just take it out

Um I mean from no I mean for the purpose of an a regular required minimum distribution or RMD you you’re gonna take it out you’re gonna receive a form called a 1099R You’re going to report it as ordinary income, assuming that you’ve, you know, traditional and then pay tax on it. It’s really that simple There’s nothing you have to designate. The only reason in her case we were designating more of it was because she took it out late.

Oh okay. So I believe that pretty well answers my question. So as long as I take enough out each year to cover the R and D That’s all I have to do really.

Right. Yeah, that’s it. As long as you’re taking out enough or more than what’s required, then there’s nothing really you have to worry about.

That that takes care of my question. I really appreciate you. Thanks a whole lot.

Thanks, William. And for any of those that are receiving RMDs or anything like that, you can hang up on William. Then they um you can also do what’s called a QCD, a qualified charitable deduction. And in that case, what you can do is you can give that money directly to a charity, and then that money is not taxed at all. You do have to put it through the system. There is a process. But it is a way of taking money and instead of taking it from your bank account and giving it to the charity, you take it directly from your required minimum distribution and send it to the charity. And now you don’t have to worry about itemizing. or any of that, you can take it directly off and it gives you a really, really good tax deduction. Now you do have to be 70 and a half and older to qualify for that and you do need to be having it through a traditional IRA 401k. It cannot be an inherited IRA or anything. It has to be your But um if you can meet those criteria, I mean most people or many people take money right from their checking account or cash out of their bank and give it to their church or their their uh charities and this would be a way of having them write the check from the fiduciary side and then you can reduce your taxes and You know, right now it’s hard for people to really itemize unless you’re giving, you know, $15,000, $20,000 because if you don’t have a mortgage, it’s very difficult to meet Itemization. All right, we’re going to take our first break. You can join the show at 615-737986-615 737-9986. We’ll be right back with the Doctor Friday show. Alrighty, we are back here live in studio talking about taxes. It is the season, guys. So the most important thing is making sure you file. If you haven’t filed in a number of years, you need to have a conversation because it’s now’s the time. I mean, there is some really good fresh start programs out there But most importantly, you have to be in compliance. You can hear all those ads you want, they’ll say they’ll settle for 15 cents on the dollar or 10 cents on the dollar, but none of that’s going to apply to someone that hasn’t filed First thing you need to file and then you need to find out what the IRS is actually showing on you. I had a case recently where they had taken someone’s ID, someone had filed a totally fraudulent you know, tax return trying to get two hundred thousand dollars or something worth of refunds um on this person that didn’t have that kind of situation Um but the government was trying to collect forty-five thousand dollars on them, which had nothing to do with their normal taxes. I mean they usually owed maybe fifty 1,500 or less, right? So again, making sure what the IRS has is correct and also filing what is correct for you so that that way then you’re now dealing with your particular tax. If it is a fraudulent situation like this one, there is a form that needs to be filed. You need to notify the IRS. You need to show the proof behind it. In this case it was so easy, but in some cases maybe not. But especially if if you’re self-employed and someone tries to fraudulently file a tax re I mean these returns were absolutely ridiculous. I mean, if you ever look at some of the the fraudulent returns coming through, I am totally surprised the IRS allows any of them to go through the system. system but you know it is what it is um and so you are the responsible person to let the know let the IRS know that you need to correct the file file the actual crop proper tax return Do it through the proper system and then go from there and then either make payments or settle, or then you can hear about the offer and compromise, the fresh start program, et cetera, et cetera. None of that can be done if you’re not filing the taxes and if they’re not correct. I had one that came in and they gave us all their paperwork and then recently I got a notice saying that the IRS has changed their taxes I mean it was completely again, it wasn’t that our return wasn’t uh was a fraud in this case. The taxpayer had not told us about additional incomes that they had come in and then the IRS came back and corrected it So you’re not hiding when you don’t do that. And anytime when I see when someone says, well, um, I just got a couple more 1099s and so I need to correct my taxes, that’s a problem because 1099 should not be gearing. your income. Your income should be totally what you received. It shouldn’t make a difference if two years from now you got additional 1099s. Because those 1099s are only a gear to make sure that that person is claiming the same amount you’ve posted to them, but not shouldn’t be your total income. That’s it’s just that simple. You know, I mean, even if you only have one employer, it’s still you should know how much money that person gave you. That is one of the jobs, one of the positions we have as um self-employed people And then the other side is tracking all of our receipts so we have the best uh deductions we can have. You can’t just wing it. I mean, you know, you can’t just say, well, I think I did this much supplies and oh I’m sure I did at least that much in in advertising. It doesn’t work that way. You have to have the physical receipts, guys. That doesn’t mean that you have a bunch of stuff for Amazon and you call it all supplies IRS is going to want the physical inventory. If you went to Amazon, what did you buy? How they know you didn’t buy school supplies or personal supplies So it is your job to do that and making sure that you have everything you’re supposed to have. And nothing the IRS will basically just turn around And, you know, be honest with you, they’ll turn around and basically disallow all of your expenses. You know, they they have no reason to allow them all. It’s not their job to give them to you. So as an entrepreneur, as a self-employed person. Because we have the higher higher chance of being audit. A gentleman with a or a female with a W-2, you’re not going to have much, right? I mean it’s a W-2. There’s no tax deductions against W-2s. You may have some overtime or tips, again, that’s being reported from your employer. So if you’re going to go in there and put $25,000 and you only made 30 is not going to make any sense and you’ll be audited anyways. I feel very strongly that the tip one, especially because you can report cash tips, but If it’s not reported on your W-2 or through your 1099, at least through the 1099, to be quite honest, we pay all of our ta our taxes. on it. But if you write off all these expenses and then you say, well, this much was tips, and then you turn around and show it, the government’s going to probably audit because it’s going to be, how did you support yourself People have a tendency to reduce things down to very, you know, they don’t want to pay any more money than they have to. And I get that. But there is a reality. You have a car payment or you have a mortgage or you have rent You have food, you have clothes, you have medical, all these things come in play. The IRS has already got a lot of that information on you. So then when you go in and say, Well, I only made $2,000 a month based on your tax return. And most of that came through TIPS. So there you four, I didn’t really have any income. Now the IRS is going to sit back and say, wait a second, this person has always been showing this much money, but now they’re saying almost all that money came through tips. You know, and I get it. Your bartender, your waiter, I can see where some of that, but most people only get 20% tip. They don’t get you know, hundreds and thousands of dollars. Um, you know, in even even if you make a thousand dollars a weekend at your job, your your wages should be offset and that should already be in that number So I would just have to say be careful when you’re looking at all of that information. Be truthful because it is going to most likely be one of the highest audited areas. Tips, especially overtime. I think most people can justify. Keep in mind you’re only using the qualified portion. Do not put 100% of your overtime in that box. It specifically asks you on the tax return. Is this the qualified portion? If you say yes and it’s actually 100%, then you’re gonna see that you’re going to either get your taxes uh audited and they’re going to come back and ask you for the money that they that you’ve taken or they’re going to disallow your tax return because they’ve already figured out that that was a problem in the first place So, you know, again, your choice, but no one likes to be audited. No one likes to have these kind of things happen to us. So Really, really important for you to make sure that you’re putting the right information because most of us like to file our taxes, put them to bed, never have to look at them again. That’s the perfect world. You know, you never know if the IRS is gonna pick your number and it does happen, but I usually find that most of the time, most of the time Something different happened in the year in which they’re pulling. Unless you’re just a self-employed person. They see some consistencies in the way that the expenses are going. Um, you know, they see some consistencies in how the numbers are reported. Most people don’t make the same amount in sales, most people don’t have the same expenses every year in same categories. Um, you know, it just isn’t normal associated with inflation and things. Most of the time we are paying more money and therefore we’re actually billing more money in many of those cases. So if you’ve got questions on that, um make sure you can always call the show 615-737-9986-65 So when preparing your taxes, what’s the first thing? First thing, make sure we have all of our documents in front of us. Right. We have our W-2s. We have our 1099 SAs if you have a health savings account. You have your 1098 T or mortgage or your 1098 T for college if you’re in college. Um all the things, interest, dividends, stock portfolios. If you’re into crypto, your stock portfolio, because crypto is stock, right? So all of those forms have to be in front of you before you even start doing your taxes. And all of those forms are also being copied to the IRS So if you have a Coinbase or you have, you know, e-trade, whatever, all of those are going to go to them. So making sure you have all that, then sit down and start putting the information. If you’re not sure of the answer. I will say I know some of these software programs have assistance. Don’t be shy to ask. You can also ask us, but you know, in most cases, it’s it’s a pretty straightforward answer. You know, you may not like the answer because you might find that the answer is basically one of those deals where you’re like, hmm, you know what? If I say yes to this answer That’s fine. But if I say no, I get more money back. I can’t tell you how many times I’ve heard those words. I went ahead and checked this. I married, but my husband and I filed separately. So I went ahead and chose head of household because if I change married filing separately, I didn’t get the kind of refund I did when I was filing head of household. Well of course not. Head of household means you’re supporting that person that you’re claiming as your dependent solely by yourself. You’re not living in the same house as your husband or wife and then claiming that that person doesn’t really exist that you know that’s blatantly lying but also it’s not that confusing Head of household means that you are the only adult basically in that household supporting those other people you listed as your dependent. If you are married, married filing separately is your only option. And right now, if you file married filing separately and you do have tips and you do have overtime, you will not get those deductions. It doesn’t fly when you’re married finally separately because most of them have means testing and they don’t know how much money your spouse made. So they’re not giving it to you at all. So understanding that if you switch from married filing separately to head of household because you want to get all this money, it’s not going to fly in the big picture Sooner or later, I feel that people are going to be caught. I know there’s some people out there that have probably been doing it forever and has never been caught, but you know, karma’s karma, so we’ll find out because theoretically that is just Wrong. That’s my opinion. Head of household should be for the people that are truly single parents trying to raise kids or grandparents that are trying to raise their grandkids, you know, a single parent and a and children because That’s why we’re trying to level the playing field by giving them head of household. All right, we’re gonna take our second break. If you got a question, you can join the show. 615-737-9986. 615-737-9986. We’ll be right back. Alrighty, we are back here live in studio. If you want to join the show, you can 615-737 9986-615-737-9986. And we have Rob on the line. Let’s see if we can get Rob on the line. Thanks. Hey Rob.

How are you? I got a question. Um you were talking about the deductions for being uh married, uh and filing head of household and all that. Yes. I have a problem. My wife is medically disabled. But she cannot get disability from the government because I make too much money.

Right.

How can I claim her if it won’t allow me to use her as a dependent or anything Just an exemption, but I still have to pay all her medical bills.

Well, I mean theoretically I mean the only option you have is You claim her as your wife, so you would claim married and she would be your spouse, and then any medical expense would go on Schedule A that you might be able to meet itemizing with your income being higher, it may be very hard to actually get itemizing under the current tax code, but that’s the way it would work.

Okay, so I I was just checking to see there’s another way around it.

Yeah, there’s no easier way around it. I mean unfortunately either way, you know, um She doesn’t have any way of deducting it. You could gift it to her, but there’s no income to offset and your income’s too high to offset it. So it’s one of those catch twenty-two’s it doesn’t benefit you either way. Okay. All right. Well thanks so much. Thanks, mate. And there’s the true story of how it happens so often. Um and I have a a number of clients with that kind of situation. So Um it it’s not easy. I have a couple that are, you know, theoretically now, you know, he could file Mary filing separately, but that wouldn’t benefit him because then he’d lose the actual higher deduction as being married um and she would have no advantage to being married violent separately because she has no income to report it sounds like so yeah it it’s not a it’s the the system definitely is not a perfect system. So um, you know, I hate to say this, but theoretically divorce, and then you could do head of household, but, you know, and have of her as a dependent but again it’s not really going to get you any more money you’d be better off almost married because the higher uh earnings would be tax lower as a married couple versus as mayor uh head of household or single so um no win in that conversation okay so um if uh you have question you can join the show Show 615-737-9986. 615-737-9986. Taking your calls, talking about taxes. It is tax season. We are working on all kinds of funding. and exciting things. We do have better depreciation this year. So for all of those that may have um purchased equipment, tractors, all those good things, we should have a better deduction. I will say again, talking about cars. Um, sorry, no one knows I’m talking about cars because I was just reading an email and someone had sent in and they are basically asking, you know, hey, I brought myself a Land Rover and I’m a real estate person and I want to take a 179 on it. How does this work? You have to be really careful when you’re truly, I mean, if you are audited and you’re a real estate agent and all you have is one Land Rover and nothing else to your name and you’re trying to say 100% of vehicle uh is being used for business, I would think the IRS would say, hmm, that’d be very hard because you do have to go the grocery grocery store you do go do personal things therefore the car is being used for personal use um say you do have a full car I mean you have another car that you use for personal and you only drive the Land Rover for the purpose of real estate. They could, I mean, for one, it’s a luxury vehicle, so does it really qualify? And you wouldn’t be able to to do it is over six thousand pounds I know you’re gonna say and it’s a bigger vehicle but you know um after the first year my question really comes to this so you got a hundred thousand dollar vehicle You’ve accelerated depreciation on that. So now the next year, all you’re going to have is interest, possibly penalty. I mean um insurance. and petro, but you’re not putting a lot of miles on this car apparently. And that’s my example from this email. So the first year you got all of this, even if you qualify and you you’re able to accelerate the depreciation in the first year and you can take this huge savings. Now you’ve got another two, three years and then you sell this car. And so let’s say you in three years you sell it and now it’s worth $70,000. Well you’ve taken all the expense for $100,000. So now you’ve got to recapture $70,000 as income. Or you go out and buy another Land Rover and now you’ve only got a savings of maybe $20,000, $30,000. After the first time you’ve done it, you’re you’re basically unless the car becomes worthless and you hold it long enough It’s an endless cycle. So yes, if you are a construction guy and you drive your truck to the ground and you want to use it and solely use for your business, or you have a tractor and you’re or a farmer or you’re a land mover, um, you know, you you build roads, whatever. Those types of equipment, no question, easy to do. But when it’s a personal vehicle, and even though you may be able to do something Something with it in the first parts. After the first time you do that, you’re going to then have to always be buying a more expensive vehicle than what you’re reselling it back for. And a lot of these cars have decent resale values. So Just put it in your mind, yes, you may be able to get an initial instant gratification, which is what we call section 179 or I do. Um, but after three or four years and you want to get rid of it and you’re gonna have to recapture 60-70 grand because that’s what it’s still worth, then you have to go buy another car worth more than that because you’re not going to have any depreciation to offset the gains And now you’re taxed three or four years later for what you could have just been paying the taxes for. So just keep in mind, maybe do it more of a straight line, um miles at 70 cents a mile, guys, um, for real use. Usage of vehicle is is pretty clean and you can use a vehicle that is used personally and for business as long as you’re tracking your miles and miles logs are required. IRS has never stipulated that you can just go in and just make an educated guess. You need to know what, when, where, and how, basically for why did you go there? Who did you meet with what was the purpose of the meeting was it business oriented and you need to know that on everything for every mile you do so i mean in some businesses it’s easy i went stopped at the client dropped off the product moved on and they they do deliveries. Um or you know, I went to visit my my my tax person and then you went back. And those are legitimate business if we talked about business. But you know, I went to the coffee house every day and some people try to write off their coffee every day. Now if you are in the coffee business maybe there’s some legitimate reason there. Otherwise that truly is just the stop and it’s not going to fly if you’re ever audited. And we do try to do taxes Just believe it or not, most people should. We try to do taxes based on the true fact. What is going to be legitimate when and if the government ever asks you to prove yourself right you don’t want to just throw some numbers on a piece of paper and then turn around and have to then try to backtrack and figure out well how did I come up with those 35,000 miles? Um and I’m a nail specialist or something. You know, I mean obviously it was commuting. Unless you’re going from location to location and doing people’s nails, maybe there is a business out there like that. Most of mine aren’t and remember commuting is not a tax deduction for nobody that means for Dr. Friday to go from my home here to the office in Brentwood, that is commuting. My clients are at the office in Brentwood. My clients are not where I’m at. So therefore I don’t get to take the miles from my home to the office and my office back home. Commuting. Always going to be. Once I’m in the office and then I go and and uh go to the bank or I go to see a client or I go meet Hank at his office to meet his clients, those would be legitimate business miles from office to go see client back, that’s fine Keep in mind that is very important because I have a lot of times. I mean, if you have a business with a um brick and mortar situation and you only have one business. and you’re coming from your home to that business, that is not a tax deduction. Now if you’ve got four or five locations, your first location would be the place that the you know the from home to the first location would be commuting from there to other locations could be um business miles and then obviously from wherever you’re going back home would be commuting Because it’s no different than a person that’s going to go to work. They have to go from home to the workplace and back. They are not allowed to ride off those miles. We are not allowed to ride off those miles miles. So again, don’t um when you’re when you’re estimating or you’re guessing, those are often the problems that people are not taking into account their true commuting miles. And it’s really important because if we’re ever audited, I will tell you miles are usually one of the first things they come back at, especially for people in the service business like real estate professionals or um Um or any, I mean, if it’s a business, let’s say that you have a hotel or you have a business like that and somehow you’re showing 15, 20,000 miles, but you only are showing one hotel in your tax return. or something like that. They’re going to question, are you really taking commuting from home to that hotel and back as part of your miles? Even if you’re you know, just an investor. I mean, you have to be able to justify those miles. So it’s really, really important that you’re doing that. All right. So for any of you that are just tuning in, I am Dr. Friday, an enrolled agent licensed by the Internal Revenue Service to do taxes and representation. just basically means I have passed all the tests. I’ve been doing this for 32 years this year. So I’ve been at it for a little while. And um, you know, I I find that I totally enjoy doing taxes. It’s always a change. Everyone’s taxes are different. But if you are in a situation where you don’t know what or how to get forward, maybe you haven’t filed for a number of years, maybe you’ve got a a lot of love letters coming. from the IRS, then we’re the people you might want to give a call. At least give us the option to see if we can help you. If you have a question now, you can join the radio show. It is 615 737-9986. Take your call. You don’t have to give us a real name or anything. 615-737-9986. There really are no I know a lot of times people are afraid I’m gonna sound really stupid on the radio. Well, hey guys, I’ve been doing this for what, 18 years or something. Um, I’m pretty sure I’ve said some pretty silly things. But seriously, there’s only, you know, if you don’t ask a question, you’re never gonna really know the answer. So give us a call, we’ll take our last break. We’ll be right back with the Dr. Friday show. Alrighty, we are back to the show. We’ve got two people that have called so let’s start with Jerry from Nashville and then we’ll go on to Greg. Hey Jerry, what’s happening?

How you doing doc?

I’m good.

Hey, great. Uh question for you. As an airline pilot, say I live in Nashville but based in Dallas. If I have a dedicated car to drive to the airport Can I deduct those miles and the expense of travel to Dallas to begin my job?

Uh there’s some software, I do a couple of different pilots and so when you go from here but let’s say your your flight is out of Dallas is what you’re saying. So if you’re staying in Nashville and you have to go to Dallas to get onto your first flight There is some allowable transfer in there, but in theory, the IRS is gonna say you driving from here to the Nashville Airport is your commute

Oh, but then the expense of per say you purchase a ticket to go to work.

Right. You would be able to go most likely from from Nashville to Dallas to have to catch your flight. They would allow that

Oh I see.

Just the drive would not be allowed because you’re going from the airport. Once you’re at the airport, you’re theoretically having to get to Dallas and they would allow that commute Okay. Or they can file the cost. All right.

That’s that’s good good information to have. Thank you very much, man.

Thanks, buddy. All right, let’s go to number two, which is Greg. Hey Greg, what’s happening?

Oh not much. Enjoying the sunshine and no eyes.

I like that.

Quick question, we have a small construction company and we run two trucks. I run one and my helper runs it. Construction trucks, loaded ladder racks and all that. Um now my location I do have a active home office at my house that’s got desks and all that in there Um the shop is beside our property. We’re on Acreage, but I walk to that shop and he pulls up to that shop and we take off. Are we allowed to claim mileage from there to the first stop? I’m a little clear. You would have asked for a year.

Yes, and and you would, Greg. You are a little different because your home office or your shop is your first place of business. That’s where you’re stocking up on all your supplies, you’re you’re taking your phone calls, whatever. Everything is starting there. So that is point one. So from there to your first client would be your starting of the meter. Yes

Yes. And they don’t like even so we try to keep a good log. You know that if you’ve done any kind of audits with people. It is so tough like Did he stop at the store to get a soda or what? I I can’t keep up with all that, you know, and the mileage IQ goes so far, I mean it’s gotta be a little grace with some of this. You know, we try real hard to keep up with with everything but it is hard when you some pl times we see thirty clients a day. And that truck is active from day one. It’d be nice to have it where you could just Just do your mileage at the end of the year and never have to keep a truck. We keep a dump.

Yeah, that would be sweet, but you could see how many people would cheat. But in your case, since your employee or your helper has a truck when he leaves the office and goes back home, those miles would be his commuting.

Yeah he doesn’t we don’t allow him to take trucks home.

We just construction guys do. Okay Um, so yeah, it sounds like you actually have a little cleaner because a lot of times they do allow them to take them home and that’s when it starts getting more because How do we and then they also have a gas card which makes it even harder because how do we know you filled it up to go home, not for business? So It is a it is a very difficult uh thing, but uh the best thing is if in your case would be always tracking a customer calendar so you could actually show all the trips that would have been there. So I have found most of the time if they’re darn consistent. the auditors are much more open than if there’s a lot of blank holes when people do their schedules.

Oh I understand. Yeah, I appreciate that. Yeah it’s it’s tough as a business owner trying

It is and that that’s where mileage IQ and stuff has helped, but I agree with you there’s still a lot of work that has to be done for an employer to make sure that it’s meeting compliance.

And and and I have had a friend that just said, Forget it, I’m not gonna claim any mileage because I guess he got audited and he was like, I’m just done, I’m just gonna run. I can’t keep up with you know, I went two point eight miles to the next house. You know.

Yeah. But that’s huge because in your life, I mean, I I’m assuming if you’re seeing twenty, thirty people, even if they’re all fairly close together, you’re talking at seventy cents a mile, you know, I mean that’s a lot of money that you’re leaving off the table. By just saying, hey, you know what? I don’t want to have to deal with the IRS. I get that hole, I don’t want to deal with the IRS. Most of us don’t. But if nothing else Play it on the safe side, you know. Hey, you know what? I’m gonna my my car had sixty thousand miles and I’m gonna be able to easily justify forty-five of it You know, at least take what you can easily justify. If you don’t want to push the bucket, that’s fine, but I think he’s probably leave you a lot of money on the table.

Yeah, no, we we do that because uh we keep our vehicles until they’re plumb or out. So yeah, doing the what you were speaking about earlier, people buying these hot dollar vehicles and writing them off. Yeah, it’s great that first year to think about it, but that next year you’re kinda in trouble. And I’ll be honest with you, I don’t want to keep up with oil change and all that to collect that money, I’d rather do the mileage and take the 70 cents instead of keeping all the receipts for fuel. Did they put fuel in the you know lawnmower or what? I I I have no clue what all these guys are doing. You know, but I appreciate your time, ma’am. Have a wonderful weekend.

You too. Thanks, Greg, for listening. Appreciate it. All right, let’s see if we can hit Elizabeth really quick. Hey Liz, what can I do for you?

Uh just wanted to tell you uh enjoy your show, listen to it every weekend, and thank you for taking my call. I have two questions The first one is do you have to turn it in on income tax if you give your uh child, grandchild like three, four thousand dollars to buy a vehicle?

No ma’am. That’s not sub has to be turned in and it’s underneath the gifting rules so nothing has to be reported.

Okay. The second question is do I have to file I don’t file taxes because I’m on social security and low income Uh, but do I have to file taxes on like twenty-five thousand dollars uh interest on a savings account?

If you actually earn twenty-five thousand dollars that would make you taxable yes I’m sorry two thousand five hundred oh twenty five thousand big difference there yeah twenty five hundred dollars would not make you a taxable situation No.

Thank you so much. You have a wonderful day. Appreciate you.

Bye. All right. Well, that was great. I love it when you guys participate. Makes my show go so much faster. We’re going to get down to the nitty-gritty. So if you would like to call our office on Monday Sunday morning you can phone number is six one five three six seven zero eight one nine six one five three six seven zero eight one nine and you can can also email friday at drfriday.com. Remember when you’re working on your taxes or someone else is helping you with your taxes, hopefully you’re using a tax tax person and enrolled agent. Um, but you know, make sure that the information you’re putting together is to the best of your ability. That’s what the tax law says. Um and I get it sometimes Sometimes it’s it’s frustrating and nobody likes to go through audits. Um no matter how good your paperwork is, you just it’s just a lot of time that has to go into it. So keeping track, making sure you’ve got everything saved and put into the proper files so that way if some question comes up on your tax return, then you’re able to turn around and respond to that instead of having to open up a full audit. Because if you don’t respond, what’s going to happen is the IRS is going to disallow everything and then it is going to be a full audit because you’re going to have to justify every expense and you know more and more I see that I will be honest a lot of times I see now we have paper audits and a lot of times they’ll come back and they basically say um here’s what we’re we’re auditing and it’s mostly a schedule C or a schedule E. We’ve disallowed all expenses. Please justify the expenses you took on your tax return. And now you have to send in all of those details. So easiest way to do that is obviously when you’re preparing your tax Make sure you’ve saved those documentations, scanned in the files. Um we do have to have receipts that justify the expenses, give or take, unless it’s $75 or less for meals and entertainment, but otherwise we can’t really take any entertainment only meals. Um so if you’re taking people out for entertainment purposes, remember that isn’t a tax deduction for a business right now. But meals would be a tax deduction so again if you’re interested or need help or just if you if we can lead you to someone else in your area because we’re in the Brentwood area maybe it’s a little too far away you can give us a call 615 367 0819 615 367 0819. You can also email Friday at drfriday.com again Friday at drfriday.com. If you don’t have any idea who I am or if you’re a returning customer and you have not yet got your calendar or got um you put onto my calendar I should say say you can check the website at drfriday.com the calendar is there and or you can call the office and we’ll make sure there’s an opening for you. If you’re a new client, we usually like to try to do an intake. So make sure Make sure that we are a good fit because you know your tax person should be able to handle the kind of taxes that you’re doing. Make sure that you feel comfortable because there’s gonna be a lot of personal information going between you when you’re tax person. And if you don’t have that comfort zone, you’re probably not dealing with the right tax person. So if you need to find a new tax person, even if we’re not that person, we might be able to lead you in the right direction. Again, the phone number in the office 615-367-0819. Or you can email Friday at drfriday.com or check out drfriday.com. Hope you guys have an awesome Saturday. Cop you later